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The Great DepressionChapter 23—Unit 2
“We in America today are nearer to the final triumph over poverty than ever before in this history of this land”
~Herbert Hoover, August 1928
The Coming of the Depression
• Financial collapse was a severe shock
• Stock Prices had risen significantly since Feb. 1928
• May 1928—Sept 1929: 40% increase!
• Trades per day doubled and tripled
• Offering of credit to buy stocks
The Great Crash
• “Black Tuesday”: October 29, 1929
• Dow Jones dropped 10%, wiping out all gains since October 1928
• By the end of November, stocks had lost half of their value
• Not the cause of the Great Depression, more of a symptom of the approaching economic crisis
Causes of the Depression…
Why did it happen?
Why was it so severe?
Why did it last for so long?
Lack of Diversification
• Prosperity depended on a few industries
• Construction• $11billion in 1926 to less than $9Billion in
1929
• Automobiles/Railroads• Auto sales fall by more than 1/3 in the first
months of 1929
• All require Steel
• New Industries lack strength to make up for it• Petroleum, chemicals, electronics, plastics
Weak Consumer Demand
• Maldistribution of purchasing power
• Wealth centralized at the top
• Inadequate market for goods being produced
• ½ of all families live on or below minimum subsistence level
Credit
• Farmers: Cycle of Debt• Crop prices still too low
• Small Banks: trouble when customers default on loans
• Big Banks: investing recklessly in the stock market, unwise loans
• Stock CrashBankFailureCreditcontraction
International Trade
• European demand for American goods declines • Recovery from WWI
• European financial troubles
• European economy destabilized by WWI debt
US “helps” European Nations
• All European allies of US owed US large sums of $$$• Owed it to US banks
• Could not repay, needed reparations from Germany and Austria
• Germany and Austria cannot afford reparations
Debt Structure
• All European allies of US owed US large sums of $$$• Owed it to US banks
• Could not repay, needed reparations from Germany and Austria
• Germany and Austria cannot afford reparations
Progress of the Depression
• The Crash triggered a chain of events that led to the depression
• Collapse of the banking system• 1930-1933: 9000 banks go
bankrupt or close to avoid bankruptcy
• Money supply shrinks by 1/3 or more• What will happen to prices?
• But what if you’re in debt?
Things Get Worse…
• Deflation leads to lower prices
• Manufacturers cut back production, lay off workers
• Federal Reserve attempts to build confidence in US Market: Raises Interest Rates• Now harder to acquire and pay off
debt, contracts money supply further
• GNP: $104billion in 1929$76 billion in 1932 (25% decline!)
By 1932…
• Estimates say 25% unemployment (probably higher)
• Unemployment will average 20% for the rest of the decade
• 1/3 of workforce “underemployed”
The American People in Hard Times
John Maynard Keynes was asked if he was aware of any era comparable to the Great Depression: “It was called the Dark Ages, and it lasted 400 years.”
Unprecedented economic despair to the US and much of the western world
Unemployment and Relief
• Industrial cities paralyzed by unemployment• Cleveland 50%
• Akron 60%
• Toledo 80%
• No jobs or support for unemployed
• City and state public relief systems unable to handle the strain and collapsed
• Private charities struggle as well.
Rural Areas
• ’29-’32: Farm income declines 60%
• 1/3 farmers lose their land
• “Okies”
• Migrant farmers
The Dust Bowl
• Began in 1930
• Texas to the Dakotas
• Decline in rainfall, increase in heat
• Removal of topsoil/prairie grasses led to dust storms
Dust Pneumonia Blues
African Americans and the Depression
• At beginning, ½ live in the south
• Evicted by landlords whom had given up on sharecropping
• Moved to Southern cities
• Whites displace trad. African American Jobs• Janitors, servants, street
cleaners
• 50% of all southern African Americans unemployed
African Americans in Northern Cities
• 400,000 leave south
• Conditions barely better
• New York: African American unemployment 50%
• 2 million African Americans (1/2) on relief by 1932
The Scottsboro Case (March 1931-1950!)
