Unit 8 – The Great Depression and New Deal (1929 – 1941) Lesson 2 – The Crash, Aftermath, & Social Effects of the Depression
Review – 5 Causes of the Depression! The Gap Between the Rich and the Poor. Easy Credit Led to Larger Amounts of Personal Debt. Unregulated Stock Speculation! Industrial Overproduction of Durable Goods. Farmers Suffered First!
The Road to the Great Crash 1928 – Dow Jones Industrial Average – the avg. price of stock for major industries hit 191. Think of Points on the Dow as $$$$’s Mar. 4, 1929 – Dow hit 313 Points! Sept. 3, 1929 – All time high of 381 Points! The Bull Market had run its course. It fell gradually until Oct. 23, 1929 when it fell 21 Points in one hour. Black Thursday, Oct. 24, 1929 orders to sell by worried investors caused it to plummet!
Black Tuesday, Oct. 29, 1929! By November 13, the Dow had fallen to 198.7 (381 on Sept. 3rd). i.e. GE had been $400/ share; now $283. $30 Billion evaporated! At first only the 4 million Americans (2.5%) who owned stock were affected; soon millions more! To stop panic, a group of bankers pooled $ to start buying again, but be Monday, Oct. 28th they were falling again. Black Tuesday – a record 16.4 Million shares sold (compared to 6 Million on a average day)!
The Impact of the Crash on Workers, Farmers, & Businesses Factories shut down leaving millions jobless! Ford Motor Co. left 75,000 out of work by Aug. 1931! 1932 –1 out of 4 Americans were unemployed! Farm prices continued to fall. Wheat from $1.04 in 1929 to $0.38 in 1932; Cotton $0.17/ lb. To $0.065/ lb. Business failures large and small put others out of work and slashed many incomes and hours of those able to keep their jobs.
The Impact on Banks Bank failures went from rural to urban. 9 Million savings accounts vanished and runs on banks added to the problem! In 1931 alone– 1500 banks ran out of money! Federal Reserve – tightened the money supply – big mistake!
The Depression goes Worldwide International banking, manufacturing, & trade had made the world interdependent by 1930. France and Britain could not pay U.S. because Germany could no longer borrow from U.S. banks to pay reparations! Republican Tariff Policy (Hawley-Smoot Tariff – 1930) – a high import tax restricted international trade.
Exit Slip – The Crash October 29, 1929 is known as “__________.” T or F: Most businesses were hurt by the Great Crash. T or F: Banks prospered after the crash because they were the only ones that had money. This European nation suffered most during the Depression? A. Great Britain B. France C. Germany
Misery and Despair Grip America’s Cities Few understood why “No Help Needed” signs everywhere Worn clothes, hunger, & despair; meat & milk scarce Soup Kitchens and Bread Lines
Soup Kitchens and Bread Lines
Hard Times “Hoovering” Over People
Many Face Homelessness Many sold and/ or pawned things after savings were spent Evictions were common “Hoover Flags”, “Hoover Blankets”, “Hoover Heaters”, and…
“Hoovervilles”
More Hoovervilles
Hoover Hut
Farmers Lose Farms It reached from the Dakotas to the TX panhandle. “Black Blizzards” could reach speeds of 100 mph and often killed livestock, birds, and fish. Dusters removed more earth than the Panama Canal! 1930-34 – 1 Million farmers lost farms! Some remained as tenant farmers & others migrated away. The Dust Bowl of the Great Plains was caused by drought, poor farming methods, and wind storms.
The Dust Bowl (1932 – 39)
Dust Bowl Drifts
Map of Dust Bowl Conditions
Migration of the “Okies” and “Arkies” 60% of Dust Bowl families fled homes. Destination West Coast, often CA, to work as migrant farmers; some North Hwy’s 30 and 66 were filled with families like this one.
Farmers Dump Milk & Dorothea Lange’s Migrant Mother
Exit Slip – Social Effects of the Depression Many unemployed in urban areas were forced to eat meals in __________ and __________. T or F: Most unemployed liked getting charity rather than having a regular job. Crude, homemade dwellings where many homeless lived were called __________. A. Hoovervilles B. Hoover Flags C. Slums 4. What area of the U.S. was known as the Dust Bowl during the 1930’s? A. East Coast B. Great Plains C. California
Hoover’s Strategy and Downfall Urged business leaders not to cut production Hawley-Smoot Tariff (1930) – highest import tariff in history! Killed trade! He believed in “Trickle-down Economics” and Tax Breaks for the rich???? and for poorest Americans.
Volunteerism and Localism Wanted state and local gov’ts to provide more jobs and take care of their own charities, but they didn’t have the money either. Thought the federal government should not give handouts or welfare. Thought Americans would not act in their own interests, but for the nation = Volunteering to aid others Factories cut production & laid off workers and farmers kept planting more and more.
The Agricultural Marketing Act (1929) AMA - passed before the Crash Farm Board urged farmers to pool products and sell as a group to raise prices. Failed b/c it provided no immediate help or loans to farmers!
The Reconstruction Finance Corporation (Feb 1932) RFC gave $2 B to RR’s, corps., & banks. An example of Trickle Down Economics Banks covered their own a$$ets instead of lending $$$ out. Emergency Relief Act or ERA (July 1932) also failed as only half of $300 M was distributed.
Hoover=Too Little Too Late! Hoover the “Great Humanitarian” now seemed cold and indifferent. Summer 1932 photo of him feeding his dog, King Tut, further irked the public. Why?
The Bonus Army (Summer 1932) 20,000 WW I vets to Washington, DC to demand bonus early. Hoover vetoed a bill and told the vets no! Riots broke out in July then U.S. Army drove them from the capital and burned the Hooverville!. Dozens were injured!
Who Will Restore Hope?