The Great Depression was the worst economic crisis in history. It lasted from 1929-1939.
Some historians would argue that it lasted through the mid-1940s. The story of the Great Depression is a story of struggle but it is also a story of perseverance and resourcefulness. with WWII bringing the country out of the economic collapse. The Great Depression reached its peak in 1933 when 15 Million Americans were unemployed. Over 25% of employees were out of work. In states like West Virginia and Pennsylvania, unemployment was as high as 50%.
To make a connection to today, if you think about how in March & April of 2020, when Covid caused businesses that were considered unessential to close, that was under 15% of those employed. Most of us know someone who was out of work at the height of Covid – those numbers don’t come close to what was experienced in the 1930s. If you listened to our episode on The stock market crash, we discussed the causes. The stock market crash alone episode on The stock market crash, we discussed the causes. The stock market crash alone didn’t cause the Great Depression. Overproduction, consumer debt and buying on credit, banks were uninsured, speculation, high protective tariffs. Conditions were bad across the globe. It was a perfect storm of sorts. Life in the United States during the Great Depression was full of challenges, yet families found ways to survive and move forward.
Political impact
Globally, The Great Depression allows for the rise of dictators around the Globe. Most notably, Hitler in Germany, Mussolini in Italy and Francisco Franco in Spain. In the US you have two very different responses to the Depression when Hoover is President as opposed to what FDR does when he comes into office. Hoover doesn’t believe in big government. He doesn’t believe the federal government should be providing direct relief to US citizens. Republicans lose the election and FDR and the democrats will maintain control of the Federal government until Eisenhower becomes President in 1953. FDR famously expanded the role of government with the passing of his proposed New Deal Legislation which we are going to have a separate podcast on because there is just so much to talk about.
Economic impact
Bank runs
The economic landscape during the Great Depression was nothing short of devastating. It was a period of immense financial turmoil and widespread despair. The stock market crash of 1929 set off a chain of events that led to a sharp decline in production, income, and employment. Businesses shuttered, factories closed, and banks failed, leaving millions of Americans unemployed and penniless.
The unemployment rate skyrocketed to a staggering 25%, leaving families without a means to support themselves. Poverty became a harsh reality for countless individuals, as basic necessities such as food, clothing, and shelter became increasingly scarce. Many families were forced to stand in long lines at soup kitchens and bread lines just to get a meal.
As jobs disappeared and wages plummeted, the economy spiraled further into chaos. People struggled to pay their bills, resulting in widespread evictions and homelessness. It was a constant battle to find affordable housing, with families often resorting to makeshift dwellings in shanty towns known as "Hoovervilles." As people were evicted from their apartments or homes due to unemployment and failure to pay their bills, shantytowns started to spring up across the United States. They became known as Hoovervilles. People built structures from stone, cardboard and even metal scraps. They were often located not far from free soup kitchens. The most famous Hooverville was on the Great Lawn of Central Park in NYC. If you go to rarehistoricalphotos.com they have an abundance of images of Hoovervilles and Shanty Towns that existed throughout the country.
Despite these dire circumstances, Americans found innovative ways to make ends meet. Some turned to odd jobs or day labor, while others bartered or traded goods to acquire what they needed.
The majority of Americans didn’t have savings accounts. Which is another problem altogether. Those who did have their money in the bank wanted to withdraw it. The problem is that when you put your money in the bank it doesn’t go in a drawer with your name on it waiting for you to come back and do something with it. It goes to give loans to other people, for a mortgage, for a business loan, for an investment. As more and more people took their money, the banks had no more money to give out and closed. Banks were not insured, if you had a savings account, your money was gone. Bank Holidays or closures for multiple days to try to calm the storm only caused further panic. Notices on locked bank doors often stated “closed by the Board of Directors until further notice”. Many of those banks never reopened. To top it all off, homes are being foreclosed, people are being evicted from apartments and fired from their job. By 1933 28 states didn't have an open bank. After Roosevelt Inauguration in March of 1933, he declared an 8-day bank holiday. During this time banks were closed, and the Emergency Banking Act was passed. The act created the FDIC which at the time insured bank accounts up to $2,500. It also mandated that banks be inspected to insure their financial stability. “Healthy banks could reopen, banks that weren’t financially stable had to remain closed. This helped to boost confidence in American banks.
In the early 1930s you also have the worst environmental crisis in history that takes place.
The farming land of the great plains was once fertile but over farming coupled with drought and the loss of topsoil ruined the land. This coupled with years of minimal rainfall all contributed to a massive dust storm that was created. In April of 1935, the biggest dust storm ever recorded started to travel across the plains. Winds up to 65 MPH and hundreds of miles wide carrying tons of topsoil. April 14, 1935 became known as Black Sunday. People’s lungs were filled with sand and topsoil. The storm was so strong dust clouds even covered NYC by May of 1935. The area of the Great Plains becomes known as the Dust Bowl. Many people fled the area. Roughly 2.5 million people left the Dust Bowl states—Texas, New Mexico, Colorado, Nebraska, Kansas. Many moved to California and were often nicknamed Okies. If you’ve ever read Grapes of Wrath by John Steinbeck, that’s about the dust bowl. There are great images that exist today of life in the dust bowl from the work of photographer Dorothea Lange.
