The Great Depression

Roy King

March 10, 2022

Word Count: 2109

All too often historians get hung up on superficial analyses of events, merely analyzing

the effects rather than doing the hard work necessary to discover root causes. The adage that

“those who cannot remember the past are condemned to repeat it” ignores one specific nuance. It

fails to point out that memorizing a date or gaining a superficial understanding of events doesn't

provide useful knowledge. What really matters are the causes of the events that lead to

momentous happenings. One excellent example of this is the Great Depression and all of the

social, economic, and political changes that vastly modified the structure of the nation following

this event. The combination of the stock market crash of 1929, the banking failures that followed,

the massive overproduction of food stuffs by American farms, the overcapacity of American

industry, and the dust storms that rendered much of the bread-basket of America barren resulted

in one of the greatest economic upheavals in American history. The economic, social, and

political upheaval unleashed by the Great Depression created an environment where new ideas

could develop. In a way it was like clear-cutting a forest. The institutions, practices, and

programs that had dominated American society and commerce for more than a century were now

brought into question. Without the cataclysm of the Great Depression that exposed the

weaknesses within America’s economic system there would have been no foundation for the

system to be questioned. There were multiple reform movements that followed the Great

Depression. While the majority of these movements had begun prior to the depression, and some

had even gained some level of support, the majority of these movements would not have had the

broad success they enjoyed were it not for the depression. These reform movements ran the

gamut of social issues from welfare to universal suffrage to prohibition to unionization. Thus the

Great Depression was largely responsible for creating a social and economic situation within

America that allowed these reform movements to take place. As the root causes of the depression
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began to be understood, a need for increased government involvement in the economy became

apparent. This involvement was manifested in three main areas: farming, civil works, and

welfare. Government involvement in these three areas increased dramatically following the

Great Depression creating a situation where ongoing political and economic movements in these

areas could grow and succeed.

The first important way that the Great Depression fostered ongoing reform movements

was to draw attention to the need for publicly funded employment programs within the United

States. One of the key consequences of the Great Depression was mass unemployment. In New

York City alone there were hundreds of thousands of unemployed and homeless even in the early

years of the depression. To help alleviate this problem massive public works projects began to be

implemented. Prior to the major effort in this direction under the New Deal, Herbert Hoover

made several attempts to increase employment in the United States through public works

programs. These efforts were successful but far too little, and much too late to win Hoover even a

sniff at reelection. As unemployment numbers continued to skyrocket, Franklin Delano Roosevelt

saw a solution. He started a massive wave of public works programs sponsored almost

exclusively by the government to put American workers in a position to acquire jobs. One of

these programs was the Civil Conservation Corps or CCC. The role of these programs is best

summed up in Roosevelt's speech commissioning the CCC: “Opportunities for employment in

work for which individually you are best suited are increasing daily and you should emerge from

this experience splendidly equipped for the competitive fields of endeavor which always mark

the industrial life of America.” Those who volunteered for the CCC would be paid 30 dollars a

month in addition to a host of quality of life improvements sponsored by the government. These

types of programs revolutionized the government's involvement in the job market. Today the
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federal government employs almost two million people making it one of the largest employers in

the country. This comes in stark contrast to the turn of the twentieth century when the

government employed a minute portion of the population and ranked below the majority of major

corporations in terms of employees. While this rise in public employment was in motion prior to

the depression and the New Deal, it was not until the nation was gripped by the depression that

the political will to spend public money to create government jobs finally materialized. The only

way that the American people would allow the government that level of influence in the job

market was if their lives were on the line. The depression made those stakes very real and

eventually drove people to accept the government-funded job programs that came to their aid.

Another of Roosevelt's programs was the Works Progress Administration or WPA. This

program built schools and other public buildings like libraries, post offices, and government

offices. A map showing the counties for which the WPA built government buildings during 1936

truly shows how extensive their projects were. At least 60 percent of counties have some sort of

public building that was created by the WPA. The Tennessee Valley Authority, also one of

Roosevelt's job programs, completely reshaped the Tennessee landscape with numerous dams

and power stations. A map of their projects from 1942 shows 10 dams that were constructed

from 1933-1942. These two maps show what a profound impact the depression-driven policies of

the federal government had on the American job market and public infrastructure. The

government was essentially scouring the country for problems and then creating jobs by hiring

people to fix those problems. This clear stimulation of the job market and economy would have

been seen as a blatant violation of states’ rights and a clear example of government overreach.

