26 Module Introduction
The Great Depression and the New Deal (1929–1941)
Module Introduction
The prosperous decade leading up to the stock market crash of 1929, with easy access to credit and a culture that encouraged speculation and risk-taking, put into place the conditions for the country’s fall. The stock market, which had been growing for years, began to decline in the summer and early fall of 1929, precipitating a panic that led to a massive stock sell-off in late October. In one month, the market lost close to 40 percent of its value. Although only a small percentage of Americans had invested in the stock market, the crash affected everyone. In the immediate aftermath of the crash, the government was confident that the economy would rebound. But several factors led it to worsen instead. Affluent Americans considered the deserving poor—those who lost their money due to no fault of their own—to be especially in need of help. But at the outset of the Great Depression, there were few social safety nets in place to provide them with the necessary relief. While some families retained their wealth and middle-class lifestyle, many more were plunged quite suddenly into poverty and often homelessness. Children dropped out of school, mothers and wives went into domestic service, and the fabric of American society changed inexorably.
President Hoover’s deeply held philosophy of American individualism led him to greatly resist government intervention in the Depression, considering it a path to the downfall of American greatness. His initial response of asking Americans to find their own paths to recovery and seeking voluntary business measures to stimulate the economy could not stem the tide of the Depression. Ultimately, Hoover did create some federal relief programs, but the severe limits on these programs meant that most Americans saw no benefit. The American public ultimately responded with anger and protest to Hoover’s apparent inability to create solutions. Protests ranged from factory strikes to farm riots, culminating in the notorious Bonus Army protest in the spring of 1932. Veterans from World War I lobbied to receive their bonuses immediately, rather than waiting until 1945. The government denied them, and in the ensuing chaos, Hoover called in the military to disrupt the protest. The violence of this act was the final blow for Hoover, whose popularity was already at an all-time low.
The Great Depression affected huge segments of the American population—sixty million people by one estimate. African Americans and farmers were hit harder than the rest. There was very little in the way of public assistance to help the poor. While private charities did what they could, the scale of the problem was too large for them to have any lasting effects. People learned to survive as best they could by sending their children out to beg, sharing clothing, and scrounging wood to feed the furnace. Those who could afford it turned to motion pictures for escape