Great Depression2018-04-14T13:29:39+00:00

Great Depression

While some accounts state that no people suffered more during the Great Depression than Mississippians, a majority of residents of the Magnolia State were impoverished long before 1929 and knew little but hard times. According to the 1920 census the state was 86.6 percent rural, two-thirds of the population farmed, and 70 percent were tenants or sharecroppers dependent on the price of cotton. After fetching nearly a dollar a pound during World War I, the staple’s price fell sharply during the 1919–23 recession. Recovering to twenty cents per pound over the rest of the decade, the price eroded to less than a nickel per pound in 1932. Planters, tenants, and sharecroppers watched helplessly as farm income dwindled from $191 million in 1929 to a mere $41 million in 1932. No other state experienced such a precipitate drop in farm income. Moreover, any discussion of the farmer’s dilemma after 1930 must include crimes of nature: boll weevils; the floods of 1927, 1932, and 1936; and the great southern drought of 1930–31. Paradoxically the drought reduced the amount of cotton grown without raising the price, leading to widespread support for various crop-reduction schemes in Mississippi and other cotton states.

Farmers were not alone as victims of diminishing income. The state’s tiny manufacturing sector also suffered. Between 1929 and 1932, 1,165 small plants, more than 800 of them sawmills, ceased operations. The number of jobs in lumbering, fishing, manufacturing, and railroading dropped from 52,000 in 1929 to 28,000 in 1932, and payrolls dropped from $42 million to $14 million. In turn, the lack of consumer purchasing power devastated the state’s retail business. In the supposedly prosperous 1920s, wholesale and retail prices were 44 percent lower than they had been during World War I, even before the crest of the depression. After 1930, prices hit rock bottom. Advertisements for grocery and dry goods stores indicate the depths to which the economy had plunged. Prices appearing in the New Albany Gazette in 1931 were typical: ten bars of soap for twenty-nine cents, potatoes at two cents a pound, boys’ tennis shoes at seventy-five cents, and cotton-yard goods at ten cents a yard. But consumers had little or no income to spend. The entire stock of many stores was sold at public auction, and nearly one thousand stores closed, leaving an additional nine thousand people out of work. News notices told a vivid picture of deflation. In April 1932 the Jackson Clarion-Ledger reported that the Delta State Teachers College dining hall offered a full breakfast for ten cents and a dinner for twenty cents.

As individuals and businesses went broke, tax collections fell to a trickle, leaving state and county officials strapped for funds. Property assessments fell by $80 million between 1928 and 1932. In January 1932 state coffers contained a paltry $1,347, while the state debt reached $50 million. Lack of adequate revenue resulted in drastic cuts in services. Public schools, hospitals, and health units closed or operated with seriously curtailed funds. Many school districts were unable to pay teachers for a year, and others paid teachers only in scrip, often discounted up to 20 percent. Even members of the state legislature were unable to cash their salary warrants. Gov. Martin S. Conner used his own money to buy food for patients at the state’s mental hospital. Only the adoption of the nation’s first sales tax led to a balanced budget, but even that was a mixed blessing because of its regressive effect on low-income taxpayers. In the words of historian John Ray Skates, “The Great Depression harshly underlined the defects in Mississippi’s economic order.”

Because of the deflation in property values, the state treasury’s 1932 receipts totaled only 64 percent of the preceding year’s ad valorem taxes. Many private citizens now found themselves burdened with mortgages larger than the values of their homes or businesses. Even ex-governor Theodore G. Bilbo lost his pecan farm to the hard times. A staple of most survey histories of the Great Depression is a May 1932 headline from the Literary Digest declaring that on a single day in April, “One-Fourth of a State Sold for Taxes.” How many Mississippians lost their homes in the depression is hard to measure, but a good indication is that within eighteen months of Congress’s passage of the 1933 Home Owners Loan Act, the Home Owners Loan Corporation received more than eighteen thousand applications from Mississippi totaling an estimated $30 million in property. The corporation eventually acted favorably on eight thousand of the applications.

With agriculture, manufacturing, and retail sales languishing, the banking system—never one of the nation’s strongest—began to buckle. Property values shrank to their lowest level since 1850, payrolls dropped, and savings deposits fell by 50 percent from 1930 to 1933. Bank failures began in 1930, when fifty-nine banks went under, followed by fifty-six in 1931 and twelve in 1932. After the March 1933 national bank holiday only four closed.

The depression also had enormously high social costs. Whites replaced blacks in menial jobs. Lack of public funds for schools and health services punished blacks and poor whites alike. Most factory owners, either by willful neglect or by economic necessity, paid low wages to workers who had virtually no access to union protection. By 1939 the Congress of Industrial Organizations had only one hundred members in the state.

Unemployment figures fluctuated throughout the decade. Some indication of the serious nature of unemployment emerges from the fact that by June 1943, when the New Deal’s Works Progress Administration was liquidated, $117 million had been allocated for the state, mostly for wages.

Significant recovery did not begin until 1936, when Gov. Hugh L. White’s Balance Agriculture with Industry initiatives joined the massive injection of federal money into Mississippi by Pres. Franklin D. Roosevelt’s New Deal ($450 million from 1933 to 1939). The onset of World War II brought robust economic growth and a modicum of social reform that neither Mississippi’s political leaders nor New Deal largesse could achieve.

Further Reading

  • James C. Cobb, The Most Southern Place on Earth: The Mississippi Delta and the Roots of Regional Identity (1992)
  • Oliver Emmerich, in A History of Mississippi, vol. 2, ed. Richard A. McLemore (1981)
  • Martha H. Swain, Pat Harrison: The New Deal Years (1978)
  • Roger D. Tate Jr., “Easing the Burden: The Era of the Great Depression in Mississippi” (PhD dissertation, University of Tennessee, 1978)
  • William Winter, in Mississippi Heroes, ed. Dean Faulkner Wells and Hunter Cole (1980)

Citation Information

The following information is provided for citations.

  • Article Title Great Depression
  • Martha Swain
  • Author Roger D. Tate, Jr.
  • Website Name Mississippi Encyclopedia
  • URL
  • Access Date December 12, 2018
  • Publisher Center for Study of Southern Culture
  • Original Published Date
  • Date of Last Update April 14, 2018