Your Federal Quarterly Tax Payments are due April 15th Get Help Now >>

01 Great Depression by shitingting

VIEWS: 3 PAGES: 34

									      Ch. 9. The Great Depression
             (1929-1932).
The depression had devastating effects in both
the industrialized countries and those which
exported raw materials. International trade
declined sharply, as did personal incomes,
tax revenues, prices and profits. Cities all
around the world were hit hard, especially
those dependent on heavy industry.
Construction was virtually halted in many
countries. Farming and rural areas suffered
as crop prices fell by 40 to 60 percent. Mining
& logging areas had perhaps the most striking
blow because the demand fell sharply and there
were few employment alternatives.                 Dorothea Lange's Migrant Mother
                                                   depicts destitute pea pickers in
Liberal democracy was weakened and on the         California, centering on Florence
defensive, as dictators such as Adolf Hitler,     Owens Thompson, a mother of 7
Joseph Stalin & Benito Mussolini made major       children, age 32, in Nipomo, CA,
gains, which set the stage for WWII in 1939.                 March 1936.
                                    Alfred E. Smith endured a smear campaign in
                                     the 1928 election because he was Catholic.
Sec. I.    Causes.
  A. Election of 1928 – Decided by religious
     prejudice & Prohibition (Hoover won).

                          Hoover
                           was
                         from CA.




 Republican Herbert Hoover was a Quaker, a “dry” & supported Prohibition.
 Democrat Alfred Smith was a Catholic and a “wet.”
 Many Protestants were willing to believe that if Smith won, the Catholic
      Church would run the US gov’t.
 Republicans took full credit for economic prosperity.
 Hoover slogan “two cars in every garage.”
 B.     Bull Market – Long period of rising stock
        prices led many to risky investments
        (buy stocks).
        1. Stock Market – System of buying &
             selling shares in companies.
                                                                 Stock
                                                              Exchange
                           The opposite of a                   Markets
                        Bull Market (confident)                 are in
                          is the Bear Market                   several
                             (pessimistic).                     major
                                                            cities (NYC).
 Margin – buy stocks with small down payment (10%), the stockbroker
      loaned the rest; safe as long as the market rises.
 Margin Call – Broker demands that the investor repay the loan at once.
 Speculation – Instead of investing in company’s future, they took risks
      and bet the market would continue to rise & make money quickly.
C.      The Great Crash – The October 29,
        1929, stock market crash led to bank
        failures across nation.
        1. Black Tuesday –
              stocks lost $10-
              15 billion in value.



 When the market began declining on Oct 21st, frightened customers
      began selling their stocks, lowering their value.
 The Stock Market Crash was not the major cause of the Great
      Depression, but it undermined the economy’s ability to hold out
      against its other weaknesses.
                                  A ticker tape machine
                                    prints the current
                                       stock prices.



Groucho looked around and spotted his broker:
  “He was sitting in front of the now-still ticker tape
  machine, with his head buried in his hands. Ticker tape
  was strewn around him on the floor and the
  place…looked as if it hadn’t been swept out in a week.
  Groucho tapped [him] on the shoulder and said, ‘Aren’t
  you the fellow who said nothing could go wrong?’ ‘I
  guess I made a mistake,’ the broker wearily replied.
  ‘No, I’m the one who made a mistake,’ snapped
  Groucho. ‘I listened to you.’”
      -- Quoted in 1929: The Year of the Great Crash

  Groucho Marx, comic star of stage and screen, was bankrupt.
D.       Banks in a Tailspin:
  1.    Lost $ to investors;
  2.    Lost $ in market crash;
  3.    Made fewer loans, making less $
        available, causing a recession.
     4. Not gov’t insured (customers lost $ &
        confidence in banks).
     5. Runs on banks (many
        bankrupt).
   During first two years of Depression, over
         3,000 banks (10% of national total)
         closed.
a) Bank Holidays – Closed banks
by many Governors to prevent
bank runs.
 E.      Uneven Distribution of Income –
         Overproduction caused depression.
                                                           2007




Most economists agree that overproduction
 was a key cause of the Great Depression.
 Many Americans used Installment Plans to purchase goods.
 1929, top 5% of U.S. households earned 30% of the nation’s income;
      In contrast, 2/3 of Americans earned less than $2,500 a year,
      leaving little expendable income.
F. Loss of Export Sales – The ‘Hawley-Smoot
   Tariff’ raised tariffs to all time high.




                        Representative W.C. Hawley, and Senator
                        Reed Smoot shake hands in agreement on
                               new Republican tariff bill.

