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The Great Depression

The Great Depression

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The Great Depression

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  1. The Great Depression

  2. The Coming of the Great Depression • Causes of the Great Depression • The Worldwide Depression

  3. The Great Depression was the worst peacetime disaster in American history and dominated the political, social, and cultural developments of the 1930s.

  4. Since the beginning of the Industrial Revolution, the United States had experienced recessions or panics at least every twenty years, but none as severe as the Great Depression of the 1930s After 1927, consumer spending declined, and housing construction slowed. In 1928, manufacturers cut back on production and began to lay off workers, and by the summer of 1929 the economy was clearly in recession. The stock market crash of 1929 was an indication of serious, underlying problems in the United States economy.

  5. The Crash made the cracks in America's superficial prosperity more obvious. And, since the causes of the economic crises were complex, the solution to the economic problems facing the United States would be complicated as well. • The stock market had become the symbol of the nation’s prosperity, yet only about 10 percent of the nation’s households owned stock.

  6. In 1928 and 1929, stock prices rose an average of 40 percent; market activity, such as margin buying, was essentially unregulated. • On “Black Thursday,” October 24, and “Black Tuesday,” October 29, 1929, overextended investors began to sell their portfolios; waves of panic selling ensued. • Commercial banks and speculators had invested in stocks; the impact of the Great Crash was felt across the nation as banks failed and many middle-class Americans lost their life savings.

  7. Causes of the Depression • The crash of 1929 destroyed the faith of those who viewed the stock market as the crowning symbol of American prosperity, precipitating a crisis of confidence that prolonged the depression. So we naturally ask ourselves that one important question: • 1. What were the origins and consequences of the Great Depression?

  8. As we just noted - the stock market crash of October 1929 cannot alone account for the length and severity of the slump.

  9. What then were the causes of the Great Depression? • The Great Crash of October 1929 wiped out the savings of thousands of Americans and destroyed consumers’ optimism. Many investors had bought stock on margin while the prices were inflated and lost money when they were forced to sell at prices below what they had paid.

  10. Structural weaknesses in the economy, especially in agriculture and “sick industries” such as coal, textiles, shipping, and railroads, made the economy vulnerable to a crisis in the financial markets. These had suffered setbacks in the 1920s.

  11. The unequal distribution of wealth made it impossible to sustain the expansive economic growth of the late 1920s. • In the 1920s the share of national income going to upper- and middle-income families had increased, so that in 1929 the lowest 40 percent of the population received only 12.5 percent of the national income. • Once the depression began, not enough people could afford to spend the money necessary in order to revive the economy, a phenomenon known as under-consumption.

  12. Once the depression began, America’s unequal income distribution left the majority of people unable to spend the amount of money needed to revive the economy. • The Great Depression became self-perpetuating. The more the economy contracted, the more people expected the depression to last; the longer they expected it to last, the more afraid they became to spend or invest their money.

  13. In 1931, the Federal Reserve System significantly increased the discount rate, squeezing the money supply, forcing prices down, and depriving businesses of funds for investment. • Americans kept their dollars stashed away rather than deposited, further tightening the money supply.

  14. The Worldwide Depression

  15. Domestic factors far outweighed international causes of America’s protracted decline, yet the economic problems of the rest of the world affected the United States and vice versa. • By the late 1920s, European economies were staggering under the weight of huge debts and trade imbalances with the United States; by 1931, most European economies had collapsed.

  16. When U.S. companies cut back production, they also cut their purchases of raw materials and supplies abroad. • When American financiers sharply reduced their foreign investment and consumers bought fewer European goods, debt repayment became even more difficult, straining the gold standard.

  17. The reduced flow of American capital to world markets after the Great Crash and the trade war initiated by the Hawley-Smoot Tariff of 1930 led to a decline in world trade that made the depression worse. • In response to the Hawley-Smoot Tariff of 1930, foreign governments imposed their own trade restrictions, further intensifying the worldwide depression.

