Although the 1988–89 drought was the most economically devastating natural disaster in the history of the United States (Riebsame et al., 1991), a close second is undoubtedly the series of droughts that affected large portions of the United States in the 1930s. Determining the direct and indirect costs associated with this period of droughts is a difficult task because of the broad impacts of drought, the event’s close association with the Great Depression, the fast revival of the economy with the start of World War II, and the lack of adequate economic models for evaluating losses at that time. However, broad calculations and estimates can provide valuable generalizations of the economic impact of the 1930s drought.
In 1937, the Works Progress Administration (WPA) reported that drought was the principal reason for economic relief assistance in the Great Plains region during the 1930s (Link et al., 1937). Federal aid to the drought-affected states was first given in 1932, but the first funds marked specifically for drought relief were not released until the fall of 1933. In all, assistance may have reached $1 billion (in 1930s dollars) by the end of the drought (Warrick et al., 1980).
According to the WPA, three-fifths of all first-time rural relief cases in the Great Plains area were directly related to drought, with a disproportionate amount of cases being farmers (68%) and especially tenant farmers (70% of the 68%). However, it is not known how many of the remaining cases (32%) were indirectly affected by drought. The WPA report also noted that 21% of all rural families in the Great Plains area were receiving federal emergency relief by 1936 (Link et al., 1937); the number was as high as 90% in hard-hit counties (Warrick, 1980). Thus, even though the exact economic losses are not known for this time period, they were substantial enough to cause widespread economic disruption that affected the entire nation.