The Great Depression

Videos https://www.youtube.com/watch?v=XzGlqFnV3qc http://www.history.com/topics/great-depression/videos/1929-stock-market-crash http://www.history.com/topics/great-depression http://www.history.com/topics/great-depression/videos/america-black-blizzard?m=528e394da93ae&s=undefined&f=1&free=false http://www.history.com/topics/great-depression/videos/black-blizzard?m=528e394da93ae&s=undefined&f=1&free=false

Election of 1928 Herbert Hoover – Republican Head of Food Administration during WWI Sec. of Commerce for 7 years Alfred E. Smith – Democrat Governor of New York 1st Roman Catholic to be nominated to run for president

Campaign Issues Prohibition Hoover “dry” (for) Smith “wet” (against) Religion Hoover – Quaker Smith – Catholic Would the Catholic Church run the US? Prosperity of the 1920s Republicans take credit for general wealth of nation, Smith can’t compete

The Election of 1928 Hoover wins in a landslide -Broadcast on radio worldwide

Roots of the Great Depression More than just the Stock Market Crash

1. Unequal Distribution of Income 5% of American households earned 30% of the nation’s income People buy on installment plan, can’t buy more because too many payments

2. Overproduction Making more than Americans could buy Cyclical Effect Fewer cars sold Less demand for rubber, textiles, steel, oil, glass, etc. Fewer people can afford to buy cars Cyclical Effect Unemployment lower wages Slowdown of industry

3. Loss of Export Sales Banks made loans to stock speculators instead of foreign companies They buy fewer US goods Hawley-Smoot Tariff – 1930 Highest in US history Hurt overseas sales

4. Mistakes by the Federal Reserve Didn’t raise interest rates to curb speculation Banks made risky loans Business leaders thought economy still good Raised interest rates after Depression hit Made it harder to get a loan

The Long Bull Market Stock market established Bull market in 1920s system of buying and selling shares of companies Bull market in 1920s long period of rising stock prices

Buying on margin PROBLEM made only a small cash down payment – as low as 10% of the price as long as stock prices keep rising, buying on margin was safe PROBLEM If prices began to fall – broker could issue a margin call – demanding the investor repay the loan at once

Before the late 1920’s prices generally reflected stock values Late 1920’s – new investors drove up prices without regard to companies earnings and profits engaged in speculation – hoping to make a profit overnight Late 1929 – market running out of new investors, stock prices begin to decline September – investors sensed danger and sell off their holdings

The Great Crash Monday Black Thursday Black Tuesday October 21, 1929 Markets begin to fall Lots of margin calls Black Thursday October 24, 1929 Stocks drop $5 billion Black Tuesday October 29, 1929 Prices took steepest drive yet Stocks drop $10-15 billion                                                  

Banks Crash hurt banks in 2 ways Some banks forced to close Lost $$ on defaulted loans (from stock speculators) Lost $$ invested in stock market Some banks forced to close Government did not insure bank deposits People lose confidence in banks Run on banks – depositors want to withdraw their money at one time 3,000 close in 2 years

30,000 companies out of business in 1932 Depression Worsens 30,000 companies out of business in 1932

Depression Worsens By 1933 – more than 9,000 banks failed 12 million workers unemployed Average family income dropped from $2,300 in 1929 to $1,600 in 1933

People without jobs often went hungry. Breadlines private charities Soup kitchens that provided meals Bailiffs – court officials that ejected the nonpaying tenants from their homes

Bread Lines and Soup Kitchens High unemployment caused many to wait in long lines for food

Evictions People & belongings were ejected from their homes when they couldn’t pay

Hoovervilles Name given to shantytowns that sprung up on unused or public land

Hoovervilles

Hoboes Hobos Homeless wanderers who would “ride the rails” looking for jobs

The Dust Bowl Farmers soon faced a new disaster Farmers left many of their fields uncultivated in the 1920’s b/c of falling farm prices Drought struck the Great Plains in 1932 From the Dakotas to Texas, America's pastures became a vast “Dust Bowl”

The Dust Bowl

Okies Farmers from Great Plains (Oklahoma) moved West to California

Escaping the Depression – Movie Stars Greta Garbo Shirley Temple Groucho Marx Clark Gable & Vivien Leigh – Gone With the Wind - 1939

Escaping the Depression - Movies First feature length animated film – Snow White and the Seven Dwarfs 1939

Escaping the Depression- Radio Radio offered entertainment on a more personal level Daytime radio dramas – soap operas The Lone Ranger George Burns & Gracie Allen Jack Benny The Green Hornet

The Source of Country Music Art in the Depression The Source of Country Music Thomas Hart Benton American Gothic Grant Wood

Literature during the Depression William Faulkner John Steinbeck Photojournalist – showed the ravages of drought