The 1920–1921 recession

The 1920–1921 recession was a postwar economic downturn whose effects reached from collapsing farm prices to the haberdashery of Harry S. Truman and Edward Jacobson in Kansas City, Missouri. For the two partners, it transformed a flourishing business into a failure, left them with roughly $35,000 in debt, and committed Truman to years of repayment. The shop’s decline also made visible a recurring tension in his life: his instinct to help friends persisted even as the business that supported him was coming apart.

Agricultural Prices and a Reversal of Prosperity

The downturn’s pressure was especially clear in the Midwest, where falling farm prices curtailed the spending of rural customers. At the Kansas City grain exchange, the same place where John Truman had lost money twenty years earlier, wheat prices were tumbling. A bushel that had fetched a record $2.15 in 1919 was down to $1.44 by the fall of 1920. Farm prices overall fell 40 percent, and the farmers’ difficulties began to spread beyond agriculture. By 1922, wheat had fallen further, to 88 cents a bushel.

The reversal reached the store in an especially concrete form: the silk shirt, once a conspicuous emblem of postwar prosperity, became an item Truman & Jacobson could no longer sell. The partners had been restocking their shelves and serving customers as the country seemed to be settling into the return to normalcy. But by 1921, that appearance of ordinary commercial life had given way to a full-scale depression. Their flourishing trade evaporated, and keeping the stock current required them to borrow more money. The recession was not simply an economic backdrop to the shop’s story; the changing prices and vanishing demand entered its daily operations.

A Store Becomes a Lending Place

As sales declined, old friends continued to visit, but increasingly they came without buying. Some borrowed an extra five or ten dollars. The shop took on the character of a club, an unemployment agency, and, because of Truman’s generosity, a small loan office. Edward Jacobson recalled that a request for “Captain Harry” meant a friend wanted money, while “Captain Truman” meant a customer was there to buy. The distinction captured how far the store’s social role had diverged from its commercial purpose.

Truman’s willingness to lend did not resolve the partners’ financial trouble. It placed his personal loyalty alongside the business’s shrinking resources, even as the shop struggled to borrow enough to maintain merchandise. As the downturn worsened and there was less to do, Truman grew restless. Ted Marks recalled that Truman went out to lunches and mixed with people while Jacobson stayed behind to look after the business. The partners spoke about many things but avoided discussing Truman’s troubles. Marks remembered that rents were high and starting over was difficult. The recession thus narrowed the shop’s prospects while leaving its partners to face the strain in different ways: Truman sought company and activity; Jacobson remained at the store.

Failure, Creditors, and the Cost of Keeping Faith

Truman & Jacobson failed in 1922. After discussing what to do, the partners decided not to file for bankruptcy and wipe out their debts. Instead, they would try to pay creditors back gradually. The business was approximately $35,000 in the red. Jacobson went on the road as a shirt salesman to meet his share of the obligation, but after three years he could not keep up and was forced to declare bankruptcy.

Truman continued paying long after the store had closed. Fifteen years after its failure, he was still making payments on the haberdashery, and the debt left him strapped for money for twenty years. The choice to repay rather than seek bankruptcy therefore carried consequences well beyond the immediate collapse: a failed retail venture became a lasting personal financial burden. Yet the account also preserves a small act of care amid that burden. When Truman and Jacobson met for lunch downtown some time later, Truman noticed his friend’s frayed suit, gave him money, and told him to buy new clothes. The gesture echoed the store’s earlier informal lending, but now took place after the partnership had ended and Jacobson’s own attempt to repay had failed.

Blame and Retrospective Memory

Many who knew the business did not consider its failure Truman’s fault. Edgar Hinde, then trying to sell Willys-Overland automobiles in Independence, remembered him as a victim of circumstances and emphasized how hard the times were. Gaylon Babcock, whose father had invested in the store, offered a less sympathetic recollection: to him, Truman’s downfall was no surprise, and he regarded it as another instance of Truman’s recurring misfortune. The difference in their judgments shows how the same collapse could be remembered either as an economic disaster imposed by the times or as a personal pattern.

Truman himself blamed Republicans in Washington, particularly Treasury Secretary Andrew Mellon’s tight-money policy. The narrative also points to an earlier possible contributor: in 1920, the Wilson administration had abruptly cut government spending and raised taxes. These explanations place the store’s fate within larger policy and economic conditions without reducing it to a single cause. In a 1942 letter to Bess, Truman looked back on the store’s failure as one of the painful episodes in their life together, alongside political defeats, while saying their happy experiences had outweighed the bad. The recession’s significance in his biography lies in both its material aftermath—the long debt—and the way a short-lived business collapse remained part of his later account of hardship, responsibility, and endurance.