The Great
Depression
1929-1940
Looming Economic Troubles
•
Troubled Industry
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•
Railroads, textiles, coal mining, auto industry,
and consumer goods were weakening or
struggling
The number of houses being built declined
Farmers in debt
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
Decline in crop prices lead to debt, foreclosures
on farms and defaults on loans.
Congress tried to pass federal price-supports to
buy surplus wheat, corn, cotton and tobacco to
sell on the world market.
Hawley-Smoot Tariff
 1930
 Highest
protective tariff in peace-time
history
 Made trade from Europe extremely
difficult
•
Consumer debt
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Prices were rising, wages weren’t
Credit allowed consumers to spend outside their
means plunging them into debt
Businesses encouraged spending on credit, but
consumers cut back spending to counteract
debt

“Rich got richer, poor got poorer”
 0.1% of population with incomes more than
$100,000; had 34% of nation’s savings
 71% of population with incomes less than
$2,500, the minimum to provide a decent
standard of living
 80% of population had no savings
 Large portion of population was in debt
because of using credit to purchase new
consumer goods
 Only 1/ 10 city homes owned an electric
fridge
The Election of 1928

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Republican candidate
Herbert Hoover against
Democrat Alfred E. Smith
Smith was more
personable, but he was a
Catholic , pro-alcohol,
and from NYC
“We in America are
nearer to the final triumph
over property than ever
before.”
Hoover wins an
overwhelming victory
The Stock Market
•
•
Most visible symbol of a
prosperous American
economy
The Dow Jones Industrial
Average gauged the
market’s health
▫
•
The Dow is a measure
based on the stock
prices of 30
representative large
firms that trade on the
New York Stock
Exchange
Through the 20’s, stock
prices rose. Dow
reached a high of 381
points, an increase of
300 points in 5 years
A Bull Market
Widespread speculation where people bought
stocks and bonds to make a quick profit
 Buying on margin where they would pay a small
% of a stock’s price as a down payment and
borrow the rest
 More people began to invest in the stock
market, not just the wealthy
 If the value of stocks decline, people have no
way to pay off loans
 Gov. didn’t try to regulate the market

Black Thursday
September 1929 – stock prices reached an alltime high
 Wed, October 23, 1929 – stock prices declined
 What would you do?
• Thurs, October 24, 1929 – Nervous investors
began selling stocks
• Banks joined together to buy stock to prop up
stock prices and the stock market. This worked,
but for just a few days.
• Mon, October 28, 1929 – stock prices started
falling again
•
Black Tuesday

Tues, October 29, 1929



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
Everyone rushed to sell their
stock (get their money out of
the stock market)
Wide spread panic led to the
dumping of 16.4 million shares
of stock
Stock market dropped in
value by $16 Billion
 211,942,040,062 today
The stock market actually
collapsed = The Great Crash
Total loss of the Great Crash =
$30 billion
 397,391,325,116 today
People who used credit to
buy stocks faced huge debts
and others lost their savings.
Financial Collapse
•
•
The Stock Market Crash signaled the beginning of the
Great Depression
Banks Fail
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•
People rush to withdraw $ from banks, but some couldn’t
because banks had invested their $ instocks
1929: 600 banks closed
1933: 11,000 banks had failed
Millions lost savings because gov. didn’t protect or insure
bank accounts
Businesses Fail
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Between 1929-1932, GNP was cut from $104 billion to $59
billion
90,000 businesses went bankrupt including auto and
railroad
Unemployment in 1929 was 3% compared to 25% in 1933
(that’s 1 in 4 people w/o a job)

Effects overseas
 Many countries still trying to recover from WWI

devastated European economy

Made it hard to export Am. Goods

United States passed high tariffs to protect Am.
Farmers from competition
Causes of the Great Depression
 Tariffs
and war debt policies cut down the
foreign market for Am. Goods
 Overproduction (surplus) of farm goods
 The availability of easy credit
 An unequal distribution of income
The Depression Hits Home


