Part 2

• The price of houses had risen dramatically, especially in Florida, and the housing market collapsed in 1926
• This left people with huge mortgages for houses which weren't worth anywhere near that amount, and they couldn't sell their houses to pay their debts
• Factories were making too many goods, and workers wages were too low to enable them to pay for more goods
• Supply outstripped demand, there were too many cars made, and nobody to buy them
• Factories had to make workers redundant, which meant fewer people could afford consumer goods
• Farmers had produced too much, and prices fell and often were not enough to cover their costs
• There were too many small banks, and when people wanted to withdraw their money, they didn't have it because the banks had invested their savings in the stock market
• Investing in shares became a hobby for middle class people, and when the stock market collapsed, they lost lots of their money
• In the 1920s, America lent lots of money to Britain and Germany, and when America fell into economic problems, they asked for their money back, which turned the Depression into a world crisis
• The collapse of the Austrian bank Kreditanstalt led to a world financial crisis and people lost confidence in banks
• After the Fordney-McCumber act, other countries put high taxes on American goods, making them too expensive for people in other countries to buy
• The Depression started in 1929, triggered by the Wall Street Crash, and lasted until 1939, with the hardest years being 1929-32
• In 1932, 13m people were unemployed and 1-2m travelled around looking for work, becoming hobos
• In Alabama, a third of white people and half of black people were unemployed, and it was worse in the industrial northern states as companies laid off workers
• Those who had jobs had their wages cut 25%
• Ford had employed 120,000 workers in Detroit, which fell to 37,000 by 1931, and industrial production fell by 45% and house building fell by 82%
• By 1933, all the United States Steel Corporation's workers were working part time, and 100,000 companies closed
• In 1932, a quarter of a million people lost their homes, and some deliberately got themselves arrested so they could spend the night in prison
• Many moved to the edge of town and built shelters out of scrap metal and wood, which were called Hoovervilles - an insult to President Hoover
• 110 people died of starvation, although it was a contributing factor in many more deaths
• Some towns ran their own public relief programmes, providing jobs, temporary homes and food, and the Salvation Army set up soup kitchens
• Individual rich people sometimes offered help, for example Al Capone provided food in Chicago
• Unemployment in towns meant farmers sold less, and prices fell so much that it cost more to harvest the crop than it was worth, so they left wheat to rot in the field
• In 1932, one farmer in every 20 was evicted for failure to make mortgage repayments, and some farmers organised themselves to resist banks taking their homes
• In the south and Midwest like Oklahoma and Kansas, farmers had changed from cattle farming to growing crops, and the land became infertile due to over-farming and severe drought, turning the soil to dust in the Dust Bowl
• The Republican government at the start of the Depression, led by President Hoover, believed in 'rugged individualism' where the government should not interfere with people's problems
• Hoover promised people a 'chicken in every pot and a car in every garage'
• At the end of WW1, soldiers were promised a pension to be paid in 1945, and in 1932 many veterans had been hit by the Depression and wanted their pension early, so 20,000 marched to Washington to protest, but Congress refused to pay them and Hoover called in the army to get rid of them
• Hoover's government tried to help by cutting taxes, providing $4000m for building projects, giving $300m to states to help the unemployed, and providing $1500m in loans to businesses
• People blamed the government for the Depression and felt they hadn't done enough to help, holding marches and demonstrations against the government
• In the 1932 election, Roosevelt (a Democrat) won in a landslide, promising a 'new deal' for the American people
• Roosevelt used 'fireside chats' on the radio to explain to the public what he was doing and why, reaching 60m people regularly
• In his first 100 days in office, Roosevelt acted quickly, setting up a number of 'alphabet agencies' to deal with the Depression
• Roosevelt Becomes President
• Lame Duck months


  November 1932 – March 1933. The period between Roosevelt winning the election and taking office
• In the 1932 election, Roosevelt (a Democrat) won
• Roosevelt promised a 'new deal' for the American people
• Roosevelt won 42 of the 48 state votes
• It was the biggest presidential election win ever
• Fireside Chats


  Roosevelt used the radio to reach the public and explain to them why the USA was in depression and how he was going to help