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THE GREAT DEPRESSION. A24 7.3.12. THE GREAT CRASH. GUIDING QUESTION. What caused the Great Depression? the federal government during the 1920s?. STOCK MARKET CRASH. Stock Market Prices, 1921–1932. May 1928-September 1929, prices doubled in value beginning in Sept 1929, gradual slide

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THE GREAT DEPRESSION

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The great depression

THEGREAT DEPRESSION

A24

7.3.12


The great crash

THE GREAT CRASH


Guiding question

GUIDING QUESTION

What caused the Great Depression?

the federal government during the 1920s?


Stock market crash

STOCK MARKET CRASH

Stock Market Prices, 1921–1932

  • May 1928-September 1929, prices doubled in value

  • beginning 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

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

UNDERLYINGCAUSESOF THEDEPRESSION


Underlying causes of the depression1

Weakness of Banking Industry

bank failures in late 1920s (farmers)

many had small reserves

low margins encouraged speculative investment by banks, corporations, and individual investors

total money supply

closing 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

UNDERLYINGCAUSESOF THEDEPRESSION

Consumer Debt, 1920–1931


Underlying causes of the depression2

UNDERLYINGCAUSESOF THEDEPRESSION

  • Decline 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 on society

IMPACT ON SOCIETY


Guiding question1

GUIDING QUESTION

How did the Great Depression alter the American social fabric in the 1930s?


The great depression

“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 billon

Business failures: 100,000 between 1929 and 1933

GNP – $104 billion in 1929 to $56 billion in 1933

Total national income – fell by over 50%

Effects on Business & Industry


Effects on business industry1

Effects on Business & Industry

  • Bank failures

    • about 20% all banks (over 6000) between 1929 and 1933)

    • over 9 million savings accounts lost($2.5 billion)

Depositors gathering outside a bank,April 1933

Bank Failures, 1929-1933

1932


Effects of the crash

Great Crash

World Payments

Investors

Businesses and Workers

Overall U.S. production plummets.

Investors lose millions.

Banks

Businesses and workers cannot repay bank loans.

Consumer spending drops.

U.S. investors have little or no money to invest.

Allies cannot pay debts to United States.

Businesses lose profits.

Businesses cut investment and production Some fail.

Savings accounts are wiped out.

Banks run out of money and fail.

Workers are laid off.

Europeans cannot afford American goods.

U.S. investments in Germany decline.

Bank runs occur.

German war payments to Allies fall off.

Effects of the Crash


Effect on workers and families

Effect on workers and families

  • Unemployment ~25% in 1932?

    • underemployment

    • patterns of reemployment and layoffs

  • hobos

  • “Depression mentality”

Men Lined Up at the New York City Employment Bureau, 1932


Effect on workers and families1

Effect on workers and families

  • Malnutrition

    • Disease: tuberculosis, typhoid and dysentery.

  • soup kitchens and bread lines

Soup kitchen, Chicago, 1930

Soup kitchen, 1931 (Cleveland)


Effects on farmers

Effects on Farmers

  • Drought hits Great Plains

  • “Dust Bowl”

  • “Okies”

  • Farmers destroy crops and move West

    Resettlement Adminstration

Dust Bowl

Dust storm, Springfield, CO, 1935


Dust storm elkhart ks 1937

Dust storm, Elkhart, KS, 1937


The dust bowl

The Dust Bowl

Aftermath of dust storms, South Dakota, 1936

Abandoned house, Kansas, April 1941

Dust Bowl Farm, Texas, 1938


Migrants

Migrants

A Destitute Family in the Ozark Mountains. 1935

“Okies” migrate west in 1939

Dorthea Lange, “Covered Wagon Again” 1935


Migrants in california

Migrants in California

"Cheap Auto Camp Housing for Citrus Workers“; Dorothea Lange, Tulare County, California, Feb. 1940

Migrant Auto Camp, California, 1936


Migrant mother dorothea lange 1936

“Migrant Mother”Dorothea Lange 1936


Effects on american culture

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 s response

HOOVER’S RESPONSE


Federal response under hoover

Federal Response Under Hoover

  • Herbert 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

Evaluation of Hoover’s Response

  • Contemporary popular opinion

  • “Hoovervilles”


Contemporary political cartoon

Contemporary Political Cartoon


Evaluation of hoover s response1

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 election

1932 ELECTION

Misery Sweeps Roosevelt into Office


1932 election1

1932 ELECTION

  • Franklin D. Roosevelt

  • philosophy

  • “New Deal”

Franklin D. Roosevelt, 1920 Vice Presidential nominee for Democratic Party

Roosevelt Campaigning for Office in Kansas 1932


1932 election2

1932 ELECTION

  • Hoover

    • “The Worst is Past"

    • "Prosperity is Just Around the Corner"

  • Results

Electoral Shift, 1928 and 1932


New deal

NEW DEAL

  • Relief, Recovery, Reform

  • Willing 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 Soup

  • Closes Banks and insures the $ in them. (FDIC)

  • Increases people’s hope


Criticisms

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


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