The Old and the New Urban culture & industrial production dominated the 1920s: Mass-produced consumer goods, mass media, advertising spread a new American culture Much to the dismay of a rural America trying to cling to traditional values Progressive reforms were no match for technology & prosperity

The Great Depression

The Great Crash Prelude to the stock market crash In 1927, the economy had a recession but gov’t & business leaders ignored warning signs The Federal Reserve lowered interest rates for loans to stimulate the economy, but this easy credit led speculators to buy stock “on-the-margin” The Great Depression came as a shock to Americans, but there were warning signs: In 1927, the economy had a recession but gov’t & business leaders failed to respond The Federal Reserve lowered interest rates for loans to stimulate the economy, but this easy credit led speculators to buy stock “on-the-margin”

The Great Crash An initial stock market crash on Oct 24, 1929 (Black Thursday) led to a catastrophic drop in stocks on Oct 29 (Black Tuesday) Panicked investors sold stocks, causing stock prices to plummet Banks lent less money, factories produced less, workers were fired or paid less → consumers had less money to spend → factories & businesses closed Stock market only had about 3 million active buyers & sellers but the spillover into the greater economy led to the Great Depression

The U.S. stock market had only about 3 million active buyers & sellers but the spillover into the greater economy led to the Great Depression

Unemployment, 1929-1942 This downward spiral continued for 4 years; By 1932 unemployment was at 25%

Consumers already owned durable goods & were not buying more The Great Crash Reasons for the depression: Overproduction of consumer durable goods & agriculture The post-war conditions in Europe decreased foreign trade Unequal distribution of wealth, high consumer debt, stock market over speculation led to an overall decrease in consumer purchase power Consumers already owned durable goods & were not buying more Economic conditions in Europe, Agricultural decline since 1919, corporate mismanagement, excessive speculation all contributed to the GD as well

Effects of the Great Depression African-Americans who had migrated to North were laid off Mexican immigrants faced competition & deportation from angry Americans The middle class was hit hard: Refused relief checks & charity Many lost their homes Health care declined; doctor & dentist visits were “luxuries”

Employment Agencies & Relief-Check Lines

Soup Kitchens & Breadlines

Mortgage Foreclosures

“Hoovervilles”

Hoover Struggles to Fight the Depression

Hoover and Voluntarism President Hoover’s initial response was to reassure Americans that prosperity would return Hoover rejected bold gov’t action & called for volunteerism among charities, local gov’t, & business As the depression worsened, Hoover called for gov’t projects like the Reconstruction Finance Corps (RFC) which loaned money to failing businesses “Rugged individualism”

The Hoover administration initiated job-creation programs, like building the Hoover Dam Boulder Dam was renamed Hoover Dam

Hoover and Voluntarism In 1932, Hoover’s presidency suffered two final blows: When 22,000 war veterans marched to the capital to demand their WW1 bonus checks early, Hoover ordered this Bonus Army to be forcibly removed The steady rise of bank failures led to a complete collapse of the U.S. banking system

Bonus Army

Bank Failures, 1929-1933

The Dust Bowl (1931-1939) worsened the effects of the Depression “Okies” & “Arkies” Woody Guthrie

Fighting the Depression The inability of Republicans to resolve the economic depression opened the door for a Democratic takeover in politics Once in power, Democrats succeeded in relieving some suffering, restored hope, & created an unprecedented level of gov’t intervention in the process

Conclusions The Depression of the 1930s came as a shock to Americans: The consumer revolution led to confidence that 1920s economic prosperity would continue When the stock market crashed in 1929, businesses closed & millions were unemployed Americans began to look to the gov’t for unprecedented support