1. Causes of the Great Depression

2. The Election of 1928 The Republicans The Democrats
Candidate Herbert Hoover
Republicans took credit for
Economic prosperity of the 1920’s
The Democrats
Candidate Al Smith (NY)-1st Catholic nominated by a major US party.
Some Republicans made an issue of Smith’s religion but, Hoover did not.
Hoover defeated Smith by 6 million votes; 444 to 87 Electoral Votes.
Hoover’s Inauguration: “I have no fears for the future of our country. It is bright with hope.”

3. Causes of the Great Depression
During most of the 1920’s, the US stock market experienced tremendous growth.
The Bull Market of the 1920’s
“Bull Market”- rising stock prices on a bull market convinced many citizens to invest.
Many Americans bought stocks “on margin”– paying a small down payment on stock and borrowing money for the rest.
Stock brokers earned commission on the sale & interest on the loan.
As long as stock prices continued to rise, brokers & investors made money.
“Margin Calls”– stock brokers could call an investor in to repay the loan at once making investors sensitive to any fall in stock prices.
In the late 1920’s, investors began to ‘speculate” in stock– buying stocks without considering a company’s earnings or profits.
By late 1929, the stock market was running out of new investors= professional investors began sell their stocks= prices of stocks fell= frenzy of stock selling= stock prices fell more.

4. The Stock Market Crash
The Stock market collapse occurred over a few days & weeks.
Monday Oct. 21, the stock market plunged and stock brokers began to make their “margin calls”.
Oct. 24, 1929-(Black Thursday)– the stock market continued its fall.
Oct. 29, (Black Tuesday)- deepest dive yet for the market.
16 million shares of stock were sold
The Market lost between $10 billion & $15 billion.
November 1929
Stock prices had dropped by more than 1/3
$30 billion lost (equal to all wages earned by all Americans in 1929).
** The stock market crash undermined the economy’s ability to overcome problems.
** The Crash was not the leading cause of the depression.

5. How the Stock market Crash Affected Banks
The market crash severely weakened US banks in two ways:
Banks had loaned almost $6 Billion to stock speculators.
Many banks had invested depositor's money in the stock market (illegal today).
Banks lost on their investments and stock speculators defaulted on loans.
Banks cut back on lending= little or no money for consumers & businesses to borrow= recession.
Banks were forced to go out of business & customers lost all their deposits (loss of confidence in US bank system).
”Bank Runs”- when depositors decide to with draw out their money at one time for fear a bank will collapse.
By 1932—3,500 US BANKS had closed.

6. The Roots of the Great Depression
The problems that started the Great Depression really are rooted in what happened in the 1920’s.
Uneven Distribution of Wealth- the top 5% of Americans earned 30% of all wealth while 2/3 of US families earned less than $2,500 per year= less people to buy products= overproduction by US factories.
Americans who were in debt with less income growth began to buy less= factory layoffs.
Few Americans had any savings for hard times.
1930 alone—26,000 businesses collapsed.
2. Loss of Export Sales- foreign countries had economic trouble after WWI= difficult to buy US products.
Congress passed a very high Tariff (Hawley-Smoot) in 1929= starts a tariff war with other nations.
3. Mistakes by the Federal Reserve Bank– kept interest rates low in the 1920’s= encouraged stock investments (buying on margin), banks make riskier loans.

7. Life During the Depression
The Great Depression caused large numbers to lose their jobs, homes, property, and savings. Americans wanted to escape their misery by being entertained.
The Depression Worsens
During President Hoover’s term in office, the depression got worse
banks stopped operating.; by 1933– 9,000 banks had failed.
,000 companies went out of business
million workers (1/4 of workforce) out of work.
How did People try to get by during the Depression?
People who lost their jobs often went hungry & homeless.
Private Organizations (YMCA) & Churches- provided food & shelter.
“Breadlines” & “Soup Kitchens”
2. The homeless built shacks on unused property (“Shantytowns”).
Later shantytowns were called “Hoovervilles”.
3. Many homeless & unemployed took to the roads in search of jobs.
“Hobos” “rode the rails” across the country
Most were young men & boys

8. The Dust Bowl
To make matters worse, farmers in the plains faced an ecological disaster.
“The Dust Bowl”– area from the Dakotas to Texas affected by drought and strong winds.
Oklahoma & Arkansas worst hit areas.
Farm land was blown away & made unlivable.
“Okies”– migrants from Oklahoma left their home state & moved to California for a new life.

9. Art & Entertainment
The hard times caused many Americans to seek an escape into entertainment.
Comic Books
Grew popular; 1930’s the ‘superhero” genre was born.
1938- Superman
1939- Batman
Hollywood
During the Depression more than 60 million went to movies each week.
Child Stars– Shirley Temple
Comedy—The Marx Brothers (Groucho Marx) film Animal Crackers
1933-King Kong—introduced unique special effects.
1928- Mickey Mouse- introduced by Walt Disney
1937- Snow White and the Seven Dwarfs —1st full length animated film.
Radio
Radio offered information and entertainment.
Comedy shows– Jack Benny, George Burns & Gracie Allen
Superheroes- The Green Hornet , Lone Ranger
‘Soap Operas”—radio dramas sponsored by laundry soap companies.

10. Literature and Art
Artists & writers tried to portray life around them using the homeless & unemployed as subjects.
Writers
John Steinbeck– “The Grapes of Wrath” (1939) – a story about an Oklahoma family moving to California to escape the Dust Bowl.
William Faulkner– used a new technique called “stream of conscienceless” in which he shows what his characters were thinking & feeling before they speak.
A southern writer who reflected the attitudes of whites & African-Americans.
Photo Journalism
Dorothea Lange & Margaret Bourke-White– two American female photographers who took pictures for Life Magazine.– some of the most iconic pics of the depression.
Art
Grant Wood –emphasized traditional American values and rural life; famous work “American Gothic”.