Social and Economic History, 1890–1954

Mississippi’s socioeconomic history between 1890 and 1954 presents a dismal record of economic stagnation marked by low per capita income, excessive dependence on one-crop agriculture, underdevelopment of natural and human resources, and overall deficiency of capital investment.

Lackluster legislatures and agrarian anti-industrial ideologies have frequently been blamed for the state’s failure to advance economically. However, poor farmers and poor legislators are ubiquitous in American life and cannot alone account for Mississippi’s history of poverty. Economic growth demanded the multiplier effect that comes from new ideas and circulation of money characteristic of vibrant consumerism, educational opportunities, and urban development. In the Magnolia State, however, crop liens, low commodity prices, and decreasing soil fertility combined with racial constructions of landholding rights to create an agricultural economy in which the majority of farmers, black and white, worked land they did not own and accumulated overwhelming debt for basic necessities. The most ardent industrial proponents favored low-wage mills that added little value to the agricultural and natural resources they processed rather than high-wage, technological development that might undermine traditional economic and racial hierarchies. Over time Mississippi enacted more progressive laws and built modern infrastructure to attract industry, but it did so within the confines of segregation and the economic, educational, and social barriers that prohibited the advancement of approximately half the population.

Mississippi’s economic and social development between 1890 and 1920 occurred within the context of national changes that included rapid population growth through immigration, the rise of industrial capitalism, modern urbanization, and mass reform movements that addressed problems ranging from moral reform to economic regulation, from woman suffrage to labor relations. Mississippi’s history in this period mimicked national trends in some areas and diverged from the national norm in others. Prohibition of monopolies and trusts, regulation of railroads and utilities, limitations on landholding by foreign investors, and taxation of corporations reflected widespread public concern over the ramifications of emerging industrial capitalism. Such concerns were not limited to Mississippi or the South, nor were they confined to the Democratic Party. First Populists and then Progressives in both parties made similar arguments for reining in timber and oil companies, railroads and meatpackers, and banking and insurance.

The foundations for the middle class traditionally had been grounded in the advancement of small agricultural producers, whose accumulated savings expanded farm production and invested in small-scale manufacturing. Rapid industrialization in the late nineteenth century undermined these historic avenues to family wealth as local manufacturing and retailing firms competed with larger national corporations in the new economy. Worried that men would soon become tenants on land they had previously owned and that well-capitalized investors would strip timber, oil, and mineral resources, leaving devastated lands in their wake, farmers and urban reformers pushed for regulation, particularly for corporations without state roots. Indeed, Mississippi’s laws on landholding and labor attracted positive attention from national Progressive leaders including Robert La Follette.

Corporate claims to the contrary, outside investors found numerous loopholes in the regulatory legislation and eagerly exploited the state’s resources by creating multiple individually chartered firms. Delta and Pine Land’s British investors farmed thousands of acres of cotton, while the Hines Timber Company of Chicago, among others, harvested yellow pine and hardwoods at a rate that placed Mississippi third in the nation in lumber-producing states between 1904 and 1915. Advances in technology and large stands of easily accessible, old-growth timber encouraged the construction of rail lines and sawmills to meet the national demand for lumber. By 1920, however, most of the old-growth timber was gone, and with it the companies that had profited from the state’s forest resources. Citing prohibitive land taxes for their unwillingness to plant new forests, the larger timber companies abandoned Mississippi for investment elsewhere. Sustained profits from Mississippi timber required modern forestry programs and new uses for forest products. Research programs at Mississippi State College (now Mississippi State University) focused on forest development and the science of chemurgy. Some native lumber companies such as the H. Weston Company and Randolph Batson introduced reforestation programs into their business practices. Laurel’s Masonite Company developed an innovative process for utilizing forest byproducts to produced pressed board. Although these local firms promised a new day for the future of Mississippi forestry, by the mid-1920s, cutover land and abandoned tracks and equipment signaled the end of the timber boom that had enriched a few, provided low-wage jobs for many, and left the state little better than it had been in 1890.

Mississippi’s business leaders entered the 1920s enthusiastically determined to demonstrate the state’s modern outlook and investment potential. Tying their efforts to the business progressivism of the postwar South, boosters championed every advance as evidence that the Magnolia State was finally shedding its reputation for one-crop agriculture and anti-industrial laws. The state Chamber of Commerce launched the Mississippi Builder in 1923 to publicize good roads, good health, consolidated schools, electric power, and agricultural diversity. Two years later the Mississippi Development Council organized a traveling display accompanied by more than one hundred prominent Mississippians to tour the Midwest and the West under the banner “What about Mississippi?” The intensive, ten-day effort presented a picture of Mississippi that was hard to reconcile with the evidence.

Publicity for the tour and in national periodicals and trade journals touted the state’s workforce as 90 percent Anglo-Saxon, playing on nativist fears outside the South and ignoring, with no apparent sense of irony, the population figures that placed whites in the minority. Statistics compiled by Mississippi business leaders claimed the Magnolia State as the nation’s healthiest, despite high infant mortality (64.5/1,000 for whites and 78.4/1,000 for blacks), low doctor/patient ratios, and the lingering presence of a number of infectious diseases. Finally, although boll weevil infestations had prompted some farmers to diversify into dairy farming, truck farming, and pecan production, the state remained firmly wedded to cotton.

