1930s The Great Depression Mr. Pagliaro Seymour High School @PagsAPUSH

Part 1: The Nation’s Sick Economy Causes of the Great Depression

9 Key Causes for Great Depression Debt liquidation and distress selling Contraction of money supply as bank loans are paid High taxes on middle class Larger decrease in net worths of businessbankruptcies Decreased profits Reduction in output, in trade, and in employment. Pessimism and loss of confidence Hoarding of money Decreased interest rates; increased deflation

Causes for 1929 Market Crash Stocks bought on margin Liberal credit policies of 1920s 4/7 of all loans went unpaid at close of 1920s Agricultural recession of 1920s Inequality of production vs. consumption 5,000 banks collapsed 1923-1930 Unequal distribution of wealth Declining real estate values Introduction of Hawley-Smoot Tariff

Black Thursday Sept. 3, 1929-Dow reached all-time high-381 Dropped 17% over next month Oct. 24, 1929-12.9 million shares traded Bloc purchase of blue chips Stop the bleeding Day ended down 6.38 points

Black Monday & Tuesday Regular investors got out – huge losses Total losses = $30 billion Date Change % Change Close Monday, October 28, 1929 −38.33 −12.82 260.64 Tuesday, October 29, 1929 −30.57 −11.73 230.07

Stock Market Crash, Oct. 1929

Run on banks…

Consequences of Market Crash Lack of confidence in stock exchange Reduced industrial output Declined investment in capital goods

Over-production & Under-consumption Companies overproduced consumer goods Consumers did not have $ to pay American Industrial Production

International Trade Hawley-Smoot Tariff (1930) raised rates on 20k goods "The world is paying for its ruthless destruction of life and property in the World War and for its failure to adjust purchasing power to productive capacity during the industrial revolution of the decade following the war.” Record high tariffs Decreased trade by 40% in 3 years European recession End of Dawes Plan loans to Germany Import quotas

Decreased International Trade U.S. imports decreased 66% from US$4.4 billion (1929) to US$1.5 billion (1933) exports decreased 61% from US$5.4 billion to US$2.1 billion

Unemployment

How about now?

Wealth Disparity

And today?

Decline in Farm Prosperity Decreased production in 1920s and 1930s Deflated prices on agricultural goods

The Dust Bowl 1930s era drought conditions of Great Plains Farming techniques +drought  Massive wind erosion Dust Storms Black Blizzards Dust Bowl Resources

Migration westward “Okies” Moved to California Chronicled by: Searched for work Same poor conditions Migrant workers Chronicled by: John Steinbeck Grapes of Wrath Of Mice & Men Dorothea Lange

Part 2 Herbert Hoover and the Great Depression

Hoovervilles

The Bonus Army World War Adjusted Compensation Act – 1924 – Pension/Bonus 1932 – March on Washington 12-17,000 vets, families, supporters (43,000 total) Supported by Senate candidate, Maj. Gen. Smedley Butler July 1932 – Hoover called out army Gen. D. McArthur marched soldiers on protestors; used gas

Hoover’s Economic Policy Believed economic recovery depended on business Care for unemployed? Emphasis on charities Spirit of voluntarism Supported Federal Loan program to support State/local government Private companies Agricultural Marketing Act/Federal Farm Board loans to farmers buy crops

1929-1932 >10,000 Banks closed (>40% of 1929) GNP down 31% Farm values down 53% (after dropping 30-40% in 20s) Unemployment at 23.6%

Reconstruction Finance Corporation Provided $1.5-2 billion in loans to states, cities, infrastructure businesses (1932) Did little to help lower classes Unemployment continued to rise RFC spent $1.8 billion in 1933 and 1934 Public opinion on Hoover dropped

Franklin D. Roosevelt – Dem. 1932 Election Name Electoral Popular FDR 472 22.8 mil. Hoover 59 15.7 mil. Franklin D. Roosevelt – Dem. Herbert Hoover – Rep.

I pledge you, I pledge myself, to a new deal for the American people. Throughout the nation men and women, forgotten in the political philosophy of the Government, look to us here for guidance and for more equitable opportunity to share in the distribution of national wealth... I pledge you, I pledge myself to a new deal for the American people... This is more than a political campaign. It is a call to arms. I pledge you, I pledge myself, to a new deal for the American people.