Causes of the Great Depression

Causes of the Great Depression Great Depression Unit – Part I

Presidential Election of 1928 • Republican domination and prosperity throughout the 20’s (Coolidge Administration) • The Candidates • Herbert Hoover – Republican candidate • Al Smith – Democratic candidate (Irish Catholic, not well known) • Hoover easily wins the election • 444 electoral votes, Smith - 87 electoral • Significance  Shows that the American public are happy with Republican leadership

Herbert Hoover (Republican) – 30th President of the United States of America. Hoover is remembered as the President during the start of the Great Depression He calls for “Rugged Individualism”  In the style of laissez-faire politics

Causes of the Depression • Industrial failures (# 1) • Railroads, textiles and steel barely made a profit • Due to new forms of transportation, high tariffs, and war time debt. • Coal mining and lumbering not in such high demand after the war. • Even the automobile, construction and consumer goods industries began to weaken by the end of the decade. • American industry is showing signs of weakening.

Causes (Con’t) • Farmer Crisis (# 2) • During the war, crops prices rose and farmers took out loans. • In the 20’s, farmers boost production in hopes of making more money (prices decrease) • Farm incomes decrease greatly and many farms have to foreclose and property seized • Price-Supports / Subsidies – Gov’t plan to buy surplus goods and sell them to the world market

Causes (Con’t) • Living on Credit (# 3) • Consumers bought goods on credit – spending money they don’t actually have • Overspeculation (Buying on Margin) – Invest in more stock than they can afford • Consumers and investors build up large debts

Causes (Con’t) • Uneven distribution of wealth ( # 4) • Despite the rise of a middle class, the rich get richer and poor get poorer • Most Americans could not participate in the economic advances of the 1920’s. • Middle and Lower classes affected the greatest during the Depression

Stock Market Crashes • Stock market prices begin to fall and confidence decreases. • Black Tuesday (Oct. 29, 1929) – Bottom fell out of the market • Shareholders sell their stocks before prices go down even more. • Many suffer huge debts while others lose most of their savings. • Investors lost about $ 30 Billion (same as US spent on WWI)

“The Big Bull Market was dead. Billions of dollars’ worth of profits – and paper profits – had disappeared. The grocer, the window cleaner, and the seamstress had lost their capital [savings]. In every town there were families which had suddenly dropped from showy affluence into debt… With the Big Bull Market gone and prosperity going, Americans were soon to find themselves living in an altered world which called for new adjustments, new ideas, new habits of thought, and a new order of values.”~ Frederick Lewis Allen

The Collapse – An Overview • Great Depression – Period from 1929-1940 in which the economy plummeted and unemployment skyrocketed. • Bank Failure – By 1933, 11,000 of 25,000 banks fail (Gov’t did not protect bank accounts and people lose their savings) • Many other businesses fail (90,000 businesses total) • Unemployment rises drastically (25% or 13 million workers) • Economic Depression becomes a worldwide problem.

Worldwide Panic • Many European countries affected more than the U.S. (German example) • Hawley-Smoot Tariff  highest protective tariff in US history • Supposed to help American businesses from foreign competition. • Prevents other countries from making money, then they cannot buy American goods. • Tariff has the opposite effect of its intentions. • Sends the world into greater Depression.

Warm Up: After reading the excerpt, answer the following question: If you were living during the Great Depression, do you think that you would feel the same way as Senator Huey Long or would you be more optimistic about the future of America? “This great and grand dream of America, that all men are created free and equal, endowed with the inalienable right of life and liberty and the pursuit of happiness, this great dream of America, this great light, and this great hope, have almost gone out of sight in this day and time, and everybody knows it. There is a mere candle flicker here and yonder to take place of what the great dream of America was supposed to be.” ~ Senator Huey Long of Louisiana

The Impact of the Great Depression on Society Great Depression Unit – Part I

With millions unemployed, men looked everywhere for jobs to put food on the tables for their families. The Depression impacts not just those with money in the Stock Market, but even the common worker and family.

Impact in the City • The depression hits families harder than it does businesses. • Throughout the cities, the unemployed and homeless increase and have to find a new way to survive. • Shantytowns – Little towns consisting of shacks spring up everywhere (also called Hoovervilles) • Soup Kitchens become common place • Bread Lines – lines of people waiting to receive food provided by charities

Breadline full of men in New York City

Impact on the Farm • Many farmers lose land through foreclosures • Dust Bowl – Because of overproduction and drought, the farmers in the Midwest leave their land and head to California • “Grapes of Wrath” by John Steinbeck • Dust is blown all over the Midwest and the East coast • Okies – Term that originally meant all Oklahomans but eventually meant all migrants • Thousands of families arrive in California looking for work and a place to live

A lone man stands during the Dust Storms in Oklahoma

Dust Bowl in Oklahoma during the Great Depression

“Okies” on their way to California, a photograph very much like the scenes from “Grapes of Wrath”

The American Family • Families stand as a symbol of strength, but even they begin to break under the pressures • Families entertain themselves by listening to radio and playing games • Monopoly – 1933 • Many suffer the difficulties of unemployment and families lose their homes

Homeless Family on the road during the Depression

Men of the Depression • Some men abandon their families because of shame and discouragement • Hoboes – Mostly men who wandered the country, sleeping under bridges and on railroads (approx. 300,000) • Very little relief to families during the early years of depression

Women of the Depression • Women still responsible for much of the household chores and raising children • Work diligently to save money and some even work • Many people become angered that women are working since many men were not. • Women suffer just as much as men even though they are not seen suffering as much

“Migrant Mother” (1936) is the most well-known photograph from the Great Depression time period By Dorothea Lange

Children of the Depression • Poor diets and health problems (lack of milk) • Many schools lose funding and have to close down (children forces to work often times in sweatshops) • Many young teenagers leave home for adventure and work (many are killed by criminals or injured on the trains)

The inside of a school in Alabama

African Americans & Hispanics • Unemployment is 30%-60% than whites • Still have to deal with discrimination and segregation • African American organizations become split because of goals (Fighting poverty v. Ending discrimination) • Many Hispanics were forced to relocate

Psychological Effects • Negatives • Between 1928-32, suicides rise more than 30% • Many more admitted to mental institutes • Health, marriage, and even the future of families are put off • Positives • There is a sense of brotherhood that is formed. People helping one another through difficult situations (strong sense of charity) • Habits formed during the Depression shape an entire generation

Causes of the Great Depression