You are on page 1of 37

6  


   
  
  
 
   
  
 

m Agriculture
m Railroads
m Textiles
m Steel
m Mining
m Lumber
m Automobiles
m Housing
m Consumer goods
m Oo industry suffered as
much as agriculture
m During World War I
European demand for
American crops soared
m After the war demand
plummeted
m Farmers increased
production sending
prices further
downward
m Jy the late 1920s,
American consumers
were buying less
m Rising prices, stagnant
wages and overbuying
on credit were to blame
m Most people did not
have the money to buy
the flood of goods
factories produced
m The gap between rich
and poor widened
m The wealthiest 1% saw
their income rise 75%
m The rest of the
population saw an
increase of only 9%
m More than 70% of
American families
earned less than
$2500 per year
m Republican Herbert
Hoover ran against
Democrat Alfred E.
Smith in the 1928
election
m Hoover emphasized
years of prosperity
under Republican
administrations
m Hoover won an
overwhelming victory
½    
m Jy 1929, many Americans
were invested in the Stock
Market
m The Stock Market had
become the most visible
symbol of a prosperous
American economy
m The Dow Jones Industrial
Average was the
barometer of the Stock
Market·s worth
m The Dow is a measure
based on the price of 30
large firms
m Through most of the
1920s, stock prices
rose steadily
m The Dow reached a
high in 1929 of 381
points (300 points
higher than 1924)
m Jy 1929, 4 million
Americans owned
stocks
O½  !  
m Jy the late 1920s,
problems with the
economy emerged
m „ 
Too many
Americans were
engaged in speculation ²
buying stocks & bonds
hoping for a quick profit
m › 
Americans were
buying ´on marginµ ²
paying a small
percentage of a stock·s
price as a down payment
and borrowing the rest
V " #  
 
m In September the Stock
Market had some unusual up
& down movements
m On October 24, the market
took a plunge . . .the worst
was yet to come
m On October 29, now known as
Jlack Tuesday, the bottom fell
out
m 16.4 million shares were sold
that day ² prices plummeted
m People who had bought on
margin (credit) were stuck
with huge debts
J
$O    

  %&
m The Stock Market crash
signaled the beginning
of the Great Depression
m The Great Depression is
generally defined as the
period from 1929 ² 1940
in which the economy
plummeted and
unemployment
skyrocketed
m The crash alone did not
cause the Great
6   ' & Depression, but it
hastened its arrival
m After the crash, many
Americans panicked
and withdrew their
money from banks
m Janks had invested in
the Stock Market and
lost money
m In 1929- 600 banks fail
m Jy 1933 ² 11,000 of the
25,000 banks J  ( 6 
nationwide had
collapsed
m Jetween 1928-1932, the
U.S. Gross Oational
Product (GOP) ² the total
output of a nation·s
goods & services ² fell
nearly 50% from $104
billion to $59 billion
m 90,000 businesses went
bankrupt
m Unemployment leaped
from 3% in 1929 to 25% in
1933
m The U.S. was not the only
country gripped by the
Great Depression
m Much of Europe suffered
throughout the 1920s
m In 1930, Congress
passed the toughest
tariff in U.S. history
called the Hawley-
Smoot Tariff
m It was meant to protect
U.S. industry yet had the
opposite effect
m Other countries enacted
their own tariffs and
soon world trade fell
40%
m Tariffs & war debt
policies
m U.S. demand
low, despite
factories
producing more
m Farm sector crisis
m Easy credit
m Unequal
distribution of
income
m The Great Depression
brought hardship,
homelessness, and
hunger to millions
m Across the country,
people lost their jobs,
and their homes
m Some built makeshifts
shacks out of scrap
material
m Jefore long whole
shantytowns (sometimes
called Hoovervilles in
mock reference to the
president) sprung up
m One of the common
features of urban
areas during the era
were soup kitchens
and bread lines
m Soup kitchens and
bread lines offered
free or low-cost food
· 
    ''

for people
)         
 
6*  
m Conditions for African
Americans and Latinos
were especially difficult
m Unemployment was the
highest among
minorities and their pay
was the lowest
m Increased violence (24
lynchings in 1933
alone) marred the
1930s 6  
 
 

m Many Mexicans were       
´encouragedµ to return   

to their homeland
m While the Depression
was difficult for
everyone, farmers did
have one advantage;
they could grow food for
their families
m Thousands of farmers,
however, lost their land
m Many turned to tenant
J $&  + 
'   
farming and barely
scraped out a living
m A severe drought
gripped the Great Plains
in the early 1930s
m Wind scattered the
topsoil, exposing sand
and grit
m The resulting dust
traveled hundreds of
miles
m One storm in 1934
picked up millions of
tons of dust from the
Plains an carried it to the
East Coast A , &&
î      '
V! $ &-
î 
  
   î  
 &.
m Aansas, Oklahoma,
Texas, Oew Mexico,
and Colorado were
the hardest hit
regions during the
Dust Jowl
m Many farmers
migrated to
California and other
J     
 Pacific Coast states

 &/
6 ' 

  
  
m The 1930s created the
term ´hoboesµ to
describe poor drifters
m 300,000 transients ² or
hoboes ² hitched rides
around the country on
trains and slept under
bridges (thousands were
teenagers)
m Injuries and death was
common on railroad
property; over 50,000
people were hurt or killed
m Suicide rate rose more
than 30% between 1928-
1932
m Alcoholism rose sharply in
urban areas
m Three times as many
people were admitted to
state mental hospitals as
in normal times
m Many people showed
great kindness to
strangers
m Additionally, many
people developed habits
of savings & thriftiness
m After the stock
market crash,
President Hoover
tried to reassure
Americans
m He said, ´Any lack of
confidence in the
economic future . . .
Is foolishµ
m He recommended 
 
business as usual
m Hoover was not quick to
react to the depression
m He believed in ´rugged
individualismµ ² the idea
that people succeed
through their own efforts
m People should take care
of themselves, not
depend on governmental
hand-outs
m He said people should
´pull themselves up by
  
 
 
  0
  '       
their bootstrapsµ
m Hoover gradually softened
his position on government
intervention in the economy
m He created the Federal Farm
Joard to help farmers
m He also created the Oational
Credit Organization that
helped smaller banks
m His Federal Home Loan Jank
Act and Reconstruction
Finance Corp were two
measures enacted to protect
 # ''    people·s homes and
     businesses
 0
m A 1932 incident further
damaged Hoover·s
image
m That spring about 15,000
World War I vets arrived
in Washington to support
a proposed bill
m The Patman Jill would
have authorized
Congress to pay a bonus
to WWI vets immediately
m The bonus was
scheduled to be paid in
1945 --- The Army vets
wanted it OOW
m Hoover called
the Jonus
marchers,
´Communists
and criminalsµ
m On June 17,
1932 the
Senate voted
down the
V
'J  6 
 
 )  & Putnam Jill
m Hoover told the Jonus
marchers to go home²
most did
m 2,000 refused to leave
m Hoover sent a force of
1,000 soldiers under the
command of General
Douglas MacArthur and
his aide Dwight
Eisenhower