The Great Stock Market Crash October 29, 1929 “Black Tuesday” $16.4 million shares of stock sold (average day = $4 to $8 million) By November 1929 Dow Jones had fallen from September ‘29 high of 381 to Result of Panic created on October 24, 1929 “Black Thursday”

Headlines Oct. 30, 1929

The Bear and the Bull Bear Market = exists when the stock market falls over a significant period of time. Bull Market = exists when the stock market rises over a significant period of time.

Causes Overspeculation during the 1920s Overproduction of goods Buying on margin

Causes Uneven distribution of wealth in the 1920s Too much borrowing from banks Stock prices grossly inflated; did not have “real” value Decay of “backbone” industries

Effects Investors and businesses lose millions Thousands of banks fail, savings are wiped out Businesses cut production, lay off thousands of workers GNP down from $103 billion in 1929 to $56 billion in 1933

Market Crash

Effects Unemployment rises, consumer base drops further. By 1932, 12 million people unemployed Economic contraction in the US spread to Europe The Great Depression sets in

Depression Food Lines

Unemployment

Social Effects City Laborers - Many lost their jobs, became homeless, lived in poverty, some resorted to living in “Hoovervilles”. Hooverville – Shanty towns build by homeless with stacks of tar paper, cardboard, or scrap material to “mock” President Hoover. Herbert Hoover – rugged individualism

President Herbert Hoover

Hoovervilles

Social Effects Farmers – In ‘29 a bushel of wheat sold for $1.18, in ‘32 it sold for 49 cents. Cotton dropped from 19 to 6.5 cents a pound Many could not afford to keep their farms; Dust Bowl forced thousands to migrate elsewhere Dust Bowl – Between , so much soil blew out the of central and southern Great Plains that the region became known as the Dust Bowl.

Dust Bowl

Leaving Farms

Social Effects Women – Had trouble finding work because so many men were unemployed. More responsibility for survival of family Change and equality gained from WWI and 20s false?

Psychological Effects

Social Effects Children – Faced horrible health conditions through labor, lack of food; many could not go to school; could not be supported by their parents

Social Effects Men – Psychologically felt like failures because of inability to find work Many left home, to “ride the rails” (“Hobos”) Suicide rate soars

Unemployment

Social Effects Racial minorities – Discrimination increased, work became harder to find for African Americans; many Hispanics and Asian Americans were deported; lynchings increased in the South Nativism continued to grow

Americans Pull Together Farmers Stick together Worked together to minimize impact of Great Depression They held “penny auctions” to save the farms of other farmers in the community Legislation was soon passed giving farmers more time to pay their debts

Young people ride the rails Young people left home in seek of a better life Rail riders faced dangers along the way; “Hobos” faced injury, police arrests, angry farmers Young people witnessed the Depression throughout the country and experienced loneliness

Riding the Rails

Hobos

Seeking Political Solutions Most US citizens kept faith in the democratic process despite hard times Some citizens were attracted by reform and radical movements Communist and Socialist Parties grew in size and support

Depression Humor Humor kept people laughing thorough troubled times “Hooverisms” became popular, like “Hoover Flags” Board Games like Monopoly are created

Depression Humor

Signs of Change Prohibition is Repealed The 21 st Amendment 1933 There was mixed reaction, but most Americans welcomed repeal Hoover regretted this

18 th Amendment Repealed

Bars open for business

Empire State Building The building became a promising symbol of hope The 102-story building cost $41 million, soared 1250 feet in the sky, and had 67 elevators

Construction of Empire State Building

The End of an Era The Symbols of the 1920s faded; Al Capone, Calvin Coolidge, Babe Ruth, and Henry Ford The Lindbergh kidnapping echoed the nation’s distressed condition 20s Hero’s infant son kidnapped and murdered

The Election of 1932 Republican incumbent Herbert Hoover Vs. Democratic candidate Franklin Delano Roosevelt

Franklin D. Roosevelt

In wheelchair

Herbert Hoover Believed in minimal government action Strict view of government (less is better) Advocated voluntary action by businesses and citizens (“rugged individualism”) Believed in minimal government spending, but some spending projects; Hoover Dam, Federal Farm Board

Herbert Hoover Believed that assistance to businesses and banks (at the top) would eventually help individuals and the economy as a whole Hawley-Smoot Tariff 1930 (highest in history) Reconstruction Finance Corp. (RFC) – Government credit to major industries (“Bail outs”) also lent money to banks Home Loan Bank Act – discounting mortgage rates

Franklin Delano Roosevelt Willing to experiment with government roles (expand government) Supported broadening the role of government Wanted to do whatever possible to try to end the Depression Favored increased government spending and government projects Introduces “The New Deal”

Bonus Army Incident Low Point for Hoover, summer of ,000 jobless, WWI veterans march and encamped in Washington DC Demanded immediate payment of a pension bonus they were promised for Not given, many left, some stayed in DC. Although generally peaceful, some violence broke out

Bonus Army encampment

Outside capital building

US Army brought in to drive the bonus army out of DC Many were injured when tear gas was shot This incident would defeat Hoover in ‘32 election FDR wins election in landslide electoral votes, 22.8 million-15.7 million popular votes

Election of ‘32 results