Causes of the Depression
Even before the infamous Black Tuesday, the U.S. economy showed signs of weakening. The 1920s had been a time of superficial prosperity; a time when Americans indulged in the newest luxury by paying on credit. However the prosperity was short lived. By the late 1920s many industries including automobiles, construction, and agriculture began to fail. Agriculture in particular suffered because crops had been in high demand during World War I. With the war over demand decreased and farmers were left with surplus crops. Food prices plummeted as farmers went into debt. Many could not repay their loans to the banks. Throughout the nation consumers began to cut spending. Many found themselves in debt. During the 1920s credit was easy and available but consumers now found themselves unable to pay their bills. Prices continued to rise yet wages did not. There was an uneven distribution of wealth as the few wealthiest Americans controlled the majority of the income. All these factors put strain on the economy until on October 24, 1929 everything came crashing down.
The Stock Market Crashes
During the 1920s stock prices increased significantly. The rising prices caused many people to speculate meaning they bought stock in hopes of selling it and making a quick profit. In addition to speculation, many investors bought on a margin meaning they paid a small percentage of the stock's price as down payment and borrowed the rest (Danzer et al. [485]). In order for the investors to repay their loans they needed to make a profit on their stock. On October 24th 1929 stock prices began to fall. People frantically started to sell their stock. On October 25th, which become known as Black Friday, the stock market crashed. Prices plummeted as everyone tried to sell their stock. Those that had bought on a margin were unable to repay their debts. Those that had invested their savings in the stock market lost everything. Banks that had invested in the stock market lost their money. The public panicked and many decided to withdraw their money from the banks, however the banks were unable to repay the people.
Life During the Depression
By 1933 the unemployment rate was 25%. Those who were still employed suffered pay cuts and reduced hours. Many became homeless. Shanty towns, which were small towns of shacks, became a common sight. Many people depended on the charity of soup kitchens and bread lines for their food. There was no direct government relief for those in need. Men wandered the streets looking for work. They hitched rides on freight trains and box cars and slept under bridges. They became extremely demoralized as they were no long able to provide for their families. Suicide rates increased 30%. Health throughout the nation declined. Many were malnourished and doctor and dentist visits could not be afforded. Sickness related to diet became very common especially among children. Families and individuals alike became extremely frugal.
The song "Brother, Can You Spare Me a Dime?" by Bing Crosby accurately describes the low moral of the time.
Meet Mildred Lucille McFerran Chase
Mildred Chase was born May 20, 1928 in Detroit, Michigan to Allan and Lilah McFerran. She was just a small child when the depression hit. The most immediate impact of the depression was that her father lost his job. Allan McFerran was a construction worker. Construction had been a steady job during the early 1920s but between 1925 and 1929 construction work significantly declined. With no income to support the family, young Mildred along with her sister and mother were sent to live their grandparents in Los Angeles. It took 3 days by train for the girls to arrive. Allan McFerran was later able to reunite with his family in California by hopping freight trains. Throughout the depression the McFerran family was forced to move around as Allan McFerran searched for work. At one time they lived in the basement of an uncle and aunt. Mildred recalls that it wasn't until the war started that her father finally had a steady job again.
As a child living through the depression Mildred recalls, "Everyone was poor so we didn't seem any different. It was a hard time for everyone." Although the family always had enough to eat their lifestyle became extremely frugal. Mildred recounts how she and her sister would sell soda pop caps and use the money to go to the movies. She also remembers that they would wear their shoes until the soles fell off and couldn't be repaired anymore. Although she was just a child, the ethics of the depression affect her lifestyle today. She has remained extremely frugal throughout her life. Even now she always shops with coupons and looks for sales and bargains. Her example of frugality has passed down to her children and grandchildren.
McFerran Cousins 1934 left to right: Mary Jane McFerran, Jacquetta Hill, Billy Hill, Violet McFerran, Mildred McFerran
Meet John Earl Chase
John "Jack" Chase was born September 15, 1925 in Los Angeles California to Sisson "Earl" and Loretta Chase. As most families of the time the Chase family had to learn to skimp and save during the depression. The family rarely went out to eat but Jack describes his mother as an excellent cook. He also recounts, "We couldn't even afford a Christmas tree. We wore old clothes and shoes and could never afford new ones. For birthdays and Christmas we didn't buy new presents. We made them or re-gifted." Jack remembers that on one occasion he was particularly proud of himself because he found a BB gun that was missing its sights but he fixed it up and gave it to his brother Bob for either a birthday or Christmas present. For the Chase family the greatest struggle during this time was keeping their family appliance business going. The Chase family store was the family livelihood. Extended members of the Chase family struggled as well. Two of Earl's brothers were going through a rough time finding work so he hired them to work in the family store. Though just a child at the time and unable to fully comprehend what the depression was, Jack carried the lessons he learned from the depression with him his whole life. To this day he remains frugal. He and his wife Mildred always take advantage of coupons and discounts. They always analyze the necessity of a purchase before buying anything.
Young Jack standing on a hay loader. Also pictured are his step grandmother, grandfather Sisson Chase, and Uncle Maurice. (1933-1935)