Unit IV:
America Between
The Wars
The Nation’s Sick Economy
• Economic troubles on the Horizon
• Industries were struggling and farmers were growing more
crops and raised more livestock than they could sell at a profit
Industries in Trouble
• Key industries (railroads, textiles, and steel)
barely made a profit
• Coal mining was hit hard due to new forms of
energy
• Housing starts (an important economic indicator)
declined during this time (the number of new
dwellings being built)
• When housing falls many other industries soon
follow
Farmers Need a Lift
• Agriculture suffered the most
• During WWI, prices rose along with demand for
crops
• Because of this farmers planted more and took
out loans for more land and equipment
• Demand fell and prices dropped by 40%
• Farmers then planted more crops
• Farmers lost the farm
Farmers
• McNary-Haugen Farm relief Bill called for federal price
supports for key products such as wheat, corn, cotton, and
tobacco
• Government would buy surplus crops at guaranteed prices
and sell them on the world market
• President Coolidge vetoed the bill twice
Less Money to Spend
• As incomes fell, farmers spent less on goods and services
• Rising prices, stagnant wages, unbalanced distribution of
income, and overbuying on credit
• Widening gap between rich and poor
Hoover Takes the Nation
• Election of 1928: Hoover was the former secretary of
commerce. He was a mining engineer from Iowa who had
never run for public office.
• Hoover was Republican, and most Americans were happy with
the leadership.
Dreams
• By 1929, some economists were warning of
weakness in the economy. Most Americans
believed in the nation’s economic health.
• The stock market had become the most visible
symbol of a prosperous American economy.
• The Dow Jones Industrial Average was the most
widely used barometer of the market’s health.
• The Dow is a measure based on the stock prices
of 30 representative large firms trading on the
New York Stock Exchange.
Stock Market
• The market was in a “bull market,” meaning that
it was on the rise.
• People began to engage in speculation (they
bought stocks and bonds on the chance of a
quick profit, while ignoring the risks).
• Many bought on margin (paying a small
percentage of a stock’s price as a down payment
and borrowing the rest).
• The government did little to discourage this
buying or to regulate the market.
Stocks
• Rising prices did not reflect a companies true
worth.
• Those that speculated and bought on margin
had no way to pay off the loans if the prices
declined.
The Stock Market Crashes
• Early September 1929, stock prices peaked and
then fell.
• Confidence waivered and investors quickly sold
their stocks and pulled out.
• Oct. 24 the market took a plunge; panic ensued
and investors unloaded.
• Black Tuesday, Oct. 29th, the bottom fell out of
the market.
• People who had bought stocks on credit were
stuck with huge debts. Others lost their savings.
Financial Collapse
• Bank and business
failures: Many withdrew
their money from the
banks. Some could not
get their money because
the banks had invested it
in the market.
• Millions lost everything
because the government
did not insure accounts.
Depression: "Runs on Banks" people milling about outside of bank
(National Archives and Records Administration, n.d.c)
Millions Lose Their Jobs
• The US was not the only
country in a depression.
• Because of this, America
had difficulty selling
American farm products
and manufactured goods
abroad.
• Hawley-Smoot Tariff Act
was passed in 1930,
which established the
highest protective tariff
in U.S. history.
Depression: Unemployed: Typical picture capturing the number of
people who were unemployed and looking for a job
(National Archives and Records Administration, n.d.b)
Hardship and Suffering During the
Depression
Depression-Unemployed, man dressed poorly walking with
head down, shacks in background
(National Archives and Records Administration, n.d.a)
Devastated People’s Lives
• In the early 1930s, a
drought hit the Great
Plains destroying crops
and leaving the earth dry
and cracked.
• The drought and winds
lasted more than 7 years.
• Dust storms hit Kansas,
Colorado, New Mexico,
Nebraska, the Dakotas,
Oklahoma, and Texas.
Dust Storm in Spearman Texas
(U.S. National Oceanic and Atmospheric Administration, 1935)
Devastation
• The Depression brought hardship, homelessness,
and hunger to millions.
• In the cities, some slept in parks or sewer pipes,
wrapping themselves in newspapers.
• Many lived in makeshift shacks built out of scrap
materials.
• Shantytowns were little towns consisting of
shacks.
Cities
• The poor dug through garbage cans or begged.
• Soup kitchens offered free or low-cost food.
• Bread lines: lines of people waited to receive
food provided by charitable organizations or
public agencies.
• African American and Latino rates were higher
and dealt with racial violence.
• Twenty-four African Americans died by lynching
in 1933.
Rural Areas
• Most farmers could grow food for their families.
• Thousands lost their land. Between 1929-1932,
400,000 were lost to foreclosure.
• Many turned to tenant farming to barely make a
living.
Dust Bowl
• Farmers began using tractors in the previous
decade to break up the grasslands.
