The Great Depression significantly affected American society, impacting everyday people, farmers, and businesses, while shaping political change through President Hoover's failure and Roosevelt's election.
The onset of the Great Depression
The Great Depression began in October 1929 with the dramatic collapse of the stock market, known as the Wall Street Crash. It marked the beginning of the most severe and widespread economic crisis in American history, lasting through most of the 1930s. The crash had a domino effect that spread rapidly throughout the financial system, leading to a national and then global economic collapse. Investors, banks, and businesses lost massive amounts of money, and the American people were plunged into poverty and unemployment.
Key causes of the Depression
Overproduction: Both agriculture and industry were producing more goods than could be sold. Factories and farms were making surplus products, but consumers did not have the income to buy them.
Unequal distribution of wealth: A small percentage of Americans held most of the country’s wealth. This meant that most people didn’t have enough disposable income to keep the economy going when times got tough.
Reliance on credit: Many Americans had bought goods using credit schemes such as hire purchase, and when they lost their jobs, they couldn’t keep up with repayments.
Stock market speculation: People invested heavily in stocks using borrowed money (buying on margin), which created an unstable financial bubble. When prices fell, investors panicked and sold off their shares, accelerating the crash.
Banking weaknesses: There was little government regulation. Banks loaned out too much money and had no insurance for depositors. When people rushed to withdraw their money, many banks couldn’t cope and failed.
Decline in international trade: The Smoot-Hawley Tariff Act (1930) increased tariffs on foreign goods, prompting retaliatory measures from other countries and reducing exports, worsening the economic crisis.
Impact on unemployed people
As businesses cut back or shut down, millions of Americans lost their jobs. By 1933, the unemployment rate had reached approximately 25% of the workforce, equating to over 12 million people out of work.
Urban unemployment
In industrial cities like Detroit and Cleveland, unemployment soared. In Cleveland, it reached 50%.
Formerly prosperous cities saw the emergence of widespread poverty, hunger, and homelessness.
People stood in long breadlines and relied on soup kitchens for basic food.
The rise of Hoovervilles
Thousands of shantytowns appeared on the outskirts of cities. These makeshift settlements were built from scrap materials and became known as “Hoovervilles,” mocking President Hoover’s inability to solve the crisis.
Residents lacked running water, electricity, and sanitation. Disease and malnutrition were common.
"Hoover blankets" referred to newspapers used for warmth, while "Hoover flags" were empty pockets turned inside out.
Family breakdown and hardship
Financial stress led to rising divorce rates, though many could not afford formal separation.
Marriage and birth rates declined due to economic insecurity.
Children left school early to help support their families, and child malnutrition increased.
Many Americans took to the railways in search of work, especially young men. These “hobos” rode freight trains illegally and lived transient lives.
Struggles of farmers
The farming sector had already been in trouble before the Depression. During the 1920s, farmers suffered from low prices due to overproduction. When the Depression hit, their situation became even worse.
Falling prices and farm foreclosures
Crop prices plummeted. For example, wheat prices fell from $2.16 per bushel in 1919 to only 38 cents by 1932.
With falling income, many farmers could not repay debts or afford to maintain their land and equipment.
Foreclosures were widespread, with banks seizing farms when owners defaulted on loans.
Many families were forced off their land and became migrant laborers.
The Dust Bowl
A natural disaster made life even more difficult for farmers in the Great Plains.
Between 1930 and 1936, a severe drought hit states like Oklahoma, Texas, Kansas, and Colorado.
Poor farming techniques, such as over-plowing and lack of crop rotation, had stripped the soil of nutrients.
High winds created massive dust storms that darkened skies and buried homes and farmland.
This region became known as the Dust Bowl.
Around 2.5 million people left the Dust Bowl region in search of work, many heading to California. These migrants were often derogatorily called "Okies," regardless of their actual state of origin.
Effects on business and industry
Business confidence was shattered following the stock market crash. As consumer spending dried up, many companies were unable to stay afloat.
Collapse of businesses
Thousands of businesses went bankrupt due to plummeting sales.
Even large companies had to lay off workers or drastically cut wages.
Industrial production fell by nearly 50% between 1929 and 1932.
Banking crisis
Between 1929 and 1932, over 5,000 banks failed.
Depositors lost their savings because there was no federal insurance at the time.