Nevertheless, boosters could not be dismissed as simply snake oil salesmen. At least for whites, the early twentieth century had produced some improvements in educational opportunities. Mississippi boasted more agricultural high schools than any other state. Every county had at least one high school, and consolidation of public schools was proceeding at a remarkable pace. A new normal school in the Delta and another in South Mississippi promised better-qualified teachers for the future.

Cooperation between the US Public Health Service, the Rockefeller Foundation, and the Mississippi Department of Health under Dr. Felix Underwood resulted in health improvements for many Mississippians. Pellagra- and hookworm-eradication programs enhanced the health of both blacks and whites. The state recorded significant decreases in typhoid fever, smallpox, diphtheria, malaria, and tuberculosis. The state legislature provided funding for new hospitals for psychiatric patients and children with special needs.

Business and legislative leaders worked together to standardize banking practices, improve infrastructure, and assure adequate power. In 1909 Mississippi had 185 miles of paved road that supplemented an extensive rail system. In the 1920s federal support for road construction and a state highway tax funded a modern roadway system that brought new retail and manufacturing opportunities to many small towns. In the 1910s legislators established new banking standards that abolished a corrupt system of state deposits in private banks. Historically, New York firms had underwritten insurance in Mississippi. In 1905 Lamar Life Insurance Company opened offices in Jackson, and four more insurance companies followed over the next fifteen years. In 1925, 60 percent of insurance in Mississippi was underwritten by Mississippi companies. The changes in banking and insurance had positive effects in local settings, with banks and insurance companies boasting of their investments in local creameries, industries, and retail businesses.

Mississippi’s experience with power was more complex. In 1920 electrification of cities and towns was provided by local mills or power companies, at a time when the South was experiencing consolidation of large utility companies (Alabama Power and Duke Power) and the establishment of regional power grids. Although Mississippians hailed the 1923 creation of Mississippi Power and Light Company as evidence of the state’s progress in the electrical age, a more critical assessment might note the tardiness of that move, even by the standards of the South. In addition, geologists and wildcatters explored the state for oil and gas. In 1926 the first natural gas field was developed in Monroe County; by the following year a pipeline supplied gas to Amory, Tupelo, and Aberdeen. The first oil field was discovered in 1938 by a Works Progress Administration crew chief in Yazoo County. Twenty years later, Mississippi had 2,500 oil and gas wells in more than 150 fields and produced 125,000 barrels of oil and 750,000 cubic feet of natural gas daily.

Like other agricultural states, Mississippi felt the effects of the economic downturn long before the “official” start of the Great Depression. And like other regions, the effects of natural disaster, such as the Great Flood of 1927, compounded the drop in commodity prices. By 1932 Mississippi was in serious trouble: dependent on an income tax and property tax, the state treasury contained $1,326.17, while the state debt amounted to more than $13,000,000. Foreclosures on farm property placed one-quarter of the land in the state for sale. The response to the economic crisis brought the state into a modern relationship with the federal government and forced Mississippi lawmakers to take responsibility for the public good. The congressional delegation supported the New Deal, which built roads, schools, libraries, and courthouses. The Civilian Conservation Corps replanted cutover and abused land. Rural homes gained access to electricity through the Tennessee Valley Authority and rural electrification programs. At the state level, lawmakers enacted the Balance Agriculture with Industry (BAWI) program to reorganize and modernize the economy and lure industrial investment. A state sales tax, the first in the nation, financed Mississippi’s efforts to balance the budget and reconstruct the economy.

By the end of the decade, Mississippi had made real progress in overcoming the effects of the depression. Federal income tax receipts, a measure of personal income, reached $1,500,000, and corporate tax receipts rose from $356,000 in 1934 to $1,600,000 in 1939. Bank deposits doubled in the same period. Other indicators showed that while progress had been made, recovery was incomplete. Per capita income was $250 in 1929, $117 in 1933, and $207 in 1938—a promising rebound but not a complete victory.

Despite such progress, Mississippi’s Great Depression experiences had some consequences—both immediate and long-term—that were more problematic. Agricultural programs embodied in the Agricultural Adjustment Administration and the Soil Conservation Service favored larger planters, who mechanized their farms and reduced the number of tenants and sharecroppers. In the long run, the movement from the land to industrial jobs had positive benefits, but the more immediate effect was less salutary: tenants and sharecropper contracts were not renewed, and impoverished families found themselves with no other options for employment. Furthermore, the BAWI program attracted a number of low-wage, no-benefits industries with unsavory labor histories. As evidence of the state’s continued resistance to modernizing trends in work relations, labor unions, national media, and the US Congress pointed to Mississippi’s failure to enact protective policies for labor and to its abuse of federal programs intended to train workers for industrial jobs. The rising tide of recovery brought some improvements for everyone, but Mississippi’s economy remained at the bottom of national assessments.

