The population of California had rapidly increased from 1.5 million in 1900 to 2.4 million in 1910 and had more than doubled again in the next two decades: it stood at 5.7 million in 1930. It was now the sixth most populous state after New York, Pennsylvania, Illinois, Ohio and Texas, ahead of both Michigan (Detroit's state) and Massachusetts (Boston's state). The growth was largely due to southern California. Three transcontinental railroads had opened between 1876 and 1883, but especially the car was now responsible for making it easier to travel across the country. Tourism became a new lucrative industry in California. In 1925 the first motel opened (the Milestone Mo-Tel in San Luis Obispo). And many tourists decided to relocate permanently. In 1900 San Francisco's population was 130,000 and in 1930 it was 474,000. In 1900 Los Angeles' population had barely passed 100,000 but in 1930 it was more than one million (1,238,000), more than double that of San Francisco. Southern California's population had passed that of northern California already in 1920. There were 800,000 cars registered in Los Angeles in 1930, almost one per person.

The man elected US president at the end of 1928 was the mining magnate Herbert Hoover, who had been one of the first students to graduate from Stanford in 1895, and in his youth had traveled the world as a mining engineer, starting in the Sierra Nevada and in Australia, but also managing gold mines in China at the time of the anti-foreign Boxer Rebellion (1899-1901).

In October 1929 the New York stock market crashed, and in 1930 banks started failing, ushering in the Great Depression, the biggest economic crisis in the history of the USA. California was hard hit, but the rest of the USA was hit even harder, and so the Great Depression sent young people "west" again. Also affected were the thousands of elderly couples who had retired to southern California in the 1920s, lured by nation-wide marketing campaigns. Starting in 1931 and lasting the whole decade, a drought ravaged the farmlands of Oklahoma, Texas and Arkansas, lands which became known as the "Dust Bowl" (and its people generically "Okies"), and thousands of "Dust Bowl" refugees (of "Okies") headed to California.

Okies, Arkies (from Arkansas) and Texans moved to Kern County. That's when Bakersfield became a capital of country music, a city of honky-tonk bars that spawned country stars like Merle Haggard and Buck Owens.

The other victims were the Mexican immigrants. They had greatly increased after the Exclusion to replace Chinese agricultural laborers, especially in the 1920s when demand for their labor was high, but as the crisis hit the USA started deporting them by the tens of thousands (about two million by 1940, including many who had become US citizens). The mass repatriation of Mexicans was even worse than the "exclusion" of Chinese.

Some neighborhoods of San Francisco were devastated by the Great Depression, for example the middle-class Haight-Ashbury which had witnessed a boom of Victorian homes in the previous twenty years but rapidly descended into poverty and crime. By the start of World War II many of its gorgeous homes were decayed or even abandoned.

San Francisco philanthropist Lizzie Glide built the "Glide Church" in 1931 that during the Great Depression (and after) offered free meals and other services to low-income families.

In 1934 a general strike of San Francisco's longshoremen was violently suppressed by the police but led the protest's leader, Harry Bridges, an Australian immigrant, to establish in 1937 the International Longshore and Warehouse Union.

Inevitably, the crisis led to xenophobic riots. In 1930 anti-Filipino riots broke out in rural Watsonville and spread to San Jose.

Hoover, besides presiding over the economic crisis, was not friendly to immigrants. He launched a campaign to prosecute illegal immigrants, limited immigration to individuals who had already found a job from abroad and deported one million Mexican-Americans of Southern California (mostly born in the USA and therefore US citizens).

Former San Francisco mayor James Rolph was elected governor of California in 1931 but died in 1934 and was succeeded by his lieutenant Frank Merriam, an early "Okie" who had moved from Oklahoma to Long Beach California in 1910. Merriam suppressed the 1934 Longshore Strike and in 1938 an investigation exposed the degree of corruption in Sacramento (notably by Charles Lyon, a conservative representing Hollywood and Beverly Hills). During his tenure, Art Samish, raised in destitute poverty and with no education, became the first major lobbyist of California, using his client's money to get politicians elected or dismissed. Meanwhile, FBI detective Edwin Atherton, tasked with investigating organized crime in San Francisco, delivered a scathing report in March 1937 in which he unmasked the clandestine operations of Peter McDonough and his brother Tom, including dozens of brothels and gambling houses, and implicated dozens of San Francisco police and government officials in a vast scheme of bribes. A popular joke was that the organized crime of Chicago and New York had no chance to infiltrate San Francisco because the entire city was just one big racket.

