The Great depression

Chapter 14

Great depression

• 1929-1941

• Does not end until start of World War II

• Causes:• Uneven distribution of wealth• Debt of 1920’s• U.S. industry not competitive• Unsuccessful economic policies• Stock Market Crash• Industry and agriculture overproduction

(WW I)• Absence of cash

Election of 1928

• Al Smith (Democrat) vs. Herbert Hoover (Republican)

• Hoover won due to prosperity of the 1920’s• Rugged individualism• “Lassez-faire” economics

Hoover would eventually be personally blamed for the Depression

Stock market conditions

• Late 1920’s, stock prices continued to rise

• In the 1920’s, many were risk-takers and wanted to “gamble” with the Stock Market

• “Buying on Margin” allowed investors to use credit to purchase stock

• “Black Tuesday”-October 29, 1929….the day the market “crashed”• 16 million shares of stock sold that day• Many people lost their life savings in the

stock market

Run on banks

• Some people wanted to safely save money and put their money in banks

• People panicked and ran to the banks to withdraw all their money

• Money in banks was not insured at the time

• Once the bank gave all money out, there was no more!

• People that did get some money from the bank often hoarded their money (buried it, stuffed it in a mattress, etc.)-They were afraid to spend any money because they feared it could not be replaced

Conditions decline

• Many companies suffered once the stock values continued to decrease

• More and more people lost jobs-by 1933, the unemployment rate was 25%

• Hoover promised that there would be prosperous times around the corner and there would be a “chicken in every pot”, but that did not come to pass

Continued

• Many lost jobs, were homeless, and hungry

• Many children malnourished

• Many stood in bread lines or went to soup kitchens to get food

• There was no government assistance….no food stamps, monthly checks, unemployment, etc.

• Charities/churches did provide some support, but the government did nothing at this point

• See clip of “Cinderella Man”

Bonus army• World War I veterans

• Promised a bonus for their service payable in 1945

• Because of desperate conditions, many asked for their bonus early in 1932

• Thousands made the trip to Washington, D.C. to attempt to sway Congress to provide the money early-set up a tent city

• Congress denied their request, and those that did not leave voluntarily were forced out with tear gas and tanks

• Last straw for Hoover “Bonus Army” video

Hoover blamed

• Although Hoover promised that prosperity was “right around the corner”, that did not happen for most

• Make-shift homes made of scrap wood, metal and cardboard were referred to as “Hoovervilles”

• “Hoover-flags”

• “Hoover-blankets”

• “Hoover-hogs”

Depression effects rural areas

• Lower demand for food after World War I

• Many years of drought in area of Great Plains called the Dust Bowl• Caused by:

• High winds• Little or no rain• Lack of crop rotation

Okies

• Farmers from the Great Plains (mostly Oklahoma at first) that moved West to find work picking fruit in California

• Too many went and there were not enough jobs available

• Okies were often not welcomed out West

Effects of the Great Depression

• People suffered widespread unemployment, hunger, hopelessness, and homelessness

• Industrial and farm production failed

• World economic crisis developed

• Roosevelt won victory in 1932

• President Franklin D. Roosevelt initiated the New Deal for all Americans

• Clara Video