Bank failures further reduced credit availability, worsening the economic situation.
Attitudes of businessmen
Business leaders generally opposed government interference and preferred a laissez-faire approach.
Many saw the Depression as a temporary setback and hoped the market would self-correct.
Others criticized the federal government for its lack of support but also feared socialism and big government solutions.
President Hoover’s responses and their unpopularity
Herbert Hoover served as President from 1929 to 1933. Though intelligent and experienced, his response to the Depression was widely seen as inadequate.
Hoover’s philosophy
He believed in “rugged individualism” — the idea that Americans should rely on themselves, not the government.
Hoover was convinced that direct government assistance would undermine self-reliance and create dependency.
He promoted voluntarism, encouraging businesses to keep wages high and avoid layoffs voluntarily — a strategy that quickly failed.
Hoover’s policies
Reconstruction Finance Corporation (1932): This agency provided loans to banks, railroads, and major businesses to prevent collapse. However, it did little for ordinary Americans.
Public works projects were initiated, such as the construction of the Hoover Dam, which provided some employment but were too limited in scope.
Hoover raised taxes with the Revenue Act of 1932, aiming to balance the budget, but this reduced consumer spending even further.
Public criticism and mockery
Hoover’s reluctance to provide direct federal aid led to widespread resentment.
His name became associated with failure and hardship:
“Hoovervilles” – shantytowns
“Hoover blankets” – newspapers used for warmth
“Hoover flags” – empty turned-out pockets
Many viewed him as cold, indifferent, and out of touch with ordinary Americans.
The Bonus Army incident
One of the most damaging events to Hoover’s reputation occurred in 1932.
Approximately 20,000 World War I veterans (known as the Bonus Army) marched on Washington, D.C.
They demanded early payment of bonuses that were scheduled to be paid in 1945.
The veterans built a camp in the capital, refusing to leave until Congress passed legislation for early payment.
Hoover rejected their demands, fearing budget consequences and setting a precedent.
When the protest continued, he ordered the U.S. Army, under General Douglas MacArthur, to forcibly remove the veterans.
Troops used tear gas, bayonets, and set fire to the camps.
The violent eviction shocked the public and damaged Hoover’s image further.
Roosevelt’s election in 1932
In November 1932, the American people turned to Franklin D. Roosevelt (FDR), the Democratic governor of New York, to lead them out of the crisis.
Roosevelt’s campaign
FDR promised a “New Deal for the American people” — although vague, this slogan gave hope.
He emphasized action, experimentation, and compassion.
Roosevelt was a charismatic speaker and used the media, particularly radio, to reach out to Americans and project confidence.
His campaign contrasted Hoover’s pessimistic tone with optimism and determination.
Election results
Roosevelt won a landslide victory:
472 electoral votes compared to Hoover’s 59.
Won 57.4% of the popular vote.
His victory reflected a national demand for change and a new approach to handling the Depression.
Why Roosevelt appealed to voters
FDR was seen as empathetic, having personally battled polio.
Promised bold government intervention, including public works, unemployment relief, and economic reform.
He united a broad coalition: urban workers, farmers, African-Americans, and immigrants who had become disillusioned with the Republican Party.
His willingness to experiment with solutions reassured a desperate population.
Political shift
Roosevelt’s victory marked a major turning point in American political life.
People began to see the federal government as responsible for economic and social welfare.
His presidency would soon redefine the relationship between the government and the American people.
FAQ
Charities and local organizations played a crucial role in supporting struggling Americans during the Great Depression, especially before federal relief efforts became widespread. With President Hoover’s reluctance to provide direct aid, many people turned to churches, community groups, and local governments for food, clothing, and shelter. Religious organizations such as the Salvation Army and local church missions organized soup kitchens, breadlines, and free clothing distribution. Mutual aid societies, especially in immigrant and African-American communities, also helped by pooling resources. However, the overwhelming demand for assistance far exceeded what these groups could provide. By the early 1930s, most local charities were overwhelmed, underfunded, and unable to meet the basic needs of millions. In many areas, the sheer scale of poverty and unemployment rendered these efforts insufficient. This inadequacy eventually fueled public demand for federal intervention and demonstrated that private charity, while vital, could not replace the role of a coordinated national response to economic disaster.
