Great Depression and Cities

In the Great Depression, unemployment rates reached a high of 24.9 percent in 1933, accompanied by a fall in gross national product (GNP) of 29 percent from 1929 to 1933. Even after a modest economic recovery from 1935 to 1937, the economy sank again, with an unemployment rate persistently in the high teens from 1937 to the outbreak of World War II. Cities, home of American industry, were the geographic locations for much of the economic tumult of the 1930s. While the economies of a few cities weathered the economic storm, the Great Depression hit most cities—particularly the industrial cities of the Northeast and Midwest—very hard, ending the era of relative prosperity for metropolitan areas that had marked the opening decades of the 20th century.

The 1920s had been a period of growth for the cities. Migrants from rural America flocked to the great metropolises to take industrial jobs, as well as find employment in the retail and service industries as the nation's consumer markets flourished. Los Angeles, for example, powered by the glamour of the film industry and its good climate, ranked among the fastest growing metropolitan areas of the country, as did the core industrial cities of Akron, Ohio, and Detroit, Michigan, as well as resort towns like Miami, Florida. However, in the late 1920s, the national economy stuttered; the economy collapsed after the stock market crash in October 1929.

Urban governments in the 1930s were not designed to manage the vicious cycle of economic distress. In the moribund marketplace, surpluses of goods mounted. Industry responded by cutting production and firing workers or cutting shifts for hourly employees. Without cash, workers and small businessmen could not cover the mortgage or the rent. Foreclosures and evictions resulted. Municipal governments were particularly vulnerable to foreclosures since most were dependent on property taxes for revenue. Their problem was made worse by the fact that the same residents who could not pay their property taxes required food, shelter, and employment that local governments were often unable to provide. Only a handful of cities had mature government social services agencies to assist the unemployed and their families. The economic earthquake often cracked the façade of order and civility, revealing the architecture of power politics in the cities.

In most cities, the Great Depression revealed the dominance of business interests. Private, not public, power was the first to respond to the humanitarian crisis. The private sector in Philadelphia, for example, formed the Philadelphia Committee for Unemployment Relief to help needy families. In Pittsburgh, the Allegheny County Emergency Association organized big business for a works program of public improvements. Across many communities, the National Association of Community Chests and Councils coordinated a network of local affiliates in 174 cities to raise $83 million for relief. But the role of business in urban affairs was not uniformly benevolent. Bankers forced the municipal governments of [Page 312]New York and Detroit to adopt austerity measures or face the risk of being locked out of the bond market. In many conservative cities, such Houston, Denver, and Cincinnati, local governments enforced austerity budgets with the approval of local businesses and homeowners.

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