THE CRASH, THE GREAT DEPRESSION AND THE NEW DEAL

The American economy derails in October 1929 with a mighty stock-market crash, and an era of poverty and despair begins in earnest. Millions experience bread lines, soup kitchens and "Hoovervilles" as a consensus emerges that government intervention in economic life is essential.

The stock market begins its collapse on October 24, 1929, with panic selling and 12.9 million shares trading. On Black Tuesday — October 29 — panic selling again prevails as some 16 million shares are traded. Paper losses from the crash total $15 billion, roughly 15 percent of the gross national product. Margin calls wipe out tens of thousands of accounts.

Enter the Great Depression. The GNP falls more than 45 percent from 1929 to 1933, dropping to the level of 1916.

Unemployment approaches 25 percent in 1933. Almost 15,000 banks fail between 1929 and 1933. Corporate profits plunge to less than zero. On the farm front, prices are halved. President Hoover enlists farm aid in the form of the Agricultural Market Act and the Federal Farm Board. But it is too little, too late. Despite a decade of government intervention aimed at stabilizing farm prices, surpluses grow and prices fall.

Ralston Purina sales plummet from a 1930 high of $60 million to $19 million in 1932. In 1931 Ralston registers its first net loss — half a million dollars. According to Fortune magazine, "When 200-pound hogs brought only $12 ... farmers could not afford to buy commercial feed at any price." In 1932, Ralston loses $168,800 more.

Donald Danforth, the founder's son, takes over the Company and begins a program of expansion, opening six new mills by 1935 to establish a decentralized production and distribution base.

Consumer products companies rely heavily on new products, advertising and promotion to compete for scarce Depression dollars. Ralston Purina also masters the art of celebrity endorsements by sending Dog Chow® Checkers dog food to the South Pole with Admiral Byrd in 1933. That same year a cowboy named Tom Mix agrees to hawk Ralston cereals, and an army of young Straight Shooters pledges allegiance to Purina.

Franklin Delano Roosevelt wins a landslide victory for President of the United States on November 8, 1932, which leads to the National Industrial Recovery Act, The New Deal and Agricultural Adjustment Act of 1933-an "emergency" act to raise farm prices and income. Other elements of The New Deal include the Securities and Exchange Commission, Social Security, WPA, and Wagner Act.

After 1932 Purina never again operates in the red, and by 1939 elevates profits to $2.9 million.