Causes of the Great Depression
In their 1963 book "A Monetary History of the United States, 1867–1960", Milton Friedman and Anna Schwartz laid out their case for a different explanation of the Great Depression. Essentially, the Great Depression, in their view, was caused by the fall of the money supply. Friedman and Schwartz write: "From the cyclical peak in August 1929 to a cyclical trough in March 1933, the stock of money fell by over a third." The result was what Friedman and Schwartz called "The Great Contraction" — a period of falling income, prices, and employment caused by the choking effects of a restricted money supply. Friedman and Schwartz argue that people wanted to hold more money than the Federal Reserve was supplying. As a result, people hoarded money by consuming less. This caused a contraction in employment and production since prices were not flexible enough to immediately fall. The Fed's failure was in not realizing what was happening and not taking corrective action. In a speech honoring Friedman and Schwartz, Ben Bernanke stated:
African-American socialism
The Great Depression of the 1930s began after the stock market crash in 1929. However, it hit the Black population much harder than Whites. Black people were forced out of their already unskilled jobs. This caused them to face an unemployment rate of more that 50 percent, compared to their counterparts of about 30 percent. Black workers were already being paid 30 percent below the white workers. Black people gained no relief of their trials from the Roosevelt administration because the National Recovery Act (NRA) was later referred to, by African-Americans, as the Negro Removal Act. NRA public works rarely hired Blacks during this time, even though the stated goal was to not discriminate while hiring. Although the American Federation of Labor president, William Green, did acknowledge civil rights and asserted to oppose Jim Crow locations, there was nothing enforcing the affiliated unions to follow these allegations. Because many Black laborers were without support, they formed unions of their own, like the Brotherhood of Sleeping Car Porters. Because these men sought their own support, they were often lynched in both the North and the South. This situation was soon turned around in 1934 during a strike wave. Labor strikes spread all over the country from Toledo to Minneapolis to San Francisco. These events consisted of an organization among the unskilled and mass production workers, whom all were not Black. As expected during this time, racism was the center of the industrial unionism. This is a labor union organizing method in which all workers of the same industry are organized into the same union. For instance, workers in the plant industry were placed into the same labor union, nationwide, regardless of an individual's particular job. Blacks, in the most dangerous, dirty and low-paid jobs, were in the same union as better-paid Whites. Because of these racial injustices, African-Americans remained in the lowest ends of poverty, without legal support, throughout the years of the Great Depression.