From 1929 – 1932 there was a Bear Market – the stock market was NOT doing well and stock prices began to fall. Therefore people began to sell all of their stocks.
Causes of the Great Depression
Installment buying and buying stocks “on margin.”
Banks loaned money without any to back it up, so when people went to get their savings out of the bank it was gone. Banks loaned money to people who invested in the stock market and then couldn’t repay their loans.
Overproduction of goods and crops. Factories and farmers were producing too much, driving down prices.
Cycle of disaster – without money from investors, businesses can’t expand; with banks in trouble, businesses can’t get loans, so businesses cut wages, hours, and laid off workers; workers don’t have money to buy goods (demand went down) businesses went bankrupt.
US made large loans to Europe, but had to stop giving loans, which caused their banks to close. The same cycle occurred overseas causing a worldwide depression.
The Dust Bowl
Severe drought hit the Great Plains from 1931-1939. The black blizzards formed from the dry soil and 50 mph winds. They destroyed over 5,000,000 acres of land. It ended when rain finally fell consistently and temperatures remained steady. During the Dust Bowl, temperatures changed 70 degrees in a matter of hours. In addition there were record highs of 120 degrees and no rain for months. The Dust Bowl forced hundreds of farmers and their families to move west to California to start a new life.
Cyclic winds rolled up two miles high. This is Black Sunday April 14, 1935. This is the dust storm that turned day into night. Many believed the world was coming to an end.
Boise City, Oklahoma
Men, women & children stayed in their houses and tied handkerchiefs over their noses and mouths. When they dared to leave, they added goggles to protect their eyes. Houses were shut tight, cloth was wedged in the cracks of the doors and windows but still the fine silt forced its way into houses, schools & businesses.
A family from Oklahoma packed their belongings and headed for California where they hoped to find better soil and start a new life. These migrant families were nicknamed “Okies.”
Herbert Hoover was President from 1928-1932.
Herbert Hoover believed in a laissez – faire government. He started some programs to help the US get out of the Great Depression, but they did not apply to the masses of people who were unemployed.
Most people did not believe Hoover was doing enough, so the shacks that the poor people lived in were called Hoovervilles and the newspapers that people covered up with were called Hoover blankets .
Children stand near a sign and donation jar that reads “HOOVER’S POOR FARM TOBACCO FUND” and another sign – HARD TIMES ARE STILL HOOVERing OVER US.
Hooverville in Seattle, Washington
Residents of Seattle watch as the city of Seattle burns their Hooverville to build a port. The poor and unemployed used scraps to build homes on vacant land.
Boys waiting for soup at a soup kitchen
Several men are competing for very few jobs.
WWI veterans nicknamed the “bonus army” marched on Washington asking President Hoover to give them their bonus early. They were to receive it in 1945, but 60,000 veterans wanted it in 1932 because of the depression. President Hoover denied their request, but paid their passage home by rail.
People were fed up with the lack of results from Hoover’s programs and Franklin Delano Roosevelt won a landslide victory in 1932. People were happy to see Roosevelt’s new programs started in his first 100 days in office. However not everyone was happy. Many republicans criticized FDR’s approach to taking over businesses. This seemed too close to communism for some people. Congress didn’t pass several of FDR’s programs, but hundreds of others were still passed.
Fireside Chats – President Roosevelt spoke to the American public over the radio. “Tonight, (May 7, 1933) I come to you for the second time to give you my report -- to tell you about what we are doing and what we plan to do.”
The Congress is about to pass legislation that will greatly ease the mortgage distress among the farmers and the home owners of the nation.
Our next step in seeking immediate relief is a grant of half a billion dollars to care for those who need direct and immediate relief.
The Congress also passed legislation authorizing the sale of beer in such states as desired. This has already resulted in considerable reemployment and, incidentally, has provided much needed tax revenue.
We are planning to ask the Congress for legislation to enable the Government to undertake public works, thus stimulating directly and indirectly the employment of many others in well-considered projects.
FDR’S NEW DEAL
SSA – Social Security Act
TVA – Tennessee Valley Authority
CCC – Civilian Conservation Corporation
AAA – Agricultural Adjustment Agency
FDIC – Federal Deposit Insurance Corporation
PWA – Public Works Administration
SEC – Securities and Exchange Commission
FERA – Federal Emergency Relief Act
It provided pensions, unemployment insurance, and aid to the elderly, and to blind, deaf, disabled, and dependent children.
TVA - Federal government built a series of dams to prevent flooding, brought water supply and electricity to rural areas. Pictures clockwise - Dam built in Tennessee; the sole water supply of this section of Wilder, Tennessee; electricity for the barnyard; new electric stove in kitchen in rural Tennessee
CCC - Sent 250,000 young men to work camps to perform reforestation and conservation tasks. Removed surplus of workers from cities, provided healthy conditions for boys, and provided money for families
Protected farmers from price drops by reducing production, and starting educational programs to teach methods of preventing soil erosion.
Created federally insured bank deposits ($2500 per investor at first) to prevent bank failures. Now protects up to $100,000 per investor.
Workers are constructing a new
States received $3.3 billion appropriation from Congress for public works projects.
Regulated the stock market and restricted margin buying.
Distributed millions of dollars of direct aid to unemployed workers, including food, clothing, shelter, and skills training.
Top picture shows children wearing new clothes made by mothers who learned to use sewing machines.
Bottom picture shows a garden project where people work planting food and take home what they have produced
FDR’s New Deal programs helped relieve some problems by giving people jobs, food, and shelter. It reformed some problems, such as the banking system (FDIC) and pay for the elderly and handicapped (SSA). However it did NOT recover America’s economy from a depression.
Producing goods for WWII is what pulled the US out of the Great Depression.
Women welders discuss the production of B-25 ("Billy Mitchell") bombers and P-51 ("Mustang") fighter planes.
Men and women work side-by-side building bomber planes at a factory in Michigan.
Popular movies of the 1930’s: Gone with the Wind , Snow White , Wizard of Oz , and King Kong
Legends and heroes of the 1930’s: Jesse Owens, Joe DiMaggio, and Amelia Earhart