Images From The Great Depression

OBJECTIVES:

•Determines the causes of The Great Depression.

•Outline reasons why certain groups were hit harder than others.

•Analyze the lasting effects and how they impact The Great Recession of today.

The Essential Question

•How might societies respond to severe contractions and

expansions within their economies?

VOCABULARY TERMS• Price support• Credit• Money Supply• Dow Jones Industrial Average• Speculation• Buying on margin• Black Tuesday• Great Depression• Hawley-Smoot Tariff• Shantytown• Bread line• Dust bowl• Hooverville• Boulder Dam• Federal Home Loan Bank Act• Reconstruction Finance Corporation• Bonus Army

Setting The Tone ~ “I couldn’t imagine such

financial disaster touching my small world,…but by the first week of November I was without a job. All that next week I searched for any kind of work that would prevent my leaving school. Again it was, ‘We’re firing, not hiring’…. I went to school and cleaned out my locker, knowing it was impossible to stay on.” Gordon Parks

Unemployed Men Vying for Jobs at the American Legion in Los Angeles

Unemployed People from Chicago.

Trouble on the Horizon

•Industries are in trouble•Farmers need a lift•Consumers have less money to spend

•Living on credit•Uneven distribution of income

Troubled Industries

• Coal Mining was expanding during WWI.

• Coal mining is having to compete with hydroelectric power, fuel oil, and natural gas.

• Housing starts were falling.• Automobile industry is

declining.

Farmers Need a Lift

•Agriculture suffered the most.•Demand fell after the war and farmers

had already taken out loans for planting.•Prices declined by 40%.•Overproduced in hopes of increasing

sales.•McNary-Haugen offered federal price

supports.

This is a farm foreclosure sale that was held in Iowa.

Living on Credit•The appearance of the prosperity seen in the 1920’s was actually a veil as many people were living beyond their means.

•Credit was easily available.•Consumer debt piled up quickly.•Faced with debt, consumers had to cut back on spending.

D.C. dance marathon, April 20, 1923. The first US dance marathon was held

just three weeks earlier in New York City where 32-year-old Alma Cummings was

the last dancer to quit.  She went through 6 dance partners in the 27 hours she was on her feet, igniting a marathon

craze that swept the nation.

Gertrude Ederle, the first woman to complete an English

Channel swim, greased her body to stay warm.

Uneven Income Distribution ~ 1929

Source: Historical Statistics of the United States, Colonial Times to 1970

Statistics on Uneven Income Distribution

• The income of the wealthiest 1% rose by 75%.

• More than 70% of the nation earned less than $2,500/year.

• The average man or woman bought a new outfit about once a year.

• 1 in 10 homes had an electric refrigerator.

• 50% of homes had electricity.

Hoover Takes the Nation ~ 1928

• Background – secretary of commerce under Harding and Coolidge, mining engineer, no political office.

• Major Advantage – years of prosperity under

Republican leadership since 1920• Personality – quiet and reserved

• Quote - “We in America are nearer to the final triumph over poverty than ever before.”

The Stock Market Crashes

• DJIA – The most reliable indicator or stock market health.

• SPECULATION – Ignore risk and hope for quick profits.

• BUYING ON MARGIN – Investors paid only 25% of real stock value.

TIMELINE

• September 1929 – prices peaked and then fell

• October 24th 1929 – market takes a plunge and panic strikes

• October 29th (Black Tuesday) – a record 16.4 million shares were dumped

• The Dow’s lowest point was in 1932.

A man selling apples on a New York City street corner, just trying to make ends meet.

“Hooverville”

Famous photo taken by Dorthea Lange. This is a picture of an immigrant mother who just sold the tires from her car to buy food. Before this day, her family had been living on frozen vegetables and birds that the children had killed.

Breadline.

Financial Collapse

• The stock market crash signaled the beginning of The Great Depression (the period from 1929 to 1940).

• The crash alone did not CAUSE The Great Depression, but it hastened the economic collapse.

Bank and Business Failures

• In 1929, 600 banks closed.• By 1933, 11,000 of the nation’s 25,000

banks had failed.• Millions of people lost their savings

accounts.• Between 1929 and 1932 GNP was cut in

half.• Unemployment leaped from 3% in 1929 to

25% in 1933.

http://www.ameshistoricalsociety.org/exhibits/bank_depression_ad.jpg

Why Does That Matter Today?Your turn.

•Count off by 4s.•Everyone who is a THREE please stand.•You (your family) is unemployed.•Everyone standing is forced to dropout

and instead of being here, you have to go find food,... FREE food.

•Would you resort to crime or go to a soup kitchen?

• In 2007, the FDIC seized only 3 banks, in 2008 they shut down 25, and in 2009, 130 banks failed! We’re only finishing out the second quarter of 2010 and 86 banks have already been seized.

Ready for an Activity?• Fractional Reserve Banking

Worldwide Depression• Europe is faced with massive debt as

a result of trying to rebuild after WWI.

• American farm products could not be sold to Europeans who were already having to pay reparations (payments to compensate the Allies).

• American investors withdrew their money from European markets.

Hawley-Smoot Tariff

• 1930 – The highest protective tariff in U.S. history.• Designed to protect American farming

and manufacturing from competition• Taxed 20,000 imports at a rate of 60%• Reduced the flow of good into the U.S.• Why would this tariff cause

unemployment to INCREASE?

