The Diocese of New
Jersey and the Great Depression
The financial problems
that face our nation and our diocese in 2009 are hauntingly akin to what the
nation and diocese faced in the Great Depression. Here is an overview of those
problems, from 1932 to 1935. The Right Reverend Paul Matthews was Bishop of
New Jersey during this period.
1932
The first inkling
of trouble is found in Bishop MatthewÕs Convention Address of 1932.
Evidently it took some time for the fiscal woes of the country to trickle
down to the church. The various Tables in the Journal show decreased income
from most churches but, because Bishop Matthews risked everything to get approval
of his hoped-for Cathedral, he did not so much as mention financial problems
in his 1931 address! The fifth paragraph of his lengthy 1931 Address began:
ÒIt would be a matter of considerable embarrassment to me if you were disposed
to the latter course,Ó that course being to reject plans for the Cathedral.
The pertinent text
of the 1932 Address follows: [As you will see, Bishop Matthews was not without
humor.]
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The
Bishop of New Jersey during the Great Depression, the Right Reverend
Paul Matthews
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Diocesan Finances
The Diocese has had
its own severe financial trial. Owing to the closing of the Burlington City
Loan & Trust
Company, which was the depository of our Diocesan Trust funds, we have suffered
a heavy loss.
Under existing Canons of the
Convention, the Aged and Infirm Clergy fund and the WidowsÕ and OrphansÕ Fund
is accumulated for a whole year before appropriations are made from this so-called
available fund. This income was deposited in the banking department of the
Burlington Bank, and became subject to the conditions of ordinary deposits.
This has meant that none of this fund was available for use, and it will mean
a probable heavy loss when depositors are finally paid in part.
To meet this condition, I asked
the Treasurer of the Diocese to pay, out of the funds of the Convention in
his hands, the meager pension due our beneficiaries. This he has consented
to do, and the beneficiaries have been paid.
If I did wrong in this, it is
your privilege to say so and to administer the proper discipline, which, I
presume, should be decapitation; but I hope that if I have exceeded my authority
in giving such counsel to our Treasurer the punishment will fall upon me,
who is to blame, and not upon the faithful Treasurer who has stood like a
rock on a troubled shore, breaking every assault of a raging sea into harmless
foam.
My private and personal opinion
is that Mr. Tattersall deserves the thanks of this Convention for his courageous
if uncanonical action in this matter.
In the meanwhile, the Trust
Funds of the Diocese are still as secure as they were. The securities have
been placed in the hands of the Trenton Trust Company, and arrangements have
been made whereby the income as well as the principal corpus of each fund
shall be kept in the trust Department of that Institution.
This situation, which came as
a great shock to us, points the way for a reorganization of our Diocesan Financial
System.
The matter was taken up by the
last Convention after several recommendations on my part, and a committee
Òto consider the advisability of combining the various Endowment and Trust
FundsÓ was appointed. We shall have from that Committee and from the Cathedral
Foundation some very definite proposals which I hope will receive careful
and favourable consideration.
Such a simplification and combination
will involve some Canonical changes and the Committee on Canons has been asked
to prepare this matter for our consideration.
1930 Total Receipts:
$1,198,968 (approximately
$15,000,000 in 2007 dollars)
1931 Total Receipts:
$1,115,016
1933
The 1933 Convention
Address was a good deal stronger in tone and a lot more space was given to
the financial situation. In addition to the Cathedral plans,
the 1934 General Convention, to convene in Atlantic City, was a concern.
The BishopÕs Address
My dear Brethren:
This year has been, for a multitude
of people, the hardest of their lives. For three years and a half they have
been patiently and quietly enduring an ever-increasing money stringency, a
stoppage of business, and calamity prices for commodities that have meant
the severest hardships and positive want for a large number of people. Multitudes,
whose only desire is to work and produce, have been face to face with a growing
unemployment. Great financial values have shrunk to insignificance. Large
fortunes have disappeared.
