The Great The Great Depression Depression (1929-1933)(1929-1933)

Section 1: The Stock Section 1: The Stock Market CrashMarket Crash

After years of prosperity, the stock market After years of prosperity, the stock market collapsed in October, 1929, sending the entire collapsed in October, 1929, sending the entire economy into panic and subsequent depression.economy into panic and subsequent depression.

Early 1929Early 1929

On September 3, 1929, the Dow On September 3, 1929, the Dow Jones average was at an all-time Jones average was at an all-time high, 381.high, 381.

Soaring rates brought new investors, Soaring rates brought new investors, but many of the rates were not but many of the rates were not authentic to the real value of the authentic to the real value of the company.company.

Black ThursdayBlack Thursday After the peak in After the peak in

September, stock prices September, stock prices began to slowly decline into began to slowly decline into October.October.

Some nervous investors Some nervous investors began to sell their shares, began to sell their shares, contributing to the further contributing to the further decline in prices.decline in prices.

On Thursday, October 24, On Thursday, October 24, after a sharp decline on after a sharp decline on Wednesday, investors Wednesday, investors pulled their money out pulled their money out quickly, and the market lost quickly, and the market lost $3 billion in one day alone.$3 billion in one day alone.

Black TuesdayBlack Tuesday

The market stabilized slightly for a few days.The market stabilized slightly for a few days. On the following Tuesday, October 29, investors sold shares in a On the following Tuesday, October 29, investors sold shares in a

panicked frenzy. panicked frenzy. The Dow dropped tremendously in just one day, known as Black The Dow dropped tremendously in just one day, known as Black

Tuesday.Tuesday. By November, the Down Jones had fallen from its September high of By November, the Down Jones had fallen from its September high of

381 to 198, nearly cut in half.381 to 198, nearly cut in half.

Dow Jones GraphDow Jones Graph

AftershockAftershock

Initially, the Crash hurt only those most heavily Initially, the Crash hurt only those most heavily invested in the stock market.invested in the stock market.

Soon, however, the ripple effects spread to even Soon, however, the ripple effects spread to even those who weren’t invested.those who weren’t invested.

Chain ReactionsChain Reactions In the 1920s banks made risky In the 1920s banks made risky

loans to businesses, investors, loans to businesses, investors, and consumers.and consumers.

When these groups couldn’t When these groups couldn’t pay their loans after the pay their loans after the Crash, banks revenue dried Crash, banks revenue dried up.up.

Fearful that banks would run Fearful that banks would run out of money, people rushed to out of money, people rushed to withdrawal money from their withdrawal money from their accounts, known as bank runs.accounts, known as bank runs.

Banks didn’t have the money Banks didn’t have the money because their loans weren’t because their loans weren’t being repaid.being repaid.

Bank FailuresBank Failures Because they weren’t being repaid their Because they weren’t being repaid their

loans, many banks failed.loans, many banks failed. Everyone with savings accounts in these Everyone with savings accounts in these

banks lost all of their money, even if they banks lost all of their money, even if they weren’t invested in the stock market.weren’t invested in the stock market.

Business CutsBusiness Cuts Businesses could no longer Businesses could no longer

borrow money from banks.borrow money from banks. Consumers stopped buying Consumers stopped buying

goods and services from goods and services from businesses.businesses.

Soon, businesses started Soon, businesses started laying off workers, leading laying off workers, leading to historic unemployment to historic unemployment rates.rates.

As unemployment As unemployment increased, consumers increased, consumers bought even fewer goods bought even fewer goods from businesses, which from businesses, which further caused more lay-further caused more lay-offs. offs.

Economic ContractionEconomic Contraction

All of these chain reactions are symptoms of a contracting economy, All of these chain reactions are symptoms of a contracting economy, an economic decline. an economic decline.

An economic contraction is known as a recession, a long and severe An economic contraction is known as a recession, a long and severe recession is called depression.recession is called depression.

The Great Crash triggered the most severe economic contraction in The Great Crash triggered the most severe economic contraction in U.S. history, the Great Depression, lasting from 1929 to 1941. U.S. history, the Great Depression, lasting from 1929 to 1941.

Impact on Workers and Impact on Workers and FarmersFarmers

With no money or consumption, factories across the With no money or consumption, factories across the country began to shut down.country began to shut down.

Small businesses also suffered with few people who Small businesses also suffered with few people who could afford to consume.could afford to consume.

Crop prices fell dramatically and many farmers lost Crop prices fell dramatically and many farmers lost their land.their land.

By 1932, 25% of the labor force was unemployed and By 1932, 25% of the labor force was unemployed and GNP fell from $103 billion to $56 billion.GNP fell from $103 billion to $56 billion.

Global EconomyGlobal Economy

By this era, the global economy was becoming interdependent. By this era, the global economy was becoming interdependent. France and Britain had been paying the U.S. their war debts, France and Britain had been paying the U.S. their war debts,

but weren’t able to after U.S. consumption of imported goods but weren’t able to after U.S. consumption of imported goods halted.halted.

When American investment in the German economy stopped, When American investment in the German economy stopped, Germany could no longer pay their war reparations to Britain Germany could no longer pay their war reparations to Britain and France.and France.

Therefore, it became a Global Depression, with Germany Therefore, it became a Global Depression, with Germany suffering worst of all.suffering worst of all.

CausesCauses

Despite the rising stock prices of the Despite the rising stock prices of the 1920s, much of the wealth was 1920s, much of the wealth was unevenly distributed to a minority of unevenly distributed to a minority of the U.S. population.the U.S. population.

Industries had begun producing more Industries had begun producing more than the population could consume.than the population could consume.

Those who did consume often did so Those who did consume often did so imprudently, going into debt without imprudently, going into debt without backup savings.backup savings.

OverspeculationOverspeculation In the 1920s, many In the 1920s, many

investors bought stocks investors bought stocks with borrowed money, and with borrowed money, and pledged these stocks as pledged these stocks as collateral, something of collateral, something of value that could be used value that could be used as repayment, to buy more as repayment, to buy more stocks. stocks.

Much of the stock market Much of the stock market boom was based on boom was based on borrowed money and borrowed money and optimism instead of real optimism instead of real valuevalue

Lack of Government Lack of Government Safety NetSafety Net

When banks failed in the Great Depression, When banks failed in the Great Depression, people lost their entire savings, there was no people lost their entire savings, there was no way to insure the protection of their money.way to insure the protection of their money.

Today, the government insures money that is Today, the government insures money that is saved in banks, even if the bank were to go saved in banks, even if the bank were to go out of business.out of business.

Section 2: Social Effects of Section 2: Social Effects of DepressionDepression

Many Americans expected economic recovery to happen Many Americans expected economic recovery to happen quickly after the Crash. Within a year or two, it became quickly after the Crash. Within a year or two, it became evident that the situation was worse than anticipated.evident that the situation was worse than anticipated.

Poverty SpreadsPoverty Spreads Poverty spread Poverty spread

throughout society.throughout society. Bank closings Bank closings

destroyed the savings destroyed the savings of many families.of many families.

Job layoffs forced Job layoffs forced others to foreclose on others to foreclose on homes or be evicted homes or be evicted from apartments, even from apartments, even white-collar workers white-collar workers who had felt better off who had felt better off than laborers.than laborers.

““Hoovervilles”Hoovervilles” Evicted from homes, many Evicted from homes, many

homeless Americans moved homeless Americans moved into shanty towns made of into shanty towns made of scrap materials, cardboard scrap materials, cardboard or tar paper.or tar paper.

Became known as Became known as Hoovervilles, in mockery of Hoovervilles, in mockery of President Hoover.President Hoover.

Many homeless became Many homeless became drifters, traveling, drifters, traveling, hitchhiking, and jumping hitchhiking, and jumping trains around the country trains around the country from one “hobo jungle” to from one “hobo jungle” to the next.the next.

Farm DistressFarm Distress

Low crop prices cut Low crop prices cut farmers income and farmers income and many lost their farms many lost their farms to the banks who to the banks who sold them at auction.sold them at auction.

In protest to low In protest to low prices, some farmers prices, some farmers dumped thousands of dumped thousands of gallons of milk and gallons of milk and destroyed crops.destroyed crops.

The Dust BowlThe Dust Bowl

Economic difficulties for farmers were magnified by an environmental Economic difficulties for farmers were magnified by an environmental crisis known as the Dust Bowlcrisis known as the Dust Bowl

During the 1930s, strong winds blew enormous amounts of soil throughout During the 1930s, strong winds blew enormous amounts of soil throughout the Great Plains.the Great Plains.

Causes of the Dust BowlCauses of the Dust Bowl For years, farmers had For years, farmers had

plowed the land and plowed the land and stripped the topsoil of its stripped the topsoil of its protective grass and protective grass and vegetation. vegetation.

The vegetation had The vegetation had provided the roots to provided the roots to keep soil intact. keep soil intact.

Combined with severe Combined with severe drought and heavy winds, drought and heavy winds, this lack of vegetation this lack of vegetation caused the Dust Bowl.caused the Dust Bowl.

60 percent of Dust Bowl 60 percent of Dust Bowl families lost their farms.families lost their farms.

Depression’s Impact on Depression’s Impact on HealthHealth

Depression greatly affected Depression greatly affected the health of those most the health of those most impacted.impacted.

Thousands went hungry, or Thousands went hungry, or lacked nutrition from the lacked nutrition from the food they did have.food they did have.

People lacked the money or People lacked the money or resources to properly heat resources to properly heat homes or seek medical homes or seek medical attention.attention.

Widespread poverty greatly Widespread poverty greatly increased stress, anxiety, increased stress, anxiety, depression, and suicide depression, and suicide rates.rates.

Stress on FamiliesStress on Families Difficult times often Difficult times often

caused extended caused extended families to team up and families to team up and move in together.move in together.

Men who lost their jobs Men who lost their jobs felt like a failure to felt like a failure to their family.their family.

Families were often Families were often ashamed to ask others ashamed to ask others for help, even when for help, even when they desperately they desperately needed it.needed it.

Discrimination IncreasesDiscrimination Increases African Americans and other African Americans and other

minorities were squeezed out minorities were squeezed out of the labor force.of the labor force.

As white Americans lost their As white Americans lost their jobs, they looked for work jobs, they looked for work doing lower-paying jobs doing lower-paying jobs typically filled by minorities.typically filled by minorities.

Thousands of Asian Thousands of Asian Americans and Hispanics not Americans and Hispanics not only lost their jobs, but were only lost their jobs, but were deported.deported.

By 1932, 56 percent of By 1932, 56 percent of African Americans were African Americans were unemployed.unemployed.

Stories of SurvivalStories of Survival

Families showed enormous resiliency throughout the Depression.Families showed enormous resiliency throughout the Depression. Wasting nothing, many who lived through the Depression were changed Wasting nothing, many who lived through the Depression were changed

permanently, living frugally and conservatively for the rest of their lives.permanently, living frugally and conservatively for the rest of their lives. People were willing to work hard and do any job to provide for their family. People were willing to work hard and do any job to provide for their family.

Section 3: Surviving the Section 3: Surviving the DepressionDepression

Despite difficulty, society worked hard and persevered through the Great Depression.

Farmers Stick TogetherFarmers Stick Together When banks foreclosed on When banks foreclosed on

the land of farmers who the land of farmers who couldn’t pay their loans, the couldn’t pay their loans, the banks sell the farms at an banks sell the farms at an auction.auction.

Often, neighboring farmers Often, neighboring farmers secretly agreed to keep bids secretly agreed to keep bids low, even mere pennies for low, even mere pennies for the land and equipment.the land and equipment.

Then the buyers gave the Then the buyers gave the land back to the original land back to the original owner.owner.

These auctions became These auctions became known as penny auctions.known as penny auctions.

Riding the RailsRiding the Rails Many young people Many young people

left home out of left home out of necessity or in search necessity or in search of opportunities.of opportunities.

In the mid-1930s, In the mid-1930s, roughly 250,000 roughly 250,000 teenagers were living teenagers were living on the road.on the road.

These youth often These youth often traveled by illegally traveled by illegally riding the rails of riding the rails of freight trains.freight trains.

Seeking Political Seeking Political SolutionsSolutions

Amidst difficulty, people Amidst difficulty, people began proposing more began proposing more radical forms of change.radical forms of change.

Both Communist and Both Communist and Socialist Political Parties Socialist Political Parties gained membership gained membership during the era.during the era.

Norman Thomas, the Norman Thomas, the Socialist Party Socialist Party presidential candidate in presidential candidate in 1932 won 2.2 percent of 1932 won 2.2 percent of the total vote.the total vote.

Depression HumorDepression Humor Jokes and humor helped Jokes and humor helped

people through their people through their troubles.troubles.

Herbert Hoover was at the Herbert Hoover was at the core of a lot of Depression core of a lot of Depression humor.humor. ““Hoovervilles” - shanty Hoovervilles” - shanty

townstowns ““Hoover blankets” - sleeping Hoover blankets” - sleeping

under old newspapersunder old newspapers ““Hoover flags” - empty Hoover flags” - empty

pockets turned inside outpockets turned inside out

Prohibition RepealedProhibition Repealed In February 1933, In February 1933,

Congress passed the Congress passed the Twenty-first Twenty-first Amendment, repealing Amendment, repealing Prohibition.Prohibition.

Prohibition lasted 15 Prohibition lasted 15 years.years.

Most people recognized Most people recognized the Prohibition as a the Prohibition as a failed social experiment failed social experiment that led to gangsters that led to gangsters and organized crime.and organized crime.

Empire State BuildingEmpire State Building

One symbol of hope was the construction of the new Empire State One symbol of hope was the construction of the new Empire State Building.Building.

Developer John J. Raskob built the world’s tallest skyscraper, Developer John J. Raskob built the world’s tallest skyscraper, employing 2,500-4,000 people per day.employing 2,500-4,000 people per day.

Building opened on May 1, 1931.Building opened on May 1, 1931.

End of an EraEnd of an Era By the early 1930s, it became By the early 1930s, it became

clear that the prosperous, clear that the prosperous, roaring era of the 1920s was roaring era of the 1920s was ending abruptly.ending abruptly.

Aside from economic turmoil Aside from economic turmoil itself, a number of 1920s itself, a number of 1920s symbols faded away.symbols faded away. 1931- Al Capone brought down1931- Al Capone brought down 1933- Calvin Coolidge died1933- Calvin Coolidge died 1935- Babe Ruth retired1935- Babe Ruth retired 1932- Charles Lindbergh’s infant 1932- Charles Lindbergh’s infant

son kidnapped and murderedson kidnapped and murdered

Section 4: Election of Section 4: Election of 19321932

As Hoover’s unpopularity grew, Franklin As Hoover’s unpopularity grew, Franklin Delano Roosevelt arrived with a promise of Delano Roosevelt arrived with a promise of help and a “new deal” for Americans.help and a “new deal” for Americans.

Hoover’s StrategyHoover’s Strategy

After the stock market crash, After the stock market crash, President Hoover insisted that the President Hoover insisted that the depression was out of his control but depression was out of his control but that conditions would improve soon.that conditions would improve soon.

He stood firmly by this assessment He stood firmly by this assessment in the following years, but the in the following years, but the public’s patience for the promised public’s patience for the promised improvements quickly grew thin.improvements quickly grew thin.

Voluntary Action FailsVoluntary Action Fails

Hoover believed that the voluntary action of Hoover believed that the voluntary action of businesses was the best way to end businesses was the best way to end economic crisis.economic crisis.

At a meeting he organized, business leaders At a meeting he organized, business leaders promised not to cut workers’ wages, but promised not to cut workers’ wages, but didn’t follow through on their commitments.didn’t follow through on their commitments.

Hoover’s proposal of voluntary action, Hoover’s proposal of voluntary action, rather than government regulation, rather than government regulation, increasingly upset Americans who wanted increasingly upset Americans who wanted the government to do more to help them.the government to do more to help them.

Federal Farm BoardFederal Farm Board

Hoover knew he must do something to alleviate the suffering of Hoover knew he must do something to alleviate the suffering of Americans.Americans.

Created a Federal Farm Board in 1929 to help stabilize crop prices.Created a Federal Farm Board in 1929 to help stabilize crop prices. The program was a failure, lost $150 million and crop prices actually declined.The program was a failure, lost $150 million and crop prices actually declined.

Hoover DamHoover Dam

To create jobs, the To create jobs, the government started government started new public buildings, new public buildings, roads, parks, and roads, parks, and dams.dams. Construction of the Construction of the

Boulder Dam began in Boulder Dam began in 1930 (later renamed 1930 (later renamed Hoover Dam)Hoover Dam)

Hawley-Smoot TariffHawley-Smoot Tariff

Attempting to protect domestic Attempting to protect domestic industry from import, Congress industry from import, Congress passed the Hawley-Smoot tariff.passed the Hawley-Smoot tariff.

It was the highest tariff in history.It was the highest tariff in history. The tariff backfired. European The tariff backfired. European

countries responded by raising their countries responded by raising their own tariffs, rapidly slowing down own tariffs, rapidly slowing down international trade and escalating international trade and escalating the global depression.the global depression.

Reconstruction Finance Reconstruction Finance CorporationCorporation

In 1932, Hoover set up the Reconstruction In 1932, Hoover set up the Reconstruction Finance Corporation (RFC).Finance Corporation (RFC).

Gave government credit to large industries, Gave government credit to large industries, railroads, and insurance companies.railroads, and insurance companies.

Lent money to banks so they could extend Lent money to banks so they could extend loans.loans.

Banks continued to fail and many Banks continued to fail and many Americans felt that Hoover was only helping Americans felt that Hoover was only helping businesses and the upper class, not businesses and the upper class, not ordinary people.ordinary people.

Hoover’s Growing Hoover’s Growing UnpopularityUnpopularity

Hoover argued that direct federal relief would destroy people’s Hoover argued that direct federal relief would destroy people’s self-respect and create a large government bureaucracy.self-respect and create a large government bureaucracy.

People resented his refusal to provide direct aid to Americans.People resented his refusal to provide direct aid to Americans. By 1932, Hoover finally broke down to protests and lent money By 1932, Hoover finally broke down to protests and lent money

to states for unemployment relief. It was too little too late to to states for unemployment relief. It was too little too late to restore his image.restore his image.

Veterans MarchVeterans March In 1932, 20,000 jobless In 1932, 20,000 jobless

WWI veterans and their WWI veterans and their families camped in families camped in Washington, D.C. to Washington, D.C. to protest.protest.

Known as the Bonus Known as the Bonus Army, they demanded a Army, they demanded a pension bonus that had pension bonus that had been promised for 1945.been promised for 1945.

The House of The House of Representatives agreed Representatives agreed to their demands, but to their demands, but the Senate said no.the Senate said no.

Bonus ArmyBonus Army Although mostly Although mostly

peaceful, at one point peaceful, at one point Hoover ordered General Hoover ordered General Douglas MacArthur to Douglas MacArthur to clear Pennsylvania clear Pennsylvania Avenue.Avenue.

MacArthur used force, MacArthur used force, tanks and tear gas, to tanks and tear gas, to clear the crowd.clear the crowd.

Many were injured and Many were injured and mistreating WWI mistreating WWI veterans increased veterans increased Hoover’s unpopularity.Hoover’s unpopularity.

Franklin Delano Franklin Delano RooseveltRoosevelt

Franklin Delano Roosevelt, FDR, was nominated as Franklin Delano Roosevelt, FDR, was nominated as Democratic Party’s presidential candidate.Democratic Party’s presidential candidate.

““I pledge myself to a new deal for the American people.”I pledge myself to a new deal for the American people.” FDR represented a new optimism by promising a more FDR represented a new optimism by promising a more

responsive government.responsive government.

FDR’s StoryFDR’s Story

Attended Harvard, worked as a lawyer, a New York State Senator, Attended Harvard, worked as a lawyer, a New York State Senator, then became Assistant Secretary of the Navy under President then became Assistant Secretary of the Navy under President Wilson.Wilson.

In 1920, he came down with polio and never walked without In 1920, he came down with polio and never walked without assistance again. assistance again.

Being handicapped could’ve been political death, but Roosevelt Being handicapped could’ve been political death, but Roosevelt hid his disability by rare and carefully planned public hid his disability by rare and carefully planned public appearances.appearances.

Eleanor RooseveltEleanor Roosevelt Franklin’s wife Eleanor Franklin’s wife Eleanor

Roosevelt, was a niece of Roosevelt, was a niece of Theodore Roosevelt.Theodore Roosevelt.

Eleanor herself was Eleanor herself was educated and deeply educated and deeply politically engaged.politically engaged.

Her extensive Her extensive involvement with actual involvement with actual political issues during political issues during FDR’s Presidency forever FDR’s Presidency forever changed the role of the changed the role of the first lady.first lady.

Election of 1932Election of 1932 ““This campaign is more than a This campaign is more than a

contest between two men… it is contest between two men… it is a contest between two a contest between two philosophies of government.”philosophies of government.”

––Herbert HooverHerbert Hoover

Hoover felt it was not the Hoover felt it was not the responsibility of responsibility of government to fix people’s government to fix people’s problems.problems.

FDR felt that large scale FDR felt that large scale problems such as the problems such as the Depression required Depression required government’s help and aid.government’s help and aid.

1932 Election Results1932 Election Results

FDR won the presidency in a landslide.FDR won the presidency in a landslide. Experienced large support from new demographics of Experienced large support from new demographics of

Democrats: urban workers, coal miners, and Catholic Democrats: urban workers, coal miners, and Catholic and Jewish immigrants.and Jewish immigrants.

In FDR’s Inaugural Address, he famously stated, “the In FDR’s Inaugural Address, he famously stated, “the only thing we have to fear is fear itself.”only thing we have to fear is fear itself.”

Hoover v. FDRHoover v. FDR FDR represented a responsive government, one FDR represented a responsive government, one

that helped Americans in need, something that helped Americans in need, something people felt that Hoover didn’t do.people felt that Hoover didn’t do.

One example of their differences is their One example of their differences is their handling of the Bonus Army.handling of the Bonus Army. Hoover used the Army to force them out with tanks Hoover used the Army to force them out with tanks

and tear gas.and tear gas. FDR sent Eleanor to them with food and friendly FDR sent Eleanor to them with food and friendly

greetings.greetings. ““Hoover sent the Army, Roosevelt sent his Hoover sent the Army, Roosevelt sent his

wife.” became a classic line of the New Deal wife.” became a classic line of the New Deal Era.Era.