• 9 black teenagers taken off of freight train in Alabama
• Arrested for vagrancy and disorder
• Later: 2 white women on the train accuse of Rape
• Overwhelming evidence that the women had notbeen raped• Fear of being arrested for vagrancy themselves
• “Scottsboro Boys”
• All-white Jury
• All nine convicted, 8 to death
Resolution of the Case
• Supreme Court overturns convictions in (1932)
• New Trials
• International Labor Defense aids the teens (associated with the Communist Party
• Southern Juries refuse to acquit, all eventually are freed, the final one in 1950.
Mexicans and Mexican Americans
• Population growing steadily since 1900
• Menial labor, some small farmers, some agricultural migrants
• Unemployed whites demanded Hispanic held jobs
• Some, arbitrarily removed from relief rolls
• Some rounded up and deported
• Approx 500,000 leave the US in the early Depression
The Union of Migrant Farm Workers
• California
• Harsh repression from local growers and public authorities
• Little impact
• Many Hispanics give up Ag work and move to urban areas
Asian Americans
• Lost jobs to white Americans
• College graduates had difficulty finding professional jobs
• Chinese Americans: worked in Chinese owned laundries and restaurants, few other jobs available
Women in the Great Depression
• Strengthened belief that a Woman’s place was in the home• Why?
• Reality, women would more than ever before be tasked with supporting their family• Many men simply gave up, abandoned
their families
• 25% more women were working by the end of the depression than at the beginning
• Unemployed men move into professions that were considered women’s works
African American Women
• Massive reduction in domestic service jobs
• ½ lost jobs
• By 1939: 38% of African American women working• 24% of white women
• Working out of economic necessity, not preference
The Family
• Decline in divorce rate, too expensive!
• Men humiliated because can not support family• Abandon them
• Marriage rate declines
• Birth rate declines• First time since early 1800s
The Depression and American Culture
Traumatic Experience
New Criticisms of American Life
Powerful Confirmations of traditional values and traditional goods
Depression Values
• Social values changed relatively little
• Many redoubled commitment to familiar ideas and goals
• “Success Ethic” continued
• Individual responsibility
• Many blamed themselves for their own suffering
How to Win Friends and Influence People(1936)
• Dale Carnegie
• Self-help manual
• Individual initiative
• You can restore yourself to prosperity and success through your own efforts
The Radio
• Almost every family has one
• Community experience• Front porches, parlors
• Invite friends to listen
• Parents and children listening to programs
Radio: Escapism
• Amos’ n’ Andy
• Superman
• Dick Tracy
• The Lone Ranger
• https://youtu.be/hMtTUsXHUGg?list=PLsPbqGD7bfUDjQeN2V0USKpJtKevEC2yh
• Soap Operas: Popular with Women
Radio as a Source of Information
• Direct access to important events
• News/Sports
• World Series, Academy Awards
• Hindenburg Disaster (1937)
• Orson Welles: War of the Worlds• Halloween night
https://www.youtube.com/watch?v=zWKyYRJEcRo
The Movies
• Attendance drops significantly in the first years
• By the middle: more movies have sound and some even have color.• Crowds return
• Hollywood has strong control over production• Will Hays (Censor) made sure movies carried no sensational or controversial
messages
Films Depicting the Depression
• The Grapes of Wrath (1940)
• Our Daily Bread (1932)
• Little Caesar (1930)• Gangsters
• The Public Enemy (1931)• Organized Crime
• https://www.youtube.com/watch?v=yeGMaVvzUVo
Frank Capra
• Italian-born
• Populistic admiration for ordinary people
• Decent, small-town America vs. Opportunistic, greedy, capitalistic City
• Mr. Deeds Goes to Town (1936)
• Mr. Smith Goes to Washington (1939)
• Imagined American Past, idealized vision of what America was
• https://www.youtube.com/watch?v=17MyPrAEQ28
• https://www.youtube.com/watch?v=zPv0S1-ETdI
• https://www.youtube.com/watch?v=BL-Jg7CyqLQ
Escapist Films
• Gold Diggers of 1933• Musical
• The Marx Brothers (“Screwball” Comedy)
• Fantasies about quick and easy wealth• The Three Stooges
• The Wizard of Oz (1939)
• Gone With the Wind (1939)• Controversy
• Disney, Snow White (1937)
Hollywood and Gender and Race
• Women were typically either wives and mothers OR attractive flirts (manipulators of men!)• Mae West
• Few films include important African American characters
• African American characters= farmhands, servants, entertainers
