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THETHE
GREAT GREAT DEPRESSIONDEPRESSION
A247.3.127.3.12
THE THE GREAT GREAT CRASHCRASH
GUIDING QUESTIONGUIDING QUESTION
What caused the Great Depression?
the federal government during the 1920s?
STOCK MARKET CRASHMay 1928-September 1929, prices doubled in valuebeginning in Sept 1929, gradual slide Black Thursday (Oct. 24)
largest sell-off in NYSE history
Black Tuesday (Oct. 29)$40 billion in stock value lost by Dec.
The Great Depression Response of bankers, Hoover and business leaders
Stock Market Prices, Stock Market Prices, 1921–19321921–1932
Black Tuesday Wall Street, Oct. 29, 1929
UNDERLYING CAUSES OF THE DEPRESSION
Overproduction - Massive business inventories (up 300% from 1928 to 1929)
Lack of diversification in American economy
prosperity of 1920s largely a result of construction & auto industries
Uneven distribution of income and wealth - Poor distribution of purchasing power among consumers
Farm income down 66% in 20s
By 1929 the top 10% of the nation's population received 40% of the nation's disposable income
UNDERLYING CAUSES OF THE DEPRESSION
Weakness of Banking Industry bank failures in late 1920s (farmers) many had small reserveslow margins encouraged speculative investment by banks, corporations, and individual investors
total money supplyclosing of over 9,000 American banks between 1930 and 1933 Federal Reserve system
Consumer Debt – middle class installment loans; buying on margin Overspeculation in Stock Market – by wealthy and upper middle class
Consumer Debt, 1920–1931
UNDERLYING CAUSES OF THE DEPRESSIONDecline in demand for American goods in international trade
European industry and agriculture gradually recovered from World War I Germany so beset by financial crises/ inflation that could not afford to purchase US goods High American protective tariffs
international debt structure
IMPACT IMPACT ON ON SOCIETYSOCIETY
GUIDING QUESTIONGUIDING QUESTION
How did the Great Depression alter the American social fabric in the 1930s?
“Give a man a dole and you save his body and destroy his spirit. Give him a job and pay him an assured wage and you save both the body and the spirit.”
Effects on Business & Industry
Corporate profits - from $10 billion to $1 billonBusiness failures: 100,000 between 1929 and 1933
GNP – $104 billion in 1929 to $56 billion in 1933Total national income – fell by over 50%
Effects on Business & IndustryBank failures
about 20% all banks (over 6000) between 1929 and 1933)over 9 million savings accounts lost($2.5 billion)
Bank Failures, 1929-1933Bank Failures, 1929-1933
Depositors gathering outside a bank, April 1933
1932
Effects of the CrashGreat Crash Investor
s Businesses and WorkersInvestors
lose millions.
Businesses lose
profits.
Consumer spending drops.
Workers are laid off.
Businesses cut
investment and
production Some fail.
Banks
Businesses and workers
cannot repay bank
loans.
Savings accounts
are wiped out.
Bank runs occur
.
Banks run out of money
and fail.
World Payments
Overall U.S.
production plummets.
U.S. investors
have little or no money
to invest.
U.S. investment
s in Germany decline.
German war payments to Allies fall
off.
Europeans cannot afford
American goods.
Allies cannot pay debts to United States.
Effect on workers and familiesUnemployment ~25% in 1932?
underemploymentpatterns of reemployment and layoffs
hobos“Depression mentality”
Men Lined Up at the New York City Men Lined Up at the New York City Employment Bureau, 1932Employment Bureau, 1932
Effect on workers and familiesMalnutrition
Disease: tuberculosis, typhoid and dysentery.
soup kitchens and bread lines
Soup kitchen, 1931 (Cleveland)
Soup kitchen, Chicago, 1930
Effects on FarmersDrought hits Great Plains
“Dust Bowl”
“Okies”
Farmers destroy crops and move West
Resettlement Adminstration
Dust BowlDust Bowl
Dust storm, Springfield, CO, 1935
Dust storm, Elkhart, KS, 1937
The Dust Bowl Aftermath of
dust storms, South Dakota, 1936
Dust Bowl Farm, Texas, 1938Abandoned house, Kansas, April 1941
Migrants
A Destitute Family in the Ozark Mountains. 1935 “Okies” migrate
west in 1939
Dorthea Lange, “Covered Wagon Again” 1935
Migrants Migrants in in
CaliforniaCalifornia
Migrant Auto Camp, California, 1936
"Cheap Auto Camp Housing for Citrus Workers“; Dorothea Lange, Tulare County, California, Feb. 1940
“Migrant Mother”
Dorothea Lange
1936
Effects on American Culture
Reactions of most Americans Effects on basic values (capitalism, democracy, individualism)
Alternatives: socialism, communism?Whom to blame?
Popular Culture and Escapism Frank Capra Walt Disney Gone With the Wind
HOOVER’SHOOVER’S RESPONSERESPONSE
Federal Response Under HooverHerbert Hoover (1929-1933)
Philosophy: limited government, individualism
Initial response?
public works programs
Hawley-Smoot Tariff (1930)
"Boulder Dam, 1942“, Ansel Adams
Evaluation of Hoover’s Response
Contemporary popular opinion
“Hoovervilles”
Contemporary Political Cartoon
Evaluation of Hoover’s Response
Modern Evaluations:reluctance to spend large amounts of federal funds, expand the role of the federal government.
willing to intervene in the economy to an unprecedented degree.
1932 1932 ELECTIONELECTION Misery Sweeps Roosevelt into Office
1932 ELECTION1932 ELECTIONFranklin D. Roosevelt
philosophy
“New Deal”
Franklin D. Roosevelt, 1920 Vice Presidential nominee for Democratic Party
Roosevelt Campaigning for Office in Kansas 1932
1932 ELECTION1932 ELECTIONHoover
“The Worst is Past"
"Prosperity is Just Around the Corner"
Results
Electoral Shift, 1928 and 1932
NEW DEAL
Relief, Recovery, ReformWilling to experiment with government power = has more First 100 Days: Provides relief for people who can’t take care of selves: Fireside Chats “The Only Thing We Have to Fear is Fear Itself” Creates jobs with Public works programs: Alphabet SoupCloses Banks and insures the $ in them. (FDIC)Increases people’s hope
Criticisms
Gave the gov’t too much power – Socialism?
Supreme Court declares acts unconstitutional
Women and African Americans receive less aid
Does too much/ not enough
Brings about Second NEW DEAL:
Social Benefits, union support, higher taxes for rich
SOCIAL SECURITY
Doesn’t end the Depression