The Great Depression had a profound psychological toll on the American population. As unemployment and poverty soared, so did feelings of hopelessness, shame, and fear. Many individuals, particularly men who had been family breadwinners, experienced intense guilt and a loss of identity when they could no longer support their families. Suicide rates rose sharply during the early years of the Depression, reflecting the deep despair experienced by many. Public attitudes toward poverty also shifted. Previously, poverty had often been blamed on laziness or personal failure, but the scale of suffering during the Depression led to growing sympathy and understanding. As more middle-class families found themselves unemployed or homeless, it became clear that systemic issues, not individual faults, were largely to blame. This shift in perception helped to build support for welfare programs and the idea that government had a responsibility to provide a safety net for its citizens during times of widespread economic hardship.
The Great Depression severely disrupted education in the United States. As local and state governments lost tax revenue, funding for public schools declined sharply. Many schools were forced to cut teachers' salaries, shorten school years, or shut down entirely. Rural schools were particularly hard-hit, with some areas unable to operate schools at all for months. School attendance also dropped significantly. Children from poor families were often pulled out of school to help support their families by working or caring for siblings while parents searched for employment. In extreme cases, families could not afford basic supplies like books, shoes, or warm clothing, making it difficult for children to attend even if schools remained open. Older teenagers sometimes joined the growing ranks of transient workers. Despite these hardships, education remained a priority for many families, and in some urban areas, relief programs began to include educational support. Still, the long-term impact was a generation that, in many cases, received limited formal education.
During the Great Depression, women faced a complex set of challenges and changes. While unemployment among men was far more publicized, many women also lost jobs or found it harder to enter the workforce due to gender discrimination. Despite this, the number of women in paid work actually increased slightly during the 1930s, as more families relied on dual incomes to survive. Women often took low-paying, insecure jobs in sectors like domestic service, textiles, and clerical work. However, working women were frequently criticized, especially married women, as there was a belief that they were taking jobs from unemployed men. In many states, laws were introduced or enforced that limited women’s employment, particularly if their husbands had jobs. At home, women were responsible for managing tight household budgets, stretching food supplies, and caring for family members with fewer resources. Their contributions were essential to family survival, yet often undervalued. The Depression highlighted both the resilience of women and the persistent inequalities they faced in society and the workplace.
Internal migration during the Great Depression was a widespread and often desperate response to economic hardship. One of the most notable migration movements involved displaced farmers from the Dust Bowl region, primarily from Oklahoma, Texas, Kansas, and surrounding states. These individuals and families moved westward, especially to California, hoping to find work in agriculture or industry. Often referred to as "Okies," many faced discrimination, poor living conditions, and limited job opportunities upon arrival. Migrants lived in temporary camps or overcrowded settlements with little sanitation or infrastructure. Apart from Dust Bowl refugees, many other Americans became migrant laborers, especially young men who left home to ride freight trains in search of work. These so-called hobos developed a transient lifestyle, moving from town to town with little stability. Migration also occurred from rural to urban areas, though cities were often overwhelmed by the influx and lacked jobs or housing. Internal migration during the Depression reshaped population patterns and exposed the vulnerabilities of a country unprepared for mass displacement.
Practice Questions
Explain two effects of the Great Depression on American farmers.
One effect of the Great Depression on American farmers was widespread foreclosure. Falling crop prices meant many farmers could not repay loans, leading to the loss of land and homes. Another effect was the devastation caused by the Dust Bowl. Years of drought and poor farming practices led to severe dust storms, destroying farmland and forcing many farmers to migrate west in search of work. These migrants, often called "Okies," faced harsh living conditions and limited job opportunities. Together, these effects deepened rural poverty and highlighted the economic and environmental challenges faced by farmers during the Depression.
Write a narrative account of President Hoover’s response to the Great Depression.
President Hoover believed in limited government intervention and encouraged voluntary cooperation from businesses to maintain wages and employment. As the crisis worsened, he created the Reconstruction Finance Corporation in 1932 to loan money to struggling banks and businesses. However, this aid did not reach ordinary Americans. His refusal to provide direct relief made him deeply unpopular. The Bonus Army incident, where veterans demanding early payment were violently removed, further damaged his reputation. Shantytowns known as “Hoovervilles” symbolized public resentment. Hoover’s inadequate response to the Depression contributed to his defeat in the 1932 election by Franklin D. Roosevelt.
