S | The Wall Street Crash was not the primary cause of the Great Depression that © followed although it certainly contributed. It was the structural weaknesses jn the American economy—overproduction, uneven distribution of incomes, poor level of exports—that was to pitch the nation into depression. ‘he impact of the Crash and the onset of recession is summarised in Figure 11.13. After the first series of business and bank failures the whole economy had to adjust to a general reduction in trade and demand for ‘American goods. Businesses had to reduce their operations by sacking workers and reducing the wages of those who remained. It became a vicious eycle as these actions took even more money out of the economy and further reduced the demand for goods. When it became clear that there would }e no easy return to the good times, business confidence collapsed which ‘meant that expansion projects were put on hold. Confidence also affected consumers who were unwilling to make expensive purchases at a time when jobs were insecure. America was the largest capitalist economy in the world and when it went into recession the other major capitalist economies were dragged down 1. Fg. 11.16 “Black Friday; an 100. This was because Americans could no longer afford to buy any foreign Ametican cartoon ofthe Wall imports meaning that other countries lacked the dollars to buy American Street Crash exports, Rising unemployment in Burope and Japan helped to increase ‘unemployment in America What were the social consequences of the Crash? ‘The Crash led directly to bank and business failures and the rise of unemployment. By 1933 nearly one in four of the workforce was out of a eS job. There were no welfare benefits to assist households that were suddenly without an income, but rents and mortgages stil had to be paid. Some survived with the help of families, fhiends, and neighbours. Others were evicted from their homes and were reduced to begging on the streets, scavenging rubbish dumps for scraps of food, and sleeping on park benches: Payments made by the government to assist the old, sick, and unemployed. Shanty towns made up of makeshift huts and tents were constructed on the edges of towns and cities and became known as “Hoovervilles”, named after the man whose presidency coincided with the Crash and its most severe consequences. During the day the desperate populations of these cardboard communities were dependent on soup kitchens and public relief schemes provided by local government. But by 1932 more than 100 of these authorities had no money left. A. Fig. 11.17 A“Hoovervile“in Seattle, 1934 Chapter11 271ne of the most striking s of the time was the srrival in Washington DC of ‘round 25 000 destitute army veterans during the early summer of 1932. They had een promised a war service bonus to be paid in 1945 but, in view of the economic situation wanted it brought forward to 1932. Following the refusal of GOngEESS to pass a Bonus Bill the “Bonus Army” began a peaceful protest camped in a Hooverville opposite the White House. President Hoover, however, regarded this as a threat to the institutions of government and requested the help of the army to clear the site. The camp was destroyed with the aid of tanks, machine guns, and tear gas. Two veterans were killed and nearly a thousand were injured Other instances of violence and protest took place in rural areas. Farmers were among the worst affected by the depression as the drop in city incomes made it even harder for them to sell their produce. Evictions and seizures of land were sometimes resisted with the erection of highway barricades and stand: offs between the sheriffs and local farmers. Yet most of the bankrupted farmers accepted their fate and took to the road in search of causal work. Frederick Lewis Allen, American historian, Since Yesterday published in 1938. ‘Among the comparatively well-to-do... the great majority were living on a reduced scale... These people were discharging servants, or cutting servants’ wages to ‘a minimum... In many pretty houses, wives... were cooking and scrubbing. Husbands were wearing the same sult longer, resigning from the golf club, deciding, perhaps, that this year the family couldn't afford to go to the beach forthe summer... SOURCE7 Edmund Wilson, American journalist, writing in New Republic Magazine in 1933. n the early 1930s Wilson wrote extensively about the victims of the Depression. SOURCE 8 There is not a garbage-dump in Chicago which isnot diligently haunted by the hungry. Last summer, in the hot weather, when the smell was sickening and the fies were thick, there were a hundred people a day coming to one of the dumps... a widow who used to do housework and laundry, but now had no work at all, fed herself and her fourteen year old son on garbage. Before she picked up the meat, she would always take off her glasses so that she couldn't see the maggots. A. Fig. 11.18 The burning ofthe Bonus Army's encampment, Washington DC, 1982 Congress The American law-making assemblies: the House of Representatives and the Senate. 11. What can you tell from Source 7 about how previously prosperous Americans experienced the Great Depression? 2. How useful is Source 8 2 evidence of the desperation of Americans during the worst years of the Great Depression?