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Outline of Chapter 25: The Great Depression
-Sudden economic decline that began in 1929 was a surprise because it followed the New Era, which seemed to be performing another series of economic miracles The Great Crash -Between May 1928 and September 1929, the average price of stocks increased over 40% -Stocks of major industrials doubled in value at he same time – stock market boom -In autumn of 1929, great bull market began to fall apart – On October 21 and October 23, there were alarming declines in stock prices, both followed by temporary recoveries -But on October 29, Black Tuesday, all efforts to save the stock market failed Causes of the Depression -Many observers agree that there were a variety of factors that account for severity of crisis • Lack of Diversification- Prosperity in American economy had depended a lot on a few basic industries, such as construction and automobiles – in 1920s, industries began to decline • Maldistribution of Wealth- Proportion of profits going to farmers and workers was too small to create an adequate market for good economy was producing – in 1929, many families were too poor to buy the goods the industrial economy was producing • Credit Structure of Economy- Farmers were deeply in debt – couldn’t pay off what they owed – small banks were in constant trouble as their customers defaulted on loans – large banks were trouble because some were investing recklessly in the stock market • Declining Exports- In the 1920s, European demand for American goods declined – because European industry was becoming more productive and some nations were having financial difficulties and could not afford to buy goods from overseas – also because of the fifth reason for the Great Depression-the international debt structure that emerged in the aftermath of World War I • Unstable International Debt Structure- After WWI, the European nations allied to the U.S. owed large sums of money to American banks- Allies had insisted on reparation payments from Germany and Austria-they were in too much economic trouble to pay – American banks made large loans to European governments – debts were being paid only by piling up new and greater debts – in 1920s, high American protective tariffs made it difficult for them to sell goods to American markets – without sources of foreign exchange with which to repay loans, they began to default Progress of the Depression -The stock market crash of 1929 exposed the longstanding weaknesses in the American economy rather than causing the Depression – during the next 3 years, crisis worsened -Over 9,000 banks closed down to avoid bankruptcy between 1930 and 1933 -Nation’s money supply greatly decreased partly because of these closures – total money supply fell by more than a third between 1930 and 1933 – led to deflation- decline in purchasing power – manufacturers began to lay off workers -Some economics say that depression could have been avoided if the Federal Reserve System had acted more responsibly – but they raised interest rates in 1931-contracted money supply
-The American gross national product (GNP) went from $104 billion in 1929 to $76.4 billion in 1932 – a 25% decline in 3 years – 25% of the work force was unemployed The American People in Hard Times Unemployment and Relief -Many people during the Great Depression believed that unemployment was a sign of personal failure – many men were deeply ashamed of their joblessness -The South and West were suffering from one of the worst droughts in the history of America -Beginning in 1930, a large area known as the “Dust Bowl” began to experience steady decline in rainfall and increase in heat – great dust storms swept across the plains -Many families from the Dust Bowl known as “Okies” (many came from Oklahoma) traveled to California and other states where they found better conditions -Death from starvation became more common and there were many migrant Americans African Americans and the Depression -Although African Americans did not share much in the prosperity of the previous decade, they were still devastated by the Depression – experienced more unemployment, homelessness, malnutrition, and disease than in the past and more than whites -Whites in southern cities wanted all blacks dismissed from their jobs- in Atlanta in 1930; the Black Shirts organized a campaign with the slogan, “No Jobs for Niggers Until Every White Man Has a Job!” – By 1932, over half of blacks in the South were without employment -In the Scottsboro case, nine black teenagers were taken off a freight train in Alabama and arrested for disorder – later two white women also on the train accused them of rape – although there was overwhelming evidence that they had not been raped, the all-white jury in Alabama convicted all nine of the “Scottsboro boys” and sentenced eight to death -The Supreme Court overturned the convictions in 1932 – new trials began – the International Labor Defense came to the aid of the accused boys and began publicizing the case – the NAACP helped them as well – all though the boys were never acquitted by the white southern juries, they all eventually gained their freedom -During the Depression, the NAACP began to try to win a position for blacks within the emerging labor movement, supporting formation of the Congress of Industrial Organizations and helping to break down racial barriers within labor unions Mexican Americans in Depression America -Chicanos (Mexican Americans) were discriminated against and whites in the South demanded their jobs – some were forced to leave to country – many went to Mexico -Many relief programs excluded Mexicans -Hispanics generally had no access to American schools – many hospitals refused them admission – unlike American blacks, Hispanics had not established education and social facilities of their own in response to discrimination Asian Americans in Hard Times -Asian Americans suffered similar hardships as African Americans and Hispanics -In California, Nisei (Japanese Americans) tried to challenge the obstacles facing them through politics – organized Japanese American Democratic Clubs in several cities -Some Japanese-American businessmen tried to change the Nisei by encouraging them to become more assimilated into American culture - formed Japanese American Citizens League to promote their goals Women and the Workplace in the Great Depression
