1. The Politics of Boom and Bust, 1920-1932
Chapter 35

2. THE GREAT CRASH

3. What caused the Great Depression?
GUIDING 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
prosperity of 1920s largely a result of construction & auto industries
Uneven distribution of income and wealth - Poor distribution 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.;

6. UNDERLYING CAUSES OF THE DEPRESSION
Consumer Debt – middle class installment loans; buying on margin
Overspeculation in Stock Market – by wealthy and upper middle class
Consumer Debt, 1920–1931
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
Federal Reserve system
Faragher, Out of Many, 3rd Ed.;

7. UNDERLYING CAUSES OF THE DEPRESSION
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
international debt structure

8. IMPACT ON SOCIETY

9. GUIDING 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
1932

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?
underemployment
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.;
Men Lined Up at the New York City Employment Bureau, 1932

14. 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
(Chicago)
Soup kitchen, 1931 (Cleveland)

15. 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 )

16. 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

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

18.
Dust storm, Elkhart, KS, 1937

19. 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

20. 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

21. 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

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

23. 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?
labor unions
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]
African American family during Great Depression in Scott’s Run, Virginia
Evicted Sharecroppers along U.S. 60 in Missouri, 1939

24. 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

25. 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)

26. HOOVER’S RESPONSE

27. Federal Response Under Hoover
Herbert Hoover ( )
Philosophy: limited government, individualism
Initial response?
public works programs
Hawley-Smoot Tariff (1930)
Debt moratorium
International Banking Crisis (1931)- gold standard
Reconstruction Finance Corporation (1932)
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

28. Evaluation of Hoover’s Response
Contemporary popular opinion
“Hoovervilles”

29. 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”

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

31. 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
"Bonus Marchers" and police battle in Washington, DC, July 1932

32. 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.

33. 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

34. Misery Sweeps Roosevelt into Office
1932 ELECTION
Misery Sweeps Roosevelt into Office

35. 1932 ELECTION Franklin D. Roosevelt philosophy “New Deal”
[ajo]
Franklin D. Roosevelt, 1920 Vice Presidential nominee for Democratic Party
Roosevelt Campaigning for Office in Kansas 1932

36. New Yorker 1/16/1932 Alfred Frueh

37. 1932 ELECTION Hoover Results “The Worst is Past"
"Prosperity is Just Around the Corner"
Results
Electoral Shift: Martin, America and its Peoples 5e
Electoral Shift, 1928 and 1932

38. 1932 ELECTION Lame-Duck Period (Nov. 1932-March 3, 1933)
banking industry collapse.
Twentieth Amendment
Bank Failures,
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, (Library of Congress)
Pagent 13e
Franklin D. Roosevelt and Herbert Hoover on the way to FDR's inauguration, March 4, 1933
(Library of Congress)