The Great Depression
Problems Leading to the
Depression

Superficial Prosperity of 20’s
– Businesses  Produce More Than They Could Sell
– Investors  Get More Deeply Invested and In Debt

Key Basic Industries Began to Fail
– Railroads, Steel, Textiles Began to Lose Profits

Problems for Farmers
– Farmers Continued to Suffer Financially After WWI
– McNary – Haugen Bill

Proposed by Congress to Help Farmers Sell Products
– Price Supports: Government would buy surplus crops at guaranteed prices and
then sell them on the world market

Coolidge Vetoes Twice – “Farmers have never made money. I don’t
believe we can do much about it”
Problems Leading to the
Depression

Consumers Can Purchase Fewer Goods
– Rising Prices & Stagnant Wages Caused Fewer
Goods to Be Sold in America
– Production Expanded Much Faster Than Wages

Living on Credit
– Americans Built Up a Huge Independent Debt That
Could Not Be Paid Off

Uneven Distribution of Income
– The Rich Got Richer and the Poor Got Poorer
American Income
Distribution in 1929
$1,999 and
Under
$2,000 $4,999
$5,000 $9,999
$10,000 and
Over
The Election of 1928
Republican Candidate
Democratic Candidate
Herbert Hoover
Al Smith
•Secretary of Commerce
for Coolidge
•Career Politician & Governor
of New York
•Advantage: Successes of
America Under
Republican President
•Al(Cohol) Smith Was Wet
•Catholic
Election Results
Herbert Hoover
444 Electoral Votes
83.6% Pop. Vote
Al Smith
87 Electoral Votes
16.4% Pop. Vote
•The Election of 1828 Was
the First Election Where the
Radio Played a Large Part of
the Campaign – Helped
Hoover Greatly
Hoover’s First Actions as
President

Attempted to Make Two Major Changes When Arriving in Office
– To Help Farmers
– To Deal With the Tariff

Helping the Farmers
– Agricultural Marketing Act


Helped Farmers Help Themselves Thru Establishment of Cooperatives
Established Federal Farm Board: Funded $1/2 Billion to Lend to Farmers to
Buy, Sell, and Store Surpluses
– Grain Stabilization Corporation



Attempted to Help Staggering Prices by Purchasing Farmers’ Surpluses
Was Basically Ineffective Due to Huge Amounts of Product
Dealing With the Tariff
– Hoover Promised to Make ‘Limited Changes’ to Fordney – McCumber
Tariff of 1922
– Passed Hawley – Smoot Tariff (1930)

Increased Tariffs by as Much as 50%-100% on certain goods
– Looked Like a Declaration of Economic Warfare on the Outside World
The Shock that Started
the Great Depression


The Advances of the ‘Bull Market’ and Unsteady
Stock Market Stood Extremely Close to
Tumbling by Summer, 1929
‘Black Tuesday’ – October 29, 1929
– The Stock Market Took an Initial Hit and Panicked
Investors Hurried to Sell Stocks
– 16.4 Million Shares Were Sold That Day Alone

Investors in the Stock Market Went From
Millionaires to Bankrupt in Just a Few
Days/Weeks/Months
The Main Causes of the
Great Depression

Overproduction of Farm and Factory

Uneven Distribution of Wealth

Overspeculation of the Stock Market

Tariffs and War Debt Policies
Short Term Results of the
Stock Market Crash

Banking Problems and Failures
– Many Banks Went Bankrupt b/c People Rushed to Take Out
Savings and Banks Could Not Meet Cash Demands

Business Failures
– Thousands of Businesses Shut Down b/c of Diminishing
Profits
– Workers Had No Jobs / Money So Could Not Purchase Goods
From Businesses

Worldwide Repercussions
– Other Countries Were Also Dealing w/ Post WWI Economic
Issues = The U.S. Could Not Export Goods Worldwide
Bank Failures
U.S. Bank Failures: 1928 - 1933
5000
4000
3000
Bank Failures
2000
1000
0
8 29 30 31 32 33
2
19 19 19 19 19 19
Year
35000
30000
25000
20000
15000
10000
5000
0
Business
Failures
19
28
19
29
19
30
19
31
19
32
19
33
Business Failures
Business Failures: 1928 - 1933
Year
How Americans Were
Affected by the Depression
The Depression in the
Cities


The Depression Brought Hardship, Homelessness, and
Hunger to Millions in Cities
Unemployment
– A Drastic Increase in Unemployment Left Millions Jobless
and Eventually Homeless
– Shantytowns Called “Hoovervilles” Popped Up in Most Major
Cities
– Soup Kitchens and Bread Lines Were the Only Available For
Some to Get Food

