BLACK TUESDAY

The stock market crash on October 29, 1929 shattered these good times. The fault lines kept spreading, shaking the economic foundation of the country. Over 1300 banks closed almost immediately, and businesses failed by the hour. Four and a half million people were thrown into the streets.

President Herbert Hoover hesitated to use federal power to correct the damage. He believed government involvement would make matters worse, and felt confidant that private industry and the financial market would correct itself as it had done in the past. He encouraged voluntary actions to maintain payrolls and stabilize wages. Taxes were cut, credit increased to banks, tariffs raised...but to no avail.

By 1931, at least ten million people were out of work, and it hadn't peaked yet. Two million people with families drifted from city to city living in shantytowns called "Hoovervilles," a derisive reference to the Republican President. Total economic collapse seemed inevitable. The fear of political collapse and revolution, many felt, would follow.