Popular Literature and Journalism
• Some, dealt directly or indirectly with disillusionment, and increasing radicalism
• Escapist and/or Romantic• Gone with the Wind (1936)-
Margaret Mitchell
John Steinbeck
• Chronicled social conditions
• The Grapes of Wrath(1939)
• Harsh portrait of agrarian life in the west (exploitation of the workers)
• Spirit of community among workers
• Endurance of migrant workers
The Popular Front and the Left
• Communist party flourishes
• The “popular front”• A broad coalition
• “antifascist”
• Not all were communists
• Largely controlled by Stalin and the USSR
• Writers, artists, intellectuals all critical of capitalism
Support for the Spanish Civil War
• Mid-1930s
• Fascism vs. republican government
• The Abraham Lincoln Brigade• 3,000 young Americans
• Went to Spain to fight fascists
• Actions directed by the Communist Party
Reality Behind the American Communist Party
• Tried to appear open and patriotic
• Controlled by the USSR
• 1939: Stalin signs N/A pact with Nazi Germany, the ACP abandons the Popular Front and returns to criticizing American Liberalism• Thousands of members leave
the party
The Ordeal of Herbert Hoover
1929: A bright and Prosperous Future
1930: Not so Much
Hoover forced to deal with new problems but relies on the principles he had always used to govern his life…
The Hoover Program
• First response to Depression: Attempt to restore public confidence in the economy
• “The fundamental business of this country, that is, production and distribution of commodities, is on a sound a prosperous basis” (1930)
• Asked (begged) businessmen not to cut production or lay off workers
• Convinced labor leaders to not ask for higher wages or better hours
• Cooperation until mid-1931
Government Spending?
• Asked for $423 Million increase for Federal Public Works Program
• Encouraged state and local govs. To fund public construction
• As economy worsened, Hoover became more concerned with a balanced budget
Agricultural Marketing Act (April 1929)
• Helped farmers maintain prices
• Created a Farm Board to make loans, or buy surpluses to increase prices
Hawley-Smoot Tariff (1930)
• Attempt to help the farmers
• Increased tariff on 75 products
• Massively damaged global trade
Reconstruction Finance Corporation (Jan. 1932)
• Provide federal loans to banks, railroads, other businesses
• Large scale operation
• $1.5 billion budget
• Did not directly address the real problems
• Required banks to have sufficient collateral
• most money went to large banks and corporations
Popular Protest
• At first, Americans are too stunned to react
• Farmer’s Holiday Association (1932)• Withhold farm products from
the market
• Western Iowa
• Ends in Failure
The Bonus Army
• WWI veterans had been promised a $1000 pension to be paid in 1945
• Many wanted it by 1932
• Hoover rejects the request in 1932
The Bonus Expeditionary Force
• 20,000 veterans
• Marched into Washington
• Camped in the city
• Refused to leave until Congress approved early payment of the bonus
Hoover Reacts
• Embarrassment to Hoover
• Mid-July: police ordered to clear out vets
• Some vets throw rocks at the police
• Someone opened fire
• 2 Vets killed
• Hoover believes this is a sign of uncontrolled violence and radicalism (anarchy!)
The US Army ends the march
• Hoover calls in the US Army to remove the protesters
• General Douglas MacArthur runs the mission, exceeds the president’s orders
• Infantry, machineguns, 6 tanks
• Veterans fled as MacArthur burned their tent city to the ground
• 100 Veterans injured
• Serious PR blow to Hoover
The Election of 1932
• Most people expect Hoover will lose• He was still re-nominated
though
• Franklin Delano Roosevelt is the Democratic Nominee
• Democrats win large majorities in both houses of Congress
Roosevelt’s Background
• Assistant Secretary of the Navy in WWI
• VP Nominee in 1920
• 1921: Polio (?) left him crippled
• 1928: Elected Governor of New York, re-elected in 1930
• Nationally: avoided divisive cultural issues, emphasized economic grievances of the Democrats
• “I pledge you, I pledge myself, to a new deal for the American people.”
The “Interregnum”
• Hoover tried to get FDR to promise to maintain economic orthodoxy, he refused.
• February 1933 (one month before inauguration), banking sector began to collapse• Hoover asked FDR to promise that
he would not mess with the currency, borrow money, or unbalance the budget. FDR refuses.
• March 4, 1933: Inauguration Day• FDR was beaming
• Hoover was bitter
Sources
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