 Higher tariffs damaged sales abroad and made products more
       expensive for Americans.
 U.S. banks made fewer loans to foreign companies making them
       less likely to buy American products.
G.     Mistakes by the Federal Reserve – Kept
       interest rates low.
                                           The Federal Reserve System
                                           (informally The Fed) is the
                                           central banking system of the
                                           U.S. Created in 1913 by the
                                           Federal Reserve Act, it is a
                                           quasi-public (part private, part
                                           gov’t) banking system.

                                           12 regional Federal Reserve
                                           Banks located in major cities
                                           throughout the nation.


 With low interest rates, it encouraged banks to make risky loans;
       Led business leaders to think the economy was still expanding
       and they borrowed money to expand production leading to
       overproduction when sales were falling.
The slowdown in retail led to layoffs – Lower radio
sales led to fewer orders for copper wire, wood
cabinets, and glass radio tubes; Led to layoffs in
Montana copper mines, Minn lumberjacks, and Ohio
glassworkers; Layoffs led to even fewer purchases.
II.   Life During the Depression.




                                         One of the Hoovervilles.

                                      4,004 Banks closed.
                                      25% unemployment.
                                      31% loss of nation’s production.
                                      Hoover → local responsibility.


  As banks continued to fail and people lost their jobs and homes,
        soup kitchens and shantytowns sprang up throughout the U.S.
  Droughts during the 1930’s made the Depression worse for farmers.
 A.     The Depression Worsens.
      1. Soup Kitchens – Charities set-up to
            give poor people a meal.
      2. Shantytowns – Homeless people put
            up shacks on unused or public
            lands, forming communities.
      3. Hoovervilles – Blaming President
            Hoover; name for shantytowns.
      4. Hobos – many homeless &
            unemployed “rode the rails.”

 Hobos walked, hitchhiked, or wandered around the U.S.
Children
in front
of signs
criticizing
Hoover's
policies.

   A Hooverville




 Soup line
    and
Soup kitchen
      5. Dust Bowl – The Great Plains pastures
         & wheat fields became vast dust bowl.
         a) Nearly penniless, many left and
              headed West.




 Crop prices began to drop in the late 1920’s; The wild grasses that held
       the moisture was gone; A drought began in 1932; Dust covered
       everything; More severe storms.
 Many came to CA, but met with hostility due to competing for jobs;
       most remained homeless and impoverished.
 Those from OK became known as “Oakies.”
          Route 66




“(Get Your Kicks) Route 66” by Nat King Cole.
 B.       Escaping the Depression – Movies &
          radio shows allowed people to forget the
          miseries of Depression.
          1. Hollywood Fantasy Factory – 60-90
               million weekly viewers.
               a) Walt Disney – 1st feature-length
                   animated film Snow White, 1937.




 Snow White’s box office hit led to The Wizard of Oz (1939, MGM).
 Gone With the Wind.
                         Dietrich                       Garbo



 Groucho Marx – comedy of Animal Crackers.
 European artists, producers, and directors moved to Hollywood for
      work and escape dictatorships.
 Germany’s Marlene Dietrich – movies Morocco & Shanghai Express.
 Sweden’s Greta Garbo – Highest paid female actress during 1930’s.
        2.      Radio – Families listened every day.
                a) Soap Operas – Daytime dramas.




                                                              Burns
                                                               and
                                                              Allen



 Jack Benny, George Burns and Gracie Allen, or the Green Hornet.
 The shows sponsors were often makers of laundry soap, hence the name.
       3. Art – Captured experiences of people.
          a) John Steinbeck – The Grapes of
               Wrath (1939); OK family escaping
               the Dust Bowl for CA.
                    Many Californians felt that
                     the arrival of Dust Bowl
                      refugees represented
                     more unwanted people
                      who were unemployed.




                                         John
                                         Steinbeck




 Describes people in flight along “Route 66.”
              b.      William Faulkner – The Sound and
                      the Fury.
   The Sound and
 the Fury is a Southern
    Gothic novel written
   by American author
  William Faulkner, which
     makes use of the
 stream of consciousness
    narrative technique
  pioneered by European
 authors such as James
 Joyce & Virginia Woolf.
                                          American Gothic, Grant Wood (1930)
 Stream of Conscious technique, shows what the characters are thinking
       before they speak; Exposed hidden attitudes of southern whites
       and African Americans in a fictional MS town.
 Grant Wood (painter) – American Gothic, led the regionalist school
       emphasizing traditional values, especially in the Midwest and South.
 III. Pres. Hoover Responds.
                                              Drk Blue = 6+ Democratic gain
                                              Med Blue = 3-5 Democratic gain
                                              Lgt Blue = 1-2 Democratic gain
                                              Gray = no net change




Hoover was a successful engineer and former
head of the Food Administration during WWI.


