February 1928- Fall of 1929 generally a steady rise October 21
and 23 major declines in stock market followed by temporary
recoveries 2 nd recovery engineered by JP Morgan and Company and
other big name bankers Conspicuously (noticeably) bought up stocks
to gain peoples confidence
Slide 3
Tuesday October 29, the market collapsed 4 years the market
stayed depressed Took more than a decade to recover Walter Thornton
Photograph
Slide 4
Many people believe the Great Depression began with, or was
caused by the stock market crash Is this true? The stock market
crash of 1929 did not so much cause the Depression, then, as help
trigger a chain of events that exposed longstanding weaknesses in
the American economy. (page 662)
Slide 5
Lack of diversification in American economy (1920s)
Construction fell from 11billion-9billion from early 20s to late
20s Automobiles fell more than 33% in 9 months (1929) Other
industries emerging not big or strong enough yet
Slide 6
2 nd major cause was maldistribution of wealth What does this
mean? 1920s decade of economic growth but more than 50 % of
American families below minimum subsistence level Industrial and
agricultural production increased workers and farmers not getting
enough Not enough people could afford the numerous goods being
produced
Slide 7
As a result construction, auto, coal, and other industries
found a decreased demand People Laid off even less purchasing power
In many expanding industries technology replaced need for workers
In 1929 difficult for these workers to find more jobs as economy
was slowed
Slide 8
Credit structure of the economy Farmers in debt Crop prices too
low to allow them to pay off mortgages Small banks esp. those
involved in this industry were struggling Big banks Some of or
countrys biggest banks were investing recklessly: Stock market
Unwise loans When the market crashed in 1929 many banks had greater
loss than they could afford
Slide 9
Declining exports Some European nations industries and
agriculture were becoming more productive Other European nations
(ex: Germany) were struggling financially and could not afford
overseas goods
Slide 10
International debt structure resulting from World War I When
WWI ended (1918), U.S. allies in Europe owed American banks These
countries economies were shattered Despite Woodrow Wilsons pleas,
European allies demanded reparations from Germany and Austria
Germany and Austria could not pay reparations
Slide 11
High U.S. tariffs made it difficult for Europe to export goods
and repay loans owed to America This international credit structure
collapsed as a result causing the Depression to spread to Europe
while worsening the Depression in the U.S.
Slide 12
Lack of diversification Maldistribution of wealth Credit
structure of the U.S. economy Declining exports The collapse of the
international credit structure
Slide 13
After stock market crashed, the banking system collapsed as
well More than 9,000 banks went bankrupt or closed Depositors lost
$ 2.5 billion American gross national product shrunk from 104
billion to 76.4 billion in three years Market value of all products
and services produced in one year by labor and property supplied by
the residents of a country
Slide 14
Cities of the Northeast and Midwest crippled by unemployment
Ex: Ohio unemployment rate Cleveland -50% Akron-60% Toledo 80%
Americans from this time grew up thinking everyone was responsible
for their fate
Slide 15
Most Americans had been taught to believe that every individual
was responsible for his or her own fate, that unemployment and
poverty were signs of personal failure. Many men in particular felt
deeply ashamed of their joblessness; the helplessness of
unemployment was a challenge to traditional notion of masculinity
(664). The jobless walked the streets looking for nonexistent
jobs
Slide 16
More families were in need of state and local public relief
systems (for food alone) 1920s much smaller number relied on relief
Now in a large number of areas relief collapsed With the help of
private charities, relief still could not reach a large number in
need
Slide 17
State tax revenues declined so state government leaders
hesitated to alter the already constricted budgets Other public
officials thought a widespread welfare system would undermine the
moral fiber of its clients
Slide 18
Breadlines stretched blocks 1000s sifted through garbage or
waited for restaurant scraps Nearly 2,000,0000 (mostly young men)
lived as nomads travelling from city to city by car or riding
freight trains
Slide 19
Slide 20
1929 to 1932- 1/3 of farmers lost their land Great Plains of
the South and West Catastrophic natural disaster (began 1930) Large
portion of the country became known as the Dust Bowl Fertile land
became desert
Slide 21
Invasions of Grasshoppers-devoured the few remaining crops,
fenceposts, clothes (hanging to dry) Major dust storms- known as
black blizzards moved across plains Hid the sun Killed livestock
& occasionally unlucky/unwise humans (suffocation) Cows cut
open sand in bellies "Black Blizzard"
Slide 22
Slide 23
Despite dust storms farmers still produced more food than
Americans could afford Hospitals noticed alarming increases in
deaths from starvation People slept in shacks, subways, and unused
sewers, parks, and freight cars
Slide 24
Thousands of families migrated to California and other states
(usually conditions not much better) -Called Okies because many
came from Oklahoma
Slide 25
31 st president in 1928 Republican Inaugural address: We in
America are nearer to the final triumph over poverty than ever
before.
