The American Yawp — Chapter Twenty-One: The Great Depression
Abridged for Intermediate-High Learners

On October 24, 1929, stock market prices began to plummet. On October 29 — Black Tuesday — the market collapsed completely. The crash exposed deeper problems: rising inequality, saturated markets, and a farm economy already in crisis, with crop prices falling since 1920. President Herbert Hoover then signed the Smoot-Hawley Tariff of 1930, the highest tariff in American history. Other nations raised their tariffs, and world trade dropped sharply. As panic spread, frightened depositors rushed to withdraw their savings. Bank runs destroyed 1,352 banks in 1930 and nearly 2,300 in 1932.

As the Depression spread, Americans blamed President Hoover. Hoover believed in limited government and volunteerism: he asked businesses to keep their workers and urged charities to help the poor. But charities were quickly overwhelmed. In 1932 he created the Reconstruction Finance Corporation, which gave emergency loans to banks and big industries — a "millionaire's dole" that helped bankers while ordinary people received nothing.

By 1932 nearly one in four workers had no job. Homeless families built a shantytown called a Hooverville and stood in bread lines for free food. Women suffered in special ways, since many believed men should be the only breadwinners — yet many women and children entered the workforce because their families needed the money. Black Americans suffered most of all: while national unemployment reached 25 percent, Black unemployment reached 50 percent, because Black workers were the last hired and the first fired.

Severe droughts from 1932 to 1936 turned Great Plains farmland to dust. Poor farming had destroyed the grasses holding the soil, so winds created enormous dust storms across the Dust Bowl. Ruined farm families joined an exodus of migrants — called Okies — traveling west to California for work. Meanwhile the government forced about one million Mexicans and Mexican Americans to leave the country.

In the summer of 1932, over 15,000 unemployed World War I veterans marched on Washington. Calling themselves the Bonus Army, they demanded early payment of bonuses promised for 1945. After the Senate rejected them, Hoover ordered General Douglas MacArthur to clear their camp; soldiers with tanks and tear gas killed two marchers. Americans were shocked by Hoover's cruelty.

In 1932 voters elected Franklin D. Roosevelt in a landslide. Declaring "The only thing we have to fear is fear itself," he ordered a bank holiday and explained his plans in radio "Fireside Chats." Congress created the Federal Deposit Insurance Corporation. In his first Hundred Days, Roosevelt launched the Civilian Conservation Corps for young workers, the Tennessee Valley Authority, the Agricultural Adjustment Administration, and the National Recovery Administration, which asked businesses to pay fair wages and let workers unionize.

Critics said Roosevelt did not go far enough. Senator Huey Long proposed a "Share Our Wealth" plan to take money from the rich and give it to the poor, until a gunman managed to assassinate him in 1935. The Court declared the NRA unconstitutional in 1935 and struck down the AAA in 1936. Roosevelt answered with a Second New Deal: the Works Progress Administration employed millions on public projects, the Wagner Act protected the right to unionize, and the Social Security Act of 1935 created an old-age pension program and unemployment insurance. But the act excluded farm and domestic workers — a decision that would discriminate against Black Americans and leave most of them with no benefits.

Roosevelt won reelection in 1936 — his opponent carried only Maine and Vermont. But his 1937 "court-packing" plan to add justices to the Supreme Court failed, and his spending cuts caused a new recession in 1937. By 1939 the threat of war in Europe had pushed the New Deal aside. It never fully ended the Depression, but it changed America: people now saw the federal government as an ally, and a new coalition of workers, liberals, farmers, and minorities backed the Democratic Party for decades.