  18. From 1929 to 1933, the U.S. gross national product fell by almost half, private investment plummeted 88 percent, and unemployment rose to a staggering 24.9 percent; those who had jobs faced wage cuts or layoffs.

  19. Hard Times • Families Face the Depression • Popular Culture Views the Depression

  20. A Second question of importance of course to be considered is: • How did American families react to the deprivations of the Great Depression?

  21. The depression led to hardship for many Americans. Thousands had no jobs; thousands more experienced downward mobility. Commercial banks had invested heavily in stocks and, as banks failed, many middle-class Americans lost their life savings.

  22. Race, ethnicity, age, class, and gender all influenced how Americans experienced the depression. • Blacks, Mexican Americans, and others already on the economic margins saw their opportunities shrink further and hard times weighed heavily on the nation’s senior citizens of all races, many of whom faced destitution. • People who believed in the ethic of upward mobility through hard work suddenly found themselves floundering in a society that didn’t reward them for their efforts.

  23. The damage to individual lives cannot be measured solely in dollars; the detrimental impact of not being able to provide for one’s family was great. • After exhausting their savings and credit, many families faced the humiliation of going on relief. • Hardships left an “invisible scar,” and for the majority of Americans, the crux of the Great Depression was the fear of losing control over their lives.

  24. What was the “invisible scar” of the Great Depression? • Many Americans suffered silently in the 1930s: • living on less income and accepting lower-paying, more menial jobs. • The loss of identity that resulted from unemployment, moving to poorer neighborhoods, or accepting charity was also psychologically damaging for both breadwinners and their spouses.

  25. Sociologists who studied family life during the 1930s found that the depression usually intensified existing behavior. On the whole, far more families stayed together during the depression than broke apart.

  26. Men and women experienced the Great Depression differently. Men considered themselves failures if they were no longer breadwinners, while women’s sense of importance increased as they struggled to keep their families afloat.

  27. Family lives on public relief funds (1936)

  28. The depression left a legacy of fear for many Americans that they might someday lose control of their lives again. • The depression limited the success of young men who entered their twenties during the depression. Robbed of time and opportunity to build careers, they were described as “runners, delayed at the gun.”

  29. During the depression • the marriage rate dropped • the popularity of birth control increased, resulting in a declining birth rate. • In United States v. One Package of Japanese Pessaries (1936), a federal court struckdown all federal restrictions on the disseminationof contraceptive information. • Abortion remained illegal, but the number of women undergoing the procedure increased. • Margaret Sanger pioneered the establishment of professionally staffed birth control clinics and in 1937 won the American Medical Association’s endorsement of contraception.

  30. Women workers did not fare well, but gender divisions of labor insulated some working women from unemployment. • In the 1930s, the total number of married women employed outside the home rose 50 percent; working women faced resentment and discrimination in the workplace, a sizable minority of women being the sole support of their families. • Single, divorced, deserted, or widowed women had no husbands to support them. This was especially true of poor black women; a survey of Chicago revealed that two-fifths of adult black women in the city were single. • Many fields where women workers already had been concentrated suffered less from economic contraction than did the heavy industries; when the depression ended, women were even more concentrated in low-paying, dead-end jobs than when it began.

  31. White workers pushed minorities out of menial jobs. • Observers paid little attention to the impact of the depression on the black family, as white men and women willingly sought out jobs usually held by blacks or other minorities.

  32. During the depression, most men and women continued to believe that the sexes have fundamentally different roles and responsibilities and that a woman’s life should be shaped by marriage and her husband’s career.

  33. The depression also had a negative and sometimes permanent impact on the lives of young people, whose career aspirations were often delayed or unfulfilled. • Some of America’s young people became so demoralized by the depression that they became hobos or “sisters of the road.” • College was a privilege for a distinct minority, and many college students became involved in political movements; the Student Strike against War drew student support across the country.

  34. Popular Culture Views the Depression

  35. Popular culture played an important role in getting the United States through the trauma of the Great Depression. • The mass culture that had taken root during the 1920s, especially the movies and radio, flourished spectacularly in the 1930s. • Americans spent their time and money differently during the depression. Things once considered luxuries—cigarettes, movies, and radios—became necessities to help counteract the bleak times.