It is an amazing thing that
through all this period of trial the people of the United States have behaved
with a patience, restraint, and good nature that has turned a trial into a
triumph, and a catastrophe into a conquest. Facing war conditions, the men
and women of America have found a war spirit. Quietly, and uncomplainingly,
almost with gaiety, they have faced a foe the more deadly because invisible,
intangible, sweeping upon them with unseen forces and from unexpected directions.
It has been a trial that has
proved a test of character, and has discovered to us unthought-of depths of
faith and courage. There have been no labour troubles of any moment; the most
significant of any have been the farmersÕ protests, in most cases a passive
resistance against mortgage enforcements, and only rarely joined with violence,
and much kindness, sympathy, and most substantial help have emerged.
The Church, I think, has suffered
less financially than the larger part of organized business, and in spiritual
and moral force I believe the Church has been strengthened. Congregations
have been more closely knit in the consciousness of a common need and of a
wide appeal for sympathy and by the conviction that the grace of God appears
the greater and the stronger and the more satisfying as the sense of our own
impotence is borne in upon us by the stress and struggle of the world around.
But, or course, the Church has
suffered, and suffered severely. The National Council has been forced, rather
reluctantly, to drastic retrenchments. We, as a Diocese, so far from even
attempting the over-large quota assigned the last General Convention of more
than $80,000, gave last year $65,000 because we had promised it, and this
year we have been forced to reduce our ÒexpectationÓ to $35,000. I think it
fair to say that our Diocese has not cut its missionary obligations more greatly
than any others of equal, or even greater apparent strength, and as a matter
of fact, we have done better than many, and we are at least so far keeping
faith, and paying what we promised.
At the same time we have cut
the budget of our own Diocesan needs to the limit, asking for $46,620 instead
of $66,850, as in former years.
All of our Diocesan Officers
have accepted a reduction in salary, and I think most of our Missionaries
and also the Parochial Clergy. (I hate to suggest it, as it may seem rather
invidious for me to do so, but a reduction in Diocesan expenses seems eminently
desirable at this time.)
The immediate cause
for this condition, locally, is the disastrous failure of the Burlington City
Loan & Trust
Company, which was the custodian of our Diocesan Trust Funds. While the actual
securities are intact, it was found that a large amount of our Diocesan money
was in insecure investments, and a considerable sum is in default.
In addition to this, some of
the parishes, in fact a large number, are heavily in arrears in their payments
on their Diocesan assessments. Some of these arrearages are of several yearsÕ
standing.
We have a poorly worded and
somewhat ambiguous Canon which provides that a Parish which is in such arrears
for two years or more shall lose its lay representation in this Convention.
This Canon should be made more stringent, I believe, and apply to any delinquency,
so that no parish could be represented here which was in arrears at all. And
further, to really produce results, something should be added to the Canon
to deprive the rectors of delinquent parishes from seats and votes. I say
this because I have been driven to the belief that both in Missionary Apportionments
and Diocesan Assessments failure is due more to indifference and neglect on
the part of the clergy than to the unwillingness of the laity to meet their
obligations. *
On the other hand, where
missionary money, given specifically for Missionary work, is used by the
Vestry for running expenses, it is my opinion that some form of punishment
should be meted out to these delinquents. Such a course is not honest.*
When we consider that by far
the larger part of our Diocesan Assessment is for the Pension premiums of
the clergy, the gravity of the above situation appears even more fully.
I have made a list
of twelve delinquent parishes, all of which are active, and at least seven
of them would be rated as among our stronger parishes, and several of
them have considerable endowments (see the table below):
| PARISHES
in ARREARAGES |
| Number |
Amount |
|
1 |
$1,394.40 |
|
2 |
$1,236.96 |
|
3 |
$747.31 |
|
4 |
$688.38 |
|
| |
$682.60 |
|
6 |
$611.25 |
|
7 |
$567.27 |
|
8 |
$532.78 |
|
9 |
$532.49 |
|
10 |
$463.95 |
|
11 |
$452.62 |
|
12 |
$450.45 |
|
Total |
$8,360.46 |
|
Since
the figures were compiled, five of these parishes have
made partial payments amounting to $919.04, but this leaves from this
groupÕs still unpaid arrearages of $7,371.42.
