The Great Depression

Chapter 13

Prosperity Shattered

• “…nearer to the final triumph over poverty than ever before in the history of any land.” – Herbert Hoover

• Bull Market / Bear Market– Urging to invest – Margin buying

• “Money is king – but there is something else. It is a high, wild time, a time of riotous spirits and belief in magic rather than cold calculation.”

The Stock Market Crashes

• October 24, 1929– Black Thursday – investor confidence is

crushed, stocks are dumped on the market

• October 29, 1929– Black Tuesday – Prices shrank to a shocking

new low – 16 Million shares dumped

• Stock losses exceeded the total cost of the US involvement in World War I by the end of the year

The Depression Begins

• “We have now passed the worst and…shall rapidly recover.” – Herbert Hoover

• The US economy sank steadily until 1933– GNP in 1929 – 103 Billion– GNP in 1933 – 56 Billion

» Average income for Americans was cut in half» Many companies and factories closed» Railroad production was cut to a fraction as were

automobiles» The banking system collapsed and many banks failed» 400,000 depositors and roughly 180 million in savings lost

What Caused the Depression?

• The Crash of 1929 did not cause the depression alone:– World economy after World War I– Sick industries in the US– Dependence on credit– Gap between rich and poor

» No money for largest part of population to pump into the economy

– Business Cycle and income distribution» Recession / Depression

• It was in fact a combination of these six things that caused the Depression

“Work Is What I Want”

• In 1929 1.5 Million Americans were unemployed– Three years later that number was 12 million

» Wages fell dramatically (10 cents an hour)» “If you’d have told me…”» Racial discrimination (Mississippi)» Slave Markets

– Selling apples in the street» More profitable than their old jobs

Life in the City

• City government and charitable organizations (Red Cross)– Neighbors helped each other, especially in

ethnic communities– Mutualistas

• Open Barrels (Chinese) / Rent Parties

– Breadlines– Shantytowns (Hoovervilles, Hoover Flags,

Hoover Blankets)

Life on the Farm

• Demand for farm products shrank– Let crops rot in the fields; had to let livestock

starve to death– Bank foreclosures– Cotton Farmers went bust with no crops, the

Midwest had too many crops

Family Life in the 1930’s

• Families shared food and money

• Divorce rate rose– Marriage and birthrates declined

• Revival of old crafts to save money

• Psychological Impact

• Education System

Popular Culture in the 1930’s

• Inexpensive pastimes – reading, board games (Monopoly)

• Radio and movies – Escapism– Sound Explosion – Talkies

» Gangster flicks (Rags to Riches)» Upbeat Musicals (Gold Digger)» Mickey Mouse / Donald Duck

– Golden Age of Radio» Lone Ranger, Little Orphan Annie, Shadow

Literature in the 1930’s

• Magazines and Comic Books– Superman / Tarzan– Reader’s Digest

• James Hilton “Lost Horizon”

• William Faulkner