Following a revitalization that had taken place in the economic good times of the 1920s, the railroads were well equipped to handle the 1930s—or so they thought. Unfortunately, several factors led to the bankrupting of many railroad companies. Chief among these factors was the severe national economic downturn that the country experienced in the 1930s, called the Great Depression. Although the exact causes of this economic catastrophe are still debated, most historians give at least some blame to the stock market crash of 1929. The Great Depression bankrupted many individuals and sent the unemployment rate skyrocketing to a high of more than 23 percent. Hunger and poverty became common in many areas of the country. Some families who lived by railroad tracks were so desperate that they sent their children to search for dropped coal from passing trains so that they could heat their homes and operate their cooking appliances. As widespread panic and despair gripped the nation, the suicide rate rose, and millions of families migrated to other areas of the country, only to find that those areas were just as bad—if not worse. Dislocated families set up makeshift shelters on vacant lots in cities and towns. These collections of makeshift dwellings became known as Hoovervilles, after President Hoover, whom many blamed for the Depression.
Businesses were affected, too, including the railroad industry. Railroad traffic—both freight and passenger—plummeted,...
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