At the same time Los Angeles was facing a similar problem. While Hollywood didn't suffer from the Depression, Los Angeles in general was affected by the Prohibition. Los Angeles became the bootleg capital of the West. Drinking and gambling gave L.A. a sinister image, captured in Raymond Chandler's noir thrillers. This was made possible by the widespread corruption in City Hall which became endemic after the Canadian-born businessman Frank Shaw was elected mayor in 1933. Joseph Ardizzone disappeared in 1931 (presumably murdered), but the New York Mafia (Lucky Luciano from prison) dispatched Bugsy Siegel to work with Jack Dragna, and they formed a deft duo until the center of operation moved to the Las Vegas Strip after World War II. Clifford Clinton, raised in China by missionaries who later opened a chain of restaurants in San Francisco, came to Los Angeles in 1931 and opened his own chain of cafeterias, specializing in affordable meals for the people hit by the economic crisis (originally his "Penny Cafeteria" served meals for one cent each). Clinton emerged as an anti-crime and anti-graft crusader. His cafeterias hosted gatherings of both religious and civic events. In January 1937 a bomb almost killed private investigator Harry Raymond who was shadowing Shaw, and a police captain was suspected of planting the bomb. In 1937 Clinton formed with a group of religious leaders an organization called C.I.V.I.C (Citizens’ Independent Vice Investigating Committee) to expose the gambling and prostitution rackets protected by City Hall. They literally discovered hundreds of brothels and gambling dens. In 1938 the people of Los Angeles voted to remove him from office and then elected reform candidate Fletcher Bowron, who remained in office a record 14 years. (For the record, Clinton later expanded his mission to feed the hungry and in 1944 founded the non-profit "Meals for Millions" that operated worldwide).

The people of California revolted and elected the leftist Culbert Olson as governor from 1939 until 1943. A renegade Mormon from Utah, he was a political ally of Franklin Delano Roosevelt and a friend of socialist Upton Sinclair.

Despite the economic crisis, Los Angeles kept growing: in 1930 it opened its international airport LAX, and in 1932 it held the Olympic Games (only the second time they were held in the USA). Despite the 1935 crash off Monterey Bay of the Macon, a helium-filled dirigible airship stationed in Sunnyvale, the largest aircraft in the world (a little shorter than the Hindenburg but bigger), the aviation industry was thriving: in 1932 Howard Hughes started Hughes Aircraft and Hughes in person set the world's speed record (1935) as also the record for the transcontinental trip (1937) and round-the-world trip (1938). In 1935 Douglas introduced the DC-3, a faster airplane that cut the flight from California to New York to 15 hours. The Jet Propulsion Laboratory (JPL) was founded in 1936 at CalTech by Frank Malina, Hsue-shen Tsien (Xuesen Qian) and others.

Iconic building rose like Gordon Kaufmann's Los Angeles Times building (1935) in the Art Deco style, and Robert Derrah's Crossroads of the World (1936) in Hollywood and his Coca-Cola Building (1939) in Los Angeles, the latter shaped like a cruise ship. The Streamline Moderne style yielded the Pan-Pacific Auditorium (1935), designed by Welton Becket and Walter Wurdeman, and the Julian Medical Building in Hollywood (1934) by Styles Clements and his partners.

In 1926 May Rindge, widow of one of the founders of Malibu, was forced by financial problems to rent and sell beach cottages to Hollywood celebrities (first the silent-movie star Anna Nilsson and then the director Raoul Walsh). The transition from ranch to "Malibu Movie Colony" accelerated after Rindge died bankrupt in 1941. Because of the wealthy clientele, Malibu became a hotbed of architectural experimentation, starting with Frank Lloyd Wright's house for screenwriter Arch Oboler (1940).

To lift its economy during the depression, San Diego held the California Pacific International Exposition in 1935-36. Frank Drugan, who had just arrived from Chicago, where he had worked for the Scripps newspaper empire, suggested to reuse concepts of the Chicago World's Fair (which had just closed) and to salvage the buildings of the previous Panama-California Exposition of 1915-16 in Balboa Park. Local architect Richard Requa was hired to design the exhibition and New York industrial designer Walter Teague (famous as the designer of the Kodak cameras) built the most impressive building: the Ford Pavilion, in a Streamline Moderne style.

