1. The Great Depression

2. The Great Depression
How did the working class Americans feel about the “hard times” they were facing in the 30’s?
Soup line in Chicago 1933

3. The Great Depression the gov. had let them down they are forgotten now
they did everything their country had asked of them
cannot find a job
“What did I do wrong?”

4. The Great Depression Why American were optimistic during the 1920’s
highest standard of living
medical advances increased life expectance
males 59 / women 53
stock market continued to go up
real wages had increased

5. The Great Depression women were going to college
unemployment falls below 4%
heroes of the day were business men
they are saying everything is fine
unusually high confidence in the business world
welfare capitalism
employers provided workers with raises and benefits

6. Contributing Factors that lead to the Great Depression

7. The Great Depression 1. Decline in Foreign Trade
high tariffs wanted people to buy American goods
built a tariff wall
Fordney-McCumber Tariff - 39%
Hawley-Smoot Tariff - 60%
Added an additional 75 farm
products and 925 industrial items
to the list
How would this lead to the
Great Depression?

8. Answer… Hurt US sales over seas
Other countries cannot sell their goods in US
People in other countries cannot make money needed to buy American made goods being sold in their countries
American businesses loss money because they have lost an overseas market

9. The Great Depression 2. Increase in Labor Saving Technology
more goods being produced with fewer labor
How would this lead to the Great Depression?

10. Answer… More and more people were being laid off from work
Machines were doing the jobs that were once done by people

11. The Great Depression 3. Decline in Purchasing Power
wages and salaries couldn’t keep up with the rising prices
Real wages were rising more slowly than prices of goods
How would this lead to the Great Depression?

12. Answer… People were making less money Had less money to spend
Were not buying goods
Businesses were not selling goods
Businesses would lay workers off

13. The Great Depression 4. Uneven distribution of wealth
mainly the rich getting richer
Poverty line was <$2,000
60% of Am families were at or below that line in 1929
80% had no savings
How would this lead to the Great Depression?

14. Answer… Had no money to spend on luxury goods
Could only buy for their basic needs
If they had more money they probably would have spent most of it
Poor people spend a greater percent of their income than rich people
Greater spending would have meant a boost in the economy

15. The Great Depression Bank Failures 1929 = 642 1930 =1352 1931 = 2294
Estimated 1 billion dollars had been w/drawn and placed in shoe boxes
There was no insurance for depositors
- How would this lead to the Great Depression?

16. Answer… When money was needed there was no money
Banks had failed and could not loan money to people
Depositors lose their money they had less to spend
Fewer banks meant fewer businesses loans
No banks were to be trusted even the healthy ones

17. The Great Depression 6. Overproduction in Agricultural and Industry
farmers’ depression started in early 1920’s
overproduced during WWI to feed Europe
Farmers had borrowed money to buy more land and more machinery
not needed now that war was over and Europe was feeding itself
crop princes fell 50%
How would this lead to the Great Depression?

18. Answer…
Many lost their homes and farms because they could not pay back their mortgages
Close to 50% of families in Am were farm families in the 1920

19. The Great Depression In Industry
late 20’s warehouse had piled up with un-bought consumer goods
overproduction caused some industries to slow
auto industry slumps in 1925
housing fell in 1928
How would this lead to the Great Depression?

20. Answer… Many businesses laid off workers
Expected the remaining workers to take on additional work

21. The Great Depression 7. Installment buying and Buying on Credit
people buy items while paying from them
(w/ interest) over many months
people flocked to buy many new products whether or not they could afford them
advertising made new goods irresistible
increase in personal debt
How would this lead to the Great Depression?

22. Answer…
Done in moderation it can boost economy but a high level can hurt the economy
Producers do not get signs that supply is outrunning demand
Workers who have been laid off are unable to complete their installment purchases
This further hurts businesses

23. The Great Depression 8. Buying on the Margin
paying a small % of a stock’s price as a down payment and borrowing the rest
10% down borrowed 90% from broker who charged HIGH interest rate
as stocks went up - sell - pay back the broker
broker could demand payment at any time (call)
How would this lead to the Great Depression?

24. Answer…
If people started to sell due to a panic the price of stocks would drop
This resulted in a loss for the broker and the bank who lent the broker money
The bank loan had been made with the depositors’ money
The depositors really lost

25. The Great Depression Stock Market Crash Black Tuesday on Oct 24, 1929
wave of selling as people who had brought on the margin were called
13 million shares changed hands
banks and insurance companies bought in order to stabilize

26. The Great Depression 9. Black Tuesday Oct 29, 1929
people and corporations alike tried to sell stocks
record # of stock sold - 16 million
panic continues for two weeks
total lost million
How did this lead to the Great Depression?

