After the boom years of the 1920s, the stock market crash ushered in almost two decades of the leanest years in the history of the minor leagues, and brought about a transformation that ushered in a relationship between the minors and the majors that is more like the one that we know now. It also brought several significant innovations in the promotion of the game that was to have profound effects. The game at the minor league level has probably not gone through a more turbulent time.
Both levels suffered significant declines in attendance during the first years of the Depression. Baseball no longer was a luxury that the average American could afford. Gate receipts dropped 70% in 1931 and 32 from 1930, and it took sixteen years to reach the high-water mark of 10 million after that season. Profits dropped at the major league level from $1.3 million in 1929 to a loss of $1.7 million in 1933. To make end meet, the Senators sold future Hall of Famer SS Joe Cronin to the Red Sox for $250 000 - a sum which was greater than the payroll of 14 of the 16 major league teams. Part of the problem in the decline in revenue was the majors' refusal to drop ticket prices, citing the fact that they didn't raise prices during the boom years of the 20s.
So, with the high unemployment of the Depression, baseball tickets of any kind were out of reach for most people. And for those fortunate enough to have a job, taking a day off work to watch a game was not an option. The minors began to experiment with night games as a way to both give workers a chance to catch a game, and to bring in other spectators by the novelty factor. It took a few years, but the majors, originally resistant to the idea, gave in in the mid 30s, and soon night games became a standard feature of minor and major league schedules.
Despite this, minor league teams still saw themselves as independents (the Pacific Coast League, which we have not touched upon, viewed itself almost as a third major league, and stayed quite independent until the late 50s). But their independence was waning. Attendance was still in decline, partly because of economics, and perhaps partly because the expansion of major league teams' radio broadcast networks allowed teams to follow their favourite major league team instead.
Faced with the declining revenues of the Great Depression, they became more indentured to major league teams as a source of funds to make up for the shortfall, via the sale of top players. The majors, for their part, agreed to help the minors, but in return they wanted some sort of agreement for the procurement of players that went beyond the traditional one. With the minors down to a handful of leagues and teams by the mid 30s, more and more minor leagues and teams were becoming subservient to the majors. The Cards, Yankees, and Dodgers all built vast farm systems during this period, buying interests in teams across all levels of the minors. The Cards, with no major league competition to the south or west, held tryout camps that drew thousands of prospective recruits, with which they stocked their minor league teams.
Baseball Commissioner Judge Kennesaw Mountain Landis was less than thrilled with this development, especially with the optics caused by major league clubs sometimes owning shares of multiple clubs in the same league. He had "freed" several players in the 20s and 30s who teams had "covered up" - that is, they transferred them from one farm team to another, to avoid having them exposed in the draft Landis had instituted, whereby major league teams could draft a minor league player if he played on the same minor league team for two consecutive seasons. In 1938, he "freed" 70 players from the Cardinals system who had been "covered up." Matters came to a head when Landis and Dodgers GM Branch Rickey had a memorable exchange when their competing philosophies clashed when Rickey was summoned to Landis' office later that year. Landis was of the view that talent should be allowed to bubble up from the bottom of the minor league pool naturally, whereas Rickey believed that the farm system would allow a team to nurture and teach a player how to play the game the Dodger way, even if that player was "blocked" by a better or more experienced player. While Landis was concerned about the future and autonomy of the minors, he could do little to stem a tide that had already turned. Out of economic survival, the minors were on their way to becoming branch plants of the major league, their reason for being not to win games for their fans, but to supply players for the teams above them, up to the majors.
The onset of World War II, of course, did not help the minors' plight. With the shortage of manpower caused by the war, the minors had only 66 teams in total, and drew less than 6 million fans, an all-time low. Armed with player development and financial agreements that they had procured in the Depression, however, the minors were poised for a tremendous comeback at the end of the war.