During the Great Depression of the 1930s, local and state governments as well as private charities were overwhelmed by needy families seeking food, clothing, and shelter. In 1935, welfare for poor children and other dependent persons became a federal government responsibility, which it remained for 60 years.
MINNEAPOLIS—Several hundred men and women in an unemployed demonstration today stormed a grocery store and meat market in the Gateway district, smashed plate glass windows and helped themselves to bacon and ham, fruit and canned goods.
—from the New York Times, February 26, 1931
The 1920s in America seemed like an age of endless prosperity. Construction boomed, business flourished, and the stock market soared. Then on October 29, 1929, the stock market crashed. The crash sent shockwaves throughout the economy. Banks failed. Businesses closed. Millions found themselves out of work. The Great Depression, which would last through the 1930s, had begun.
When the Great Depression began, about 18 million elderly, disabled, and single mothers with children already lived at a bare subsistence level in the United States. State and local governments together with private charities helped these people. By 1933, another 13 million Americans had been thrown out of work. Suddenly, state and local governments and charities could no longer provide even minimum assistance for all those in need. Food riots broke out. Desertions by husbands and fathers increased. Homeless families in cities lived in public parks and shanty towns. Desperate times began to put into question the old American notion that if a man worked hard enough, he could always take care of himself and his family.
The effect of the Depression on poor children was particularly severe. Grace Abbott, head of the federal Children's Bureau, reported that in the spring of 1933, 20 percent of the nation's school children showed evidence of poor nutrition, housing, and medical care. School budgets were cut and in some cases schools were shut down for lack of money to pay teachers. An estimated 200,000 boys left home to wander the streets and beg because of the poor economic condition of their families.
Most elderly Americans did not have personal savings or retirement pensions to support them in normal times, let alone during a national economic crisis. Those few able to set aside money for retirement often found that their savings and investments had been wiped out by the financial crash in 1929. Senator Paul Douglas of Illinois made this observation in 1936:
The impact of all these forces increasingly convinced the majority of the American people that individuals could not by themselves provide adequately for their old age, and that some form of greater security should be provided by society.
Even skilled workers, business owners, successful farmers, and professionals of all kinds found themselves in severe economic difficulty as one out of four in the labor force lost their jobs. Words like "bewildered," "shocked," and "humiliated," were often used at the time to describe increasing numbers of Americans as the Depression deepened.
Although President Franklin D. Roosevelt focused mainly on creating jobs for the masses of unemployed workers, he also backed the idea of federal aid for poor children and other dependent persons. By 1935, a national welfare system had been established for the first time in American history.