Commerce in Oklahoma
The Great Depression
The Great Depression encompassed much more than the infamous crash of 1929.
The Oklahoma farmers experienced the beginning of a two-decades-long depression after World War I. Prices of crops and livestock returned to prewar levels and lower, but the cost of needed items (land, seeds, tools) didn’t decrease in proportion. This phenomenon is called a “cost-price squeeze” and demonstrates another need for balance in economies. Balance is also a necessity in farming, and the desperate overworking of the land would lead to devastating environmental consequences in the next decade. Alongside the declining agriculture industry were struggling banks. With the increased demand and upward economic movement that occurred during World War I, farmers and companies alike took out additional loans to expand their production capabilities. When prices dropped, these people were unable to repay their debt, and banks found that they had overextended themselves in lending. This damaged banks and led to the bankruptcy or closure of many.
Banks in rural communities such as this one in Perry, Oklahoma, regularly loaned to farmers. Photograph by Russell Lee, 1939 (image courtesy Library of Congress).
This image taken by Dorothea Lange in Cleveland County in 1937 hints at the effects of the Depression on entire communities (image courtesy Library of Congress).
The 1920s and 1930s would be extremely difficult for many groups of people in Oklahoma. The 1921 Tulsa Race Massacre devastated a thriving, successful economy in Greenwood. The previously strong district was burnt, and its people killed, injured, made homeless, and more. While the businesses of Greenwood began after strict segregation made them necessary, African American entrepreneurs had successfully formed a mostly self-sustaining economy, all contained within one portion of a large city. The destruction of this community was an economic setback that the area would slowly recover from, always remembering the brutality of the other residents of their own city. Elsewhere, during the Great Depression, most historically All-Black towns would dwindle and many would disappear completely.
A group of young women sing in a choir in Taft, Oklahoma, an All-Black town, 1937. Photograph by Alphia O. Hart (2012.201.B1048.0343, OPUBCO Collection, OHS).
Advertisements for local businesses in Greenwood ran in the Tulsa Star before the Tulsa Race Massacre.
The state didn’t feel the full effects of the economic downturn until 1930, when a severe drought devastated the already struggling farms, and large discoveries in the oil industry upset the balance of supply and demand. Widespread layoffs led to the creation of unemployment committees. Before this point, support for the unemployed was unorganized and usually only found through charities. The Great Depression demonstrated the need for organized welfare programs. The economy reached its lowest point in the winter of 1932–33. Farm income fell 64 percent, and urban joblessness rose to around 38 percent. In 1932 Franklin D. Roosevelt was elected president. When he took office in March 1933, his New Deal attempted to bring a return to normalcy and offer recovery efforts for every facet of American life. In Oklahoma, however, the New Deal faced political setbacks. The state legislature, having dealt with several gubernatorial impeachments and growing corruption, was full of counteractive ideas and infighting. Opposition to the New Deal was widespread in the state, and people like Governor “Alfalfa Bill” Murray viewed it as federal interference in state business. Murray's successor supported the New Deal, but faced strong opposition from state legislative bodies. E. W. Marland was technically more successful than his predecessors and his successor, but only implemented a few portions of the New Deal. State budgets and processes were tainted by corruption and politicians vying for personal capital gain.
Family in the May Avenue camp in Oklahoma City, photograph by Russell Lee, 1939 (image courtesy Library of Congress).
A family’s shanty in May Avenue camp in Oklahoma City, photograph by Russell Lee, 1939 (image courtesy Library of Congress).
The National Recovery Administration, as well as the state government, attempted to prorate (limit) oil production several times, but had limited success until the Interstate Oil and Gas Compact underwrote the proration agreement. Underwriting is a way of securing an agreement where the underwriter agrees to assume liabilities and provide financial or legal support. The decision to limit oil production was made because new discoveries threw off the balance between supply and demand. The opening of new fields in the late 1920s and early 1930s led to a surplus of oil, which, combined with the worldwide economic downturn, led to a severe drop in crude oil prices. The price drop led to a spike in unemployment and outmigration as companies struggled to make ends meet. People were fleeing Oklahoma, hoping to find employment in other states.
The discovery of new oil fields rapidly increased the supply of oil in the 1930s. Photograph by Meyers Photo Shop, July 7, 1935 (21412.BH818, Z.P. Meyers/Barney Hillerman Photographic Collection, OHS).
Imbalances between supply and demand in several key economic sectors worsened the effects of the Depression in Oklahoma. This photograph of a Seminole oil field worker was taken by Russell Lee in 1939 (image courtesy Library of Congress).
The Oklahoma Indian Welfare Act was signed into law in 1936. The act was debated and rewritten multiple times, and was controversial among Oklahomans. The act was created in response to other federal attempts to provide relief to American Indian nations. Intended to specifically improve conditions for Oklahoma’s American Indian population, the Oklahoma Indian Welfare Act allowed the tribes to reestablish governments modeled after the US government. The power and abilities of these tribal governments would continue to be debated and rewritten. Still, other components of the “Indian New Deal” would help pull American Indian communities out of the Great Depression. One part of the legislation allowed the creation of tribal business councils which focused on economic development for their citizens.
Chief White Eagle (Osage) and John Collier, commissioner of Indian affairs, right. Collier oversaw the passage of the Indian Reorganization Act (1934) and the Oklahoma Indian Welfare Act (1936). The Osage were excluded from these acts because they purchased their reservation rather than acquiring it through treaty (2012.201.B0233.0168, OPUBCO Collection, OHS).
This photograph depicts the Caddo Nation Tribal Council in 1938. The Oklahoma Indian Welfare Act offered tribes the opportunity to reorganize tribal governments that had been abolished (image courtesy Caddo Nation).
