The Great Depression

Businesses and banks failed;

unemployment rocketed skyward
(reaching 25% in 1932); and consumer
income/spending dropped like a stone
in the worst economic disaster in
American history.
Causes of The Great Depression
• Economists cite a set of factors that persisted
though the 1920’s:
- A crisis in the farm sector
- Availability of easy credit at continual, low rates
- Unequal distribution of income
• However, it was the practice of buying stocks on
margin that triggered the stock market crash of
1929
• The 1930 passage of the Hawley-Smoot Tariff
Act further compounded problems by ensuring
world trade would grind to a near halt…
 Hardship and Suffering
During the Depression
I. Depression in the cities
A. High unemployment and much homelessness
B. Shantytowns – little towns consisting of shacks
(later known as “Hoovervilles”)
C. Soup Kitchens / Bread Lines – free or low cost
food often provided by charities
II. Depression in Rural Areas
A. Falling prices and increased debt combined to
drive many farms into foreclosure
B. Many farmers turned to tenant farming
 Hardship and Suffering
During the Depression (Cont.)
III. Impact on Men
A. Many men used to supporting their families
struggled to cope, lost their sense of worth
B. As a result, many men abandoned their families,
turned into transients or hoboes
 Hardship and Suffering
During the Depression (Cont.)
IV. Impact on Women
A. Women struggled to keep their families going, did
anything they could:
1. canned food
2. sewed clothes
3. went to work (even accepted less pay)
B. Women who worked outside the home were
deeply resented… how could they take jobs from
men trying to feed their families?!?!
 The Dust Bowl
I. The “Dust Bowl” consisted of parts of Kansas,
Oklahoma, Texas, New Mexico, and Colorado
A. Causes:
1. drought
2. heat wave
3. over-farming / agricultural production
4. high winds
B. Then there were locusts...
II. Farmers were forced to leave,
look for opportunities further
west, in California
 The Hoover Years (1928-1932)
I. President Hoover was elected by riding wave of optimism from
1920’s, “A chicken in every pot and a car in every garage!”
II. His character and Presidency
A. Intelligent, optimistic… a humanitarian
B. Believed in free enterprise – Gov. should foster good
relations between business and labor, but NOT necessarily
control the relationship
1. Successfully urged business leaders to NOT
cut wages shortly after stock market crash
2. Urged labor leaders to NOT strike or demand more $
C. Opposed any form of federal welfare, handouts, etc.
D. Valued “rugged individualism” and worried about
people’s “moral fiber”
 The Hoover Years (Cont.)
III. Hoover softened his positions over time – it
became apparent the economy was still suffering
IV. Direct Intervention
A. Series of measures to reform banking, provide
mortgage relief, funnel more $ into businesses
B. Federal Home Loan Bank Act – lowered
mortgage rates for homeowners and allowed
farmers to refinance debt, prevent foreclosure
C. Reconstruction Finance Corporation – up to
$2 billion for emergency financing for banks,
life insurance companies, railroads, businesses