1. THE GREAT DEPRESSION

2. THE GREAT CRASH
Page 93

3. What caused the Great Depression?
ESSENTIAL QUESTION
What caused the Great Depression?
the federal government during the 1920s?
(from 1983)

4. 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.;
Black Tuesday Wall Street, Oct. 29, 1929

5. UNDERLYING CAUSES OF THE DEPRESSION
Overproduction - Massive business inventories (up 300% from 1928 to 1929)
Lack of diversification in American economy
Uneven distribution of income and wealth
Faragher, Out of Many, 3rd Ed.;

6. UNDERLYING CAUSES OF THE DEPRESSION
Weakness of Banking Industry
Decline in demand for American goods in international trade
international debt structure
Consumer Debt – middle class installment loans; buying on margin
Overspeculation in Stock Market
Faragher, Out of Many, 3rd Ed.;
Consumer Debt, 1920–1931

7. Oct. 29, Dies Irae – page 94 (1929)
Introduction In Dies Irae (Day of Wrath) artist James N. Rosenberg illustrates his perception of the events of October 29, Questions to Consider
Why did the artist title a political cartoon about October 29, 1929, "Day of Wrath"?
What is happening to the skyscrapers? What does it represent?
Who do you think is jumping from the skyscrapers? Why?
What is the mood of the crowd in the street?
What message is Rosenberg trying to convey about the events of October 29, 1929? Do you agree with his assessment? Why or why not?

8. IMPACT ON SOCIETY
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9. ESSENTIAL QUESTION
How did the Great Depression alter the American social fabric in the 1930s?
(from 1996)

10. 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

11. 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,
Graph: Divine America Past and Present Revised 7th Ed.
Outside Bank:
American Journey Online

12. 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

13. Effect on workers and families
Unemployment ~25% in 1932?
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.;
Men Lined Up at the New York City Employment Bureau, 1932

14. Effect on workers and families
Malnutrition
City & state relief systems collapse
soup kitchens and bread lines
Soup kitchen, Chicago, 1930
(Chicago)
Soup kitchen, 1931 (Cleveland)

15. Christmas dinner in the home of Earl Pauley near Smithland, Iowa
Christmas dinner in the home of Earl Pauley near Smithland, Iowa. (Circa 1935)

16. School in Alabama. (Circa 1935)

17. unemployed shown at Volunteers of America Soup Kitchen: Washington, D
unemployed shown at Volunteers of America Soup Kitchen: Washington, D.C. (Circa 1936)

18. 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 )

19. Effect on workers and families
Women
Working - 25% more
lower pay
Women’s Rights Movement - lowest point in a century
Families
Housing
Divorce down b/c too expensive
Birthrates dropped
Health – disease, suicide
Migrants
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

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

21.
Dust storm, Elkhart, KS, 1937

22. 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

23. The Dust Bowl

24. 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 ( )
“Okies” -
“Covered Wagon” -
Dorthea Lange, “Covered Wagon Again” 1935

25. 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

26. “Migrant Mother” Dorothea Lange 1936
Migrant Mother. Lange, Dorothea. 1936

27. Effects on African Americans
Competition for jobs
High Unemployment – up to 50%: Last hired, first fired
Exclusion from relief programs
Scottsboro Case
This photograph, taken in January 1939 by Arthur Rothstein ( ), 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 [ajo]
The case of the Scottsboro Boys arose in Scottsboro, Alabama during the 1930s, when nine black youths, ranging in age from twelve[1] to nineteen, were accused of raping two white women, Victoria Price and Ruby Bates, one of whom would later recant.
The four trials, during the course of which most of the youths were convicted and sentenced to death by all-white juries[1] despite the weak and contradictory testimonies of the witnesses, are regarded as one of the worst travesties of justice perpetrated against blacks in the post-Reconstruction South.
The case quickly became an international cause célèbre and the boys were represented by the American Communist Party's legal defense organization. The death sentences, originally scheduled to be carried out quickly, were postponed pending appeals that took the case all the way to the U.S. Supreme Court, where the sentences were overturned. Despite the fact that one of the women later denied being raped, the retrials resulted in convictions. All of the defendants were eventually acquitted, paroled, pardoned, or had their charges dropped (except for one who escaped), all after serving years, decades for some, in prison.
While it has sometimes been thought that the case inspired Harper Lee's Pulitzer Prize winning To Kill a Mockingbird, she denies this, claiming it was a far less sensational case that moved her to write the novel.
The Incident==
The ten (Haywood Patterson, Clarence Norris, Andy Wright, Roy Wright, Willie Roberson, Charles Weems, Ozie Powell, Olen Montgomery, and Eugene Williams) were accused of the rapes two white women, which were alleged to have occurred on March 25, 1931, on the Southern Railroad freight run from Chattanooga to Memphis. On the train that day, catching an illegal (but common) ride on the freight train were the nine black youths, two white women, and a number of white youths. An altercation occurred between the white youths and the black youths, resulting in most of the white youths being ejected from the train by the black youths. Several of the white youths then told the nearest stationmaster that they had had an altercation with a gang of black youths. The stationmaster at the next stop prepared for their arrival, and a posse of white men armed with guns grabbed all black youths they could find on the train and took them to jail in Scottsboro. One of the two women on the train, Victoria Price, then claimed that she had been raped by several of the black youths. Word quickly spread and a lynch mob gathered, prepared to storm the jail and kill the youths. Given the situation, the governor of Alabama, Benjamin M. Miller, was forced to call in the National Guard to protect the jail. Authorities pleaded against mob violence by promising speedy trials and executions
African American family during Great Depression in Scott’s Run, Virginia
Evicted Sharecroppers along U.S. 60 in Missouri, 1939

28. 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
It’s a Wonderful Life
It’s a Wonderful Life

