Two boys selling newspapers in front of the Ohio Statehouse, ca. 1930.
The Great Depression began after the Stock Market Crash in October 1929. During the late 1920s, the stock market in the United States boomed. Many people in the U.S. began to purchase stock, and the value of stocks dramatically increased. In 1924, the New York Times index of the leading twenty-five industrial stocks topped the one hundred point mark. By the beginning of 1928, these same stocks had topped 245 points. The market continued to soar during 1928 and much of 1929. The twenty-five leading industrial stocks reached the 452 point mark in early September 1929. The selling price of the stocks had almost doubled in less than two years.
As stock prices climbed, many people in the U.S. believed they could amass a tremendous fortune. Many investors purchased stock on credit. As long as the stock market continued to increase in value, these investors would make a profit. In September 1929, the stock market began to decline in value as larger investors realized that many stocks were inflated in price. On October 23, the stock market lost thirty-one points, approximately seven percent of its value. Conditions worsened the next day. By mid-November, the twenty-five leading industrial stocks had dropped to 224 points, less than one-half of their value two months earlier. The market continued to decline in value, leaving investors who had purchased stock on credit financially at risk. Faced with ruin, some investors committed suicide, believing that they would never be able to escape from their debts.
The declining value of the stock market did not in itself start the Great Depression. Only two percent of Americans owned stock. The Stock Market Crash, however, was a symbol of greater problems affecting the American economy during the 1920s. During the 1920s, wages did increase for many workers, but the cost of living increased even more.
Certain businesses also did not fare as well as others during the 1920s. Railroads and the coal industry faced competition from trucks and oil. Workers in these more traditional industries faced declining wages as their companies tried to remain competitive with newer industries. Farmers saw declining crop prices as they used new technologies to increase yields. Approximately seven thousand banks went under during the 1920s due to poor investments. Other nations began to purchase fewer U.S. goods due to high tariffs. Businesses in the United States began to lay off workers until the companies could sell the products stockpiling in warehouses. All of these factors contributed to the coming of the Great Depression. The Stock Market Crash of October 1929 was simply the final warning that a major economic downturn was on the way.
During the Great Depression, millions of U.S. workers lost their jobs. By 1932, twelve million people in the U.S. were unemployed. Approximately one out of every four U.S. families no longer had an income. In 1930, more than 200,000 evictions took place in New York City alone, as renters could not pay their bills. Across the United States, farmers facing low prices for their products often lost their farms to foreclosure. While whites faced difficulties during this period, racial minorities faced even greater hardships. For most of the depression, unemployment rates for African-American men were around sixty-six percent. Women of all races also experienced employment setbacks. In many cases, as companies began to lay off workers, they would fire women first in the belief that men needed the jobs to support their wives and children.
The Great Depression especially hurt Ohioans. By 1933, more than forty percent of factory workers and sixty-seven percent of construction workers were unemployed in Ohio. Approximately fifty percent of industrial workers in Cleveland and eighty percent in Toledo were unemployed. In 1932, Ohio's unemployment rate for all residents reached 37.3 percent. Industrial workers who retained their jobs usually faced reduced hours and wages. These people had a difficult time supporting their families. Many of Ohio's city residents moved to the countryside, where they hoped to grow enough food to feed their families.
Herbert Hoover and Franklin Delano Roosevelt each served as President of the United States during the Great Depression. For the most part, Hoover believed that the economy would correct itself in time. Roosevelt played a much more active role. A series of government programs known as the New Deal tried to help Americans cope with the Great Depression. Despite government efforts, the Great Depression lasted until the early 1940s. The Great Depression ended with the creation of thousands of jobs associated with World War II.