Minorities Such as African Americans and Latinos
Were Suffered Worse Than White City - Dwellers
15
10
5
0
19
28
19
29
19
30
19
31
19
32
19
33
People (In Millions)
Unemployment: 1928 - 1933
Year
Unemployment
The Depression For the
Farmers

Farmers Were Struggling Throughout the 20’s, But the
Depression Just Made it Worse
– One Advantage: Most Farmers Could Grow Food For Their
Families


Many Farmers Lost Their Land and Had to Turn to
Tenant Farming to Survive
The Dust Bowl
– Farmers Had Used Technology to Break Up and Overuse the
Topsoil on the Midwestern Plains
– A Terrible Drought Combined w/ High Winds to Create the
Dust Bowl
– Many Farms Literally Were ‘Blown Away’
Photo of a Dust Storm in Kansas
Families Struggle to
Survive


The Family Unit Was Often the Only Thing That Kept People
Sane and Living During the Depression
Men
– High Unemployment Rates = Couldn’t Provide For Families
– No Direct Relief (i.e. – Welfare System)

Women
– Also Looked For Jobs



Less Paying Than Men
Discriminated b/c Why Should Women Get Jobs When Men Are Unemployed
Children
– Were Often a Burden to Families – Some Even Told to Leave

Many Boys Turned to ‘Riding the Rails’
– Schools Shut Down & Kids Had to Find Work to Provide For Families
– Sickness & Disease Rampant Due to Poor Diet
Hoover Dealing With the
Depression
Hoover’s First Steps at Dealing
With the Depression

His Message to the Nation…
– America’s Economy Was on Sound Footing and People
Should Go About Normal Life

Hoover’s Belief…
– America Was Built on Individuality and People Shouldn’t
Depend on the Government to Bail Them Out of Trouble

His Basic Philosophy…
– Outside Forces Were Mostly Responsible for the Depression
– American’s Didn’t Really Have to Change Anything – Just
“Wait it Out”
– If Americans Worked Together, They Could Beat the
Depression (Volunteerism, No Lay – Offs, No Strikes)
Hoover’s Earliest Action

As Secretary of Commerce, Hoover Proposed
Construction of Dam on the Colorado River
– Had the Power to Authorize Governmental Funding as
President to Get Construction Started

Construction of the Dam Started in Fall of 1929
– Cost: $700 Million

Purpose:
– Generate Electricity
– Supply Water to Area
– Jobs for Many Men
•Hoover Dam Is 726 Feet High and 1,244 Feet Long
•At the Time It Was the World’s Highest and 2nd Longest Dam
Hoover’s First Actions to Battle
the Depression


As the Depression Got Worse After One Year, Hoover
Finally Realized that Something Had to Be Done
Private Business and Enterprise

Federal Farm Board
– Bought Surplus of Crops to Keep Supply Down and Prices Up

National Credit Corporation
– Big Banks Loaned Money to Smaller Ones to Help Them From Going
Bankrupt

All of These Measures Basically Failed and By 1931
(With Election on Way) Hoover Realized that He
Needed to Enact More Drastic Measures
The Reconstruction Finance
Corporation (RFC)

Made $2 Billion Available to Struggling
Businesses and Companies
– Railroad Companies, Banks, Insurance Companies
– Hopefully This Money Would Also ‘Trickle Down’ to
Ordinary Citizens

It Made NO Loans to Individuals
– Hoover Believed Individual Loans Would Be Bad and
Make Americans Lazy and Looking for Handouts

Was Also Called ‘The Millionaires Dole’
The Next Blow to Hoover’s
Presidency – The Bonus Army

Bonus Expeditionary Force Arrived in Washington D.C.
in Summer of 1932
– Supported the Patman Bill Which Would Pay WWI Veterans
Their ‘Bonus’ From Service in 1932 Instead of the Intended
1945
– Averaged About $500/Soldier

Patman Bill Was Voted Down and Many Left
– About 2,000 Remained in Washington D.C. to Speak w/
President

Hoover Used U.S. Military Troops to Disperse
Veterans Which Enraged Many Americans and
Veterans
– Two Deaths and Many Injuries in the Incident
The Men Responsible
for Dispersing the
Bonus Army:
•General Douglas
MacArthur
•Major Dwight D.
Eisenhower
The Election of 1932
Republican Candidate
Democratic Candidate
Herbert Hoover
Franklin D. Roosevelt
•Believed His Administration Was Not at
Fault for Depression
•Republicans Didn’t Have Anyone Better
to Nominate
•Supported Repeal of Prohibition
•Government Had Duty to Help
Citizens
•Proposed a ‘New Deal’ for Americans
Election Results
Franklin D. Roosevelt
472 Electoral Votes
88.9% Popular Vote
Herbert Hoover
59 Electoral Votes
11.1% Popular Vote