Continued prosperity seemed certain when Herbert Hoover became president in March 1929, but the economy's foundation was shaky. It collapsed less than eight months later when the stock market crashed. Stock prices dropped in value by one-third to one-half. In the Great Depression of the 1930s that followed, business failures skyrocketed and the gross national product and building projects declined sharply. More than 9,000 banks failed between 1930 and 1932. Unemployment soared from 3.1 percent in 1929 to 25 percent in 1933, with 12,500,000 workers unemployed. The wages and salaries of most who kept their jobs were cut. Low prices made conditions in the farmbelt equally bad. They became worse when the drought that caused the Dust Bowl in Kansas, Oklahoma, and the Texas Panhandle arrived there too. Farm foreclosures and defaults climbed from 19,000 in 1919 to more than 55,000 in 1933. Some 8.5 million sharecroppers in the rural South sank into the deepest poverty. Hunger, homelessness, and door-to-door begging became ways of life.
The government was slow to respond. Hoover believed that government assistance to individuals would destroy their self-respect and diminish their desire to pick themselves up. Rescuing collapsing businesses would encourage dependency on the government. He urged the people to maintain hope and admonished business and labor leaders to keep mills and shops open without cutting wages and to avoid layoffs by spreading the work around. Eventually Hoover supported some measures to aid businesses and opened the door for more dramatic action by his successor.