29. 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

30. HOOVER’S RESPONSE
Page 96
Or lack thereof!

31. Federal Response Under Hoover
Herbert Hoover ( )
Philosophy: limited government, rugged individualism
Initial response?
public works programs
Hawley-Smoot Tariff (1930)
Debt moratorium (1931)
Reconstruction Finance Corporation (1932)
The Hawley-Smoot Tariff (or Smoot-Hawley Tariff Act)[1] was signed into law on June 17, 1930, and raised U.S. tariffs on over 20,000 imported goods to record levels, and, in the opinion of most economists, worsened the Great Depression. Economists have now generally regarded this Tariff Act (i.e., tax increase on imported goods) as the greatest policy blunder in American economic history, coming as it did after the recession and preventing the economy from a full, natural recovery which had already started by the Spring, Many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports plunged by more than half. 49 percent.
A debt moratorium is a delay in the payment of debts or obligations. The term is generally used to refer to acts by national governments. A moratory law is usually passed in some special period of political or commercial stress; for instance, on several occasions during the Franco-German War the French government passed moratory laws. Their international validity was discussed at length, and upheld in the English law case Rouquette v Overman (1875) LR 10 QB. Debt moratoriums are generally opposed by creditors.
Proponents of debt moratoriums argue that it is a sovereign decision by the government of a nation to suspend payment of debt to its creditors, in the event that to do otherwise would do irreparable harm to the welfare of its citizenry. A debt moratorium may take the form of a complete cessation of debt payments, or a partial cessation; for example, the government of President Alan García of Peru implemented the so-called "Ten Per Cent Solution", where it was announced that only 10% of export earnings would go to debt payment.
Nations which have, at one time or another, declared a debt moratorium, are Peru, Brazil, Mexico, Argentina and the US in the Great Depression with its WWI debts (1931).
Reconstruction Finance Corporation (RFC) was an independent agency of the United States government chartered during the administration of Herbert Hoover in It was modeled after the War Finance Corporation of World War I. The agency gave $2 billion in aid to state and local governments and made loans to banks, railroads, farm mortgage associations, and other businesses. The loans were nearly all repaid. It was continued by the New Deal and played a major role in handling the Great Depression in the United States and setting up the relief programs that were taken over by the New Deal in (Sprinkel 1952)
It dispersed $1.5 billion in 1932, $1.8 billion in 1933, and $1.8 billion in Then it dropped to about $350 million a year. On the eve of World War II it greatly expanded to build munitions factories, dispersing $1.8 billion in The total from 1932 through 1941 was $9.465 billion.(Sprinkel 1952)
Hoover appointed Atlee Pomerene of Ohio to head the agency in July Hoover's reasons for his surprising reorganization of the RFC included: the broken health and resignations of M. Eugene Myers, Paul Bestor, and Charles Gates Dawes; the failure of banks to perform their duties to their clientele or to aid American industry; the country's general lack of confidence in the current board; and Hoover's inability to find any other man who had the ability and was both nationally respected and available. (Shriver 1982)
The RFC was bogged down in bureaucracy and failed to disperse many of its funds. It failed to reverse the growth of mass unemployment before Butkiewicz (1995) shows that the RFC initially succeeded in reducing bank failures, but the publication of the names of the recipients of loans beginning in August 1932 (at the demand of Congress) significantly reduced the effectiveness of its loans to banks because it appeared that political considerations had motivated certain loans. Partisan politics thwarted the RFC's efforts, though in 1932 monetary conditions improved because the RFC slowed the decline in the money supply.
Starting 1933 Franklin Delano Roosevelt kept the agency, increased the funding, streamlined the bureaucracy, and used it to help restore business prosperity, especially in banking and railroads. He appointed Texas banker Jesse Jones as head, and Jones turned RFC into an empire with loans made in every state. (Olson 1988)
The RFC also had a division that gave the states loans for emergency relief needs. In a case study of Mississippi, Vogt (1985) examined two areas of RFC funding: aid to banking, which helped many Mississippi banks survive the economic crisis, and work relief, which Roosevelt used to pump money into the state's relief program by extending loans to businesses and local government projects. Although charges of political influence and racial discrimination were levied against RFC activities, the agency made positive contributions and established a federal agency in local communities which provided a reservoir of experienced personnel to implement expanding New Deal programs.
"Boulder Dam, 1942“, Ansel Adams

32. Evaluation of Hoover’s Response
“Hoovervilles”

33. This cartoon by Clifford Berryman ( ) 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”

34. Contemporary Political Cartoon
Republican cartoon showing Hoover trying to solve the country’s problems
Contemporary Political Cartoon

35. Response to Hoover’s Response
Farmers
“Farmers Holiday Association”
“Bonus Expeditionary Force”
Bonus Army camp, 1932
By an unknown Associated Press photographer, July 1932, NARA
The Farmer's Holiday Association is a group started in the summer of 1932 by . The group endorsed the withholding of farm products from the market- basically a farmers' strike. The leader was Milo Reno. One person was killed when farmers began to blockade roads. Also farmers got together to resist foreclosure. They rallied to destroy and burn their crops, thus lowering supply and rising costs. In one account, the farmers used torpedoes to halt a train carrying livestock into Iowa. The highways into Sioux City and Council Bluffs were blocked by pickets who dumped any farm produce on the side of the road. At Le Mars, Iowa a bunch of angry farmers actually dragged a judge out of his courtroom, placed a noose around his neck, and threatened to hang him unless he stopped approving farm foreclosures (
"Bonus Marchers" and police battle in Washington, DC, July 1932

36. Bonus Army Bonus Army camp in the Anacostia flats
(all)
U.S. Army soldiers guarding Bonus Army camp
Douglas McArthur directing removal of Bonus Army marchers

37. 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.