  36. What functions did movies perform for Americans in the 1930s? • The movies were the most popular form of entertainment in America; more than 60 percent of the population saw at least one movie a week. • With their exciting plots, glamorous stars, and exotic locations, they were a means for escaping from daily life in the depression. • The movies also reflected and reinforced values and customs.

  37. Americans turned to popular culture in order to alleviate the trauma of the depression. • In response to public outcry against immorality in the movies, the industry established a means of self-censorship—the Production Code Administration.

  38. Many movies were more than escapist pastimes and contained messages that reflected a sense of the social crisis engulfing the nation and reaffirmed traditional values like democracy, individualism, and egalitarianism; others contained criticisms that the system wasn’t working. • Popular gangster movies suggested that incompetent or corrupt politicians, police, and businessmen were as much to blame for organized crime as the gangsters.

  39. Depression-era films by Frank Capra pitted the virtuous small-town hero against corrupt urban shysters whose machinations subverted the nation’s ideals. • Radio occupied an increasingly important place in popular culture during the 1930s; ownership rose from 13 million households to 27.5 million households during the decade. • In a resurgence of traditionalism, attendance at religious services rose, and the home was once again the center for pleasurable pastimes such as playing Monopoly and reading aloud.

  40. Harder Times for the Down and Out • African Americans in the Depression • Dust Bowl Migrations • Mexican American Communities • Asian Americans Face the Depression

  41. The depression hit some groups harder than others. • Thousands of farmers were forced to flee the Great Plains in the face of the dust bowl and ruinous competition with mechanized agriculture. • There was growing black allegiance to the Democratic Party in the 1930s as the New Deal channeled significant amounts of relief money toward blacks outside the South. • With fear of competition from foreign workers at a peak, many Mexican Americans left California and returned to Mexico. Others joined labor unions and became more involved in American politics, important steps in the creation of a distinctive Mexican American ethnic identity.

  42. African Americans in the Depression • African Americans, who had always known discrimination and limited opportunities, viewed the depression differently from most whites. • Despite the black migration to the cities of the North, most African Americans still lived in the South and earned less than a quarter of the annual average wages of a factory worker.

  43. Throughout the 1920s, southern agriculture suffered from falling prices and overproduction, so the depression made an already desperate situation worse. • The Southern Tenant Farmers’ Union, which some black farmers joined, could do little to reform an agricultural system based on deep economic and racial inequalities

  44. The hasty trials and the harsh sentences in the 1931 Scottsboro, Alabama, rape case along with an increase in lynching in the early 1930s gave black Americans a strong incentive to head for the North and the Midwest. • Harlem, one of their main destinations, was already strained by the enormous influx of African Americans in the 1920s and, in 1935, was the setting of the only major race riot of the decade, when anger exploded over the lack of jobs, a slowdown in relief services, and economic exploitation of blacks.

  45. Partly in response to the riot but mainly in return for growing black allegiance to the Democratic Party, the New Deal channeled significant amounts of relief money toward blacks outside the South. • The NAACP continued to challenge the status quo of race relations, though calls for racial justice went largely unheeded during the depression.

  46. Dust Bowl Migrations • The years 1930 to 1941 witnessed the worst drought in America’s history, but low rainfall alone did not cause the dust bowl.

  47. What were the stages of the 1930s dust bowl disaster? • A severe drought on the Great Plains, after years of ill-advised farming techniques, - To maximize profit, farmers stripped the land of its natural vegetation, destroying the ecological balance of the plains; when the rains dried up, there was nothing to hold the soil. This created severe wind erosion and ultimately a series of dust storms. In May 1934 the storms reached the Upper Midwest and even the East, where they blackened the skies

  48. The dust bowl was one of the reasons for the great migration of “Okies” from the region. (The other was the eviction of farm workers from the land due to the growth of large-scale agriculture.) • “Okie” descendants came to make up a large proportion of California’s population, especially in the San Joaquin Valley.