-People believed that b/c jobs so scarce whatever was available should go to men—this belief strengthened notion of women’s main role staying in home, also feelings that no woman with an employed husband should hold a job -Single and married women both continued to work during Depression b/c money so necessary- result of nonprofessional nature of “pink-collar” jobs as more secure than those in heavy industry, male stigma about taking them -Support for Reform Era ideas of women economically and professionally independent began to wane; Depression saw death of National Woman’s Party Depression Families -Middle- and working-class families used to rising standard of living now uncertain b/c of unemployment or income reductions -Retreat from consumerism as women made clothes in home, home businesses established, banding together of extended family units The Depression and American Culture Depression Values -Pre-Depression acceptance of affluence and consumerism remained unchanged as ppl worked even more hard to achieve ideals -Longstanding belief that individual controlled own fate and success thru hard work (“success ethic”) largely survived Depression as many unemployed simply blamed themselves and remained passive b/c felt ashamed -Masses responded messages that they themselves could restore own wealth + success—bestselling How to Win Friends and Influence People by Dale Carnegie Artists and Intellectuals in the Great Depression -Just as urban poverty had received attention during Reform Era, during 1930s many shocked at “discovery” of rural poverty- photography of Farm Security Administration photographers highlighted impact of hostile env’t on ppl -Many writers began to highlight social injustices- Erskine Caldwell’s Tobacco Road (1932) of rural poverty; Richard Wright’s Native Son of urban ghettos; John Steinbeck’s novels of migrant workers; John Dos Passso’s USA trilogy attacked capitalism Radio -Almost every family had radio, listening often a communal activity -Most radio programming was entertaining and escapist in nature (comedies or adventures, soap operas); live programming of performances also developed -Radio allowed access to major public events in news, sports, politics -Drew nation together b/c of widespread availability of same cultural and informational programming, gathered family together in the home The Movies -Early 1930s movie attendance dropped b/c of economic hardship, but by mid-1930s many seeing them again -Most movies censored heavily and studio system kept projects largely uncontroversial; some films did manage to explore social and political questions, but most remained escapist in order to keep attention of audience away from troubles. Walt Disney movies emerged during 1930s Popular Literature and Journalism
-Literature more reflective of growing radicalism + discontentedness than radio and movies, although escapist and romantic works still widely popular (Mitchell’s 1936 Gone With The Wind; photographic Life Magazine) -Other works challenged American popular values: John Dos Passos’s U.S.A. trilogy (19301936) attacked American materialism; Nathanael West’s Miss Lonelyhearts (1933) of a woman overwhelmed by the life stories of others The Popular Front and the Left -Late 1930s more literature more optimistic of society b/c of rise of Popular Front coalition lead by American Communist Party- supported Franklin Roosevelt and New Deal, mobilized intellectuals toward social criticism -Intellectual detachment of 1920s targeted by Popular Front- mobilized some men into Lincoln Brigade to fight in Spanish Civil War against the fascists -Communist Party organized unemployed, unions, supported racial justice; however party under control of Soviet Union- when Stalin signed 1939 nonaggression pact w/ Hitler Party abandoned Popular Front and returned to criticizing liberals -Socialist Party of America under Norman Thomas attempted to argue crisis failure of capitalist system and tried to win support for party, especially targeting rural poor— supported Southern Tenant Farmers Union but never gained strength -Antiradicalism a strong force in 1930s and hostility existed toward Communist Party, yet at the same time Left widely respected amongst workers and intellectuals; temporary widening of mainstream culture -Famous accounts of social conditions of the era provided by James Agee’s Let Us Now Praise Famous Men (1941) and more famously John Steinbeck’s The Grapes of Wrath (1939) The Unhappy Presidency of Herbert Hoover The Hoover Program -Hoover responded to Depression by trying to restore confidence in economy- tried to gather business into voluntary program of cooperation to aid recovery; by 1931 voluntarism had collapsed b/c of worsening economy -Hoover tried using govt spending to boost economy; spending not enough in face of huge economic problems, sought to raise taxes 1932 to balance budget -Offered Agricultural Marketing Act to help farmers w/ low crop prices, raised foreign agricultural tariffs in Hawley-Smoot Tariff of 1930- neither helped -Dems gained majority in House + increase in Senate in 1930 elections by promising government economic assistance; presidents unpopularity grew (shantytowns called “Hoovervilles”) especially after international financial panic in spring 1931 w/ Austrian bank collapse -1932 Congress created Reconstruction Finance Corporation (RFC) to give loans to imperiled banks, RRs, businesses- RFC failed to improve economy b/c lent largely to big institutions, didn’t sponsor enough relief + public works Popular Protest -By 1932 dissent beginning to come to a head: Farmers’ Holiday Association attempted farmer’s product strike; veterans in “Bonus Army” marched on Washington to protest withholding of bonuses, Hoover called on Army units under Gen Douglas MacArthur to clear Bonus Army out of city -Popular image of Hoover as unsympathetic + unable to act effectively
The Election of 1932 -Republicans re-nominated Hoover as candidate; Democrats nominated NY Governor Franklin Delano Roosevelt -Roosevelt avoided religion and prohibition, focused on economic grievances of nation -Roosevelt won large majority of popular vote and even more overwhelmingly in electoral college; Dems majorities elected to House and Senate- signified mandate for change The “Interregnum” -Period between election and inauguration one of increasing economic problems b/c of expanding banking crisis + more depositors seeking to withdraw money in a panic; more banks declared bankruptcy -Roosevelt refused to make public commitments asked of him by Hoover to maintain economic orthodoxy or not institute broad economic reforms
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