THE GREAT DEPRESSIONBEGINS

U.S. HISTORY & GEOGRAPHY

CHAPTER 9

LONG BULL MARKET

Towards the end of the 1920s industries showed very little profit, agricultural prices for goods & demand decreased drastically causing consumer to buy fewer goods due to stagnant wages, rising prices, buying goods on credit, & the uneven distribution of income. No one, including the presidential candidates, believed that an economic collapse would happen

ELECTION OF 1928 Democratic candidate: Alfred E.

Smith – governor of NY, Roman Catholic.

Republican candidate: Herbert Hoover – former Secretary of Commerce & head of the Food Administration during WWI

Herbert Hoover becomes president in 1928 on the premise that the U.S. was doing better than ever & it was all thanks to Republican leadership

STOCK MARKET SOARS

Americans dreamed of becoming rich & invested in the stock market looking at the Dow Jones Industrial Average as their guide. The dow is a measure based on the stock prices of 30 large firms that trade on the New York Stock Exchange. When the stock market has a long period of rising prices (bull market) then many will invest in stocks.Speculation: buying stocks & bonds on the chance of a quick

profitbuying on the margin: paying a small percentage of a stock’s

price as a down payment & borrowing the rest from a stock broker. The stockbroker could protect his loan by issuing a margin call, demanding the investor repay the loan at once

THE STOCK MARKET CRASH

September 1929 prices peaked in the stock market & then fell. Investors began to panic & quickly sold their stocks

Thursday, October 24th: same scenario as the market would go down

Black Tuesday, October 29th: stock market crashed as investors had no one to sell their stocks to & a huge amount of debt accumulated. This is one cause of the Great Depression as it undermined the economy’s ability to overcome other weaknesses will surface

GREAT DEPRESSION LASTS FROM 1929 – 1940 SEE CHART PG. 233

People crowd Wall Street after the Stock Market Crash of 1929

People going to banks to get $

People selling everything

OTHER CAUSES High tariffs War debt policies Crisis in the farm sector Easy credit Unequal distribution of income

BANK CLOSURES Americans will attempt to get

their money out of the banks (“bank run”) only to learn that banks had invested in the stock market, lent billions to stock speculators or other ventures & were now closing their doors.

Businesses went bankrupt as they had no buyers for their goods or services & were unable to borrow any funds

from banks

UNEVEN DISTRIBUTION OF INCOME Over production of industries caused there to be large

surpluses of goods that could not be purchases as disposable income was not available to majority of Americans

Farmers did not share in the prosperity that many had gained as they had gone into huge debt purchasing land & equipment to fill orders during WWI. When prices fell, any went bankrupt & lost their farms

Americans used the installment plan to purchase many high-cost items & would be unable to pay the debt

Manufacturers who were not selling goods would stop production & lay off employees. This affected other industries that provided resources or materials

SEE CHART PG. 235

CONTINUED MISTAKES Hawley-Smoot Tariff Act 1930: placed

the highest protective tariff on imported goods. Europe responded by raising tariffs as well. Action ended up hurting both American companies & farmers

Reed Smoot (R-UT; chairman of Senate Finance Committee), Willis Hawley (R-OR; chairman of the House Ways and Means Committee) - sponsors of Tariff Act of 1930. “Tea Party” Republicans

CONTINUED MISTAKES Federal Reserve Board made mistakes

with interest rates: 1 – kept rates low which encouraged member banks to make risky loans; 2 – low rates led business leaders to think that the economy was still expanding

Federal Reserve would raise the interest rates after the depression hit

STRUGGLING TO GET BY 1930: 1,352 banks closed. 1932: 30k

companies closed. 1933: 25% of workforce was unemployed

Cities: People lost their jobs & homes. Would begin living in the parks or streets in shantytowns (“Hoovervilles”). To find food they would be dependent on charities & soup kitchens or bread lines

People line in Times Square and 43rd Street to recieve sandwiches and a cup of coffee in New York City on Dec. 8, 1930 during the Great Depression. (AP Photo )

A view of men gathered in a common sleeping area during the Great Depression in 1930s Cincinnati. (Paul Briol/Cincinnati Museum Center/Getty Images)

Two girls in a bedroom lined with old corn-flakes packets in 1935. (FPG/Hulton Archive/Getty Images)

An unemployed man reads a newspaper in a shanty in New York during the Great Depression, 1933. (FPG/Hulton Archive/Getty Images)

Unemployed squatters at the Hard Luck Camp at the foot of 9th and 10th Streets and the East River in New York City wait for eviction by the police on May 9, 1933. (New York Times Co./Hulton Archive/Getty Images)

Unemployed men line up outside a Salvation Army hostel in 1935. (FPG/Hulton Archive/Getty Images)

The mother of a migrant family holds a baby while a young girl stands behind her and rests her chin on her shoulder under a lean-to, Nipomo, Calif. in March, 1936. (Dorothea Lange/FSA/Getty Images)

Seattle’s Hoovertown, early 1930s. Source: http://www.historylink.org/db_images/con125.JPG

Soup Kitchens

STRUGGLING TO GET BY Farmers had one advantage over those

in the cities: they could grow their own food. Those who lost their land would turn to tenant farming to survive

Sam Nichols, tenant farmer, Boone County, Arkansas, October 1935, Source: State Historical Society of Wisconsin

STRUGGLING TO GET BY American family faced

many hardships. Those that stuck together believed in traditional values & family unity. They entertained themselves with board games (Monopoly 1933).

