THE GREAT DEPRESSION BEGINS

1. U.S. HISTORY & GEOGRAPHY CHAPTER 9 THE GREAT DEPRESSIONBEGINS

2. LONG BULL MARKET • Towards the end of the 1920s industries showed very little profit, agricultural prices for goods & demand decreased drastically causing consumer to buy fewer goods due to stagnant wages, rising prices, buying goods on credit, & the uneven distribution of income. No one, including the presidential candidates, believed that an economic collapse would happen

3. ELECTION OF 1928 • Democratic candidate: Alfred E. Smith – governor of NY, Roman Catholic. • Republican candidate: Herbert Hoover – former Secretary of Commerce & head of the Food Administration during WWI • Herbert Hoover becomes president in 1928 on the premise that the U.S. was doing better than ever & it was all thanks to Republican leadership

4. STOCK MARKET SOARS • Americans dreamed of becoming rich & invested in the stock market looking at the Dow Jones Industrial Average as their guide. The dow is a measure based on the stock prices of 30 large firms that trade on the New York Stock Exchange. When the stock market has a long period of rising prices (bull market) then many will invest in stocks. • Speculation: buying stocks & bonds on the chance of a quick profit • buying on the margin: paying a small percentage of a stock’s price as a down payment & borrowing the rest from a stock broker. The stockbroker could protect his loan by issuing a margin call, demanding the investor repay the loan at once

6. THE STOCK MARKET CRASH • September 1929 prices peaked in the stock market & then fell. Investors began to panic & quickly sold their stocks • Thursday, October 24th: same scenario as the market would go down • Black Tuesday, October 29th: stock market crashed as investors had no one to sell their stocks to & a huge amount of debt accumulated. This is one cause of the Great Depression as it undermined the economy’s ability to overcome other weaknesses will surface • GREAT DEPRESSION LASTS FROM 1929 – 1940 • SEE CHART PG. 233

8. People crowd Wall Street after the Stock Market Crash of 1929 People going to banks to get $ People selling everything

9. OTHER CAUSES • High tariffs • War debt policies • Crisis in the farm sector • Easy credit • Unequal distribution of income

11. BANK CLOSURES • Americans will attempt to get their money out of the banks (“bank run”) only to learn that banks had invested in the stock market, lent billions to stock speculators or other ventures & were now closing their doors. • Businesses went bankrupt as they had no buyers for their goods or services & were unable to borrow any funds from banks

12. UNEVEN DISTRIBUTION OF INCOME • Over production of industries caused there to be large surpluses of goods that could not be purchases as disposable income was not available to majority of Americans • Farmers did not share in the prosperity that many had gained as they had gone into huge debt purchasing land & equipment to fill orders during WWI. When prices fell, any went bankrupt & lost their farms • Americans used the installment plan to purchase many high-cost items & would be unable to pay the debt • Manufacturers who were not selling goods would stop production & lay off employees. This affected other industries that provided resources or materials • SEE CHART PG. 235

13. CONTINUED MISTAKES • Hawley-Smoot Tariff Act 1930: placed the highest protective tariff on imported goods. Europe responded by raising tariffs as well. Action ended up hurting both American companies & farmers Reed Smoot (R-UT; chairman of Senate Finance Committee), Willis Hawley (R-OR; chairman of the House Ways and Means Committee) - sponsors of Tariff Act of 1930. “Tea Party” Republicans

14. CONTINUED MISTAKES • Federal Reserve Board made mistakes with interest rates: 1 – kept rates low which encouraged member banks to make risky loans; 2 – low rates led business leaders to think that the economy was still expanding • Federal Reserve would raise the interest rates after the depression hit

15. STRUGGLING TO GET BY • 1930: 1,352 banks closed. 1932: 30k companies closed. 1933: 25% of workforce was unemployed • Cities: People lost their jobs & homes. Would begin living in the parks or streets in shantytowns (“Hoovervilles”). To find food they would be dependent on charities & soup kitchens or bread lines

16. A view of men gathered in a common sleeping area during the Great Depression in 1930s Cincinnati. (Paul Briol/Cincinnati Museum Center/Getty Images) People line in Times Square and 43rd Street to recieve sandwiches and a cup of coffee in New York City on Dec. 8, 1930 during the Great Depression. (AP Photo )

17. Two girls in a bedroom lined with old corn-flakes packets in 1935. (FPG/Hulton Archive/Getty Images) An unemployed man reads a newspaper in a shanty in New York during the Great Depression, 1933. (FPG/Hulton Archive/Getty Images)

18. Unemployed squatters at the Hard Luck Camp at the foot of 9th and 10th Streets and the East River in New York City wait for eviction by the police on May 9, 1933. (New York Times Co./Hulton Archive/Getty Images) Unemployed men line up outside a Salvation Army hostel in 1935. (FPG/Hulton Archive/Getty Images)

19. Soup Kitchens The mother of a migrant family holds a baby while a young girl stands behind her and rests her chin on her shoulder under a lean-to, Nipomo, Calif. in March, 1936. (Dorothea Lange/FSA/Getty Images) Seattle’s Hoovertown, early 1930s. Source: http://www.historylink.org/db_images/con125.JPG

20. STRUGGLING TO GET BY • Farmers had one advantage over those in the cities: they could grow their own food. Those who lost their land would turn to tenant farming to survive Sam Nichols, tenant farmer, Boone County, Arkansas, October 1935, Source: State Historical Society of Wisconsin

21. STRUGGLING TO GET BY • American family faced many hardships. Those that stuck together believed in traditional values & family unity. They entertained themselves with board games (Monopoly 1933).

