THE GREAT DEPRESSION

1. THE GREAT DEPRESSION

2. 1920’s Economy • Strengths • Record profits • Stocks rise • Moderate unemployment & inflation • Overall wealthiest society in world history • Weaknesses • Half of the population barely getting by (income gap) • Farm crisis • Prices down 2/3; ½ million farms bankrupt • Leads to bank failures

3. Herbert Hoover, 1929-1933 "We in America today are nearer to the final triumph over poverty than ever before in the history of any land." --August, 1929

4. Stock Market

5. “Black Monday” • Oct 29, 1929 • Stock Market drops 40% • Eventually loses 90% of value • Led to bank & business failures • Beginning of the Depression

6. Bank Closings & Depression • People put $ in banks • Banks invest in stocks and loans to others • Stocks fall • Banks call in loans • Businesses close • People laid off • No purchasing • Banks fail • DEPRESSION

7. Causes of the Great Depression • Stock Market Crash • Mostly a symptom; but also a cause • Underlying weaknesses in economy • Farms; income gap, etc. • Poor Purchasing power • Common person no longer with money to buy • “All eggs in one basket” • Much of economic growth in autos & construction • Over reliance on credit & “watered stock” • International economic problems • Bad Timing

8. The Great Depression • Depressions are not unusual • Boom & bust capitalist economy • 1819, 1837, 1857, 1873, 1893, (1907), etc. • What is unusual: • Duration • Lasts 1929-1940 • Major recession in 1937-1938! • Depth…..

9. Great Depression Statistics by 1933 • Banks • 9,000 fail • Loss of $2.5 billion in savings • 25 % drop in Gross National Product (GNP) • Stock investment down 97% • 25 % unemployment • 50 %-80% in some cities • Even more “underemployment • Farm income drops by 2/3 more • Millions forced off land

26. Help? • Almost no government help • A little private charity • Most felt it was their own fault • The myth of the “rugged individual”

27. How People Coped • 25 % rise in women working • Despite lack of jobs • Poor & minority women especially • Made due with old stuff • Ate less • Despondency, alcohol, suicide • Escaping into movies & radio • The only two industries to grow during Depression • Very limited charity help • Almost no government help

29. The “Red Decade” • Willingness to look at radical ideas • Communist Party has 100,000 members • “Communism is 20th Century Americanism” • Forms “popular front” (alliance with New Deal liberals • Strong civil rights record • Socialist Party gets 1,000,000 votes in 1932 • Abraham Lincoln Brigade • 2,800 American volunteers who fought in Spanish Civil War against fascism

30. Spanish Civil War (1936-1939)

31. African Americans & the Depression • Started off poorer • Less educated • More discrimination • Poorer health • Discriminated further • Fired for white workers • Rise in violence • Great Migration continues • 400,000 North during 1930’s

32. The Scottsboro Boys • 8 young blacks accused of raping two white women on a train in 1931 • Clearly not guilty • Convicted anyhow in Alabama • All freed up to 20 years later

34. Mexican Americans & the Depression • Suffered much of the same discrimination and disadvantages of blacks • 400,000 deported to Mexico • Including many American citizens

35. The Dust Bowl

36. The Dust Bowl • Massive drought in OK, TX, KS • At the height of the Depression • ½ million “Okies” leave their land for Calfornia

37. An Okie Family

38. Woody Guthrie Huddie “Lead Belly” Ledbetter 1912-1967 1885-1949

39. “Pretty Boy Floyd” by Woody Guthrie If you'll gather 'round me, children, a story I will tell 'Bout Pretty Boy Floyd, an outlaw, Oklahoma knew him well. It was in the town of Shawnee, a Saturday afternoon, His wife beside him in his wagon as into town they rode. There a deputy sheriff approached him in a manner rather rude, Vulgar words of anger, an' his wife she overheard. Pretty Boy grabbed a log chain, and the deputy grabbed his gun; In the fight that followed he laid that deputy down. Then he took to the trees and timber to live a life of shame; Every crime in Oklahoma was added to his name. But a many a starving farmer the same old story told How the outlaw paid their mortgage and saved their little homes.

40. Others tell you 'bout a stranger that come to beg a meal, Underneath his napkin left a thousand dollar bill. It was in Oklahoma City, It was on a Christmas Day, There was a whole car load of groceries come with a note to say: “Well, you say that I'm an outlaw, you say that I'm a thief. Here's a Christmas dinner for the families on relief.” Yes, as through this world I've wandered, I've seen lots of funny men; Some will rob you with a six-gun, and some with a fountain pen. And as through your life you travel, yes, as through your life you roam, You won't never see an outlaw drive a family from their home.

42. Hoover’s Initial Response • Initially cautious • Believed • It would soon get better on its own • Hand-outs weaken people • Called for voluntary cooperation as solution • This collapsed quickly

43. "While the crash only took place six months ago, I am convinced we have now passed through the worst -- and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us.“ • Herbert Hoover (April of 1930)

44. Stock Market

45. Hoover’s Eventual Response • Agricultural Marketing Act (AMA) • $500 million in loans to farmers • Did little; still overproduction & low prices • Hawley-Smoot Tariff • Put a tariff on agricultural goods • Most economists warned against this • Hoover felt he had to do something • Disasterous; Europe responded with own tariffs

46. Hoover’s Eventual Response • Reconstruction Finance Corporation • $1.5 billion to firm up banks • Seen as a hand out to the already hated rich • A very little bit for suffering individuals • $400 million on public works • But Hoover would only spend on projects that paid for themselves • Only 20% of budget ever used • Too little, too late, & unpopular

47. Could Hoover Have Done More? • Obviously, his approach failed. • But • No precedent for big federal spending • Federal budget only 3% of GNP in 1930 • 20% today • No common understanding that more spending would help • He spent more than anyone before him • A precedent setter?

48. “Hoovervilles” shacks for homeless people“Hoover flags” empty pockets turned out“Hoover blankets” newspapers made into blankets A Hooverville

49. The Bonus Army, 1932 • World War I vets had been promised a pension starting in 1945 • Unemployed vets camped in front of White House demanding the pensions now • Congress would not agree • Hoover orders military to remove campers • Shacks burned, 2 killed • Hoover now even less popular than your history teacher. 