It was during the Great Depression (around 1932) that the Los Angeles-based self-taught architect Cliff May conceived the ranch-style home, the home that personified the California lifestyle: seclusion, relaxation, comfort. It was not important how the home looked (they all looked pretty much the same) but how "livable" they were. New Yorkers spent as much time as possible outside their homes, Californians spent as much time as possible at home. The ranch house was a detached, single-family, one-story building surrounded by a garden and with a spatious garage for the car. The ranch house was typically located in the suburbs, far from the crowds, noise and crime of downtown.

In 1939 Bay Area architects such as William Wurster, who had designed the Gregory Farmhouse (1928) in Scotts Valley, Catherine Bauer (Wurster's wife), who had written the book "Modern Housing" (1934), Thomas Church and Vernon DeMars formed the group Telesis which in 1940 staged the exhibition “A Space for Living” at the Museum of Art: San Francisco had so far been an "unplanned" city that had grown spontaneously and chaotically. Two years later the city created the planning department.

Like Los Angeles, San Francisco too went through the Great Depression relatively unscathed. Major works that opened in the 1930s include the Coit Tower in 1933 (designed by Arthur Brown Jr in the Art Deco style) and in 1934 a new aqueduct carrying water from the Hetch Hetchy reservoir in Yosemite (269 kilometers away).

The Italian-born opera lover Gaetano Merola, originally based in New York, came to California with Fortunato Gallo's itinerant San Carlo Opera Company. In 1922 Merola organized an open-air program of opera in Stanford University's stadium and in 1923 he founded the San Francisco Opera Association, financed by the city's business aristocracy, and for a decade staged operas in the Civic Auditorium. Finally in 1932 there was enough money to inaugurate a proper opera house across from City Hall, the War Memorial Opera House (designed by Arthur Brown Jr in the Beaux-Arts style). The following year Merola established both the San Francisco Opera Ballet, the first professional ballet company in the USA, and the San Francisco Ballet School under the direction of Russian-born choreographer Adolph Bolm (who had graduated from the Russian Imperial Ballet School in Saint Petersburg and worked with Diaghilev's Ballets Russes in Paris). The ballet became its own independent entity when in 1938 Willam Christensen became its director (originally an itinerant vaudeville dancer). Christensen went on to stage the first full-length American productions of Pyotr Tchaikovsky's ballets "Swan Lake" (1940) and "The Nutcracker" (1944), soon to become staples of every ballet in the USA. In 1945 the War Memorial Opera House would be chosen as the birthplace of the United Nations.

Next to the Opera House and City Hall, the San Francisco Museum of Art was inaugurated in 1935 on the fourth floor of the Veterans Building (also designed by Arthur Brown Jr in 1928, a late Beaux-Arts building), the second museum in the USA devoted exclusively to modern art. Its first director was art historian Grace Morley, a Berkeley native and UC Berkeley graduate who had studied in Paris, and the first lesbian to direct a major California institution. At the time it was not common at all for a woman to be in such a position of power. Under her leadership, the city began the shift from European modernism to US abstract art. For example, she purchased Jackson Pollock’s "Guardians of the Secret" (1943) when Pollock was not famous at all.

After the repeal of the Prohibition in 1933, a secondary tourist economy was fueled in San Francisco by gay, lesbian and transgender entertainment. Bohemians of the North Beach district resurrected the gay bar, for example the Black Cat Cafe that reopened in 1933. The city's first lesbian nightclub opened in 1934, Mona’s, the first of many in North Beach. In 1936 Joe Finocchio opened the gay bar "Finocchio's" on Broadway.

The region inaugurated the Bixby Bridge in 1932 (south of Monterey), the Bay Bridge in 1936 (between San Francisco and Oakland) and, the following year, the Golden Gate Bridge, designed by Oakland native Irving Morrow (who had the idea to paint it orange), finally enabling car traffic across the famous strait. The Bayshore Highway (now called "101") opened in 1932 to Palo Alto, and in 1937 reached San Jose. San Francisco was quietly becoming one of the financial capitals of the USA. In 1930 its Ferry Building was the second busiest transportation terminal in the world after Manhattan.

In February 1939 San Francisco celebrated its two new bridges with a world's fair (the "Golden Gate International Exposition") that was held on an artificial island in the middle of the Bay, Treasure Island, which had been created in three years of work. The exposition's highlights were Ralph Stackpole's 24-meter tall colossus "Pacifica" (dynamited in 1942 to make room for a naval base) and Jo Mora's colossal diorama "Discovery of the San Francisco Bay by Portola". The layout was designed by skycraper specialist George William Kelham and directed by structural engineer William Peyton Day, who had built several movie theaters around the Bay Area. The California Pavilion included Jo Mora's 30-meter 64-sculpture diorama "Discovery of the San Francisco Bay by Portola". By May 1940, when it closed, the exposition had attracted 16 million visitors. Alas, both "Pacifica" and the diorama were later destroyed.