• The protective layer of prairie grasses was gone.
• The land became exhausted due to over
production of crops.
• When the winds hit, it gathered the topsoil
exposing the sand and grit underneath.
• Storms gathering on the grasslands would move
all the way to the East coast.
Dust Bowl
• Because of the storms
and evictions, thousands
would leave the land and
head west on Route 66
to California.
• Migrants known as Okies
found work as
farmhands.
• Others continued to
wander in search of jobs.
Dust Bowl winds pile up against barn in Kansas
(Rothstein, n.d.)
Effects on the American Family
• Stood as the source
of strength for most
Americans
• Traditional values
and the importance
of family
• Most stayed home
and played board
games (Monopoly,
1933) and listened to
the radio
Monopoly game tokens
(Oberger, 2012)
Men in the Streets
• Many men had problems coping with being unemployed.
• Frederick Lewis Allen wrote in Since Yesterday:
“Men who have been sturdy and self-respecting workers can take
unemployment without flinching for a few weeks, a few months,
even if they have to see their families suffer; but it is different
after a year…two years…three years.”
• As many as 300,000 transients, or hoboes, wandered the
country hitching rides on railroad boxcars and sleeping
under bridges.
• There was no direct relief (cash or food) or federal
system in place during this time.
Women Struggle to Survive
• Many women canned food and sewed clothes and carefully
managed household budgets.
• Many women worked outside the home.
• Many believed that women, especially married women, had
no right to work when there were men who were
unemployed.
Children Suffer Hardships
• Poor diets and lack of
money for health care
led to serious problems
• School year was
shortened
• Children went to work in
sweatshops
• “Wild boys” or “Hoover
tourists” were teenage
boys and girls who
hopped on trains to
escape
School children line up for free issue of soup and a
slice of bread in the Depression
(Hood, 1934)
Social & Psychological Effects
• Many lost their will to survive.
• Between 1928 and 1932, the suicide rate rose
more than 30%, with three times as many being
admitted to mental hospitals.
• Many made long-range compromises.
• Achieving financial security became most
important.
• Many showed great kindness during this time.
Hoover Struggles
with the Depression
Herbert Clark Hoover listening to a radio
(U.S. Department of Commerce, 1925)
Hoover Tries to Reassure
• Hoover tried to tell the nation that the economy
was on a sound footing
• “Any lack of confidence in the economic
future…is foolish”
• Important for Americans to remain optimistic
and go about their business as usual
• Depressions were part of the normal business
cycle
• Periods of rapid economic growth were naturally
followed by periods of depression
Hoovers Philosophy
• He was an engineer and had great faith in the
power of reason
• Believed that one of government’s chief
functions was to foster cooperation between
competing groups and interests of society
• Governments role was to encourage and
facilitate cooperation, not to control it
Hoover
• Americans valued “rugged individualism” and
should succeed through their own efforts
• Opposed any form of federal welfare
• Believed that handouts would weaken people’s
self-respect and moral fiber
• Individuals, charities, and local organizations
should help out
• The federal government should direct such
efforts but not with a huge federal bureaucracy
Hoover Takes Cautious Steps
• Called together key leaders in the fields of business, banking,
and labor
• Urged them to work together and find a solution
• None of his steps made much of a difference
Boulder Dam
• Construction of a dam on the
Colorado River
• Proposed using the profit from
sales of electricity from the dam
and helped arrange an
agreement on water rights
among the seven states of the
Colorado River basin (Arizona,
California, Colorado, Nevada,
New Mexico, Utah, and
Wyoming)
• Later to be called “Hoover Dam”
• 726 ft. high and 1,244 ft. long
• It would be the world’s tallest
dam and the second largest
Photograph of the Boulder Dam from Across the Colorado River, 1941
(Adams, 1941)
Democrats win in 1930
Congressional Election
• Anti-Hoover sentiment sets in
• Republicans lost control of the House and their
majority in the Senate dwindled to one vote
• Farmers began to burn their crop and dump their
milk rather than sell it at a loss
• “Farm holidays” where farmers refused to work
their fields
• Some blocked roads hoping that a food shortage
would raise prices
Hoover
• Shantytowns = Hoovervilles
• Newspapers = Hoover
blankets
• Empty pockets = Hoover
flags
Hooverville Portland, Oregon
(Rothstein, 1936)
Hoover Takes Action
• Backs cooperatives: backed the creation of the
Federal Farm Board (an organization of farm
cooperatives)
• This was intended to raise prices by helping
members buy crops and keeping them off the
market until prices rose
• National Credit Corporation: meant for nation’s
largest banks to loan money to the smaller banks
Direct Intervention
• Federal Home Loan Bank Act: lowered mortgage
rates for homeowners and allowed farmers to
refinance their farm loans and avoid foreclosure
• Glass-Steagall Banking Act: separated investment
from commercial banking
• Reconstruction Finance Corporation: $2 billion
for emergency financing for banks and other big
businesses. $805 million in first 5 months
Gassing the Bonus Army
• They called themselves
the Bonus Expeditionary
Force (WWI Vets and
families went to D.C.
spring 1932)
• Led by Walter Waters
• The Patman Bill
authorized the
government to pay a
bonus to WWI vets who
had not been
compensated adequately
for their wartime service
Members of the Bonus Army on the U.S. Capitol lawn, Washington, D.C.
