The Great Depression

Depression Hits Texas

Chapter 22-1

Pages 498-502

The Great Depression Begins• In 1929, early in Republican Herbert

Hoover’s presidency, the US Stock Market collapsed.

• Many investors hoping to make quick fortunes, drove up the price of stock.

• Some had borrowed money very heavily to buy stocks, and when stock prices dropped, those investors and the banks that loaned them money were wiped out.

• The Great Depression was a nationwide crisis.

• Hoover, underestimated the crisis. He believed relief efforts should begin at the state and city levels.

Too Much Oil• The largest oil field in the state at the time

was in East Texas.

• Drilling in the new oil fields provided high paying jobs for drillers, farmers, and timber workers.

• Other businesses also benefited and the Depression seemed far away.

• Hundreds of small oil drillers or independents in the region drilled oil wells everywhere.

• Soon, the East Texas field was producing more oil than the rest of the state combined.

• According to the law of supply and demand, oil prices fell with too much oil on the market.

• In April 1931, the Texas Railroad Commission issued an order to limit production.

• Independents continued to secretly pump and transport oil.

• Governor Sterling declared martial law and sent in the Texas national Guard, but overproduction resumed when martial law ended.

• What is martial law?

• In 1935, laws were passed to control production, making oil prices stable.

Crisis for Cotton Farmers• In the 1920’s. the price of cotton declined

and the Great Depression forced the price down.

• Stored cotton created a large surplus and lowered the price further.

• The Texas Department of Agriculture urged farmers to reduce the number of acres planted.

Dust Storms Blanket the High Plains

• After the railroads emerged in Texas, the large ranches were divided into farms.

• After WWI, when the wheat prices were high, farmers tried to earn more money by planting more. Prices fell in the 1920’s, due to overproduction.

• Farmers plowed under the grasses of the Plains to plant crops, but there was nothing to hold down the soil from the strong winds.

• In the 1930’s, a severe drought added to the problem as dust storms made the area into a Dustbowl.

• People became ill from lung diseases, and many families lost farms because of hard times.

• What were the causes of the Dustbowl?

Texans Look for Answers• As banks failed, merchant associations

printed coupons that could be used for money.

• Rural communities paid their church ministers with food and their teachers with IOUs.

• Large numbers of Mexican Americans and Mexicans moved to Mexico. Residents of Texas and the US who could not prove citizenship were forced to leave the country.

Franklin

D. Roosevelt

FDR

The New Deal Begins• When FDR won the presidential election in

1932, an overwhelming 90% of Texans supported him.

• FDR took office in March 1933, and his reform programs were called the New Deal.

• During “the 1st 100 days”, he closed banks briefly to determine which were strong enough to stay in business.

• Vice-President John N Garner, from Texas, helped push New deal programs through Congress.