There are some
sixty parishes in arrears for the years 1930-31 and 1932, and of course
for this yearÕs as well. In addition, some forty others are in arrears
for this year, no payment having been made since January first.
This means that 100 parishes
owe money to the Diocese. A good part of this yearÕs assessment will undoubtedly
be paid, and probably much of it has already been paid, but the unpaid assessments
for this current year were reported to me very recently as being nearly $12,000.
It is rather discouraging to grant the appeal of a hard-pressed congregation
to have their arrearages wiped out and charged off, and then with their promise
to do better in the future, have them fail to keep their word and pay their
current indebtedness to the Diocese.
One parish was forgiven a debt
of $1,500, but has not paid this year its quarterly assessment of $56. Another
was forgiven a debt of $500, and has not paid its $25 quarterly assessment
this year. Another parish, largely endowed, owes the Diocese $985, with no
prospect of payment.
The Treasurer reports an aggregate
of $16,576.57 owing on assessments, of which $9,698.29 is due for Pension
premiums.
In addition to this, the Board
of Adjustment has charged off nearly $3,500 this year. I believe that at least
an equal amount might be charged off for equally good reasons, but I am not
in favor of such a course of general amnesty. I think it is time that our
parishes generally should be held to a stricter account. It is not just or
fair that the parishes which do pay should bear the burden any longer; nor
is it right that the clergy whose parishes are so delinquent in their Pension
premium payments should be kept on a sort of charity list.* Such a condition
cannot continue. It is not surprising that our Diocesan Treasury is depleted,
and the Treasurer will hardly be able to pay the next quarterly installment
due for pensions.
We have had a fine system, now
operating for years in this Diocese, of paying the Pension premiums by the
Diocese itself, the money being raised by assessments on the parishes, and
of course this has amounted to a guarantee that all the premiums would be
paid. The system now breaks down, by the default of so many parishes, and
if it seems that it must be abandoned at once, the duty of paying the premiums
must be laid upon each parish individually and directly.
Some of the clergy will, I fear,
suffer some hardship if this has to be done, and, of course, one objection
which naturally rises to such a course is that the premiums for the Missionary
clergy and for the Diocesan officers would have to be met from the Missionary
treasury, thus increasing the Missionary quota by the amount needed for such
purposes. It would add, I think, approximately $3,000 to the apportionment.
1932 Total Receipts: $935,516
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| Cover
of TIME magazine during the 1934 General Convention, featuring the
Presiding Bishop of the Episcopal Church |
1934
The 1934 Convention
Address continued in a bleak mood. However, Bishop Matthews was heartened by
a move made by some Southern Ohio laymen called Forward Movement. His address
makes interesting reading today.
The Financial Situation
We are all appalled
at the deficit which faces the National Council, and the results which
may follow. A half-million dollar deficit
at the close of the year just ended, and another similar deficit for the current
year, would of necessity mean not only no forward steps, but also the cutting
off of many important and apparently vital parts of the present programme.
I believe that this deficit is due to causes beyond the control of the National
Council and its existence cannot be considered in any real sense their responsibility.
The deficit is due partly to
the shrinking of values in invested funds and in legacies, and also in a very
large measure to the fact that the Diocese failed to pay the amount which
the National Council was assured they would pay. This lapse amounts to something
over $125,000, about one-quarter of the entire deficit for the year.
This failure to meet the amount
definitely undertaken is a matter of grave concern. It does seem to me that
an official notification from the Diocese of what they expect to pay amounts
to an obligation of honour. I am thankful to say that New Jersey paid, and
slightly overpaid, this Òexpectation.Ó
It seems a strange thing that
the National Council should have in its elected membership representatives
of some Dioceses which have most woefully failed to meet their engagements.
A ray of hope appears in the
movement started by the laymen of Southern Ohio, under the leadership of Mr.
Charles P. Taft, for an EverymanÕs Offering, to enable the National Council
to hold the line and balance the budget. I hope that New Jersey laymen may
be moved to undertake their share in this volunteer task, and to shoulder
a real and definite part of this burden.