The most ambitious public work of the era was the Central Valley Project, designed in 1933 to provide power and water to the farming region of the San Joaquin Valley, some 700 kilometers away, by connecting dams built in the north with reservoirs in the south via canals, starting in 1936 with the construction of the Shasta Dam.

Other engineering feats of the era include the completion in 1936 of the Hoover Dam on the Colorado River, the tallest in the world, and its power plant, the world's largest, and the completion in 1937 of the coastal highway between San Simeon and Carmel through Big Sur (thanks to convict labor, using inmates from San Quentin Prison who exchanged work for shorter sentences). Previously the few settlers of that coast had to travel by boat or via horse trails. This section completed the coastal highway connecting San Francisco to Los Angeles (today's Highway 1). It was now possible to travel by car from the beaches of southern California to the forests of northern California. In 1939, after six years of work, the Colorado River Aqueduct was completed to bring water to the Los Angeles area: another 400-kilometer behemoth, it had originally been conceived by William Mulholland in the 1920s. It was during its construction that a physician named Sidney Garfield launched a pioneering health-insurance program for the 5,000 workers, setting up a small hospital in the Mojave Desert. The year 1940 also witnessed the opening of California's first freeway, the Arroyo-Seco Parkway (also the first one in the entire USA).

In 1933 Franklin Delano Roosevelt was elected president of the USA and launched his "New Deal" to confront the Great Depression. In the same year the socialist and writer Upton Sinclair launched a grass-roots movement, "End Poverty in California" (EPIC). He also ran for governor of California, but was defeated thanks to the smear campaign unleashed by newspaper tycoons William Randolph Hearst and Harry Chandler.

It was during the Great Depression that California's universities became significant centers of science and engineering. Linus Pauling was another major physicist at CalTech after Robert Millikan. In 1932 Carl Anderson discovered the positron, the first particle of anti-matter, and in 1936 the muon, a fundamental particle. Both Albert Einstein and and Niels Bohr were visiting professors at Caltech in 1931-33. Ernest Lawrence was hired in 1928 by UC Berkeley. In 1931 he designed the first successful cyclotron (a particle accelerator) and opened a Radiation Laboratory that became one of the most celebrated research centers for atomic energy and would bring several of the world's most promising scientists to Berkeley, including four future Nobel Prize winners: Edwin McMillan, Luis Alvarez, Glenn Seaborg and Emilio Segre. He is credited with coining the "big science" multi-disciplinary paradigm. In 1929 UC Berkeley also hired Robert Oppenheimer, who had worked with Linus Pauling in Los Angeles. Meanwhile, in 1934 Stanford University hired the Swiss-born physicist Felix Bloch, who had been Werner Heisenberg's first doctoral student in Germany and had fled Germany after Hitler's rise to power. Oppenheimer and Bloch organized weekly seminars of theoretical physics that alternated between the two campuses. Oppenheimer also helped shape the intellectual mood of the Berkeley campus with his passion for Eastern philosophy and his flirting with socialist causes. During the 1930s several of his friends, relatives (including the woman he married in 1940) and students were affiliated with the Communist Party. In 1942 the USA government launched the "Manhattan Project" to build a nuclear bomb, and appointed Oppenheimer in charge of it. Oppenheimer applied Lawrence's concept of "big science" and assembled a large team of scientists to design the weapon. The project soon exceeded the capacity of the Berkeley campus and was moved to Los Alamos in New Mexico. Even after he successfully delivered the atomic bomb, Oppenheimer was investigated by the FBI for his "communist" connections.

Meanwhile, in 1925 Stanford hired Fred Terman, a local kid who was the son of Lewis Terman, the psychologist who had popularized the IQ test. During the 1930s Terman turned Stanford into a major engineering school, notably for electronics. In 1936 Terman, Charles Litton and Karl Spangenberg established the Stanford vacuum tube laboratory. Terman's students included William Hewlett and David Packard, whom he encouraged to start a company: in 1939 they started in a Palo Alto garage Hewlett-Packard, the first startup of Silicon Valley. Their first customer was Walt Disney, who purchased their oscillator for his animation film "Fantasia".