27. Answer…
If the stock market falls business investment declines because confidence is shaken
Banks are less likely to make loans
Spending by the rich declines because they either have less money and/or are unsure about future earnings
Spending by the poor declines because they have lost faith in the economy and/or they will have lost their job

28. The Great Depression Had Begun

29. Impact!
By 1932, 5,761 banks had failed (22% of total) -- Many banks invested in stocks before the crash
Thousands of businesses failed -- 20,000 in 1929; 30,000 in 1932
Unemployment reached 25% by 1932 (13 million people) excluding farmers.             a. As high as 33% including farmers; Chicago = 50%!             b. Low-skilled workers most susceptible (professionals and middle-class suffered less)
By 1932, 25% of farmers lost their farms
-- A major cause was the large drop in food prices
Many families broke up; marriage rate and birth rate declined.
-- Families doubled up in houses and apartments
3 million people became hobos and lived in makeshift shacks known as "Hoovervilles"
Depression longest and most devastating in U.S. history and world history.

30. Rose Bowl “Scenario”

31. Rose Bowl “Scenario” –1931: 100,000 men at Rose Bowl
–Announce: Everyone is out of work
62,000 = unemployed at least one year
44,000 = at least two years
24,000 = at least three years
11,000 = at least four years
––Repeated every Sat. for 130 Sat.
–Accurate to the speed & volume of Depression

32. Depression longest and most devastating in U. S
Depression longest and most devastating in U.S. history and world history.
U.S. hit the hardest among industrialized nations.
-- Nat’l product fell from $104 billion in 1929 to $56.1 billion in 1933.

33. CONDITIONS FOR MINORITIES
Conditions for African Americans and Latinos were especially difficult
Unemployment was the highest among minorities and their pay was the lowest
Increased violence (24 lynchings in 1933 alone) marred the 1930s
Many Mexicans were “encouraged” to return to their homeland
As conditions deteriorated, violence against blacks increased

34. THE DUST BOWL
A severe drought gripped the Great Plains in the early 1930s
Wind scattered the topsoil, exposing sand and grit
The resulting dust traveled hundreds of miles
One storm in 1934 picked up millions of tons of dust from the Plains an carried it to the East Coast
Kansas Farmer, 1933

36. Dust storm approaching Stratford, Texas - 1934

37. Storm approaching Elkhart, Kansas in 1937

38. Dust buried cars and wagons in South Dakota in 1936

39. HOOVER STRUGGLES WITH THE DEPRESSION
After the stock market crash, President Hoover tried to reassure Americans
He said, “Any lack of confidence in the economic future Is foolish”
He recommended business as usual
Herbert Hoover

40. HOOVER’S PHILOSOPHY Hoover was not quick to react to the depression
He believed in “rugged individualism” – the idea that people succeed through their own efforts
People should take care of themselves, not depend on governmental hand-outs
He said people should “pull themselves up by their bootstraps”
Hoover believed it was the individuals job to take care of themselves, not the governments

41. HOOVER’S SUCCESSFUL DAM PROJECT
Hoover successfully organized and authorized the construction of the Boulder Dam (Now called the Hoover Dam)
The $700 million project was the world’s tallest dam (726 feet) and the second largest (1,244 feet long)
The dam currently provides electricity, flood control and water for 7 western states

42. Any dam questions?

43. HOOVER TAKES ACTION: TOO LITTLE TOO LATE
Hoover gradually softened his position on government intervention in the economy
He created the Federal Farm Board to help farmers
He also created the National Credit Organization that helped smaller banks
His Federal Home Loan Bank Act and Reconstruction Finance Corp were two measures enacted to protect people’s homes and businesses
Hoover’s flurry of activity came too late to save the economy or his job

44. BONUS ARMY A 1932 incident further damaged Hoover’s image
That spring about 15,000 World War I vets arrived in Washington to support a proposed bill
The Patman Bill would have authorized Congress to pay a bonus to WWI vets immediately
The bonus was scheduled to be paid in The Army vets wanted it NOW

45. Thousands of Bonus Army soldiers protest – Spring 1932
BONUS ARMY TURNED DOWN
Hoover called the Bonus marchers, “Communists and criminals”
On June 17, the Senate voted down the Patman Bill
Thousands of Bonus Army soldiers protest – Spring 1932

46. BONUS MARCHERS CLASH WITH SOLDIERS
Hoover told the Bonus marchers to go home– most did
2,000 refused to leave
Hoover sent a force of 1,000 soldiers under the command of General Douglas MacArthur and his aide Dwight Eisenhower

47. AMERICANS SHOCKED AT TREATMENT OF WWI VETS
MacArthur’s 12th infantry gassed more than 1,000 marchers, including an 11-month old baby, who died
Two vets were shot and scores injured
Americans were outraged and once again, Hoover’s image suffered