Between 1930 and 1945, the United States experienced a severe economic depression and then a spectacular recovery during World War II. In 1932, as the Great Depression was entering its depths, unemployment reached 23.6 percent. In 1933, nearly 14 million people were out of work. The dollar’s buying power was high—admission at some local movie theaters might be only a dime—but many people had little to spend on anything but necessities.
The stock market hit its lowest level in mid-1932, just before the presidential election, and Franklin Roosevelt swept to the first of four victories by blaming the disaster on Herbert Hoover. Roosevelt’s administration moved to bolster the economy. The National Recovery Administration, established in 1933, cast a lenient eye on big-business practices, such as trusts and oligopolies, while also displaying a new tolerance of labor unions. Both policies had a major impact on Hollywood. The government also fostered economic growth by financing roads, buildings, the arts, and other areas under the Works Progress Administration (WPA; established in 1935). The WPA put 8.5 million people back to work, thus building up buying power and aiding industries to recuperate.
Recovery was uneven, and a recession during 1937 and 1938, though not as severe as the original crisis, caused similar problems. By 1938, however, increased government intervention was pulling the country out of the Depression. The outbreak of war in parts of Europe accelerated that process. Although the United States remained neutral until the Japanese attack on Pearl Harbor on December 7, 1941, armaments companies were allowed to sell abroad beginning in November 1939. America declared itself “the arsenal of democracy,” selling arms to its allies around the world and then building up its own combat capability. This increased manufacturing gradually absorbed the available labor
Force. Although there were still 3 million unemployed when the United States entered the war in 1941, by late in the war some jobs remained unfilled.
The war expanded the American economy. Between 1940 and 1944, for example, the output of manufactured goods quadrupled. Fully 40 percent of the nation’s gross national product supported the war effort, but the newly employed workers at home (including many who had previously been housewives or servants) gained purchasing power and a higher standard of living. Despite shortages of some products, most American industries increased their sales, often by 50 percent or more. The film industry shared in this wartime boom, as movie theater attendance rose dramatically.
World History