Diocesan Finances
We have our own troubles in
the Diocese. There has been a great shrinkage in values in invested funds,
and I fear a total loss of considerable amounts. This has affected our Episcopal
fund for the payment of Episcopal salaries, a number of the funds belonging
to Parochial endowments, and also the graver loss and depletion of income
in the Aged and Infirm Clergy fund and the WidowsÕ and OrphansÕ Fund.
To make the situation critical,
we have delinquencies in payment of assessments on the parishes which amount
to the formidable total of $20,222.40. Some of these arrears seem to me to
be unavoidable and due to causes quite beyond the control of the parishes
involved, but on the other hand I believe that some of it is avoidable.
It points the gravity of the
situation that the Finance Committee could not recommend any appropriation
for the expenses of entertaining delegates to this Diocesan Convention, and
as a consequence the custom of years has been abandoned, and you will have
to pay all your own expenses, including luncheons and the Fellowship Dinner.
It is, of course, a much greater
concern to me that the widows of the clergy received only a fraction of the
already pitifully meager sum hitherto appropriated for them. Forty-five dollars,
I believe, was the total grant for the past year. It makes my heart ache to
think of it. One lady, whose means perhaps barely made the sacrifice possible,
has returned to the Diocese the amount recently sent her, as she felt that
by doing so she could help to augment the payment to those poorer than she
is. I give her your grateful thanks for her generosity, but I am rather ashamed
in doing so!
The widow of one of our clergymen
who has recently died, and whose pension premiums had not been paid owing
to a long period of enforced inactivity, has been notified by the Church Pension
Fund that her annual pension will be thirty-nine dollars. I am far from faulting
the Church Pension fund. I am sure this great enterprise is a wonderful benefit
to the Church, and is being managed in a very human way. I did not expect
that this lady would receive anything from that source. It is a surprise to
me that she is going to get nearly forty dollars. But that is what her assured
income is, and that is all of it.
Our Pension payments are so
seriously affected by these arrears that some drastic action is forced upon
our Finance Committee. It begins to look as though the Diocese would find
it impossible to ÒcarryÓ much longer, if at all, clergymen whose parishes
are in arrears. The Diocese has suffered for years from delinquencies, and
it has come to the end, not of its patience, but of its resources. It can
no longer pay for parishes which are unable or unwilling to meet their obligations
to the Diocese.
More than gratitude is due to
the unremitting and skillful attention given to the financial affairs of the
Diocese by our Finance Committee and by the Trustees of our Diocesan funds.
The present Trustees were elected when things were at their worst, and they
have been doing, for the past two years or more, a work for the Diocese which
I can best describe as a salvage job.
We have on our Finance Committee
busy and distinguished men, whose time is valuable. They have given largely
of their time, and unsparingly of their expert knowledge to the service of
the Diocese. They have been holding monthly meetings. The day of perfunctory
performance has passed, and we are now having personal service.
In conjunction with the almost
heartbreaking work of our Finance Committee, I am more than glad to recognize
publicly the constant and unremitting labour of the Assistant Treasurer of
the Diocese, Mr. William F. Stroud. He is effective, expert, and unsparing.
He gives to his work his whole self, and my feeling is that he has worked
altogether too hard. I doubt very much whether the N.R.A. would approve of
it. However, he is an executive and so can give eighteen hours a day to his
task, if he wants to. And he often does. I think the least you can do
to show your appreciation of his work for the Diocese is to elect him to some
additional office!
1935
From 1930 until
1934, the losses in receipts looked like this:
1930 Total Receipts:
$1,198,968 (approximately $15,000,000 in 2007 dollars)
1931 Total Receipts:
$1,115,016
1932 Total Receipts:
$935,516
1933 Total Receipts:
$799,182
1934 Total Receipts:
$847,308
1935 Total Receipts:
$924,205
The percentage of loss
from the high of 1930 to the low of 1933 was just over 34 percent.
The 1935 Convention
Address mentions nothing about financial distress, as it appears the worst
crisis was over and the total receipts began to increase.
Researched and compiled
by the Reverend Canon Laurence D. Fish, Archivist of the Diocese of New Jersey
*Emphasis added
by the compiler