STRUGGLING TO GET BY Men who became

embarrassed as they were not able to provide for their families & would abandon them. Many men became “hoboes” or transients traveling the trains, hitching rides, & wandering the country side.

STRUGGLING TO GET BY Direct relief was only offered by a few cities

(NY - $2.39 per family was the highest) Women attempted to keep the family

together. Many learned to can food, sew, work, & shop together to share the cost of food

Psychological impact: rise in the number of suicides & suffering of ailments that had cures because they could not afford to go to the doctor or dentist.

STRUGGLING TO GET BY Children suffered from

malnutrition & diet-related diseases as many programs for children were cut. Schooling was not a priority anymore as the year as shortened or schools were closed. Many teenagers would travel the country to see the “world” (“Hoover tourists”)

THE DUST BOWL The Great Plains would be affected by a

severe drought. This allowed for the winds to pick up the farming soil & carry it away to other parts of the country. Many left & migrated to California (“Okies”)

http://dsc.discovery.com/news/2009/03/23/dust-bowl-zoom.html

MOVIES Movies featured comedy, musicals, love stories, & action

(gangster films). Most memorable pictures:

Animal Crackers (Marx brothers)Gone with the Wind (Clark Gable, Vivian Leigh 1939)Fling Down to Rio (1933)Snow White (1937) – 1st full-length animated filmWizard of Oz (1939)Monkey Business (1931)

Frank Capra most famous director: Mr. Deeds Goes to Town (1936) & Mr. Smith Goes to Washington (Jimmy Stewart 1939)

RADIO Provided entertainment & access to the

American peopleFDR & his fireside chatsDramas, comedy routines (Jack Benny), soap

operas (Guiding Light) Orson Welles stirred all Americans into a

“panic” as his story of the War of the Worlds aired over the radio

Airing of news events would become a staple in society (Hindenburg, zeppelin from Germany, crash in NJ)

Fr. Fulton Sheen 1930s - Radio City Studios, the Catholic hour

Radio jazz broadcast with Tommy Dorsey, Philadelphia, PA, March 17, 1938

ARTISTS Paintings & pictures of American

society during this time American Gothic by Grant Wood

Federal Art Project (program of WPA) will help pay artists to provide paintings & pictures

Music would embrace the tragedies & hardships of the great DepressionWoody Guthrie

ARTISTS

Federal Writer’s Project would pay writersRichard Wright wrote Native SonJohn Steinbeck wrote The Grapes of Wrath

ARTISTS

LIFE magazine begins in 1936 chronicling American life through photos

Other photojournalists:Dorothea Lange (PG. 229)Margaret Bourke-White

Photojournalists demonstrated the affects of the Great Depression on the average American through their photos

HOOVER’S RESPONSES Kept emphasizing that the country was on

sound economic footing “Rugged Individualism” – people succeeded

through their own efforts. Hoover provided NO direct relief. Believed

that charities & local organizations should provide direct relief

HOOVER’S SOLUTIONS Hoover called on the leaders of business,

banking, & labor to come up with solutions. He asked them not to cut wages, lay off workers, & for laborers not to demand higher wages (strike). These “ideas” of Hoover’s did not work & things worsened. – SEE POLITICAL CARTOONS PG. 241

Federal Farm Board: intention to raise crop prices by buying crops & keeping them off market

HOOVER’S SOLUTIONS

Boulder Dam (Hoover Dam): increased funds to public works programs but did not do enough to help the millions unemployed

HOOVER’S SOLUTIONS Banks:

National Credit Corporation 1931: lend money to trouble banks that were to continue lending $ in their communities

Federal Home Loan Bank Act 1932: reduced mortgage rates & refinanced farms/homes

Reconstruction Finance Corporation 1932: emergency financing for banks, life insurance companies, railroads, & large businesses

Emergency Relief & Construction Act 1932: Hoover will be pressured by Congress to sign act providing funds to states for direct relief & public works programs

IN AN ANGRY MOOD

Americans across the country will raid grocery stores to obtain food.

“Hunger Marches” were organized by the American Communist Party who will march on Washington D.C. in 1932

Farmers will desperately try to raise the prices for crops by burning crops & dumping milk on the side of the roads. All in an effort to try to save their farms from foreclosure

THE BONUS MARCHERS Patman Bill 1929: a bill proposed by Congressman Wright

Patman, TX , to provide WWI veterans their bonus early Bonus Expeditionary Force (Bonus Army): veterans

who gathered in Washington D.C. from all over the country to try to get support for the passage of the bill. Bill failed. Some left, some stayed in the hopes of meeting with Hoover.

Hoover orders them disbanded & sends in General Douglas MacArthur & Major Dwight D. Eisenhower. They will gas the group & burn their shantytown. An 11 month old (killed) & an 8-year old (blinded) along with many others were injured.

SEE MAP PG. 231

Thousands of World War I veterans camped along the Anacostia River in Washington, D.C., 1932. Theodor Horydzak  Library of Congress.

Chow Line: Bonus Army vets lining up for food distribution at the camp in Anacostia, 1932. Underwood&Underwood/Library of Congress.

Members of the Bonus Expeditionary Force (World War I veterans) washing in the Anacostia River, 1932. Source: National Archives

U.S. Army led by General Douglas MacArthur burns the Hooverville encampment put up by the Bonus Army on the Anacostia flats, Washington, DC, 1932. U.S. Capitol building is in the background