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The Great Depression, "Black Tuesday"
The Great Depression was an enormous tragedy putting millions of Americans out of work and was the beginning of government involvement in the country’s economy and society. It began with the Stock Market Crash of 1929 and lasted until the early 1940’s. On October 29th, thereafter known as "Black Tuesday," after nearly a decade of prosperity, the United States was catapulted into economic ruin. Panic struck the masses as the nations’ stock prices plummeted dashing any hope for recovery. The stock market, which everyone thought as the securest way to riches, was promptly the quickest way to the poorhouse.
The stock market crash on Black Tuesday had immediate repercussions in Europe. Previously the boom in stock prices marking the bull market of 1928, quickly siphoned money away from European countries.
One of the most devastating features of the depression was the drastic fall in agricultural prices. The years from 1925 to 1928 saw record harvests…and then the bottom of the grain market fell out just as the industrial and financial slump hit. To make matters worse, loss of urban and international markets already had farmers in trouble from overproduction and heavy debts. By 1933, 26.6% of people were unemployed. Workers were either fired, laid-off or had extra work to do with less pay, providing they still had a job. Many lost their lands and property because they couldn't make payments.
Since many banks had also invested largely in the stock market, some were forced to close when the stock market crashed. Seeing a few banks close prompted another panic. Afraid they would lose their money, people swarmed to withdraw their savings. This massive withdrawal caused additional banks to close…those who didn't reach the bank in time also went bankrupt.
Thousands of investors lost large sums of money and many were wiped out. It became ranked as the longest and worst period of high unemployment in modern times. Banks, stores, and factories closed leaving millions of Americans jobless and homeless. Many came to depend on government or charity for food.
As a stopgap measure many businesses began cutting their workers' hours and wages. As a result, consumers stopped purchasing such things as luxury goods. This lack of consumer spending caused even more companies to go out of business.
And then there was the dustbowl. In previous depressions, farmers could at least feed themselves. Unfortunately, the Great Plains were hit hard with both a drought and horrendous dust storms. Years of overgrazing combined with a drought caused grass to disappear leaving topsoil exposed. The resulting dust storms destroyed everything, leaving farmers without any crops.
Millions Out of Work
Therefore, with millions of Americans out of work and unable to find a job locally, many hit the road, hoping to find work. A few had cars, but most hitchhiked or "rode the rails." Many who hopped a freight train were teenagers, but there were also older men, women, and entire families who traveled in this mode.
When there was a job opening, there were in some cases, literally a thousand others applying for the same job. Those who didn’t find work usually stayed in shanties outside of town often called "Hoovervilles." Housing in the shanties was built from any materials that could be scrounged such as driftwood, cardboard or even newspapers.
Many destitute farmers headed west to California, because of circulating rumors about possible agricultural jobs there. Although there was some seasonal work, conditions for these families were harsh and hostile since many had come from Oklahoma and Arkansas. These people were harassed and called derogatory names such as "Okies" and "Arkies." The stories of these migrants was commemorated in The Grapes of Wrath by John Steinbeck.
The Great Depression occurred during the presidency of Herbert Hoover and people held him responsible for it. Hence, the term Hoovervilles were named after him. Accordingly, newspapers became known as "Hoover blankets." Pants pockets turned inside out to show they were empty were called "Hoover flags," and broken-down cars pulled by horses were known as "Hoover wagons."
During the 1932 presidential election, Franklin D. Roosevelt won in a landslide. There were high hopes Roosevelt could solve the nations’ ills. As soon as Roosevelt took office, he began establishing what became known as the New Deal. Roosevelt's New Deal reforms gave the government more power and helped ease the depression. The Great Depression began ending as nations increased their production of war materials at the start of World War II. This increased production provided jobs and put large amounts of money back into circulation.
These New Deal programs were generally easily memorized as they were most commonly known by their initials, like the AAA (Agricultural Adjustment Administration). There were other programs, such as the CCC (Civilian Conservation Corps) and the WPA (Works Progress Administration.)
In retrospect, it’s uncertain how much Roosevelt's New Deal programs helped to end the Great Depression. Some say New Deal programs relieved much of the hardships. However, the economy was still sickly by the end of the 1930s.
The major turn-around for the U.S. was the entrance of the United States into World War II. Weapons, artillery, ships, and planes were needed. Men became soldiers while women labored in factories. Food needed to be grown for both at home and overseas military. Because of these factors many attribute the end of the Great Depression to World War II.
The Depression of the 1930s affected almost all nations leading to sharp decreases in world trade. Each country tried protecting their own interests by raising tariffs on imported goods. In Germany, poor economic conditions let dictator Adolf Hitler rise to power. And the Japanese invaded China, developing industries and mines in Manchuria. These events were major factors leading to World War II (1939-1945.)