Ch. 14 The Great Depression

Key industries barely made a profit; some industries lost business to foreign competition and new American technologies; some industries suffered from declining demand for their goods after WW I; the coal industry declined because of the development of new sources of energy; new housing starts declined; affecting other businesses that depended on home construction. After WW I, demand for farm products fell drastically, as did prices; many farmers could not pay off their debts and lost their farms, which caused some rural banks to fail; Congress passed federal price supports for farm products, but President Coolidge vetoed them. By making credit easily available, businesses encouraged Americans to pile up a large consumer debt; faced with rising prices, stagnant wages, and high levels of debt, consumers decreased their buying Nearly half of American families earned less than the minimum amount needed for a decent standard of living, while the rich got richer; this unequal distribution of wealth meant most consumers had too little money to buy goods produced by American factories. Many investors engaged in speculation and buying on margin, fueling the market upward and generating great wealth, but only on paper; when the market crashed, many investors lost their life savings. - Democratic Presidential candidate, Roman catholic from N.Y. - Oct. 29, 1929 – The day the stock market crashed - Is measured based on the stock prices of 30 representative large firms trading on the New York Stock Exchange. - Established the highest protective tariff in American history.

- Many people found themselves out of jobs for years; women, African-American men, and Mexican-American men were discriminated against in the workplace and became targets of hostility. - Many unemployed people lost their homes; many homeless lived in the streets or in shantytowns called “Hoovervilles”; many farmers lost their farms. - Farmland already exhausted through overproduction was hit with drought and winds, turning the plains into the Dust Bowl; dramatic decreases in farm prices and income; many farmers lost ownership of their farms and were forced to become tenant farmers or farm laborers. - Intense competition for jobs sparked existing racial resentments into open hostility and violence; in 1933, 24 African-Americans were lynched ; thousands of Mexican- Americans left the U.S. voluntarily or were deported. - The Depression strengthened family ties, but also increased family tensions; some men abandoned their families, discouraged by their inability to provide for them; women also faced greater pressures to provide for themselves and their families. - Poor and homeless people scavenged or begged for food or turned to soup kitchens and bread lines; poor diet and lack of health care increased rates of serious health problems; malnutrition and starvation grew more common. - Many people became demoralized; suicides and admissions to mental hospitals increased dramatically; people were forced to accept compromises that would affect the rest of their lives; some people came to want financial security more than anything else in life. Wind scattering the top soil in the Midwestern States: Kansas, Oklahoma, Texas, New Mexico, and Colorado -Towns that sprang up around dumps at the outskirts of towns: Hoovervilles Charitable organizations or public agencies that offered free or low cost food - Charitable organizations or public agencies that offered free or low cost food - Cash payments or food provided directly to the poor. No federal program existed. Came from charitable services

- Believed that a chief function of the government was to encourage voluntary cooperation among competing interest groups; believed that the federal government should guide relief measures but not directly participate in them. Caution; urged key leaders to work together to provide solutions and to act in ways that would not make the economic situation worse. -Economic situation: Continued to worsen; unemployment continued to rise; more companies went out of business; soup kitchens, shantytowns, and hoboes became common; the misery of ordinary people to continue to grow - Voter response: Republicans lost control of the House of Representatives and saw their majority in the Senate dwindle to one vote Economic action: Directed federal funds into public works projects, such as Boulder Dam, to jump-start the economy and create jobs; backed a series of federal programs; including the Federal Farm Board, the National Credit Corporation, the Glass-Steagall Banking Act, the Federal Home Loan Bank Act, and the Reconstruction Finance Corporation - Continued to deteriorate - Opposed immediate payment of bonuses to WW I veterans; ordered an infantry operation to close their Capitol Hill shantytown, leading to the gassing of 1,000 people, a baby’s death, and public outrage Damaged his public image; assured the victory of Democratic candidate Franklin Delano Roosevelt in the 1932 presidential election. - The RFC provided emergency financing to banks and other large businesses to fuel business expansion and thereby pump new life into the national economy; its efforts were ultimately too little too late.