What Americans had to endure during their biggest economic crisis: the Great Depression
The post-war economy of the United States of America had undergone a “boom” in the 1920s: Americans produced 46% of the world’s total output,and had a GNP of 104 billion dollars. This economic thriving was supported by the national population growth, which was especially migrant- induced, going from 103 million people in 1920 to 123 million people in 1930, resulted in many producers and consumers. Yet, this was equally due to the installation of an important network of trains, the extraction of diverse natural resources such as oil or coal, and the Republican policies: on the one hand, the laissezfaire helped big businesses expand without government restrictions, and on the other hand, the protectionism supported the American production
by taxing foreign goods. In parallel, the Roaring Twenties, the decade illustrated by the glamorous popular culture and wealth, dawned from this boom.
However, this boom brought to an overproduction with “overspeculation”, meaning the prices were higher than the company’s worth. Underconsumption was the primary consequence. America’s economy recessed and completely collapsed on Black Tuesday, the 29th of October 1929 : sellers outnumbered buyers ten to one. It is the beginning of the Great Depression, a period of socioeconomic crisis between 1929 and 1940. This new situation led to various and important.
An important loss of jobs
The cities that relied mostly on manufacturing were hit the hardest: for example, only 50% of the Chicagoans working in that sector in 1927 remained employed in 1933. As a matter of fact, the national unemployment rate amongst the labour force rose from approximately 3.2% to 25.2% from 1929 to 1933, that is more than a quarter of the labour force. Hence, many jobs were lost and people were led to self-promote in the streets to get attention from employers and possibly get hired, or in other cases, people migrated towards states such as California for better work opportunities. Furthermore, the national average weekly earnings, or wages, extremely dropped during that period. For example, the weekly coal industry wage went from 25$ to 13.78$ from 1925 to 1933, thus decreasing by 44,9%, or even the weekly metalliferous mining wage went from 30.12$ to 18.63$ from 1929 to 1932, making it a reduction of 38.2%.
In addition, a lowering of prices, known as deflation, occurred all throughout the country. This lowering of prices created debt in every sector and led to bankruptcy. For instance, between 1929 and 1932, 5000 banks failed. Lastly, agriculture was also deeply affected. In fact, there was an agriculture crisis linked to the Dust Bowl drought of 1930: the Great Plains were subjected to dust storms, also called “black blizzards” that, alongside the overuse of the land and overproduction, damaged the topsoil, making it unusable or blowing it away. In point of fact, 850 million tons of topsoil was taken away by the dust storms in 1935 alone. Therefore, the farmers had to abandon traditional practices and reform their use of land and machinery.
Great slump: By 1933, unemployment in the USA was at 25%
Multiple forms of poverty amongst 60% of the Americans
For instance, the extreme poverty led to famine. In fact, restaurants in the United States had to lower lower their prices so that the poor Americans consumers, representing most of the population, could afford meals. To survive, some of them began eating from the garbage, while others attended soup kitchens, known as a place where food was served mostly by volunteer organisations at little or no charge to the needy. Although, this lowering of prices created debt in every sector and led to bankruptcy. Many auctions took place because farms failed at an astounding rate; for 0,01% of its original price, going from 4100$ to 49,5$. Homelessness was therefore very common, and to avoid living in the streets, many citizens went after different solutions ; they either held tight with relatives, contributing to fewer but fuller houses, squatted illegally into vacant buildings, or created their own shanty towns, the “Hoovervilles” ; they were named so to show the citizens’ anger at the Republican Party, which was governed from 1929 until 1933 by the president Hoover, blaming him for their condition. According to Donald Roy, a sociology graduate student, in 1934, Seattle had 500 selfbuilt one-room domiciles “scattered over the terrain in insane disorder” with 639 residents. Moreover, the poor also suffered from new diseases, such as the “dust pneumonia” brought by the storms born during Dust Bowl Drought, and their overall hygiene was very bad. Also, education was an issue, as the teachers were underpaid, suggesting fewer of them remained in the education sector and less children were schooled. For example, in February of 1933, publicn school teachers in Chicago were owed eight and a half months’ back pay.
Various important social class inequalities
For example, the Mexicans and African Americans, faced racial segregation, were particularly hurt by the uprising of the Depression. By 1932, according to the Encyclopedia of Chicago, “40 to 50 % of black workers in the city were unemployed, hence more than the white workers, who represented 25% of the unemployed citizens”. Having said that, social inequalities during the Great Depression wasn’t only brought up by racism, but also by the differences in social classes, notably between the poor and the High Society. As a matter of fact, even though they were affected by the Great Depression as well, the rich and famous still had savings and access to credit, in opposition to the poor, and could thus afford paying for foreign products and living extravagant and glamorous lives. For example, while storefronts stood empty, the 47-story WaldorfAstoria Hotel opened in 1931 at a cost of $42 million ($600 million today) and hosted a number of lavish parties during the Great Depression with their own in-house professional hostess, Elsa Maxwell. However, according to an extract from the “PBS 1930s high society”, these celebrations were only contributing to “escape reality”, and the rich wouldn’t really help out the critical state in their country.
The famous actress Joan Bennett in a luxurious dinner in 1931
The human cost of the Great Depression, the first industrial crisis to occur in America, led to the people suffering from major social
impacts such as the widespread joblessness, the fast rising of poverty, or the deep racial and social class inequalities, so much that it is now key in the nation’s History.
Vocabulary Box
overspeculation = to increase the prices of a share to a limit that it does not represent the actual price anymore
laissez-faire = a policy established by the Republican Party so there would be no intervention of thestate in the economicfield.The
companies may develop freely.
protectionism = the theory or practice of shielding a country's domestic industries from foreign competition by taxing imports.
metalliferous = (chiefly of deposits of minerals) containing or producing metal