In cities, people lost their
jobs and were evicted
from their homes
Built shantytowns, little
towns made of shacks
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
Used car bodies, orange
crates, piano boxes
Poor dug through
garbage cans, begged,
or waited in soup kitchens
or bread lines to get
cheap or free food
African Americans and Latinos
 Higher
unemployment rates and they
received the lowest pay
 Faced increased racial violence from
whites competing for jobs
 1933: 24 African Americans died by
lynching
 Mexicans and Mexican Americans faced
deportation
The Dust Bowl
•
•
Between 1929 and 1932, about 400,000 farms were
lost to foreclosure
Not only economic damages, but environmental
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•
Land was overworked
Drought and dust storms in the Midwest for much of
the 1930s
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“Black Sunday” – worst dust storm – April 14, 1935
Dust would get into everything…kitchens, bedrooms, hair,
nails, mouths
Wrapped faces in damp rags to filter out the grit
Nostrils with Vaseline to keep noses from clogging and
bleeding
“dust pneumonia”
Many packed up families and headed west to California
along Route 66
Click below for a video!
^ Click for a song
Searching for Jobs
 HOBOS
 No
federal system of
direct relief
Women and Children
 Canned
food, sewed clothes, managed budget
 Many worked outside the home for less wages,
but resented for taking jobs away from men
 By
1933, 2,600 schools had closed leaving
thousands of children to work in sweatshops
 “Wild boys” hopped freight trains travelling the
country for jobs, adventure, and to escape
poverty
Social and Psychological
Effects
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•
•
•
•
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Between1928 and 1932, the suicide rate rose by
30%
Health declined because couldn’t afford the
doctor
Couldn’t afford college, others put off marriage
and raising large families or having kids at all
People gave food, clothing, and shelter to the
needy
Strengthened communities and family ties
Developed habits of saving and thriftness
President Herbert Hoover
 After
the crash, he tried to convince public that
the economy was on sound footing and to
remain optimistic
 Opposed any form of federal welfare, or direct
relief to the needy, because it would weaken
their self-respect
 He asked employers not to cut wages or lay off
works, he asked labor leaders not to demand
higher wages or strike
Hoovervilles and Shantytowns
What did Hoover Do?
 He
finally decided he had to do
something…
 He got Congress to approve $2.25 billion
for public works projects
 Hoover
Arizona
Dam on the Colorado River in
Reconstruction Finance
Corporation
 1932
– under Hoover
 Government lending bank to help smaller,
rural banks
Bonus Army of 1932
 Veterans
marched on
Washington DC to
demand their bonus
from services during
WWI
 Hoover sent Douglas
MacArthur in to
remove the veterans
who would not leave
using tear gas and
bayonets
ELECTION OF 1932

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
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
Herbert Hoover
(Republican)
“Prosperity is Just Around
the Corner”
Franklin D. Roosevelt
(Democrat)
Roosevelt’s theme song
was “Happy Days are
Here Again”
He used his “Brain Trust”
of trusted aides to help
write speeches, etc.
March 4, 1933
 FDR
was inaugurated President, 4 months
after the election
 Worked with the Brain Trust to provide a
“New Deal for the American people”
during this time
NEW DEAL
 His
first Hundred Days were filled with legislation,
over 15 pieces of major legislation
 Expanded
 March
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

the role of the federal government
6-10 Nationwide Bank Holiday
Closed all banks to prevent withdrawls
Passed the Emergency Banking Relief Act to
inspect the country’s banks
Banks that couldn’t pay debts remained closed,
restored confidence
3 Rs – Relief, Recovery, and
Reform
 Relief
– short range goals
 Recovery
 Reform
– long range goals
– deal with current abuses
 CONGRESS
worked with the President and
gave him “blank check” powers
Emergency Banking Relief Act
of 1933
 Power
to regulate the banking system
 Close and reopen banks
 Safer
to keep money in a reopened bank
than in the back yard!
Fireside Chats
 Roosevelt
used the
radio to talk to
Americans
 Focused
Pump
 Click
on Priming the
picture for his first
fireside chat during the
bank holiday
Glass-Steagall Banking Reform
Act
 FDIC
– Federal Deposit Insurance
Corporation Insures individuals up to
$5,000
Nation taken off the Gold
Standard
Civilian Conservation Corps
(CCC)
 Most
popular of all the New Deal
alphabet agencies…
 Employment
in fresh air government
camps for about 3 million uniformed
young men
 Reforestation, firefighting, flood control,
swamp drainage
 Paid $30 a month, sent $25 home to their
families
Federal Emergency Relief Act
(May 1933)
 Harry
L. Hopkins
 $3 billion to states for work projects
 Agricultural
Adjustment Act (AAA)– help
farmers meet mortgages & paid farmers
to grow less
 Home
Owners’ Loan Corporation (HOLC)
– to refinance mortgages on non-farm
homes
 Tennessee
Valley Authority (TVA)—
renovated five damns and constructed 20
new ones.
 Created jobs, provided flood control,
hydroelectric power
Civil Works Administration
(CWA)
 Provided
4 million temporary jobs during
cruel winter months
 Built 40,000 schools and half a million
roads
Some people hated the New
Deal
 Didn’t
go far enough to help the poor and reform
the economic system
 FDR spent too much on direct relief and used
New Deal to control business and socialize
economy
 Huey Long—Share-Our-Wealth promised “Every
Man a King”

