great depression
The Great Depression
Economic recession- A time when a nation's real output (GNP) declines
Economic Depression- A severe and prolonged economic downturn
REASONS FOR TGD
Major industries saw profits fall. Industries that expanded during WW1 faced a high need for their goods.
New house construction fell by 25% between 1925 and 1929
Farming troubles
During WW1 demand was high. This caused prices to rise. Farmers planted more crops and took out loans to buy more land and equipment
When demand dropped farmers decided to produce more hoping to sell more crops and thus make up for the drop in prices
Credit
People were living beyond their means (Spending more than what they had)
Uneven distribution of Income
People who are making more money than others
1920s- almost half of the nation's families earned less than $1500 annually.
1920s American incomes rose an average of 9%
The wealthiest 1% = 75%
Bad Banks
In the 1920s, banks opened at the rate of four to five per day without any federal restrictions on the amount of start-up capital a bank needed or the amount it could lend. As a result, most of these banks were highly insolvent.
FDIC- Federal Deposit Insurance Corporation
Stock market
“Bull market”= when stocks and shares are going up “Bear market”=Stocks are going down.
Buying on Margin- pays a small % of stock as a down payment, paid to brokers.
Sales of goods and the construction of factories were falling rapidly while stock values continued to climb.
“Self-adjusting economy”
Black Tuesday
October 29, 1929 - was the single most devastating financial day in the history of the New York Stock Exchange.
Crash repercussions
People panicked and withdrew $ from banks. Many banks could not meet the high demand for cash, therefore going out of business.
In 1929 659 banks closed.
By 1933 a little over 6,000 banks had failed (¼ of nations total)
The unemployment rate went from just over 3% in 1929 to over 25% in 1933
This caused a “snowball” effect on the economy. Times continued to get worse with little hope for economic turnaround
Effects of Depression
Shantytowns- towns on the fringes of cities. Comprised of shacks and mainly migrants that were working or looking for work.
Racial violence
Some whites were angry with African Americans and Mexican Americans because of job competition.
Rural Devastation
Between 1929 and 1932 400,000 farms were foreclosed on.
Extreme drought merely added to the problems
Societal Consequences
Malnutrition increased
Schools shut down
Suicide rates rose
Psychology of saving/being poor/distrust
The Dust Bowl
Region through Midwest (stretching from North Dakota to Texas)
Why - Land was exhausted because of overproduction/poor crap rotation/ overgrazing. Land exempt from grass and trees to help hold the soil down.
Herbert Hoover
Man of the “people”
Hoover's advisors felt that he shouldn't do anything too hasty with regard to the economy. They thought it would fix itself.
Hoover felt that people should take care of their own problems and that any form of government welfare was uncalled for. In many ways, he felt that federal handouts would morally “corrupt” the nation.
1930 congressional elections and aftermath
Hoover became the scapegoat
Shantytowns = “Hoovervilles”
Newspapers = “Hoover blankets”
Empty pockets = “Hoover flags”
“The Migrant Mother” - picture of a woman with 3 kids
The Hoover Dam
Black Canyon on the Colorado River. About 30 miles southeast of Las Vegas
The Bonus Army
Group of veterans that wanted their money 15 years earlier
Hoover opposed the legislation
Hoovers called on the Army to remove them
11-month-old baby died, 2 people were shot, and many injured
1932 Elections
Roosevelt gets landslide victory - 23 million to 6 million
First 100 days
“New deal for the American people”
“Fireside chats”
Fixing the Banks
“Bank holiday” All banks shut down preventing any more withdrawals
Help for Farmers
AAA- Agricultural Adjustment Act- farmers were paid to NOT grow crops
WHY- this was all done to lower the supply and in turn raise prices.
Work Projects
CCC- Civilian Conservation Corp.- Men ages 18-25 built roads, parks, planted trees, etc…
PWA- Public Works Admin- And CWA Civil Works Admin- Gave money to states to create jobs. Most of the $ was used to construct community centers, parks, theatres, and schools.
“Boondoggles” wasted time
New Deal Opposition
Court Packing Scheme
All cartoons ^^^
Many people criticized Roosevelt and said that he was overstepping his power as President
Huey P. Long
“Share the Wealth”
Francis Townsend
Proposed a pension plan: all Americans over 60 would get $200 per month
Father Charles Coughlin
Against communism and FDR
Anti-Semitic
American Gothic painting
The Second New Deal
NYA (National Youth Admin)- provided work specifically for nations youth
WPA (Works Progress Admin)- the program was given a budget of $5 billion
Labor Reform
Wagner Act - under the act the federal gov. Supported the right of workers to join union and to engage in collective bargaining
Established maximum and minimum wages. For the first time it set a minimum hourly wage (25 cents) and a 44-hour work week.
Social Security Act
1. Old age insurance for people 65 or older
2. Unemployment compensation to be administrated at the state level
3. Aid to families with dependent children and the disabled was made to the blind, crippled, elderly, and mothers with dependent children.
Women & the New Deal
Frances Perkins- First female cabinet member (Sec of Labor) Major factor in creating Social Security
Pop Culture 1930s
Many people needed an escape from tough times- they looked to movies for this escape
65% of the population attended a movie at least once a week