(Underwood & Underwood, 1932)
Bonus Army
• Hoover called them “Communists”
• Felt they had a right to peaceful assembly and
even gave them food and supplies
• Bill voted down June 17th; Hoover called for
them to leave (most did)
• 2000 stayed and on July 28th a force of 1000
soldiers under Douglas MacArthur and Major
Dwight D. Eisenhower were sent to disband the
“Army”
• They were gassed; an eight month old baby died
and an eight year old boy was partially blinded
FDR’s New Deal
• Franklin Delano
Roosevelt elected as the
32nd President in 1932
• He will take the United
States through the
Depression into WWII
and almost out of the
War
• Elected to office four
times
Roosevelt in wheelchair
(Suckley, 1941)
References
Adams, A. (1941). Photograph of the Boulder Dam from Across the Colorado River, 1941 [Image]. Retrieved October 12,
2015, from https://commons.wikimedia.org/wiki/File:Adams_Boulder_Dam_1942.jpg
Hood, S. (1934). School children line up for free issue of soup and a slice of bread in the Depression, Belmore North Public
School, Sydney [image]. Retrieved October 12, 2015, from
https://commons.wikimedia.org/wiki/File:Schoolchildren_line_up_for_free_issue_of_soup_and_a_slice_of_brea
d_in_the_Depression,_Belmore_North_Public_School,_Sydney,_2_August_1934__Sam_Hood_(3550268287).jpg
National Archives and Records Administration. (n.d.a). Depression-Unemployed, man dressed poorly walking with head
down, shacks in background [Image]. Retrieved October 12, 2015, from
https://commons.wikimedia.org/wiki/Category:Great_Depression#/media/File:DepressionUnemployed,_man_dressed_poorly_walking_with_head_down,_shacks_in_background,_no_credit_Typical_pict
ure..._-_NARA_-_195916.tif
National Archives and Records Administration. (n.d.b). Depression: Unemployed: Typical picture capturing the number of
people who were unemployed and looking for a job [Photograph]. Retrieved October 12, 2015, from
https://commons.wikimedia.org/wiki/File:DepressionUnemployed,_Typical_picture_capturing_the_number_of_people_who_were_unemployed_and_looking_for_a_
job_-_NARA_-_195512.tif
National Archives and Records Administration. (n.d.c). Depression: "Runs on Banks": people milling about outside of
bank [Image]. Retrieved October 12, 2015, from
https://commons.wikimedia.org/wiki/File:Depression,_%22Runs_on_Banks%22,_people_milling_about_outside
_of_bank_-_NARA_-_195559.tif
References
Oberger, B. (2012,). Monopoly game tokens [Image]. Retrieved October 12, 2015, from
https://commons.wikimedia.org/wiki/File:Monopoly_game_tokens_01.JPG
Rothstein, A. (1936) Hooverville Portland Oregon [Image]. Retrieved October 9, 2015, from
https://commons.wikimedia.org/wiki/File:Hooverville_Portland_Oregon_1936.jpg
Rothstein, A. (n.d.). Dust Bowl winds pile up against barn in Kansas [Image]. Retrieved October 12, 2015, from
https://commons.wikimedia.org/wiki/File:Dust_Bowl_winds_pile_up_against_barn_in_Kansas.jpg
Suckley, M. (1941). Roosevelt in wheelchair [Image]. Retrieved October 12, 2015, from
https://commons.wikimedia.org/wiki/File:Roosevelt_in_a_wheelchair.jpg
Underwood, & Underwood. (1932). Members of the Bonus Army on the U.S. Capitol lawn, Washington, D.C. [Image].
Retrieved October 12, 2015, from
https://commons.wikimedia.org/wiki/File:Bonus_army_on_Capitol_lawn_cph.3a00515.jpg
U.S. Department of Commerce (1925). Herbert Clark Hoover listening to a radio [Image]. Retrieved October 12, 2015,
from https://commons.wikimedia.org/wiki/File:HerbertClarkHoover.jpg
U.S. National Oceanic and Atmospheric Administration. (1935). Dust Storm in Spearman Texas [Image]. Retrieved
October 12, 2015, from https://commons.wikimedia.org/wiki/File:DustStormInSpearmanTexas19350414.jpg