Had 7.5 million members until he was assassinated
 Father
Charles Coughlin – Catholic priest who
became anti Semitic

Broadcasted on radio economic, political, and
religious ideas
The Supreme Court

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Struck down two New Deal acts because
federal government overstepped their roles
FDR tried to pass a court-reform bill in 1937
reorganizing the federal judiciary and appoint
new justices
Criticized it upset judicial independence and
checks and balances
Over next four years, FDR appointed 7 new
justices from resignations
Second Hundred Days
(or Second New Deal)
 Spring
1935
 More relief for farmers and workers
 Eleanor Roosevelt travelled the country to
remind her husband of the suffering
 1936

election FDR wins overwhelmingly
1st time African Americans voted solidly
Democratic and labor unions supported a
candidate
Works Progress Administration
(WPA)
 1935
 Employment
on useful projects
 $11 billion spent to give jobs to over 8
million workers
 WKU’s
Cherry Hall was a recipient of the
WPA money and workers
 Federal Art Project was also started
Chronicling the Depression
 Artists,
Painters,
Filmmakers,
Photographers
showed a new interest
in social problems and
activism.
 Dorothea Lange –
Photographic
chronicler of the
Great Depression
Wagner Act
 1935
 Protected
right of workers to join unions and
collective bargain
 Prohibited unfair labor practices like threatening
workers, firing union members, and interfering
with union organizing
 1938
Fair Labor Standards Act
 Set maximum hours at 44 and minimum wage at
$0.25
 Set rules for 16 and under, and banned
dangerous work for under 18
Social Securities Act
 1935
 Old-age
insurance for retirees 65 or older
and their spouses
 Unemployment compensation system

$15-$18 a week
 Aid
to families with dependent children
and the disabled
Rural Electrification Administration
 1935
 Brought
electricity to isolated areas
 In 1935, only 12.6% of American farms had
electricity
 48% in 1945, 90% in 1949
New Roles for Women
 More
women working outside of
home
 Frances Perkins
Secretary of labor– First woman to
head an executive department
 Helped create the Social Security
system

 Mary
McLeod Bethune
Leader of the Black Cabinet and
director of Negro Affairs in the
National Youth Administration
 Advised FDR on racial issues and
made provided job training and
benefits to minority students

 Movies—65%
1x a week
of population attending
 “Mr. Smith Goes to Washington”
 Disney – “Snow White”
 “Gone with the Wind”
 “The Wizard of Oz”
 Radio—90%
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
of homes had a radio
New Type of Music Emerging - “Swing”
Radio programs such as The Lone
Ranger & Orson Welles “War of the
Worlds”
 Literature


John Steinbeck’s The Grapes of Wrath
Zora Neale Hurston’s Their Eyes Were
Watching God
 Sports

Boxing was hugely popular—Joe Louis
Why would radio and movies
increase in popularity?
Culture
American Gothic by Grant Wood
1937 A Troubled Year
 Moving


Forward
Supreme court upheld many New Deal programs
 March 1937 upheld a Washington law that granted
Minimum Wage
 Ruled both, a key part of the Wagner Act and Social
Security constitutional.
Farm Tenancy Act - 1937
 Gave tenant farmers and Sharecroppers a chance to
buy land of their own
 Recovery


in Doubt
FDR scaled back federal deficit spending
1937 - A bad year for recovery. Massive drop in stocks
and by the end of the year another 2 million American
unemployed.
Impact of the New Deal
 Relief,

Recovery, Reform
Which area was the New Deal most
successful?
 Changing


relationships
Changed the link between the American
people and the Government
New Role for Government meant a much
larger Government.
 As
a result many more people now looked to
the Government for help
End of the New Deal
 Weakened

What happened in 1937 to cause loss of support?
 The


1938 Election
Republicans and Southern Democrats gained seats in
the House and the Senate
Why did this happen?
 After



support – 1937
the New Deal
After 1938 FDR lacked the support to pass New Deal
Styled programs.
Problems in Europe now held the attention of the
American Public.
In 1939 and 1940 international conflict will ultimately
do what FDR’s programs could not.