Because of the Depression, attendance dropped during the decade, but teams continued to show increased profits, partly due to falling player salaries. 1932 and 1933 were the only two years of the decade in which the industry did not make a profit. In 1931 and 1932 gates showed a decline in profit by 70%. Accordingly, franchise values dropped. Many players took pay cuts, and between 1931 and 1933 payrolls in general were decreased by one fourth.

One reason salaries were able to stay low is because minor league players were willing to make the move to the majors and take less pay than major league veterans were willing to play for. A veteran could be threatened with losing his job to a minor leaguer if he continued to pressure his team for a raise.

The retired players' pension funds were low during this time; in 1933 150 players were drawing a pension, but only forty-five received monthly payments.

During 1930 and 1931 a new National Agreement was established on drafting. In the Agreement the minors accepted a universal compulsory draft. The majors agreed to limit the draft eligibility to players in class B through D with two or more years of service, players in A ball with three years of service, and players in AA ball with four years of service. The majors could only draft one minor leaguer per year from any minor league club. The majors also agreed to not sign any amateurs directly, with the exception of those coming out of college. The majors could option fifteen players to the minors, and the number of times that a player could be optioned was increased from two to three.

In effect, the draft allowed the parent club to draft a player and gave the club the rights to keep the player in the minors for seven years without promoting to the majors. In 1930 Fred Bennet petitioned for his freedom and won, under the two option limit which was still in effect at that time. However, the courts did not ban the direct ownership of minor league teams by major league clubs.

In this era, it was common for major league teams to own many of their own minor league clubs. Branch Rickey, the owner of the Cardinals, had at least one team in all twenty class D circuits and amazingly had working arrangements with two full leagues, the Arkansas league and the Nebraska league. This gave the Cardinals the opportunity to have their pick of players from all of these teams in exchange for financial reimbursement. Additionally, they could sell their players to other organizations for cash.

The New York Yankees had a similar farm team based dynasty, owning a plethora of teams, and from 1932-1960 won eighteen American League pennants and fourteen World Series, all with players they moved around in their large group of farm clubs.

In 1938, Commissioner Landis cracked down on Rickey and the Cardinals farm teams. Seventy-four Cardinals minor leaguers were freed, and teams that had been working closely with the Cardinals to, in essence, "launder" players (Sacramento, Cedar Rapids, and Springfield, MO) were fined. However, they were allowed to bid on these free agents, but if they were found to have hidden any transfers to other clubs after retaining them, they would be subject to penalty.

In 1939 Landis freed ninety-one Tigers minor leaguers for the same reason, however in this case he banned Detroit from signing these players for the next three years.