Shannon Slaughter St. Clair Co. High THE GREAT DEPRESSION Shannon Slaughter St. Clair Co. High

THE GREAT CRASH

What caused the Great Depression? GUIDING QUESTION What caused the Great Depression? the federal government during the 1920s? PERSPECTIVE – did government intervention cause the depression? Or did lack of government intervention cause the depression? (from 1983)

STOCK MARKET CRASH May 1928-September 1929, prices doubled in value Stock Market Prices, 1921–1932 May 1928-September 1929, prices doubled in value beginning in Sept 1929, gradual slide Black Thursday (Oct. 24) largest sell-off in NYSE history Black Tuesday (Oct. 29) $40 billion in stock value lost by Dec. The Great Depression Response of bankers, Hoover and business leaders Faragher, Out of Many, 3rd Ed.; http://wps.prenhall.com/hss_faragher_outofmany_ap/ Black Tuesday Wall Street, Oct. 29, 1929

John Maynard Keynes Economic Theory When investments > savings = inflation When savings > investments = recession In the midst of an economic depression, the correct course of action should be to encourage spending and discourage saving.

UNDERLYING CAUSES OF THE DEPRESSION Keynesian Theorists Overproduction - Massive business inventories (up 300% from 1928 to 1929) Lack of diversification in American economy prosperity of 1920s largely a result of construction & auto industries Underconsumption -- Widened gap between rich and poor – lack of purchasing power among consumers Farm income down 66% in 20s By 1929 the top 10% of the nation's population received 40% of the nation's disposable income Faragher, Out of Many, 3rd Ed.; http://wps.prenhall.com/hss_faragher_outofmany_ap/

UNDERLYING CAUSES OF THE Depression Keynesian Theorists Consumer Debt – middle class installment loans; buying on margin Overspeculation in Stock Market – by wealthy and upper middle class Laissez – Faire Economy – Republican Presidential Economic Policy

Monetarism Theory Opposition to the Gold Standard Restriction of the money supply (in accordance with the Friedman rule) to tame inflation in the economy. Governmental control of the supply of the money will stabilize prices.

UNDERLYING CAUSES OF THE DEPRESSION Monetarists Theories Weakness of Banking Industry bank failures in late 1920s (farmers) many had small reserves low margins encouraged speculative investment by banks, corporations, and individual investors Total money supply closing of over 9,000 American banks between 1930 and 1933 – mostly small banks Federal Reserve system – reduction in monetary supply causes deflation Consumer Debt, 1920–1931 Faragher, Out of Many, 3rd Ed.; http://wps.prenhall.com/hss_faragher_outofmany_ap/

UNDERLYING CAUSES OF THE DEPRESSION Monetarists Theory Federal Reserve – Did not do what it was supposed to – which is to protect small banks Previously (before the Fed) LARGE banks stepped in to help small banks, but after creation of the Fed, those large banks no longer felt responsible for assistance Decline in demand for American goods in international trade European industry and agriculture gradually recovered from World War I Germany so beset by financial crises/ inflation that could not afford to purchase US goods High American protective tariffs

IMPACT ON SOCIETY

How did the Great Depression change American society in the 1930s? GUIDING QUESTION How did the Great Depression change American society in the 1930s? (from 1996)

Effects on Business & Industry GNP – $104 billion in 1929 to $56 billion in 1933 Total national income – fell by over 50% Corporate profits - from $10 billion to $1 billon Business failures: 100,000 between 1929 and 1933 Brinkley 10e

Effects on Business & Industry Bank failures about 20% all banks (over 6000) between 1929 and 1933) over 9 million savings accounts lost($2.5 billion) Depositors gathering outside a bank, April 1933 Bank Failures, 1929-1933 Graph: Divine America Past and Present Revised 7th Ed. Outside Bank: http://www.wadsworth.com/history_d/special_features/image_bank_US/1929_1939.html American Journey Online 1932

Effects of the Crash Great Crash World Payments Investors Businesses and Workers Investors lose millions. Businesses lose profits. Consumer spending drops. Workers are laid off. Businesses cut investment and production Some fail. Banks Businesses and workers cannot repay bank loans. Savings accounts are wiped out. Bank runs occur. Banks run out of money and fail. World Payments Overall U.S. production plummets. U.S. investors have little or no money to invest. U.S. investments in Germany decline. German war payments to Allies fall off. Europeans cannot afford American goods. Allies cannot pay debts to United States. Pathways

Effect on workers and families Unemployment ~25% in 1932? Underemployment – loss of hours not jobs patterns of reemployment and layoffs hobos “Depression mentality” This photograph shows men lined up at the New York City Employment Bureau.  In the early years of the Great Depression, in the absence of federal jobs programs or of any sort of local or state unemployment assistance, people turned to agencies such as the New York City Employment Bureau to look for work.  Nationally, the unemployment rate had risen from 3 percent in 1929 to 6.3 percent in 1930 and to 16.5 percent in 1931; it stood at 29.4 percent in 1932, the year this photograph was taken.  [ajo] Unemployment Graph: Faragher, Out of Many, 3rd Ed.; http://wps.prenhall.com/hss_faragher_outofmany_ap/ Men Lined Up at the New York City Employment Bureau, 1932