Slide 26
Hoover met with the Business, agriculture, and labor leaders
and urged them to adopt the policy of Voluntary Cooperation
Business- urged not to cut labor/production Labor- not to ask for
higher wages, better hours (conditions) By mid-1931 economic
conditions worsened Voluntarism collapsed
Slide 27
Tried using government spending ($ 423 million) In federal
works programs Pressed state and local governments to fund public
construction Economic conditions worsened he reversed the trend of
spending Wanted now balanced budget 1932 (depth of the Depression)
proposed a tax hike to avoid a deficit
Slide 28
April 1929 Agricultural Marketing Act Est. first major
government program to help farmers maintain prices Est.
corporations to buy surpluses of crops this would raise prices Why
would buying surplus crops raise crop prices? Hint: surplus is when
there is a greater supply than demand
Slide 29
Hawley-Smoot Tariff 1930 Increased protection of 75 farm
products Neither act helped American farmers significantly
Slide 30
1931 Hoovers popularity deteriorated Democrats won control of
the House Democrats gained some ground in the Senate Promised
increased government assistance in the economy Americans blamed
Hoover for crisis Hoovervilles-name given to shantytowns
established by unemployed Americans on city outskirts
Slide 31
Slide 32
Slide 33
Spring 1931- international financial panic 1920s European
nations relied on U.S. banks for loans After 1929 they could not
receive these loans financial fabric of several European nations
began to unravel (667) One of the Largest banks in Austria
collapsed U.S. economy quickly plummeted to new lows
Slide 34
Congress met December 1931 Conditions were desperately bad,
causing Hoover to support a series of measures that would keep
endangered banks afloat and protect homeowners from being
foreclosure
Slide 35
Bill passed January 1932 Formed the RFC-a government agency
provided federal loans to troubled banks, railroads, etc. Made $
available to local governments allowing them to support public
works projects and relief efforts
Slide 36
Early Hoover programs small scale RFC-Large scale 1932
budget-$1.5 billion dollars
Slide 37
Only lent to businesses with sufficient collateral A lot of
money went to Big corporations and banks Only funded public works
projects that would ultimately pay for themselves (ex: toll
bridges) What is collateral? a borrower's pledge of specific
property to a lender, to secure repayment of a loan
Slide 38
Did not have enough money to make a significant impact on the
Depression Did not spend all the money it had either $300 million
available for local relief efforts RFC only lent out $30 million of
that $1.5 billion budget only lent out 20%
Slide 39
At first, Americans too stunned, confused, etc. to really
protest 1932-people began to organize Famers formed: the Farmers
Holiday Association-kept farm products from market (A farmers
strike) Ended in failure did block some markets
Slide 40
1924, congress approved a $1,000 bonus for all who served in
WWI These veterans would be paid starting in 1945 1932 (bad
economy) many veterans began demanding their bonuses immediately
Hoover refused (wanted to balance the budget) June (1932) 20,000
veterans marched into Washington D.C. Built camps around the city
and refused to leave until congress passed legislation to pay the
veterans bonuses immediately
Slide 41
These men called themselves the Bonus Expeditionary Force
(Bonus Army) Hoover embarrassed by the Bonus Army Ordered police
Troops threw rocks and one police officer fired killing two Hoover
then ordered the military to assist in clearing out these men and
camps
Slide 42
General Douglass MacArthur led the mission himself (with the
aid of Dwight D. Eisenhower) MacArthurs action would exceed the
presidents orders MacArthur led the third Calvary under George S.
Pattons command
Slide 43
General Douglas MacArthur (left) George S. Patton (Right)
Slide 44
Veterans fled in fear 100 + marchers injured the incident
served as perhaps the final blow to Hoovers already battered
political standing
Slide 45
Republicans dutifully renominated Hoover Democrats nominated
New York Governor Franklin Delano Roosevelt Broke tradition-
addressed the convention in Chicago in person I pledge you, I
pledge myself, to a new deal for the American people His future
plan as president would be called the New Deal
Slide 46
Roosevelt won easily Democrats won the majority in both houses
of congress
Slide 47
Distant cousin Teddy Roosevelt Secretary of the Navy in WWI
Stricken with polio (1920)* Never could truly walk again Appeared
to be able to through crutches and braces