Economic Indicators

• Bank Failures• Business Failures• Unemployment• Income

Bank Failures

0

0.5

1

1.5

2

2.5

3

3.5

4

1928 1929 1930 1931 1932 1933

Banks inThousands

Business Failures

0

5

10

15

20

25

30

35

1928 1929 1930 1931 1932 1933

Businesses inThousands

Unemployment

0

2

4

6

8

10

12

14

1928 1929 1930 1931 1932 1933

People in Millions

Income

0

100

200

300

400

500

600

700

1929 1930 1931 1932 1933

AverageYearly Incomeper Person

CAUSES

* Tariffs

* War debt policies

* A crisis in the farm sector

* Availability of easy credit

* Unequal distribution of income

Depression in the Cities

•People lost their jobs, were evicted, slept in parks or sewer pipes wrapped in newspaper to fend off the cold.

•The poorest people were digging through garbage cans, living in shantytowns, and eating in soup kitchens and bread lines.

Soup Line

Conditions for African Americans

•Unemployment rates stood at 50%

•Lowest paid•Dealt with racial violence when

competing for jobs•1933 – 24 African Americans died

from lynching

Conditions for Latinos

• Mexicans were targeted• Whites demanded that Latinos be

deported, even if they were born in ths U.S.

• 1930s – hundreds of Latinos had relocated to Mexico

• Many were deported by the federal government

Depression in Rural Areas

•Advantage – farmers can at least grow enough food to feed their families in spite of falling prices and rising debt

•From 1929 to1932 about 400,000 farms were foreclosed

The Dust Bowl

• Farmers overproduced and exhausted the land.

• Little grass and few trees were left

• Drought and winds began in the early 1930s

• Topsoil scattered and grit remained

Dust Bowl Statistics

•One windstorm in 1934 picked up millions of tons of dust and carried it to East Coast cities.

•Thousands packed up and headed west to California.

•“Black Blizzards” darkened the sky in NYC and Washington D.C.

Men in the Streets

•“Men who have been sturdy and self-respecting workers can take unemployment without flinching for a few weeks, a few months, even if they have to see their families suffer; but it is different after a year…two years…three years.” Frederick Lewis Allen in Since Yesterday

Lack of Direct Relief

•Most towns and cities could not provide charity for the poor.

•The most generous relief effort was given from New York City which provided a weekly payment of $2.39 a week.

•This was not enough to feed a family.

Women Struggle for Survival

•Many canned food and sew clothing.•Women became the target of

resentment, because many believed that women had no right to work while men were unemployed.

•Starved in attics and rooming houses.•Too ashamed to reveal their hardship.

Children Suffer

• By 1933 some 2,600 schools had closed.

• Thousands of children went to work• Hospitals reported a dramatic rise

in Rickets (vitamin D deficiency).• “If I leave my mother, it will mean

one less mouth to feed.” Eugene Williams, Age 13

Rickets

Social and Psychological Effects

•Between 1928 and 1932 the suicide rate rose 30%.

•Three times as many people were admitted to mental hospitals as in normal times.

•Adults stopped going to the doctor because it was costly.

National Habits

• Many made it their personal goal to never be poor again.

• Show kindness to strangers.• Share resources.• Community bonds were strengthened.• Value – habits of thriftiness will see

you through the dark days• A generation was shaped.

Hoover Struggles

• “Any lack of confidence in the economic future… is foolish,” Hoover

• This is a normal part of the business cycle.

Hoover’s Philosophy•“Rugged Individualism” – people will

succeed through their own efforts.•Handouts would weaken people’s

“moral fiber.”•Humanitarian•He asked employers not to cut

wages.•He urged labor leaders not to strike.

Hoover Takes Action

• Boulder Dam = $700 M, provided electricity, flood control and water

• Tried to persuade the big banks to establish the National Credit Corp to make loans to small banks.

• Federal Home Loan Bank Act• Reconstruction Finance

Corporation

Federal Home Loan Bank Act

• Lowered mortgage rates• Allowed farmers to refinance

Reconstruction Finance Corp.

•Authorized $2 Billion in emergency financing for banks, life insurance companies and railroads

•Hoover thought money would trickle down to the average citizen

•Loaned $805 Million to large corporations but business failures continued

•The RFC was initiated too late and was not aggressive enough to work.

The Bonus Army

•About 15,000 WWI veterans organized in D.C. to support the Patman Bill.

•This bill was designed to compensate soldiers for their service in the form of $500 and a life insurance policy.

•The bill was approved in 1924, but was not scheduled to pay out until 1945.

“No Pay All Stay”

A Shantytown Within Sight of the Capitol.

Bonus Army (2)

• Patman Bill was voted down

• Hoover ordered General Douglas MacArthur to take 1,000 infantry soldiers in to gas them out with bayonets drawn.

Outcome

• 1,000 WWI veterans were gassed including an 11 month old baby, who died, and an 8 year old boy was partially blinded.

• Two people were shot.• Many were injured by bayonets.• Hoover’s political fate was now

sealed.

The Depression Continues

New York City. The corner of 6th Avenue and 42nd Street.

Effects of The Great Depression

• Unemployment persists• Rise of shantytowns• Banks fail• Schools close• World economy is weakened• Hoover employs a more active

role for government

THE END.