*Although farmers in the West and South were poor, and some factory workers, especially in marginal regions were not making much money (women working in the Elizabethton rayon plants made $10 a week working 56-hour weeks), many Americans enjoyed an improved standard of living.

*The prosperity of the 1920s ended on 29 October, 1929, a day also known as Black Tuesday.

*Throughout the 1920s, stock prices had slowly but steadily risen, fuelled by the consumer spending of the decade, but that spending was based on indebtedness.  Even stocks could sometimes be bought on the instalment plan, although with stocks it was called buying on margin, and was done in the hope of making back the balance of the cost and a profit by selling the stocks when they rose high above the purchase price.  However, as stock prices rose, people began buying in a frenzy, driving prices artificially high.

*In September of 1929, however, the economy was beginning to slow down.  Not even instalment plans could entice people to buy all the products of factories and people also began to realise that stocks were not really worth as much as people were paying.  Stock prices slowly began to fall again.

*On Wednesday, 23 October, stock prices began to fall late in the trading day.  On ‘Black Thursday,’ 24 October, prices fell faster, even good stocks like General Electric losing over a quarter of their value in many cases.  To stop the slide, a group of bankers led by J.P. Morgan, a man so rich he had once loaned money to the US Treasury, worked together to buy up stock and stabilise prices, but this only helped for a few days.  On Tuesday, 29 October, the entire stock market crashed, and within two weeks had lost almost half its value.  Over $30 billion worth of investments were lost.  Consequently, this is called the Great Crash, and the date it happened Black Tuesday.

*Initially the Crash only hurt people who invested in the stock market.  Unfortunately, many banks had invested, and all were tied into the nationwide financial system.  Loans banks had made to stock investors could not be paid back, investments banks had made in stocks were often worthless, people worried about the crash withdrew all their money (more than banks had on hand), and many banks collapsed, taking with them the life savings of many Americans.

*As the economy collapsed, factories and businesses laid off their workers—the Ford Motor Company alone laid off 75,000.  In time, one third of American men would be unemployed (and almost all women, as was the custom of the time), and many more would only have part time work.

*Simultaneously, the west, already filled with impoverished farmers, was hit by a terrible drought.  This followed years of monocrop farming, which depleted the soil.  The dry, barren soil was blown away in windstorms, destroying the land.  Some soil was blown from the Dakotas to points as far east as New England, where it stained the snow red.  The part of the country stripped of its topsoil and impoverished was called the Dust Bowl.  In combination with low crop prices, these terrible conditions caused about 60% of families in the area to lose their farms.

*Herbert Hoover insisted the rising unemployment was temporary—prosperity was just around the corner.  However, as the homeless crowded together and built little shantytowns under railroad bridges and in dumps, they called these settlements Hoovervilles.  Others took to the rails and became hoboes, only stopping occasionally in ‘hobo jungles.’

*In 1932, a group of veterans marched on Washington, D.C., some all the way from Portland, Oregon.  When the Great War ended, all veterans had been promised a bonus pension in 1945.  These veterans, however, wanted their share of the bonus now, and called themselves the Bonus Army.  25,000 camped outside Washington, where they were ultimately attacked and dispersed with tear gas by the US Army.  The operation was directed by the Army Chief of Staff, Douglas Macarthur with the help of his aide Dwight Eisenhower, and implemented by the commander of the Third Regiment, George Patton.

*Cities opened soup kitchens to feed the poor, and people living in towns cultivated gardens and raised livestock in their yards in order to have some kind of sustenance.

*Hoover wanted to help, but he feared it would hurt Americans to get government handouts.  However, he did fund private businesses and banks in the hope they would make loans and employ people.  He also enacted the Hawley-Smoot tariff, the highest in American history, in order to keep out imports and protect American industries.

*In 1932, Hoover ran for President again, against Franklin Delano Roosevelt, a distant cousin of Theodore.

*FDR promised a New Deal for America, although he was deliberately vague on just what that meant.  If Americans wanted to find out, they would have to elect him.  His campaign song was ‘Happy Days are Here Again,’ and enough Americans hoped he was right that he was elected by a landslide.

*FDR’s New Deal required a great deal of government involvement in the economy and society, and Hoover was not fond of that.  He thought it would change American forever.  However, once Roosevelt was elected, Hoover tried to work with him, but FDR refused to give him any details of his plans so that if they worked, only he and the Democrats would get credit for them.  In response to this Congress passed the XX Amendment, also called the ‘Lame Duck Amendment,’ because it sets the inauguration day for the president on 20 January, as opposed to the traditional 4 March, so that new presidents could begin their work sooner.

*In his inaugural address, Franklin D. Roosevelt assured Americans that he and the government would take care of them.  He told America ‘the only thing we have to fear is fear itself.’

*Roosevelt immediately began his New Deal.  To reduce crime and restore joy to Americans, the XXI Amendment, passed in February 1933 and ratified the next year, ended Prohibition.

*The first hundred days of Roosevelt’s presidency were so full of new programmes begin created that ever since every Presidency has been judged, to some degree, by the accomplishments of its first hundred days.

*First, FDR wanted to restore confidence in the nation’s banks.  The day after his inauguration, FDR declared a bank holiday, closing all banks so no-one could withdraw more funds, forcing banks to close.  Within five days, Congress had passed the Emergency Banking Act, which let the government inspect banks to see if they were sound.  The government also created the Federal Deposit Insurance Corporation, or FDIC, to insure deposits, paying back a certain amount (as much as the average person was expected to have saved) in case of bank failures.  All this made Americans confident in their banks again.

*To create new jobs, Roosevelt created the Civilian Conservation Corps to build and maintain facilities in national parks (such as large parts of the Appalachian Trail) and the Public Works Administration, which built dams, roads, and other projects.  Later on, the Works Progress Administration would employ artists of various types to do public works of art and do other projects.

*In and around Tennessee, the Tennessee Valley Authority built dams along the Tennessee River and its tributaries.  Not only did this create jobs, it also controlled floods (a serious problem in the region), and provided cheap electric power for a large part of the South, allowing new industry and previously-unknown luxuries like refrigerators and washing machines.  Sponsored by George Norris of Nebraska, this was one of the most successful and long-lasting of the New Deal projects.

*To help homeowners, FDR created the Federal Housing Administration, which also still exists, and insures mortgages so that banks will be more willing to loan money to people who want to buy a house.

*To help raise farm prices, the New Deal created the Agricultural Adjustment Act, which paid farmers subsidies not to produce too many crops, and even bought up extra produce and destroyed it (although movies of this activity infuriated some people standing in bread lines).

*Roosevelt made several attempts to help industry and industrial workers, many of which were less successful.  However, to get individual workers out of the factories part of the time so more people would be employed some of the time, he instituted the eight-hour work day and the forty-hour work week (and thus the five-day week, thereby creating the weekend).  He also created the Social Security Administration, taking money from all workers and saving it up in order to pay pensions in retirement.

*Some criticised the New Deal for spending too much money and instituting too much government interference in people’s lives, but it restored people’s faith in their government, reduced the chance of a revolution, and helped improve the economy, although the economy would not really pick up until America had a new job to do, and America would not get that until 7 December, 1941.

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