22. STRUGGLING TO GET BY • Men who became embarrassed as they were not able to provide for their families & would abandon them. Many men became “hoboes” or transients traveling the trains, hitching rides, & wandering the country side.

24. STRUGGLING TO GET BY • Direct relief was only offered by a few cities (NY - $2.39 per family was the highest) • Women attempted to keep the family together. Many learned to can food, sew, work, & shop together to share the cost of food • Psychological impact: rise in the number of suicides & suffering of ailments that had cures because they could not afford to go to the doctor or dentist.

25. STRUGGLING TO GET BY • Children suffered from malnutrition & diet-related diseases as many programs for children were cut. Schooling was not a priority anymore as the year as shortened or schools were closed. Many teenagers would travel the country to see the “world” (“Hoover tourists”)

26. THE DUST BOWL • The Great Plains would be affected by a severe drought. This allowed for the winds to pick up the farming soil & carry it away to other parts of the country. Many left & migrated to California (“Okies”)

28. MOVIES • Movies featured comedy, musicals, love stories, & action (gangster films). • Most memorable pictures: • Animal Crackers (Marx brothers) • Gone with the Wind (Clark Gable, Vivian Leigh 1939) • Fling Down to Rio (1933) • Snow White (1937) – 1st full-length animated film • Wizard of Oz (1939) • Monkey Business (1931) • Frank Capra most famous director: Mr. Deeds Goes to Town (1936) & Mr. Smith Goes to Washington (Jimmy Stewart 1939)

30. RADIO • Provided entertainment & access to the American people • FDR & his fireside chats • Dramas, comedy routines (Jack Benny), soap operas (Guiding Light) • Orson Welles stirred all Americans into a “panic” as his story of the War of the Worlds aired over the radio • Airing of news events would become a staple in society (Hindenburg, zeppelin from Germany, crash in NJ)

31. Fr. Fulton Sheen 1930s - Radio City Studios, the Catholic hour Radio jazz broadcast with Tommy Dorsey, Philadelphia, PA, March 17, 1938

32. ARTISTS • Paintings & pictures of American society during this time • American Gothic by Grant Wood • Federal Art Project (program of WPA) will help pay artists to provide paintings & pictures • Music would embrace the tragedies & hardships of the great Depression • Woody Guthrie

33. ARTISTS • Federal Writer’s Project would pay writers • Richard Wright wrote Native Son • John Steinbeck wrote The Grapes of Wrath

34. ARTISTS • LIFE magazine begins in 1936 chronicling American life through photos • Other photojournalists: • Dorothea Lange (PG. 229) • Margaret Bourke-White • Photojournalists demonstrated the affects of the Great Depression on the average American through their photos

35. HOOVER’S RESPONSES • Kept emphasizing that the country was on sound economic footing • “Rugged Individualism” – people succeeded through their own efforts. • Hoover provided NOdirect relief. Believed that charities & local organizations should provide direct relief

36. HOOVER’S SOLUTIONS • Hoover called on the leaders of business, banking, & labor to come up with solutions. He asked them not to cut wages, lay off workers, & for laborers not to demand higher wages (strike). These “ideas” of Hoover’s did not work & things worsened. – SEE POLITICAL CARTOONS PG. 241 • Federal Farm Board: intention to raise crop prices by buying crops & keeping them off market

37. HOOVER’S SOLUTIONS • Boulder Dam (Hoover Dam): increased funds to public works programs but did not do enough to help the millions unemployed

39. HOOVER’S SOLUTIONS • Banks: • National Credit Corporation 1931: lend money to trouble banks that were to continue lending $ in their communities • Federal Home Loan Bank Act 1932: reduced mortgage rates & refinanced farms/homes • Reconstruction Finance Corporation 1932: emergency financing for banks, life insurance companies, railroads, & large businesses • Emergency Relief & Construction Act 1932: Hoover will be pressured by Congress to sign act providing funds to states for direct relief & public works programs

40. IN AN ANGRY MOOD • Americans across the country will raid grocery stores to obtain food. • “Hunger Marches” were organized by the American Communist Party who will march on Washington D.C. in 1932 • Farmers will desperately try to raise the prices for crops by burning crops & dumping milk on the side of the roads. All in an effort to try to save their farms from foreclosure

41. THE BONUS MARCHERS • Patman Bill 1929: a bill proposed by Congressman Wright Patman, TX , to provide WWI veterans their bonus early • Bonus Expeditionary Force (Bonus Army): veterans who gathered in Washington D.C. from all over the country to try to get support for the passage of the bill. Bill failed. Some left, some stayed in the hopes of meeting with Hoover. • Hoover orders them disbanded & sends in General Douglas MacArthur & Major Dwight D. Eisenhower. They will gas the group & burn their shantytown. An 11 month old (killed) & an 8-year old (blinded) along with many others were injured. • SEE MAP PG. 231

42. Thousands of World War I veterans camped along the Anacostia River in Washington, D.C., 1932. Theodor Horydzak  Library of Congress. Chow Line: Bonus Army vets lining up for food distribution at the camp in Anacostia, 1932. Underwood&Underwood/Library of Congress. Members of the Bonus Expeditionary Force (World War I veterans) washing in the Anacostia River, 1932. Source: National Archives

43. U.S. Army led by General Douglas MacArthur burns the Hooverville encampment put up by the Bonus Army on the Anacostia flats, Washington, DC, 1932. U.S. Capitol building is in the background