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In October 1929, the 'Roaring Twenties' came to a dramatic end and the USA economy went into a period of deep economic and social distress called The Great Depression.

Its impact was felt throughout America.

Unemployment was increasing even before the Wall Street Crash of October 1929 and had reached 1.6 million.

Originally, it hit workers in the old industries, for example coal mining, textiles, railroads and shipbuilding, but by 1929 it also affected workers in the consumer industries.

Businesses were failing because of overproduction of goods and underconsumption.

Banks were refusing to lend money to companies to help them survive because of a lack of confidence in the economy.

The cutbacks in production led to unemployment, which in turn reduced demand for goods and created further unemployment.

The Great Depression saw many manufacturing businesses close.

Widespread unemployment created a cycle of problems that kept feeding into one another and making the problems even worse.

• Factory closures lead to unemployment.
• Unemployed people lose income and experience poverty.
• They cannot afford consumer goods.
• Factories cannot sell goods, suffer overproduction and lose money.
• Factories have to close.

For many workers, the Great Depression was a period of misery and destitution.

America had no social security system and so those without work had to fend for themselves.

• Unemployment increased: It rose from 1.6 million in 1929 to 14 million in 1933. This was an increase from 3 per cent to 25 per cent of the workforce.

  • People were desperate for work. For example, in 1930 there were 6,000 men on the streets of New York trying to survive by selling apples. In Cleveland, a city dependent on the steel industry, over 50% of men were unemployed.

• Wages fell: As competition for jobs increased, even those in work suffered.

  • Employers reduced wages and increased hours.
  • Some government employees, such as teachers, were not paid when city councils went bankrupt.

• Starvation grew: Workers struggled to buy even the basics, such as food.

  • In 1931, about 100 died directly of starvation in New York hospitals.
  • Many more died of illnesses related to a lack of nutrition. One third of children in New York were malnourished.

• Homelessness soared: By 1932, over 250,000 people could not pay their mortgages.

  • Those who fell behind with their mortgages or their rent were evicted.
  • Most ended up either on the streets sleeping or sleeping on park benches.

• Shanty towns of cardboard and corrugated iron sprang up on the edges of cities. They were nicknamed Hoovervilles to express the frustration people had about the lack of support coming from President Hoover.

• Vagrants: A large number of men (estimated at two million in 1932) became hobos, travelling around America, living in tents by railway tracks or in freight wagons.

  • Some deliberately got arrested because a night in jail meant warmth, a bed and food.

• Reliance on charity and relief schemes escalated: America did not have unemployment benefits. It was left to towns and cities to organise temporary homes, food and clothing for the poor.

  • Long queues for bread handouts were common.
  • Many state governments went bankrupt.
  • Hoover eventually had to lend billions of dollars of government money to them in 1932 to fund public works schemes.

• Angry protests: Demonstrations, by both the unemployed and employed, at the lack of action by the government became violent.

  • In 1930, a rally of unemployed people became a riot as police charged the crowd.
  • There were strikes and bitter clashes in many American cities because of starvation level wages.

The biggest protest was by the Bonus Army in 1932.

These were World War One veterans supporting a bill going through Congress which would give them early payment of their $1,000 war bonuses.

They were not due to receive them until 1945.

With their wives and children, 15,000 of them set up a camp on Anacostia Flats, Washington to support a Bill that was going through Congress for early payment.

Hoover accused them of being communists and ordered their removal.

They were dispersed by armed troops, tanks and tear gas on the command of General MacArthur.

Two veterans and two babies died - many children were injured.

Farmers had missed out on the economic boom in the 1920s.

Their income was very low due to overproduction of their crops and underconsumption by the public of their produce.

Farmers had also been encouraged to take out loans to modernise.

Before World War One, about 90% of grain was used to make alcohol.

After the introduction of Prohibition there was a lot of surplus grain throughout the 1920s.

One alternative was to sell the surplus produce abroad, but many countries had placed tariffs on American goods in retaliation for protectionism.