The advent of World War II had a positive effect on the Mississippi economy, although the state received less defense spending ($64 million) than any other southern state. Wartime investment went to industries with economies of scale that guaranteed timely production, and Mississippi’s recent, small-scale industrialization disqualified state firms for many defense contracts. Nevertheless, the number of manufacturing establishments rose by more than seven hundred between 1939 and 1947. Ingalls Shipyard in Pascagoula, a BAWI industry, produced seventy C-3s, welded-steel ships that were the workhorse of the merchant fleet. Shipyard employment increased from three thousand workers in 1940 to more than twelve thousand at the height of production. In addition to the defense industries, the creation of army and air training bases across the state pumped federal dollars into many communities. The largest bases were Camp Shelby in Hattiesburg and Keesler Field in Biloxi, but small bases were established at Greenville, Columbus, Jackson, Laurel, Greenwood, and Meridian.

The war brought high-wage jobs and full employment as defense industries and military bases employed all excess labor and created boomtowns. With wages ranging from 40 cents per hour to $1.25, per capita income increased from $218 in 1940 to $605 in 1946. Full employment, cash wages, and few consumer goods meant that Mississippians accumulated savings during the 1940s that subsequently provided capital for investing in homes, farms, businesses, and consumer goods. As men of military age volunteered or were drafted into service, Mississippi’s farm population shrank from 1,403,142 in 1940 to 1,050,444 in 1945. As farmers mechanized to increase their production for the war effort, the number of tenants and sharecroppers continued to decline. By 1945 returning GIs sought employment in towns and cities, and the tenant shacks that had dotted the countryside began disappearing from the rural landscape.

With the end of the war, Mississippi legislators reinstituted the BAWI program, which had been allowed to lapse in 1940. Between the end of the war and the US Supreme Court’s 1954 Brown v. Board of Education ruling, Mississippi’s economy continued to make impressive gains. Civilian income exceeded $1 billion in 1948 and approached $2 billion a decade later. Nevertheless, agriculture remained the dominant source of income, accounting for $520 million in 1948 and $441 million in 1955. Two important indicators of Mississippi’s changing economy can be seen in the total income received for employment in wholesale/retail trade and government service. The trade sector (manufacturing income) accounted for $230 million in 1948 and $341 million in 1955, while income from government employment was $112 million in 1948 and $183 million in 1955. By comparison, trade accounted for $78 million in 1929 and government employment produced $29 million.

Despite its growth, Mississippi continued to lag behind the rest of the region and the nation. Mississippi’s average per capita income in 1955 was $946, more than three times the state’s average in 1929 yet still at the bottom of the economic ladder: the average per capita income for the Southeast region was $1,291. Economists praised the state’s efforts to diversify its economy and readily attributed the growth to the effects of the BAWI programs. However, they also noted that the benefits of industrialization accrued to white workers, while more than half of nonwhite workers remained employed in agriculture. BAWI plants employed almost no black workers in the early 1950s. Between 1890 and 1954, Mississippi’s population shifted from majority-black to majority-white, but the dynamics of segregation did not change. With between 42 and 51 percent of the population locked out of economic advancement, the effects of federal and state programs, private investment, and diversification through BAWI were limited.

Further Reading

  • John M. Barry, Rising Tide: The Great Mississippi Flood of 1927 and How It Changed America (1997)
  • Eric Charles Clark, “Industrial Development and State Government Policy in Mississippi, 1890–1980” (PhD dissertation, Mississippi State University, 1989)
  • James C. Cobb, The Most Southern Place on Earth: The Mississippi Delta and the Roots of Regional Identity (1992)
  • James C. Cobb, The Selling of the South: The Southern Crusade for Industrial Development (1982)
  • Pete Daniel, Breaking the Land: The Transformation of Cotton, Tobacco, and Rice Culture since 1880 (1985)
  • Don H. Doyle, Faulkner’s County: The Historical Roots of Yoknapatawpha (2001)
  • Ernest J. Hopkins, Mississippi’s BAWI Plan: Balance Agriculture with Industry, an Experiment in Industrial Subsidization (1944)
  • Sara E. Morris, “‘Good Equipment Makes a Good Homemaker Better’: Promoters of Domestic Technology in Mississippi, 1930–1940” (master’s thesis, Mississippi State University, 2004)
  • Lawrence J. Nelson, King Cotton’s Advocate: Oscar G. Johnston and the New Deal (1999)
  • Ted Ownby, American Dreams in Mississippi: Consumers, Poverty, and Culture, 1830–1998 (1999)
  • Jack Edward Prince, “History and Development of the Mississippi Balance Agriculture with Industry Program, 1936–1958” (PhD dissertation, Ohio State University, 1961)
  • Roger D. Tate Jr., “Easing the Burden: The Era of Depression and New Deal in Mississippi” (PhD dissertation, University of Tennessee, 1978)

Citation Information

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  • Article Title Social and Economic History, 1890–1954
  • Author
  • Keywords Social and Economic History, 1890–1954
  • Website Name Mississippi Encyclopedia
  • URL
  • Access Date July 8, 2020
  • Publisher Center for Study of Southern Culture
  • Original Published Date
  • Date of Last Update April 26, 2018