In 1937 Stanford professor William Hansen teamed up with brothers Sigurd Varian (an airplane pilot) and Russ Varian (a Stanford dropout and a former engineer in Philo Farnsworth's television laboratory) to invent the klystron tube, the first generator of microwaves, an electronic device that enabled airborne radars, just on the eve of World War II. Those were the prodromes of the future Silicon Valley.

In 1939 the Bay Area was finally awarded a Nobel Prize: to Ernest Lawrence.

At the same time, California during the Great Depression was fertile terrain for astrologers and mystics. Paul Foster Case, a member of the Hermetic Order of the Golden Dawn (a British magical cult derived from the Rosicrucian cult of the 17th century), arrived in Los Angeles in 1920 and, besides writing several books on the Tarots and the Qabalah, founded the School of Ageless Wisdom in 1922 which later changed its name to the Builders of the Adytum (Ann Davies succeeded him in 1954). Manly Hall, who arrived in 1919 as some kind of teenage preacher, traveled the world and collected ancient texts and rare books that became the source for his esoteric encyclopedia "The Secret Teachings of All Ages" (1928) and the foundation for the library of the Philosophical Research Society, that he founded in 1934 to promote the study of wisdom in all cultures of the world. The Bay Area was impacted too. Harvey Spencer Lewis, a New York occultist vaguely affiliated with Aleister Crowley's Ordo Templi Orientis, founded the Rosicrucian Research Society in 1904, renamed it Ancient Mystical Order of the Rosy Cross (AMORC) in 1915, and moved it in 1927 to San Jose, where it became a whole city block (the "Rosicrucian Park"), soon equipped with an Egyptian Museum (1932), a Planetarium (1936), a library (1939), a shrine (1949), etc.

In 1940 the state's population was almost seven million, of which 1.5 million in Los Angeles and 634,000 in San Francisco. The south bay was still irrelevant: 175,000 in the entire Santa Clara Valley, of which 68,000 in San Jose and 17,000 in Palo Alto.

The Great Depression ended with World War II, which started in 1939 in Europe and in 1941 in America (and in 1937 in China).

The New Deal and World War II sent huge government investments to the West Coast, which started fortunes in construction. Henry Kaiser, who had paved roads in Cuba, was one of the contractors for the colossal concrete Hoover Dam (inaugurated in 1936), then built the first integrated steel mill in the Pacific states (at Fontana, near Los Angeles, in 1942). During World War II his shipyards built thousands of cargo ships (Richmond alone in the north Bay built 727) employing the latest technology (inherited from the prefabrication techniques of dam building) that allowed him to shorten the shipbuilding process from one year to 48 days. Those shipyards alone caused a population boom. Kaiser was getting immensely rich and his conglomerate was actually known for treating the workers humanely. In the 1940s Kaiser's corporate welfare programs were among the most generous in the USA. After building two more giant dams (the Bonneville and Grand Coulee dams), Kaiser ventured into aluminum, steel, real estate, broadcasting and many other businesses. To take care of the workers of the Grand Coulee Dam in Washington state, in 1938 Kaiser opened a hospital in collaboration with physician Sidney Garfield, who had already experimented a health-insurance program for the workers of the Colorado River Aqueduct, and the project was replicated in 1942 in Oakland for the workers of Kaiser's shipyards. That's when Kaiser's Permanente health-care plan was born, which was opened to the general public in 1945 (so named from the creek near Kaiser's Cupertino cement plant). Kaiser Permanente would remain the largest health-care provider of California to this day.

The Hoover Dam also created the fortune of another Bay Area construction and engineering company, the one that would become number one in the country. Started by a railroad worker, Warren Bechtel, it remained (and still remains) privately held within the family. Before the Hoover dam, they had built roads (the Klamath Highway in Northern California in 1919), dams (the Bowman Lake Dam northeast in a remote part of the Sierra Nevada in 1927), pipelines (first in 1931) and bridges (the Bay Bridge between San Francisco and Oakland in 1933-36). Warren Bechtel's son Stephen expanded the business overseas, notably with pipelines in Venezuela (1940), in Saudi Arabia (1947) and in Iraq (1952), and expanded it to building oil refineries (the Richmond one in 1937), ships (almost 600 during World War II), whole cities (Marin City in 1942, north of the Golden Gate Bridge, for workers of the wartime shipyards), nuclear power plants (starting in 1949), subways (the Bay Area Rapid Transit System or BART in 1964), and eventually airports (the Riyadh airport in 1978) and tunnels (the undersea tunnel linking Britain and France in 1994). Today, Bechtel is the second largest construction company in the USA.