This made exporting the grain very difficult, which led to a substantial drop in prices.

The price of cotton fell by an enormous 70% and the price of wheat decreased from 103 cents per ton in 1929 to 38 cents per ton in 1933.

Sharecropping was particularly common in the cotton industry and they were devastated by its collapse.

• The drop in incomes pushed many farmers into debt. Farmers had also been encouraged to take out loans to modernise.
• There was a sharp rise in interest rates between 1929 and 1931 which meant they had to pay back an extra amount to the banks.
• A lot of farmers couldn’t repay their loans or their mortgages.
• As a result, over three quarter of a million farmers lost their land.
• The collapse in agriculture didn’t just effect the landowners but also the labourers and sharecroppers who relied on the land for their livelihood.

• The Midwest area of the US had originally been grazed, but during World War One increased demand for food meant it was used for intensive arable farming, which left the exposed soil vulnerable to erosion.
• From 1930 onwards, farmers in the Midwest were hit by a series of droughts.
• The poor soil created huge clouds of dust which swept across the land, creating a dust bowl of 20 million hectares of land. Clouds could travel as far as New York.
• In 1935, huge rains destroyed crops, washed away topsoil and ruined harvests.
• There were also invasions of pests such as grasshoppers, which meant crops had to be destroyed.

• Farming families from the southern and mid-western states, particularly Oklahoma and Arkansas, migrated west to California in the hope of better land and employment. However, it was not the land of plenty for which they hoped.

  • Finding work was difficult, and Californian employers took advantage of the migrants' desperation to work.
  • Many had to live in filthy, unhygienic camps where diseases were rife.
  • These newcomers, who the locals referred to as Okies and Arkies, were often resented. This was because they were competing with Californians for scarce work.

• Many others became hobos, homeless drifters who rode the freight trains of the country, in search of work.

  • There were over one and a half million hobos and 20 per cent of them were children.

• Sharecroppers, the majority of whom were black Americans, either did not receive their portion of the crop or were made redundant.

  • Many migrated to northern towns in search of work, but unemployment and discrimination were high there too.

• As frustration mounted at the lack of government help, there was unrest in the countryside, particularly when officials came to foreclose on farms.

• Farmers even blockaded towns, refusing to let food in until they were paid for it, as happened in Sioux City.

Herbert Hoover, a Republican, was President from 1929 to 1933.

He came into office having won a landslide victory and believing the boom of the 1920s would continue.

However, after just eight months in office, the stock market crashed and he had to deal with the worst economic depression in America’s history.

Initially, he thought the crash would be short-lived.

Hoover had very fixed views on the responsibilities of the government.

He believed in laissez-faire and 'rugged individualism'.

Laissez-faire meant the government would limit its intervention in the economy.

Hoover believed that too much interference would mean economic normality would not return.

He even blocked the Garner-Wagner Relief Bill, a plan by Congress to spend government money to create jobs.

Rugged individualism meant people were expected to overcome problems and succeed by their own efforts.

They were not to depend on help from the government.

Hoover thought aid would make people lazy and damage their morals.

He was a self-made millionaire and expected others to be self-reliant.

• Voluntarism: Hoover felt that whilst it was improper for the federal government in Washington to give handouts to the poor, help for the homeless and hungry could come from charities, businesses, churches and local state governments.

• Public Work Schemes: Public work schemes are construction projects that are funded by the government that help to create jobs. Hoover spent $1.3 million dollars to fund work scheme programmes, the most successful of which was the Hoover Dam. It provided farmers in Arizona and Nevada with a regular supply of water, prevented flooding and was used to generate hydroelectric power (HEP).

• The President’s Organisation on Unemployment Relief (POUR): The President’s Organisation on Unemployment Relief (POUR) was set up in 1931. Its purpose was to co-ordinate local welfare agencies, without spending government money. It only lasted until 1932.