Effect on workers and families Malnutrition Disease: tuberculosis, typhoid and dysentery. City & state relief systems in industrial Northeast and Midwest collapse soup kitchens and bread lines Soup kitchen, Chicago, 1930 http://www.wadsworth.com/history_d/special_features/image_bank_US/1929_1939.html (Chicago) http://www.wadsworth.com/history_d/special_features/image_bank_US/1929_1939.html Soup kitchen, 1931 (Cleveland)

Dorothea Lange “White Angel Breadline“ San Francisco 1933 White Angel Breadline" By Dorothea Lange, San Francisco, California, 1933 National Archives and Records Administration, Records of the Social Security Administration Copyright the Dorothea Lange Collection, Oakland Museum of California, City of Oakland, Gift of Paul S. Taylor. (47-GA-90-497)

Effect on workers and families Women Working - 25% more New Deal – lower pay Women’s Rights Movement - lowest point in a century Families Housing Stress - divorce Health – disease, suicide Migrants - from South and Midwest to West Women in Workplace: Brinkley 10e; This photograph was taken by Resettlement Administration (RA) photographer Carl Mydans (b. 1907) in March 1936.  It shows a woman and her two children in the abandoned chassis of a Ford automobile--their home--on U.S. Route 70 in Tennessee. [ajo] Mother and two children living in an abandoned car in Tennessee, 1936 Women in Workplace 1900-1940

Effects on Farmers “Dust Bowl” “Okies” Grapes of Wrath Dust Bowl Resettlement Adminstration Pageant 13e Dust Bowl Dust storm, Springfield, CO, 1935

http://www.wadsworth.com/history_d/special_features/image_bank_US/1929_1939.html Dust storm, Elkhart, KS, 1937

The Dust Bowl Aftermath of dust storms, South Dakota, 1936 Abandoned house, Haskell County, Kansas“, By Irving Rusinow, April 1941; National Archives and Records Administration, Records of the Bureau of Agricultural Economics, 83-G-41906) Dust Bowl farm. Coldwater District, north of Dalhart, Texas. This house is occupied; most of the houses in this district have been abandoned. Lange, Dorothea, photographer June 1938 (LOC AmMem FSA-OWI( Abandoned house, Kansas, April 1941 Dust Bowl Farm, Texas, 1938

Migrants “Okies” migrate west in 1939 A Destitute Family in the Ozark Mountains. 1935 “Okies” migrate west in 1939 This impoverished family in the Ozark Mountains region of northwestern Arkansas was photographed in October 1935 for the Resettlement Administration (RA) by Ben Shahn (1898-1969) “Okies” - http://www.wadsworth.com/history_d/special_features/image_bank_US/1929_1939.html “Covered Wagon” - http://www.wadsworth.com/history_d/special_features/image_bank_US/1929_1939.html Dorthea Lange, “Covered Wagon Again” 1935

Migrants in California "Cheap Auto Camp Housing for Citrus Workers“; By Dorothea Lange, Tulare County, California, February 1940; National Archives and Records Administration, Records of the Bureau of Agricultural Economics, (83-G-41555) Migratory family in auto camp. California. Dorothea Lange 1936 (LOC Am Mem FSA/OWI) "Cheap Auto Camp Housing for Citrus Workers“; Dorothea Lange, Tulare County, California, Feb. 1940 Migrant Auto Camp, California, 1936

“Migrant Mother” Florence Owens Thompson – taken at a pea pickers camp in N. California Family had sold their tent to pay for food. The photo was originally posted in San Francisco Examiner – US govt responded by sending $20,000 in aid to the pea pickers camp where this photo was taken. Thompson and family had already moved on by then. She never collected any royalties (was promised by Lange that the photos would not be published). Original of the photo sold at auction recently for $141,000. ~Dorothea Lange 1936~ Migrant Mother. Lange, Dorothea. 1936

Effects on African Americans High Unemployment – up to 50%: Last hired, first fired Competition for jobs Exclusion from relief programs Help from the New Deal? Scottsboro Case -- nine African-American teenagers accused in Alabama of raping two white women on a train in 1931 – lack of evidence This photograph, taken in January 1939 by Arthur Rothstein (1915-1985), a photographer with the federal Farm Security Administration (FSA), shows a mother and child, their spring mattress propped up behind them, along U.S. Route 60 in New Madrid County, Missouri.  The woman and her family were sharecroppers evicted by their landlord at the height of winter. Evicted Sharecroppers along Highway 60 in Missouri. Rothstein, Arthur. 1939 [ajo] http://www.wadsworth.com/history_d/special_features/image_bank_US/1929_1939.html African American family during Great Depression in Scott’s Run, Virginia Evicted Sharecroppers along U.S. 60 in Missouri, 1939

