The Great Stock Market Crash
October 29, 1929 “Black Tuesday”
$16.4 million shares of stock sold (average day =
$4 to $8 million)
By November 1929 Dow Jones had fallen from
September ‘29 high of 381 to 198.7.
Result of Panic created on October 24, 1929
“Black Thursday”
Headlines Oct. 30, 1929
The Bear and the Bull
• Bear Market = exists when the stock market
falls over a significant period of time.
• Bull Market = exists when the stock market
rises over a significant period of time.
Causes
Overspeculation during the 1920s
Overproduction of goods
Buying on margin
Causes
Uneven distribution of wealth in the 1920s
Too much borrowing from banks
Stock prices grossly inflated; did not have “real”
value
Decay of “backbone” industries
Effects
Investors and businesses lose millions
Thousands of banks fail, savings are wiped out
Businesses cut production, lay off thousands of
workers
GNP down from $103 billion in 1929 to $56
billion in 1933
Market Crash
Effects
Unemployment rises, consumer base drops
further. By 1932, 12 million people
unemployed
Economic contraction in the US spread to
Europe
The Great Depression sets in
Depression Food Lines
Unemployment
Social Effects
City Laborers Many lost their jobs, became homeless, lived in
poverty, some resorted to living in
“Hoovervilles”.
Hooverville – Shanty towns build by homeless
with stacks of tar paper, cardboard, or scrap
material to “mock” President Hoover.
Herbert Hoover – rugged individualism
President Herbert Hoover
Hoovervilles
Social Effects
Farmers –
In ‘29 a bushel of wheat sold for $1.18, in ‘32 it sold
for 49 cents.
Cotton dropped from 19 to 6.5 cents a pound
Many could not afford to keep their farms; Dust
Bowl forced hundreds of thousands to migrate
elsewhere
About 60% of “Dust Bowl” families lost their farms.
Dust Bowl – Between 1931-1940, so much soil blew
out the of central and southern Great Plains that
the region became known as the Dust Bowl.
Dust Bowl
Dust Bowl
Dust Bowl
Leaving Farms
Social Effects
Women –
Had trouble finding work because so many men
were unemployed.
More responsibility for survival of family
Change and equality gained from WWI and 20s
false?
Psychological Effects
Social Effects
Children –
Faced horrible health conditions through labor,
lack of food; many could not go to school;
could not be supported by their parents
Siblings were separated, forced to live with
extended families
Social Effects
Men –
Psychologically felt like failures because of
inability to find work
Many left home, to “ride the rails” (“Hobos”)
Suicide rate soars
Leaving women alone to take care of family
Unemployment
Social Effects
Racial minorities –
Discrimination increased, work became harder
to find for African Americans; many Hispanics
and Asian Americans were deported;
lynchings increased in the South
Nativism continued to grow
Americans Pull Together
Farmers Stick together
Worked together to minimize impact of Great
Depression
They held “penny auctions” to save the farms
of other farmers in the community
Legislation was soon passed giving farmers
more time to pay their debts
Young people ride the rails
Young people left home in seek of a better life
Rail riders faced dangers along the way;
“Hobos” faced injury, police arrests, angry
farmers
Young people witnessed the Depression
throughout the country and experienced
loneliness
Riding the Rails
Hobos
Seeking Political Solutions
Most US citizens kept faith in the democratic
process despite hard times
Some citizens were attracted by reform and
radical movements
Communist and Socialist Parties grew in size
and support
Depression Humor
Humor kept people laughing thorough
troubled times
“Hooverisms” became popular, like “Hoover
Flags”
Board Games like Monopoly are created
Depression Humor
Signs of Change
Prohibition is Repealed
The 21st Amendment 1933
There was mixed reaction, but most
Americans welcomed repeal
Hoover regretted this
18th Amendment Repealed
Bars open for business
Empire State Building
The building became a promising symbol of
hope
The 102-story building cost $41 million,
soared 1250 feet in the sky, and had 67
elevators
Construction of Empire State
Building
The End of an Era
The Symbols of the 1920s faded; Al Capone,
Calvin Coolidge, Babe Ruth, and Henry Ford
The Lindbergh kidnapping echoed the nation’s
distressed condition
20s Hero’s infant son kidnapped and
murdered
The Election of 1932
Republican incumbent Herbert Hoover
Vs.
Democratic candidate Franklin Delano Roosevelt
Herbert Hoover
Believed in minimal government action
Strict view of government (less is better)
Advocated voluntary action by businesses and
citizens (“rugged individualism”)
Believed in minimal government spending, but
some spending projects; Hoover Dam, Federal
Farm Board
Herbert Hoover
Believed that assistance to businesses and banks
(at the top) would eventually help individuals
and the economy as a whole
Hawley-Smoot Tariff 1930 (highest in history)
Reconstruction Finance Corp. (RFC) –
Government credit to major industries (“Bail
outs”) also lent money to banks
Home Loan Bank Act – discounting mortgage
rates
Franklin D. Roosevelt
In wheelchair
Franklin Delano Roosevelt
Willing to experiment with government roles
(expand government)
Supported broadening the role of government
Wanted to do whatever possible to try to end
the Depression
Favored increased government spending and
government projects
Introduces “The New Deal”
Bonus Army Incident
Low Point for Hoover, summer of 1932
20,000 jobless, WWI veterans march and
encamped in Washington DC
Demanded immediate payment of a pension
bonus they were promised for 1945.
Not given, many left, some stayed in DC.
Although generally peaceful, some violence
broke out
Bonus Army encampment
Outside capital building
US Army brought in to drive the bonus army out
of DC
Many were injured when tear gas was shot
This incident would defeat Hoover in ‘32
election
FDR wins election in landslide 472-59 electoral
votes, 22.8 million-15.7 million popular votes
Election of ‘32 results