• The Hawley-Smoot Act 1930: In 1930, Hoover introduced the Hawley-Smoot Act which increased tariffs to 60 per cent on imported manufactured items. This aimed to encourage consumers to buy more home-produced goods by making foreign goods even more expensive. It was hoped that this would help out struggling industries.

• The Reconstruction Finance Corporation: The Reconstruction Finance Corporation (RFC) was established in 1932. This gave $2 billion dollars in loans to assist businesses, banks and insurance companies.

• The Federal Farm Board 1932: The Federal Farm Board provided loans to farmers for seed and fertilisers. It also bought $500 million worth of surplus food to help keep prices up.

Hoover had completely underestimated the length and the severity of the Great Depression.

It wasn’t the normal cycle of ‘boom and bust’, but instead a complete collapse in the economy.

Voluntarism was simply not enough to cope with the problem and the POUR programme failed by 1932 because it was money rather than organisation that was needed.

The Hawley-Smoot Act only served to make European countries retaliate, meaning that American companies and farmers couldn’t export their surplus goods at a time when it was needed.

Whilst the Reconstruction Finance Corporation and Farm Board loans were welcome, they simply weren’t enough given the massive scale of the Great Depression.

Agriculture continued to decline under Hoover and there was great hardship.

Prices remained so low farmers could not afford to harvest their crops.

They left the crops, like wheat and fruit, to rot in the fields and farm animals were killed instead of being taken to market.

40 per cent of farms were mortgaged to banks.

Evictions for non-payment of mortgages increased.

Unemployment increased under Hoover from 1.6 million to 14 million.

Even for those in work, wages remained low because businesses were struggling to survive.

The US Steel Corporation cut salaries by 10% in 1931.

Thousands were living in the Hoovervilles.

Industrial production continued to drop.

It decreased by 45 per cent between 1929 and 1932.

House-building fell by 92 per cent between 1929 and 1932.

Businesses continued to go bankrupt, especially banks.

From 1929 to 1932, 5000 banks, which tended to be too small and unregulated, went out of business.

In New York, 10,000 of the 29,000 manufacturing firms closed.

Hoover gave $300 million to the states through the 1932 Emergency Relief Act to provide support for the unemployed, but only $30 million was used by the Republican states because they believed more strongly than Hoover in 'rugged individualism'.

In the 1932 presidential election, Hoover would be up against Franklin D Roosevelt of the Democratic Party.

They were two contrasting choices.

In Hoover’s election campaign, his speeches increased his unpopularity.

Voters disliked his emphasis on self-reliance and the need for neighbours to help each other, not the government.

People did not believe his promise that, “Prosperity is just around the corner”.

In contrast to Hoover, Roosevelt ran a positive and energetic campaign.

He travelled around America to bring his message to ordinary people, in spite of his disability from polio.

He was much more approachable and charismatic than Hoover, and a more confident public speaker.

Roosevelt appealed to the electorate in a number of ways.

• He had already helped the poor as Governor of New York State by setting up the first state-run relief scheme. This made him popular with the workers, if not businessmen.

• His ideas in the election campaign seemed radically different from Hoover’s “rugged individualism” and were therefore popular with the voters.

• Roosevelt promised a ‘New Deal’ with the American people under which the government would intervene in the economy to try and solve the depression.

Hoover

• Often thought to be remote and aloof.
• He was a rich millionaire.
• A poor communicator with the public.
• He still emphasised the role of the individual in solving problems rather than the government.
• Had done ‘too little, too late' to address the depression and his policies were ineffective.

Roosevelt

• Had a warm personality and although from a rich background, he was dealing with the personal tragedy of polio which confined him to a wheelchair.
• A very good communicator who ran an energetic campaign.
• He promised government help and a ‘New Deal’ between the government and the people.
• Promised to fight the depression like he would a war.

With President Hoover and Republicans being blamed for the Depression, Roosevelt won the election in a huge victory.

Only six out of the 48 states voted for Hoover.