Social impact
During the Great Depression, food scarcity and hunger were pervasive issues that plagued the lives of countless Americans. With unemployment at an all-time high and poverty widespread, putting food on the table became a daily struggle for many families.
As job opportunities dwindled, so did the means to afford basic necessities like groceries. Families were forced to make do with whatever scraps they could find or afford. Meals became simple and sparse, often consisting of inexpensive staples like bread, potatoes, and beans. Nutritious options were a luxury many couldn't afford.
Food scarcity led to the rise of soup kitchens and bread lines, where individuals and families could receive a modest meal. These communal efforts provided a glimmer of hope in an otherwise bleak situation. Charitable organizations and churches played a vital role in ensuring that nobody went hungry, offering support and sustenance to those in need. Many cities simply didn’t have the funding or the resources to adequately respond to the economic crisis. As unemployment rose, churches, religious organizations and charities opened soup kitchens to feed the masses. Just about every major city had a soup kitchen. Even Al Capone opened one in Chicago to help boost his image! Some soup kitchens fed anywhere from 1000 to 3000 people a day.
Additionally, some families turned to their own resourcefulness to combat food scarcity. Urban gardens and backyard chicken coops became increasingly popular, allowing families to grow their own fruits, vegetables, and eggs. Community gardens also emerged, providing a collaborative space for neighbors to cultivate their own food. Hardest hit families sometimes took turns eating, with certain family members eating on certain days. Heating your home also became difficult. Wooden or coal stoves would be used to heat maybe one or two rooms in the home. If wood or coal was scarce, people used corn cobs they had saved up from a previous night’s dinner.
The Great Depression brought about numerous housing challenges for the American people. With unemployment rates skyrocketing and poverty widespread, finding affordable and stable housing became a daily struggle. As families lost their jobs and income, they were often unable to pay their rent or mortgage, resulting in widespread evictions and homelessness.
During this difficult time, families were forced to resort to makeshift dwellings in shanty towns known as "Hoovervilles." These communities consisted of tents, wooden shacks, or even just blankets strung up for shelter. Living conditions were often cramped and unsanitary, lacking basic amenities such as running water or electricity. Families had to endure the harsh elements and constant uncertainty of their living situations.
In the face of these challenges, some families banded together and shared housing in order to pool resources and provide a sense of security. This meant multiple families would live together in small apartments or houses, squeezing in as many people as possible. While this arrangement was far from ideal, it allowed families to have a roof over their heads and support one another through the tough times.
Furthermore, the government introduced various housing programs as part of the New Deal initiatives. These programs aimed to provide affordable housing for low-income individuals and families, with the goal of stimulating the construction industry and creating jobs. This helped alleviate some of the housing challenges faced by Americans during the Great Depression, offering a glimmer of hope for those in need.
The 1930s emphasized simplicity and thrift. Clothes were mended before being replaced, and the invention of synthetic fibers led to the use of washable & easy-care fabrics. Shoes were even mended, often using rubber from worn out tires. Many who could not afford books or periodicals spent time reading in libraries. Inexpensive forms of entertainment like backyard games, puzzles, card games, and board games such as Sorry and Monopoly, which came out in 1935 all became popular. Famous singer Bing Crosby sang songs “Just remember that sunshine always follows the rain” and “Brother, can you spare a dime.”
Certain foods and recipes became popular during the Great Depression. Ox Tail soup or stew gained popularity. Household brands you’ve heard of and eaten also gained popularity. Campbell’s soup was inexpensive and easy to warm and serve. Campbell’s had five different flavors: tomato, chicken, oxtail, vegetable and consommé. Kraft’s macaroni and cheese jumped onto the scene in 1937. Ritz crackers also became popular. Some Great Depression meals you can make – Meatloaf, Succotash, Dandelion salad, Vinegar Pie & Depression cake.
During the Great Depression, the United States government recognized the urgent need for intervention and implemented a series of policies known as the New Deal. These policies aimed to provide relief, recovery, and reform to the struggling economy and its citizens.
One of the most significant aspects of the New Deal was the creation of numerous programs and agencies designed to create jobs and stimulate economic growth. The Civilian Conservation Corps (CCC) provided employment opportunities for young men in environmental conservation projects, while the Works Progress Administration (WPA) funded infrastructure projects and employed millions of workers in various industries.
The New Deal also sought to stabilize the banking system and restore confidence in the economy. The Federal Deposit Insurance Corporation (FDIC) was established to insure bank deposits and prevent future bank failures. The Securities and Exchange Commission (SEC) was created to regulate the stock market and prevent fraud.
In addition to these economic measures, the New Deal also included social welfare programs to assist those in need. The Social Security Act provided financial assistance to the elderly, disabled, and unemployed, while the Federal Housing Administration (FHA) aimed to promote affordable housing and home ownership. This program was especially important as people defaulted on their loans and lost their homes due to foreclosures. This hoped to regulate the interest of home loans. Prior to this, mortgages were 5 – 10 year mortgages and it often required a large down payment.
While the New Deal policies were not a cure-all for the Great Depression, they did provide much-needed relief and hope for millions of Americans. We will go more into the New Deal and some of its programs in a separate podcast.