However, desperate times made desperate measures acceptable and if there was any time in

American history that was desperate it was the Great Depression. While public works jobs
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programs had been created by state governments throughout much of the nation’s history and the

number of federal government employees prior to the depression was not insignificant, the level

of public employment reached during the depression was unprecedented. This type of drastic

reform would not have been possible without a dramatic social and economic upheaval that

forced the government's hand and more importantly forced the people to accept the assistance of

the government.

Another way that the great depression fostered ongoing reform was to highlight the need

to increase government involvement in the production of foodstuffs by both private and corporate

farmers. One of the primary causes of the Great Depression was the overproduction of food.

While the creation of a surplus isn’t necessarily a bad thing, large and persistent overproduction

without government price supports will destroy farm incomes and impoverished rural areas.

American farmers produced so much food that the price of food fell so far that there was no way

for farmers to make a living. They could produce twice the amount of food as the previous year

and still lose money because the prices of farm products would fall by more than 50 percent . In

response to this Roosevelt proposed the Agricultural Adjustment Act. This was very unpopular

among many people because it lowered food production during a depression where many were

starving. However, despite the short term downsides there were long term benefits. These were

best described by Roosevelt himself in a discussion of the plan: “Farm Credit Administration

which, in all of its ramifications, has saved a million farms from foreclosure and has

accomplished the first great reduction in exorbitant interest rates that this country has ever

known.” Not only did the act make farming profitable again but it increased government

involvement in farming to the point where the overproduction that had been a key player in the

depression would never occur again. However, this was not the most significant reform that
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resulted from this act. This act was passed by Congress but eventually struck down by the

Supreme Court. However, in the time between its enactment and its nullification the act had a

widespread beneficial impact. The act was clearly government overreach and blatantly took

advantage of the checks and balances of the US government, but despite its borderline

constitutionality, the act is considered to be the most beneficial initiatives of the New Deal. This

precedent of subverting the constitution for a short period of time had never been done before but

would be used to great effect following the success of the Agricultural Adjustment Act. Only an

event as dramatic and impactful as the Great Depression could stimulate demand for reform to

the point where such drastic abuses by the Executive Branch could take place. The government

had been flexing its muscles and pushing the bounds of the Constitution up until this point but

the Great Depression created a situation that allowed these efforts to be successful.

The final and potentially most impactful reform movement made possible by the great

depression was in regard to welfare. The changes made to welfare also ended up being some of

the most controversial changes to the New Deal because they clearly infringed on the freedoms

of working Americans. Many argue that the implementation of social security and other forms of

welfare were a ploy to gain more government control rather than a direct response to the Great

Depression. This however is simply not the case. The Great Depression highlighted the need for

some level of government sponsored support to protect citizens in normal economic times and

especially should an event like the great depression ever reoccur. The motives behind social

security are best expressed in a comment made by Roosevelt about his signing of the Social

Security Act. He said social security is “a law that will take care of human needs and at the same

time provide the United States an economic structure of vastly greater soundness.” Now, to

address the argument that the Social Security Act was not a direct response to the Great
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Depression. One of the biggest problems of the great depression was the rampant deflation of the

US dollar followed by rapid inflation and then finally by another bout of deflation. This

fluctuation in the value of the dollar, in conjunction with the inability of the government to

stimulate the economy because of the tie to the gold standard are the two key factors that tied the

US economy to the repeated cycles of bank failures, producer price collapses due to

overproduction, and stock market crashes. Social security was a direct response to this. The

depression made it clear that reform was needed. There needed to be a long term income support

plan for a large majority of Americans to provide more stability for the dollar. One way to

provide stability to a currency is to ensure that some portion of it has very low mobility or

velocity, i.e., an inability to move about within the economy. This allows for a currency and the

economy to which it is tied to more effectively ride out fluctuations in the economy. Social

security served to add stable and protected pockets of income helping to maintain the stability of

the US dollar. Many saw this as a power grab by the US government to take hold of the economy.

An example of this belief can be seen in a political cartoon from the Chicago Tribune showing

Roosevelt with an empty bucket begging for more power from Congress. While Roosevelt

certainly did increase the power of the federal government -- especially in regard to the economy

with the introduction of the new deal -- it is hard to argue that intervention of some kind was

necessary. If a depression like that of the 1930s could happen once it could happen again and

Roosevelt recognized that he needed to take measures to increase the stability and resiliency of

the economy and forestall any similar events in the future. While there is certainly an argument

to be made that social security and the various other welfare programs passed by Roosevelt were

unconstitutional or that they increased the power of the federal government to an unsafe level

there is no reasonable argument that these reforms were not caused by the great depression. The
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great depression exposed a weakness in the American economic system and Roosevelt chose the

most efficient way of remedying that problem. The depression created a situation that

necessitated rapid reform because of how deeply it gashed the economy and the social fabric of

America.