The Great Depression in the USA

The United States, 1932. The smell of popcorn wafts across the countryside. Desperate farming families are burning corn in their stoves, unable to afford the cost of coal. They live in drafty, rundown farm houses. Their children are dressed in repurposed flour sacks.

During World War One, these farmers had worked hard to produce record crops to sell to European countries that were too busy fighting to farm. After the war, when European countries re-started their own production, prices for American crops fell. So the American farmers produced even more, to try to pay their living expenses, taxes and debt. But now, in the early 1930s, a bushel of corn is just ten cents — prices have fallen so low that farmers can’t make a profit. Despite these hardships, farmers are often better off than those living in towns and cities.

Farmers can, at least, eat the food they grow… When the stock market crashed in 1929, those who had invested in stocks lost huge amounts of money. Restaurant owners, taxi drivers and factory workers had their life savings wiped out; professional stockbrokers lost the money they had invested and their livelihoods. Since then, the value of stocks has continued to drop. Now, in the early 1930s, it’s not just individual investors feeling the hit. Banks had ‘borrowed’ money from customer accounts to buy stocks — now the stock market has plummeted, they can’t afford to replace the customers’ money.

So banks begin to close. Many Americans worry: will their bank be next? They hurry to their branch to withdraw all their funds. But many banks just don’t have the money to pay out all their customers at once. Some banks can only give each customer 10 cents for every dollar that was in their account.

And suddenly these banks have no money left to operate with. More closures. Banking is one of the first sectors to founder, but many follow. As people lose money, from the stock market crash or the failing banks, they stop buying cars, clothes and cosmetics — all their money goes instead to food and rent. Stores close, and salespeople are laid off.

Now, manufacturers have no-one to sell their products to, so factory workers have their hours and pay cut, or lose their jobs. Farmers, investors, bank account holders, workers… all are suffering as the nation enters the biggest economic crisis it has ever known: it is The Great Depression. Starting with the stock market crash in 1929, the Great Depression continues through the course of the 1930s. With no money to feed their families, people turn to charities and churches who provide food from centres known as soup kitchens. Hundreds, thousands of jobless and hungry people form long queues, or bread lines, to wait for the free meals.

The same families struggle to pay their mortgage or rent. Eventually, they are forced to leave their homes, and find shelter wherever they can. For many, the only option is to construct shacks made of cardboard boxes, wooden crates, and tar paper. Villages of these makeshift homes, or shantytowns, spring up in parks and on empty land throughout the country. People blame their poverty on the poor economic decisions of President Herbert Hoover, and the shantytowns become known as Hoovervilles.

Is there any end in sight to the declining economy, and the rising unemployment, hunger, and homelessness? Not until the close of the 1930s will Americans see radical change — in the economy, and in their everyday lives…