  Hoover’s cautious efforts did not help the economy; many Republican
       Congressmembers lost their seats in mid-year elections
       (49 Congress seats and their majority; only held Senate by 1 seat).
  In March 1930, Hoover said “the worst effects of the crash…will have
       passed during the next 60 days.”
A.        Public Works – Gov’t financed building
          projects (Hoover Dam).     Construction began in 1931
                                     and was completed in 1935.
                                                      It was designated a National
                                                       Historic Landmark in 1985




 The Hoover Dam generates
 over 4 million kilowatt-hours
of electricity per year (serving
    over a million people).

   New construction made up only a fraction of the lost jobs.
   Hoover refused to massively increase gov’t spending.
 B.     Banks.
        1. Reconstruction Finance Corporation
            (RFC) to make loans to banks,
            railroads, agricultural
                  institutions.
                  The agency gave $2 billion in aid to
                state and local governments and made
               loans to banks, railroads, farm mortgage
                  associations, and other businesses.
                It was continued by the New Deal and
                  played a major role in handling the
               Great Depression in the U.S. and setting
                up the relief programs that were taken
                     over by the New Deal in 1933.


 Failed to meet needs; economy continued to decline.
C.      Help for Citizens.
        1. Relief – $ that went directly to
             needy families.




 Hoover did not believe the federal gov’t should participate in relief.
 Reluctantly, Hoover signed the Emergency Relief and Construction
       Act (1932) with $1.5 billion for public works and $300 million
       in loans to states for direct relief; Could not reverse the collapse.
The Empire State Building is a 102-story Art Deco skyscraper
in New York City, NY at the intersection of 5th Ave & West 34th St.
Its name is derived from the nickname for the state of NY.
It stood as the world's tallest building for more than forty years,
from its completion in 1931 until construction of the World Trade
Center's North Tower was completed in 1972.




              Chrysler
               Bldg.
                                 Lunch break during construction
                                 of the Empire State Bldg., 1930.

                The Chrysler Building is an Art Deco skyscraper in NYC,
                standing at 1,047 ft high, it was briefly the world's tallest   Empire State
                building (now 3rd in NYC) before it was surpassed by the           Bldg.
                Empire State Bldg in 1931. However, the Chrysler Building
                remains the world's tallest brick building.
 D.       Angry Mood.
          1. Hunger Marches held by the
              Communist Party.
The march was organized by Communists,
 but non-Communists joined the protest
against Ford as well. The Dearborn police,
  who functioned almost as a branch of
 Ford's own company police, confronted
the marchers and four strikers were killed
in the conflict. 15,000 people joined the
     Hunger March funeral in Detroit.


  Dec 5, 1932, freezing cold, about 1,200 hunger marchers gathered &
        chanted “Feed the hungry, tax the rich.”
  Police herded them to a blocked-off area where they had to spend the
        night, deprived them of water, food, and medical attention, until
        Congress allowed them their right to petition their gov’t.
       2.     Farmers destroyed their crops to
              raise prices.




 Low crop prices since WWI; Between 1930-1934, creditors foreclosed
      on almost 1 million farms.
     3.      Bonus Army – WWI veterans
             marched to Washington D.C. to
             lobby Congress to approve their
             bonuses.
                In the summer of 1932,
                   at the height of the
                Depression, some 45,000
               veterans of the Great War
               descended on Washington,
               D.C. from all over the U.S.
               to demand the bonus that
                had been promised them
                 8 years earlier for their
               wartime service. They lived
                in shantytowns, white &
                black together, and for 2
               months they protested and
                  rallied for their cause.

 Congress approved $1,000 bonus per veteran in 1924, but delayed
       due to Depression.
 Also called the “Bonus Marchers.”
                  a) General MacArthur dispersed
                     the marchers.



 Douglas
MacArthur

       Shacks, put up by the Bonus
        Army on the Anacostia flats,
          Washington, DC, burning
           after the battle with the
                     military, 1932.


    After the Senate voted down the bill, most went home, but many stayed
           and moved into unoccupied buildings downtown; Hoover ordered
           the buildings cleared and the police used brutal force (fired into
           crowd killing two veterans) and the Army under Douglas MacArthur
           (used bayonets, tear gas, and killed a baby boy).
  Hoover failed to resolve the Depression, but did expand the economic
    role of the federal gov’t more than any other; The Reconstruction
  Finance Corp was first time the federal gov’t established an agency to
  stimulate the economy during peacetime; Hoover will be remembered
         for routing the Bonus Marchers and lingering Depression.




African-Americans, in
 front of a pre-1929
 billboard, stand in a
soup line during the
  Great Depression.
                Activity
                        Cause         Effect
In groups of
two, list the
                  1. The Stock
Causes and             Market Crash

Effects of        2.

issues            3.

during the        4.
Great             5.
Depression.       6.

								
To top