What were the effects of the depression on the USA?

Gary Chambers

At the end of the 1920s the United States went in to the Great Depression. The depression affected the American people awfully, it threw millions into unemployment and also throwing several millions into lives of famine, homelessness and hopelessness

The depression devastated the Americans and starvation was a real threat to the American people. An example of this was in Chicago where some women would pick rubbish for scraps of food for their family. The millions of unemployed and their families had to live with hunger, exhaustion and the fear of homelessness. Many people were forced into homelessness because they could not afford to pay for the rent or mortgage. Families in this position built themselves slum homes made out of wood, boxes and any other materials that they had managed to find on dumps. Shanties were known as ‘Hoovervilles’ which was a harsh reference to the president who was evidently doing very little to help them. The fact that these areas were called Hoovervilles shows what the people thought of President Hoover. They even called the newspapers that they covered themselves to sleep with 'Hoover blankets'. The unemployed were forced to queue for charity hand-outs in lines because they had no unemployment benefit to help them; some of these lines were 10,000 long. Other needy people were dependent on private charity but it was soon clear that private charity was unable to deal with a crisis on his scale. Charities ran out of funds, for example, by 1932 the Red Cross could only give 75 cents a week to each family in need.

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The unemployed found it very difficult to become employed because industries where cutting back on jobs because of overproduction and factories were closing down. The number of businesses that collapsed in 1929 was about 20,000 and this reached a peak of about 30,000 in 1932. Obviously the number of bankruptcies had an impact on the number of people who were out of work and there were about 12 million unemployed people in 1932. Furthermore the average family’s income dropped from $2300 to $1600 in 1932. The government had made mistakes and did little to overcome these problems, for example taxes were reduced on the wealthy in the hope that they would invest in new factories and hire workers, but this did not happen. Tariffs on imported goods were increased which only increased the problem as other countries did the same in retaliation and a result of this was that it reduced the United States exporting which killed any hopes of economic recovery.

Farmers, who had already missed out on the boom of the 1920s, were also affected by the Depression. Low agricultural prices meant that in some places farmers could not afford to harvest or market their crops, which were left in the fields to rot. With unemployment rising throughout America, people could no longer afford to buy the farmers' produce, even at low prices. In some areas, for example Oklahoma, terrible soil erosion meant that farmers could not even attempt to grow any crops. Many of these, having lost their homes and farms, left with their families to search for work elsewhere.

Herbert Hoover became President in 1928. When the Wall Street Crash happened he tried to reassure Americans that it was just temporary and that 'prosperity is just around the corner'. Although things showed no signs of improving, he was reluctant to help those affected by the Depression. He believed in 'rugged individualism' (people should look after themselves and stand on their own two feet). He appealed to businesses and charities to do what they could to help. By the time his government began to take action in 1932 it was too late. Hoover had lost the trust of the people. 'In Hoover we trusted, now we are busted,' became a popular saying.

The Great depression was the worst economic decline in the history of the USA.