Transcript 01 Great Depression.ppt

Ch. 9. The Great Depression
(1929-1932).
The depression had devastating effects in both
the industrialized countries and those which
exported raw materials. International trade
declined sharply, as did personal incomes,
tax revenues, prices and profits. Cities all
around the world were hit hard, especially
those dependent on heavy industry.
Construction was virtually halted in many
countries. Farming and rural areas suffered
as crop prices fell by 40 to 60 percent. Mining
& logging areas had perhaps the most striking
blow because the demand fell sharply and there
were few employment alternatives.
Liberal democracy was weakened and on the
defensive, as dictators such as Adolf Hitler,
Joseph Stalin & Benito Mussolini made major
gains, which set the stage for WWII in 1939.
Dorothea Lange's Migrant Mother
depicts destitute pea pickers in
California, centering on Florence
Owens Thompson, a mother of 7
children, age 32, in Nipomo, CA,
March 1936.
Alfred E. Smith endured a smear campaign in
the 1928 election because he was Catholic.
I. Causes.
Election of 1928 – Decided by religious
prejudice & Prohibition (Hoover won).
Hoover
was
from CA.
 Republican Herbert Hoover was a Quaker, a “dry” & supported Prohibition.
 Democrat Alfred Smith was a Catholic and a “wet.”
 Many Protestants were willing to believe that if Smith won, the Catholic
Church would run the US gov’t.
 Republicans took full credit for economic prosperity.
 Hoover slogan “two cars in every garage.”
A.
Bull Market – Long period of rising stock
prices led many to buy risky stocks.
1. Stock Market – System of buying &
selling shares in companies.
The opposite of a
Bull Market (confident)
is the Bear Market
(pessimistic).
The Stock
Exchange
on
Wall Street
in NYC.
 Margin – buy stocks with small down payment (10%), the stockbroker
loaned the rest; safe as long as the market rises.
 Margin Call – Broker demands that the investor repay the loan at once.
 Speculation – Instead of investing in company’s future, they took risks
and bet the market would continue to rise & make money quickly.
B.
Overproduction & ↓ wages slowed the
economy.
2007
Most economists agree that overproduction
was a key cause of the Great Depression.
 Many Americans used Installment Plans to purchase goods.
 1929, top 5% of U.S. households earned 30% of the nation’s income;
In contrast, 2/3 of Americans earned less than $2,500 a year,
leaving little expendable income.
C. Loss of Export Sales – The ‘Hawley-Smoot
Tariff’ ↑ tariffs to all time high.
Representative W.C. Hawley, and Senator
Reed Smoot shake hands in agreement on
new Republican tariff bill.
 Higher tariffs damaged sales abroad and made products more
expensive for Americans.
 U.S. banks made fewer loans to foreign companies making them
less likely to buy American products.
D.
The Federal Reserve kept interest rates
low.
The Federal Reserve System
(informally The Fed) is the
central banking system of the
U.S. Created in 1913 by the
Federal Reserve Act, it is a
quasi-public (part private, part
gov’t) banking system.
12 regional Federal Reserve
Banks located in major cities
throughout the nation.
 With low interest rates, it encouraged banks to make risky loans;
Led business leaders to think the economy was still expanding
and they borrowed money to expand production leading to
overproduction when sales were falling.
The slowdown in retail led to layoffs – Lower radio
sales led to fewer orders for copper wire, wood
cabinets, and glass radio tubes; Led to layoffs in
Montana copper mines, Minn lumberjacks, and Ohio
glassworkers; Layoffs led to even fewer purchases.
E.
The Great Crash – Oct 29, 1929, stock
market crash led to bank failures across
nation.
1. Black Tuesday –
stocks lost $10-15
Billion in value.
 When the market began declining on Oct 21st, frightened customers
began selling their stocks, lowering their value.
 The Stock Market Crash was not the major cause of the Great
Depression, but it undermined the economy’s ability to hold out
against its other weaknesses.
A ticker tape machine
prints the current
stock prices.
Groucho looked around and spotted his broker:
“He was sitting in front of the now-still ticker tape
machine, with his head buried in his hands. Ticker tape
was strewn around him on the floor and the
place…looked as if it hadn’t been swept out in a week.
Groucho tapped [him] on the shoulder and said, ‘Aren’t
you the fellow who said nothing could go wrong?’ ‘I
guess I made a mistake,’ the broker wearily replied.
‘No, I’m the one who made a mistake,’ snapped
Groucho. ‘I listened to you.’”
-- Quoted in 1929: The Year of the Great Crash
 Groucho Marx, comic star of stage and screen, was bankrupt.
F.
1.
2.
3.
4.

Banks:
Lost $ in market crash
& to investors.
Made ↓ loans, making ↓ $
available.
Not gov’t insured (customers lost $ &
confidence in banks).
Run on banks (many
bankrupt).
During first two years of Depression, over
3,000 banks (10% of national total)
closed.
a)
Bank Holidays – Many
Governors closed banks
to prevent bank runs.
II.
Life During the Depression.
One of the Hoovervilles.
4,004 Banks closed.
25% unemployment.
31% loss of nation’s production.
Hoover → local responsibility.
 As banks continued to fail and people lost their jobs and homes,
soup kitchens and shantytowns sprang up throughout the U.S.
 Droughts during the 1930’s made the Depression worse for farmers.
A.
The Depression Worsens.
1. Soup Kitchens – Charities set-up to
give poor people a meal.
2.
Hoovervilles – Blaming President
Hoover; name for homeless camps.
3.
Hobos – many homeless &
unemployed “rode the rails.”
 Hobos walked, hitchhiked, or wandered around the U.S.
Children
in front
of signs
criticizing
Hoover's
policies.
A Hooverville
Soup line
and
Soup kitchen
4. Dust Bowl – The Great Plains pastures
& wheat fields became vast dust bowl.
a) Nearly penniless, many left &
headed West.
 Crop prices began to drop in the late 1920’s; The wild grasses that held
the moisture was gone; A drought began in 1932; Dust covered
everything; More severe storms.
 Many came to CA, but met with hostility due to competing for jobs;
most remained homeless and impoverished.
 Those from OK became known as “Oakies.”
Route 66
“(Get Your Kicks) Route 66” by Nat King Cole.
B.
Escaping the Depression – Movies &
radio shows allowed people to forget their
miseries.
1. Hollywood Fantasy Factory – 60-90
million weekly viewers.
a) Walt Disney – 1st feature-length
animated film Snow White, 1937.
 Snow White’s box office hit led to The Wizard of Oz (1939, MGM).
 Gone With the Wind.
Dietrich
Garbo
 Groucho Marx – comedy of Animal Crackers.
 European artists, producers, and directors moved to Hollywood for
work and escape dictatorships.
 Germany’s Marlene Dietrich – movies Morocco & Shanghai Express.
 Sweden’s Greta Garbo – Highest paid female actress during 1930’s.
2.
Radio – Families listened every day.
a) Soap Operas – Daytime dramas.
Burns
and
Allen
 Jack Benny, George Burns and Gracie Allen, or the Green Hornet.
 The shows sponsors were often makers of laundry soap, hence the name.
3. Art:
a) John Steinbeck – The Grapes of
Wrath (1939); OK family escaping
the Dust Bowl for CA.
Many Californians felt that
the arrival of Dust Bowl
refugees represented
more unwanted people
who were unemployed.
John
Steinbeck
 Describes people in flight along “Route 66.”
b.
William Faulkner – The Sound and
the Fury.
The Sound and
the Fury is a Southern
Gothic novel written
by American author
William Faulkner, which
makes use of the
stream of consciousness
narrative technique
pioneered by European
authors such as James
Joyce & Virginia Woolf.
American Gothic, Grant Wood (1930)
 Stream of Conscious technique, shows what the characters are thinking
before they speak; Exposed hidden attitudes of southern whites
and African Americans in a fictional MS town.
 Grant Wood (painter) – American Gothic, led the regionalist school
emphasizing traditional values, especially in the Midwest and South.
III. Pres. Hoover Responds.
Drk Blue = 6+ Democratic gain
Med Blue = 3-5 Democratic gain
Lgt Blue = 1-2 Democratic gain
Gray = no net change
Hoover was a successful engineer and former
head of the Food Administration during WWI.
 Hoover’s cautious efforts did not help the economy; many Republican
Congressmembers lost their seats in mid-year elections
(49 Congress seats and their majority; only held Senate by 1 seat).
 In March 1930, Hoover said “the worst effects of the crash…will have
passed during the next 60 days.”
A.
Public Works – Gov’t financed building
Construction began in 1931
projects (Hoover Dam).
and was completed in 1935.
It was designated a National
Historic Landmark in 1985
The Hoover Dam generates
over 4 million kilowatt-hours
of electricity per year (serving
over a million people).


New construction made up only a fraction of the lost jobs.
Hoover refused to massively increase gov’t spending.
B.
Banks.
1. Reconstruction Finance Corporation
(RFC) to make loans to banks,
railroads, & farms.
The agency gave $2 billion in aid to
state and local governments and made
loans to banks, railroads, farm mortgage
associations, and other businesses.
It was continued by the New Deal and
played a major role in handling the
Great Depression in the U.S. and setting
up the relief programs that were taken
over by the New Deal in 1933.
 Failed to meet needs; economy continued to decline.
The Empire State Building is a 102-story Art Deco skyscraper
in New York City, NY at the intersection of 5th Ave & West 34th St.
Its name is derived from the nickname for the state of NY.
It stood as the world's tallest building for more than forty years,
from its completion in 1931 until construction of the World Trade
Center's North Tower was completed in 1972.
Chrysler
Bldg.
Lunch break during construction
of the Empire State Bldg., 1930.
The Chrysler Building is an Art Deco skyscraper in NYC,
standing at 1,047 ft high, it was briefly the world's tallest
building (now 3rd in NYC) before it was surpassed by the
Empire State Bldg in 1931. However, the Chrysler Building
remains the world's tallest brick building.
Empire State
Bldg.
C.
Angry Mood.
1. Hunger Marches held by the
Communist Party.
The march was organized by Communists,
but non-Communists joined the protest
against Ford as well. The Dearborn police,
who functioned almost as a branch of
Ford's own company police, confronted
the marchers and four strikers were killed
in the conflict. 15,000 people joined the
Hunger March funeral in Detroit.
 Dec 5, 1932, freezing cold, about 1,200 hunger marchers gathered &
chanted “Feed the hungry, tax the rich.”
 Police herded them to a blocked-off area where they had to spend the
night, deprived them of water, food, and medical attention, until
Congress allowed them their right to petition their gov’t.
2.
Farmers destroyed their crops to
↑ prices.
 Low crop prices since WWI; Between 1930-1934, creditors foreclosed
on almost 1 million farms.
3.
Bonus Army – WWI veterans
marched to Washington D.C. to
lobby Congress to approve their
bonuses.
In the summer of 1932,
at the height of the
Depression, some 45,000
veterans of the Great War
descended on Washington,
D.C. from all over the U.S.
to demand the bonus that
had been promised them
8 years earlier for their
wartime service. They lived
in shantytowns, white &
black together, and for 2
months they protested and
rallied for their cause.
 Congress approved $1,000 bonus per veteran in 1924, but delayed
due to Depression.
 Also called the “Bonus Marchers.”
a) General MacArthur dispersed
the marchers.
Douglas
MacArthur
Shacks, put up by the Bonus
Army on the Anacostia flats,
Washington, DC, burning
after the battle with the
military, 1932.
 After the Senate voted down the bill, most went home, but many stayed
and moved into unoccupied buildings downtown; Hoover ordered
the buildings cleared and the police used brutal force (fired into
crowd killing two veterans) and the Army under Douglas MacArthur
(used bayonets, tear gas, and killed a baby boy).
Hoover failed to resolve the Depression, but did expand the economic
role of the federal gov’t more than any other; The Reconstruction
Finance Corp was first time the federal gov’t established an agency to
stimulate the economy during peacetime; Hoover will be remembered
for routing the Bonus Marchers and lingering Depression.
African-Americans, in
front of a pre-1929
billboard, stand in a
soup line during the
Great Depression.
Activity
In groups of
two, list the
Causes and
Effects of
issues
during the
Great
Depression.
Cause
Effect
1.
2.
th
3. Oct 29 Stock
Market Crash.
4.
5.
6.
General MacArthur
disperses the
marchers.