Great Depression
The Cruelest Year-1932
Underconsumption
& Overproduction
• Mass production had increased efficiency per
man hour by over 40%
• In 1929, a family needed $2000/year for the
bare necessities (60% of families not earning
that much)
• People could not afford to buy new products
• Overproduction led to layoffs, led to more
underconsumption
• Could have raised wages so more people
could afford to buy goods
Other Causes
• Unequal distribution of wealth
– 1% of the population owned 59% of the
wealth
– Middle class not large enough
• Deflation- prices of goods were falling
(partly due to overproduction &
underconsumption)
• Stock Market Crash (more of a
symptom of the underlying causes)
Effects on Businesses
• Stock market- investors lost $74 billion,
• 86,000 businesses closed
• US Steel producing at 19.1% of
capacity
• Industries doing well: phonograph
recording, movies, cigarettes,
contraception, miniature golf
Immigration
• Emigration exceeded immigration (more
people left America than came into
America), 350 applications per day to
Russian trading agency for Americans
who wanted to move to Russia.
Farmers
• Destroying crops because cheaper to
burn crops for heat rather than buying
coal
• Montana rancher who shot his livestock
because he did not have $ to feed them.
• Taking revolutionary actions: blocking
highways, kidnapping judges, calling for
a “Revolution like they had in Russia.”
"Farmer and sons walking in the face of a dust storm.
Cimarron County, Oklahoma" (Also known as "Fleeing a
Dust Storm," Arthur Rothstein, 1936)
Image Source:
http://www.edb.utexas.edu/resou
rces/team/lesson_1.html
Welfare- social stigma
• Lewiston, ME. barred recipients from
voting
• Kids not allowed in schools
• Not allowed in hospital in WV unless
guaranteed payment
Effect on Schools
• Chicago Teachers worked without pay
(owed teachers $20 million)
• Schools closed for 10 or more months
in Arkansas, or only open 3 days/week
• Teachers boarding with their students
Effect on Children
• Children called drowsy, lethargic, …. Possible
mental retardation because of hunger”
• Teacher told student to go home for lunch,
student replied: “It’s my sister’s turn to eat.”
• Boy brought his pet rabbit for show & tell;
Sister: “He doesn’t know we are going to eat
it.”
Children in a “Hooverville”
Image Source: http://www.picturehistory.com/product/id/879
"Children who live in a migrant camp on U.S. Highway No.
31, near Birmingham, Alabama" (Arthur Rothstein, 1937)
Image Source: http://www.edb.utexas.edu/resources/team/lesson_1.html
Responses of the wealthy
• President Hoover: “no one is actually
starving”
• It was considered benevolent to give
your garbage (food scraps) to fellow
countrymen who were hungry
• Played polo, Republican governor
candidate “too much prosperity ruins the
moral fiber of the people”
Corruption of the Wealthy
• 1% of the population owned 59% of the
nation’s wealth
• Samuel Insull’s utility companies were a
“pyramid of holding companies” and his
stock dropped to 4% of its 1931 value
• Insull fled to Europe, held a Paris press
conference, snuck out back door to
Greece (no treaty but then US signed
extradition treaty), fled to Turkey