Effects on American Culture Reactions of most Americans Effects on basic values (capitalism, democracy, individualism) Alternatives: socialism, communism? Whom to blame? Popular Culture and Escapism Frank Capra Walt Disney Gone With the Wind

Effects on Politics Republican domination of government ended Power of federal government increased greatly – New Deal Socialism and Communism - failed to become a major force in American politics. Why??? Socialist party of America - Norman Thomas American Communist party of the 1930s Lincoln Brigade The Popular Front Nazi-Soviet Nonaggression Pact (1939)

HOOVER’S RESPONSE

Federal Response Under Hoover Herbert Hoover (1929-1933) Philosophy: limited government, individualism – Trickle – Down effect – get business on the right foot FIRST Initial response? Hawley-Smoot Tariff (1930) – protective tariff for American business -- HIGH Debt moratorium Stop countries from paying the US for WWI – to ease their burden International Banking Crisis (1931)- gold standard – Britain came off the GS Reconstruction Finance Corporation (1932) – give low interest loans to business to spur economic development Library of Congress Brinkley; "Boulder Dam, 1942“, By Ansel Adams, Nevada; National Archives and Records Administration, Records of the National Park Service (79-AAB-4); PBS American Photography "Boulder Dam, 1942“, Ansel Adams

Evaluation of Hoover’s Response Contemporary popular opinion – Hoover gets blame “Hoovervilles”

This cartoon by Clifford Berryman (1869-1949) mocks Herbert Hoover's efforts to end the depression.  Hoover's farm-relief programs are depicted as a straw scarecrow designed to scare off hard times. [ajo] “Hoover's Farm Relief”

Contemporary Political Cartoon Republican cartoon showing Hoover trying to solve the country’s problems http://www.wadsworth.com/history_d/special_features/image_bank_US/1929_1939.html Contemporary Political Cartoon

Response to Hoover’s Response Farmers “Farmers Holiday Association” – farmers from Midwest decided to withhold farm products from the government “Bonus Expeditionary Force” – BONUS ARMY Bonus Army camp, 1932 http://www.wadsworth.com/history_d/special_features/image_bank_US/1929_1939.html By an unknown Associated Press photographer, July 1932, NARA "Bonus Marchers" and police battle in Washington, DC, July 1932

Evaluation of Hoover’s Response Modern Evaluations: reluctance to spend large amounts of federal funds, expand the role of the federal government. willing to intervene in the economy to an unprecedented degree.

Bonus Army Bonus Army camp in the Anacostia flats http://www.wadsworth.com/history_d/special_features/image_bank_US/1929_1939.html (all) U.S. Army soldiers guarding Bonus Army camp Douglas McArthur directing removal of Bonus Army marchers

Misery Sweeps Roosevelt into Office 1932 ELECTION Misery Sweeps Roosevelt into Office

1932 ELECTION Franklin D. Roosevelt philosophy “New Deal” [ajo] http://www.wadsworth.com/history_d/special_features/image_bank_US/1929_1939.html Franklin D. Roosevelt, 1920 Vice Presidential nominee for Democratic Party Roosevelt Campaigning for Office in Kansas 1932

New Yorker 1/16/1932 Alfred Frueh

1932 ELECTION Hoover Results “The Worst is Past" "Prosperity is Just Around the Corner" Results http://www.wadsworth.com/history_d/special_features/image_bank_US/1929_1939_maps.html; Electoral Shift: Martin, America and its Peoples 5e Electoral Shift, 1928 and 1932

1932 ELECTION Lame-Duck Period (Nov. 1932-March 3, 1933) banking industry collapse. Twentieth Amendment Bank Failures, 1929-1933 Graph: Divine America Past and Present Revised 7th Ed. Franklin D. Roosevelt and Herbert Hoover on the way to FDR's inauguration, March 4, 1933 With little in common but their top hats, Herbert Hoover and Franklin D. Roosevelt ride to Roosevelt's inauguration on March 4, 1933. (Library of Congress) Pagent 13e Franklin D. Roosevelt and Herbert Hoover on the way to FDR's inauguration, March 4, 1933 (Library of Congress)

SOURCES Brinkley, American History: A Survey (10th ed) Wadsworth-Thompson http://www.wadsworth.com/history_d/special_features/image_bank_US/1929_1939.html Library of Congress American Memory Project Rutgers Univ. Teaching Politics Image Bank http://teachpol.tcnj.edu/amer_pol_hist/.html Divine America Past and Present Revised 7th Ed. Faragher, Out of Many, 3rd Ed.; http://wps.prenhall.com/hss_faragher_outofmany_ap/ Kennedy, American Pageant 13e