Great Depression in the United States
In the United States, the Great Depression began with the Wall Street Crash of October 1929 and then spread worldwide. The nadir came in 1931–1933, and recovery came in 1940. The stock market crash marked the beginning of a decade of high unemployment, poverty, low profits, deflation, plunging farm incomes, and lost opportunities for economic growth as well as for personal advancement. Altogether, there was a general loss of confidence in the economic future.[1]
The usual explanations include numerous factors, especially high consumer debt, ill-regulated markets that permitted overoptimistic loans by banks and investors, and the lack of high-growth new industries. These all interacted to create a downward economic spiral of reduced spending, falling confidence and lowered production.[2]
Industries that suffered the most included construction, shipping, mining, logging, and agriculture. Also hard hit was the manufacturing of durable goods like automobiles and appliances, whose purchase consumers could postpone. The economy hit bottom in the winter of 1932–1933; then came four years of growth until the recession of 1937–1938 brought back high levels of unemployment.[3]
The Depression caused major political changes in America. Three years into the depression, President Herbert Hoover, widely blamed for not doing enough to combat the crisis, lost the election of 1932 to Franklin Delano Roosevelt by a landslide. Roosevelt's economic recovery plan, the New Deal, instituted unprecedented programs for relief, recovery and reform, and brought about a major realignment of politics with liberalism dominant and conservatism in retreat until 1938.
There were mass migrations of people from badly hit areas in the Great Plains (the Okies) and the South to places such as California and the cities of the North (the Great Migration).[4][5] Racial tensions also increased during this time.
The memory of the Depression also shaped modern theories of government and economics and resulted in many changes in how the government dealt with economic downturns, such as the use of stimulus packages, Keynesian economics, and Social Security. It also shaped modern American literature, resulting in famous novels such as John Steinbeck's The Grapes of Wrath and Of Mice and Men.
Causes[edit]
Monetary interpretations[edit]
Examining the causes of the Great Depression raises multiple issues: what factors set off the first downturn in 1929; what structural weaknesses and specific events turned it into a major depression; how the downturn spread from country to country; and why the economic recovery was so prolonged.[6]
Many rural banks began to fail in October 1930 when farmers defaulted on loans. There was no federal deposit insurance during that time as bank failures were considered a normal part of economic life. Worried depositors started to withdraw savings, so the money multiplier worked in reverse. Banks were forced to liquidate assets (such as calling in loans rather than creating new loans).[7] This caused the money supply to shrink and the economy to contract (the Great Contraction), resulting in a significant decline in aggregate investment. The decreased money supply further aggravated price deflation, putting more pressure on already struggling businesses.
Homelessness during the Great Depression[edit]
As the Great Depression trekked onward, homelessness spiked. For the first time in American history, the issue of homelessness was brought to the forefront of the public eye. In search of work, men would board trains and travel across the country, in hopes of finding a way of sending money to their families back home. These men became known as "transients", which was the most common way to refer to these unemployed, homeless individuals. Large urban areas, such as Los Angeles, San Francisco, Chicago, and New York City, became flooded with transients searching for work, causing major train stations to be overcrowded with illegal passengers.[36]
Homeless individuals who were not transient often stayed in municipal shelters, which were government-run homeless shelters that provided housing and food. Because these shelters were often placed in large urban areas, they were often overcrowded with poor-quality food and state of living. Soup kitchens also became popular during this time as they were a way for the hungry to access free food. However, these kitchens were also overcrowded and often ran out of food before everyone could be served, so they were not always a reliable source of food.
Homeless individuals that did not stay in shelters sometimes stayed in shantytowns, or "Hoovervilles" (named after Herbert Hoover, the president in office when the Depression began). These "Hoovervilles" were self-made communities of homeless people that followed their own rules and established their own society. Men, women, and even some children lived in these shantytowns and people from all different types of socio-economic backgrounds lived together, which was very uncommon during the time of segregation.[37]
Although the African American community was one of the hardest hit during the Great Depression, their struggle during this time often went unnoticed. Homeless African Americans were practically invisible during this time as the effects of Jim Crow and segregation were in full force. Many municipal shelters in the North were segregated and turned away from the aid that was offered there. While other shelters accepted African Americans, the fear of racial violence and discrimination from the municipal organizers or other residents was still a threat that lingered over their heads. Many homeless shelters were also located in inconvenient neighborhoods for African Americans, so they were unable to access them. If municipal shelters for African Americans in the North were limited, they were nonexistent in the South. Many homeless African Americans relied on aid from their own communities. Churches and Black-run organizations often provided their own soup kitchens and shelters to make up for aid the government wasn't providing its African American citizens.[38]
Contraception during the Great Depression[edit]
Both birth control and abortion were illegal prior to and during the Great Depression. With the economic downturn, more families turned toward birth control and abortion to help control family sizing, due to not being able to afford children.
In 1936, thousands of women in New Jersey had an abortion "insurance" with more being card-carrying members to a "Birth Control Club", which allowed them access to regular exams and abortions for a fee. This shows that compared to the past, women were now expecting to have abortions, and looking for ways to help lower the cost in the future.[39] Maternal mortality rates rose during the depression, resulting from infections or hemorrhages of self-performed abortions, or methods that women used to try and control their reproduction.[39][40] The New York Academy of Medicine conducted a study and found that 12.8% of maternal deaths were due to septic abortion. With lower-class women attempting to self-abort due to their new poverty, preventing them from visiting a physician or a midwife to perform the abortion.[39]
The Comstock laws effectively prevented women from accessing or talking about contraception until 1950 when it was repealed with the Griswold v. Connecticut case. Only a few states allowed physicians to provide information and contraception.[40] Despite this, women and companies found ways around this law to receive and provide birth control. The most popular method was to conceal the intended function of products by marketing them as "feminine hygiene products", "protections", "security", and "dependability”. In 1930, a legal verdict allowed contraceptive companies to freely advertise their products if the product's sole purpose was not birth control.[40] Companies that previously avoided the birth control market capitalized on this opportunity and the demand for birth control was rapidly growing. Department stores became the most popular place to receive female contraception and these stores created departments where women could shop for contraception in privacy. When women were becoming wary of purchasing inside department stores, manufacturers switched to selling at their homes. In 1930, female contraceptives outnumbered condom sales five to one. By 1940, the market size was three times what it was in 1935.[40]
Effects of depression in the U.S.:[82]
General: