The Great Depression 1928-1932

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The Great Depression1928-1932
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Causes of the Great Depression
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President Hoover Takes Office

• Hoover took over as the US economy was still
  going strong
• Farmers were still left out of the prosperity
• After WWI ended, demand for food fell drastically
• Crop prices declined by 50 or more
• From 1919 to 1921 annual farm income fell from 10
  billion to 4 billion!

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The Great Crash Ends the Golden Twenties

• How does the stock market work?
• Stocks had artificially been rising through-out
  the 1920s
• Black Tuesday October 29, 1929
• 16,410,030 shares sold
• Stock market collapsed
• Example of the business cycle
• By end of 1929 stock holders had lost 40 billion

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Banks Collapse

• How do banks work?
• After crash, people flooded banks to get their
  money
• 1929 641 banks closed
• 1930 1,350 banks closed
• 1931 1,700 banks closed
• Over the first few years 6,000 banks closed
• ¼ of Americas banks
• Money not insured
• 9 million individual savings accounts gone!

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Businesses Close, Unemployment Rises

• As people stop spending money, businesses stop
  earning money
• Forces them to lay off workers
• Now less people working, meaningless money spent
• Forces businesses to lay off more workers
• GNP (Gross National Product) fell from 104
  billion in 1929 to 59 billion in 1932
• 85,000 businesses went bankrupt

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• By 1933 unemployment was at 25
• Considered very bad if its over 5!!!!!
• Unemployment skyrocketed
• 3 in 1929 (1.6 million people)
• 25 in 1933 (13 million people)
• 1 out of 4 people unemployed in America
• Unemployment rate December 2009 10 (over 14
  million people)

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Hawley-Smoot Tariff

• 1930 Hawley-Smoot Tariff passed
• Trying to protect American made goods
• Highest peacetime tariff in history
• Raised tariffs from 38 to 60
• The world responded by raising their tariffs
• Makes depression worse by cutting international
  trade down

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Depression Goes Global

• Hawley-Smoot Tariff hurt global trade
• America stopped loaning money to Europe
• Germany stopped reparation payments
• France and England became broke
• Great Depression became worldwide

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Conclusion of the Causes

• What caused the Great Depression?
• Many factors
• Over production on farms and industries
• Wealth in too few hands
• Too much credit given out
• 80 of radios, 60 of cars, buying stock on
  margin
• European economic hardships
• Hawley-Smoot Tariff/ decreased international
  trade
• Farm failures

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Americans Face Hard Times
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Cities

• People were forced to move into shantytowns
  (Hoovervilles)
• Towns made from scrap wood and cardboard
• No money to buy food
• Ate at soup kitchens
• Waited in bread lines for food

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Farmers

• Advantages?
• They could grow their own food
• 1,000,000 farms lost between 1930-1934
• Banks foreclosed

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Dust Bowls

• 1933 drought hit Great Plains (Texas to North
  Dakota)
• High winds moved through as well
• Great Plains had loose top soil as a result of
  over farming
• Wind picked up top soil and created the dust bowl
• Some dust traveled as far as the Atlantic Ocean!
• By the end of the 1930s Californias population
  increased by more than 1 million
• People travelling there were called Okies
• 1939 John Steinbecks The Grapes of Wrath

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Men

• Hard for men to handle not working
• Walked the streets daily looking for work
• Many men abandoned their families
• 2 million men became hobos (men who rode railcars
  around the country)
• No direct relief from the Government

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Women and Children

• Took care of household
• Tried to work
• Some people resented them for it
• Many children became sick from malnutrition
• By 1933 300,000 children were out of school
• Many went to work in sweatshops to make money

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African Americans

• 50 unemployment rate
• Racial violence increased
• 24 lynching's in 1933
• Why?
• Job Competition
• Anger
• Needed someone
• to blame

1930
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Mexicans and Mexican Americans

• Whites wanted them deported back to Mexico, why?
• To get rid of job competition
• Hundreds of thousands of Mexicans returned to
  Mexico, some by choice, some by deportation

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Hoovers Response Fails
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Herbert Hoover

• Believed in small government
• Rugged individualism
• People should take care of themselves. No
  government handouts
• Prosperity is just around the corner
• given a chance to go forward with the policies
  of the last eight years, and we shall soon with
  the help of God be in sight of the day when
  poverty will be banished from this Nation (1928)
• A chicken in every pot, a car in every garage
  (didnt really say this)

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Herbert Hoover Contd.

• Wanted people to volunteer to help
• Donate to charities
• Put the nation before their own self-interest
• Help should come from local and state governments
• Did not want the government to use direct relief
  to individuals
• Afraid of a vast government bureaucracy
• Goes against
• rugged individualism

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Hoover Tries to Help

• Asked leaders of business to work together
• Employers not to cut wages or lay people off
• Unions not to demand higher wages or strike
• Was it effective?
• No because businesses and people acted in their
  own self-interest

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Americans React to Hoovers Help

• 1930 Congressional elections
• Democrats gained control of the House
• Farmers burnt crops
• Hoover Blankets
• Newspapers
• Hoovervilles
• Shantytowns
• Hoover Flags
• Pockets turned inside out

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• We'd Like To Thank You Herbert
  Hooverhttp//www.youtube.com/watch?vjAgm13acwoI
  
• Today we're living in a shanty Today we're
  scrounging for a meal Today I'm stealing coal for
  fires Who knew I could steal? I used to winter in
  the tropics I spent my summers at the shore I
  used to throw away the paperWe dont anymore
  We'd like to thank you Herbert Hoover For really
  showing us the way We'd like to thank you
  Herbert Hoover You made us what we are today

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• Prosperity was 'round the corner The cozy
  cottage built for two In this blue heaven That
  you Gave us Yes! We're turning blue! They offered
  us AL Smith and Hoover We paid attention and we
  chose Not only did we pay attention We paid
  through the nose. In ev'ry pot he said "a
  chicken But Herbert Hoover he forgot Not only
  don't we have the chicken We ain't got the pot!
  Hey Herbie

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• You left behind a grateful nation So, Herb,
  our hats are off to you We're up to here with
  admiration Come down and have a little stew Come
  down and share some Christmas dinner Be sure to
  bring the missus too We got no turkey for our
  stuffing Why dont we stuff you? We'd like to
  thank you, Herbert Hoover For really showing us
  the way You dirty rat, you Bureaucrat, you Made
  us what we are today Come and get it, Herb!

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Hoover Tries to Help Again

• Massive public work program
• Building roads, dams (Boulder/Hoover Dam), and
  other projects
• Reconstruction Finance Corporation (RFC)
• Trickle-down economics
• Gave a billion dollars in loans to businesses and
  banks
• Hoped that these loans would allow businesses to
  create more jobs and put people back to work
• Did it work?
• No, because people/businesses acted in their own
  self-interest and kept the loans

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Bonus Army

• 20,000 WWI veterans and their families marched
  on Washington DC
• Veterans promised bonus checks for WWI service in
  1924, payable in 1945
• Veterans marched to DC in 1932 hoping to pressure
  Congress into passing legislation (The Patman
  Bill) that would allow them to receive their
  checks immediately

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• Created Hoovervilles all over DC
• Moved into abandoned buildings
• June 15, 1932 the House of Representatives passed
  the Patman Bill
• Hoover then vetoed the bill
• Hoover asked the protestors to leave DC

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• Most veterans left peacefully, but 2,000 stayed
• Hoover decided to disband the mob by force
• General Douglas MacArthur led troops against the
  veterans
• He raided their Hoovervilles
• Used tear gas, fixed bayonets, tanks
• Was not what Hoover wanted (too much force)

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• The mob was disbanded
• 11 month old baby died
• 8 year old partially blinded
• 2 people shot and many wounded
• America was outraged at what happened
• Franklin Delano Roosevelt, Wellthis will elect
  me.
• Americans were ready for a change

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Primary Sources

• The Report on Federal Troops
• The Whole Story of the Bonus Army

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Statement to the Press by President Hoover, July
29, 1932. A challenge to the authority of the
United States Government has been met, swiftly
and firmly. After months of patient indulgence,
the Government met overt lawlessness as it always
must be met if the cherished processes of
self-government are to be preserved. We cannot
tolerate the abuse of Constitutional rights by
those who would destroy all government, no matter
who they may be. Government cannot be coerced by
mob rule. The first obligation of my office is
to uphold and defend the Constitution and the
authority of the law. This I propose always to
do.