Philadelphia and the Great Depression, 1929-1941
This essay also appears in the online resource, The Encyclopedia of Greater Philadelphia.
The Great Depression, which lasted from 1929 to 1941, was characterized both in Philadelphia and the nation by massive unemployment, bank failures, price deflation, and very real human misery. People lost their life savings and their homes. Untold thousands went hungry; some starved. The ideology of self-reliance suffered a blow as people turned to government for relief and jobs. The city of Philadelphia, on the edge of bankruptcy, ruthlessly cut its spending and neglected its infrastructure. Only World War II sufficiently revived the economy to pull the city and the nation out of the Depression. Meanwhile, a large and powerful organized labor movement emerged, and the seemingly invincible Republican Party organization lost some of its power. Philadelphia and the nation were fundamentally changed.
Even during the so-called “Roaring Twenties,” Philadelphia showed signs that its economy was in trouble. The number of manufacturing jobs fell from 1925 to 1927 and by 1929 had only just returned to 1925 levels. The textile industry, the city’s largest manufacturing sector, felt competition from plants elsewhere in the region as well as in the South. Although the garment industry did well, seasonal layoffs and low wages characterized both the textile and apparel sectors. Production of knit goods, radios, and motor vehicle parts helped to bolster employment, but as soon as the national economy began to falter, Americans cut back on the purchase of manufactured goods. Citywide unemployment stood at 10 percent in April 1929; 30 percent of the jobless had been idle for six months or longer.
Although the stock market crash of October 1929 did not cause the Great Depression, it certainly signaled its arrival. Over the next four years the national and local economy spiraled downward. The decline in manufacturing between 1929 and 1933 was staggering. For the entire region, manufacturing output plummeted 45 percent; retail sales sank by 40 percent; new car sales by 52 percent. Construction went into free fall, dropping 84 percent, and unemployment rose inexorably. By April 1930, 135,000 Philadelphians were jobless with another 46,000 working only part time. A year later, the number of unemployed approached 250,000, more than a quarter of the workforce. The slide continued until March 1933 when 330,000 were jobless; by then, only 40 percent of the workforce was employed full time, the rest worked only part time or not at all. Manufacturing workers had higher rates of unemployment than did those in white collar and service occupations. The foreign born and African Americans sustained particularly high levels of joblessness.
The sinking economy jeopardized an overextended banking sector. In 1929 the city had more than 100 commercial banks and trust companies, and almost 3,000 building and loan associations. Most of the latter were linked to ethnic groups and local neighborhoods, with assets tied up in home mortgages. In the 1920s, Philadelphia ranked high among major cities in the rate of homeownership, with over half of city families owning their own homes. But often that ownership rested on a precarious foundation of second and even third mortgages. After exhausting personal savings, people ran up debts to local store owners, and skipped mortgage and tax payments and mortgage or rent payments. As property owners defaulted on mortgages, banks found themselves in trouble. To protect their liquidity, banks foreclosed on borrowers, which then led to a wave of evictions. But since there were few buyers for any properties, foreclosure achieved little except increased homelessness. Between 1929 and 1933 more than 50 commercial banks and 1,600 building and loan associations failed. Since there was no federal deposit insurance before 1933, thousands of people lost their savings. The largest bank failure was that of Bankers Trust Company, which had 100,000 depositors.
Meanwhile, the Depression took a devastating toll on the people of Philadelphia. Thousands went hungry. Some turned to begging, petty theft, and scavenging for discarded or spoiled food. With increasing despair, men pounded the pavement in search of any work at all. Over 50,000 tenants fell behind on their rent. Evicted families, when they could, moved in with relatives; whole families crammed into one or two rooms. Others occupied abandoned houses that one observer described as “so bad that no one who could raise a cent to pay rent would ever live in them.” Makeshift homeless encampments, derisively named Hoovervilles after the president, sprang up around the city, with the largest along the east bank of the Schuylkill River below the Museum of Art. Pride and self-esteem melted away.
From the outset, activists called for government action to alleviate suffering. Protestors clamored for public works jobs, more generous relief grants, and a halt to evictions. In February 1930, police broke up a rally at City Hall and arrested 12. At a March rally, 150 protestors showed up. In the same week, during a bitter strike against Aberle textile mill, a strikebreaker shot and killed a worker, Carl Mackley. Mackley’s funeral drew thousands to the streets in what became the largest protest against conditions yet seen. Over the next two years, activists organized workers in Kensington-Richmond and other neighborhoods hard hit by the Depression. Communist involvement allowed the mayor and newspapers to dismiss the protestors as “reds”; in reality, the Communists attracted few adherents, but they gave voice to thousands who suffered in silence.