Great Depression
The Great Depression of the 1930s was a time of widespread poverty and hardship in the United States and around the world. Until the Great Depression, poverty relief was seen as primarily the responsibility of cities and states. As a result of the nationwide economic hardship caused by the Great Depression, the federal government under President Franklin Delano Roosevelt became heavily involved with poverty relief, setting up short-term work projects, long-term poverty relief programs for women and children, and long-term social insurance programs such as Social Security and unemployment insurance. The Great Depression marks a turning point in shifting much of the responsibility from poverty relief from local and state governments, to the national government.
The Great Depression started in 1929, with the crash of the stock market. Although the United States had suffered periodic economic depressions in the past, this was by far the worst. The causes of this depression, and the reasons for its severity, are many. History professor Robert McElvaine suggests that this depression was so severe because more people were living in urban areas and dependent on salaries, so when they lost their jobs, they had no family farm to fall back upon. However, rural farmers were also hit hard by the Great Depression—crop prices had been falling for some time, and the ten-year drought that affected the middle of the United States drove many farmers off their land. As prices dropped, farmers and businesses could not make enough money to pay their bank loans, and many banks failed. One of the main causes of the Great Depression, according to McElvaine, was that there were a few very wealthy people holding on to much of the country's wealth, and a vast lower class that did not make enough to pay for adequate food and clothing: “Maldistribution of wealth was only one among many roots of the Great Depression, but it was the taproot” (1984, 50).
From an unemployment rate of 3.2 percent in 1929, the jobless rate rose to 25 percent by 1933. In some areas, it was much worse. For example, about half of Cleveland's workers were unemployed. The federal government under President Herbert Hoover still believed, as many people did at that time, that poor relief was primarily the responsibility of local governments and private organizations. (See the excerpt from President Hoover's speech on pages 296-298.) Hoover believed in a cooperative approach, and he asked businesses to voluntarily agree not to cut wages. Many businesses did in fact refrain from lowering wages, but because they were not able to make as much money due to the slowing of the economy, businesses were forced to lay off employees (McElvaine 1984, 73-74; Katz 1996, 214).
Lorena Hickok, a journalist, was hired during 1933 and 1934 by Harry Hopkins, head of the Federal Emergency Relief Administration, to travel the country and report back her impressions of poverty and how government relief programs were working. Hopkins wanted to be aware of the human dimension of the problem. Here are a few of Hickok's anecdotes from the beginning of the Roosevelt administration.
Kentucky (September 1933)
Relief in Kentucky having been none too adequate in the matter of clothing, most of them are scantily clad. An investigator visiting one of their villages back up in the mountains in Clay county a few weeks ago noticed that all the men and boys as they passed one cabin pulled their caps down over their eyes. When asked why, they told him, “Well, you see the women folks in that thair place hain't got no clothes at all. Even their rags is clean wore out and gone” (26).
Maine (September 1933)
In some towns the school teachers were actually on relief. Some of them hadn't received any money since last January. And before that their pay had been cut down to practically nothing. In one town they were going to close the schools, but the teachers, having no place to go and no way to earn a living, said they preferred to keep on working—for food orders. Their offer was accepted (39).
New York City (October 1933)
“Foodless holidays” are periods of a week or more at the end of the month when thousands of families are temporarily removed from the relief rolls because the [local] administration has run out of money. “Foodless holidays” mean, too, that thousands of men and women on work relief projects—including the investigators themselves—can never be sure from one month to the next whether they are going to be paid for their work (46).
Source:
- Hickok, Lorena. One Third of a Nation. Urbana, IL: University of Illinois Press, 1981.
Hoover did set up some federal programs to address unemployment and poverty, but at first these programs mostly spread positive news and placed advertisements in magazines in an attempt to bolster the confidence of businesses and the unemployed. In 1931, Hoover created the Reconstruction Finance Corporation, to provide government credit to banks. Hoover hoped that, if banks had more money to lend, businesses would borrow more, invest in their businesses, and hire more people. However, businesses were not interested in expanding during a Depression (McElvaine 1984, 78-79, 89-90).
Hungry and desperate, Americans began to take the law into their own hands. Across the country, groups of people looted food from stores, bakery trucks, and even the Red Cross. In March 1932, 3,000 people marched through Detroit to the Ford automobile plant in Dearborn, Michigan, to present their demands to the management. However, at the border of Dearborn, they were asked by the police to disperse. When they refused, the police attacked the crowd with tear gas and gunfire. Four demonstrators were killed and fifty were seriously injured.
In the spring of 1932, a group of World War I veterans began marching from Portland, Oregon, to Washington, D.C., to demand advance payment of the bonuses Congress had promised to give them in 1945. As many as 20,000 veterans joined the march. After Congress refused early payment of the bonuses, many of the veterans built shacks near Washington, DC and decided to camp out. In July, General Douglas MacArthur ordered U.S. troops to drive away the veterans with tear gas and bayonets.
As late as 1932, even as it became apparent that Hoover's programs were failing, the Hoover administration continued to believe that providing direct federal aid to the hungry and poor would deprive them of their feeling of self-reliance (McElvaine 1984, 80).
In 1932, Hoover was voted out of office in favor of President Franklin Roosevelt, who, as governor of New York, had set up a state program called the Temporary Emergency Relief Association to provide aid to the poor. Roosevelt realized that states and cities could not cope with the massive poverty and unemployment of the Depression, and he believed that the federal government had to help.
For the first time, under Roosevelt, the federal government took the lead in poverty alleviation by creating a number of programs, called the New Deal, to help the needy and create jobs.
While the New Deal helped to curb unemployment, the problem was not really solved until the United States entered World War II toward the end of the 1930s and beginning of the 1940s. At that time, the government poured so much money into the war effort and created so many jobs that the unemployment rate fell to just one percent.
Even with the easing of poverty, however, the federal government has continued to be heavily involved with poverty relief in the United States. The New Deal programs of social security, minimum wages, unemployment insurance, and aid to needy children have continued and expanded to this day. The poverty of the Great Depression was caused by nationwide and even worldwide conditions, revealing the necessity of involving the national government with poverty relief.
See also: Aid to (Families with) Dependent Children; Hoover, Herbert; Indian New Deal; New Deal; Roosevelt, Franklin Delano; Social Security Act; Unemployment Insurance
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