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The Great Depression: The Perfect Storm. “About the time we can make the ends meet… somebody moves the ends.” - Herbert Hoover. The Stock Market. The value of stocks on Wall St. continuously rose, and even tripled between 1925 and 1929. This actually indicates something was wrong.
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The Great Depression:The Perfect Storm “About the time we can make the ends meet… somebody moves the ends.” - Herbert Hoover
The Stock Market • The value of stocks on Wall St. continuously rose, and even tripled between 1925 and 1929. • This actually indicates something was wrong. • Due to the wild success of the markets, speculation became a popular activity. • This is when you buy stocks low and then sell them when a profit can be turned. • Since the market was so safe many bought on margin: • Investors could borrow money from brokers with only a small down payment on the whole value. • Most stocks were purchased with money investors didn’t actually have.
Problem with the Stock Market • In the 1920s stocks reflected the demand in a company, not the company’s actual value. • By late 1929 the value of stocks had risen much higher than the actual production of companies. • Brokers knew this, and when prices started to fall they all sold and made the problem worse. • When brokers and investors defaulted on their loans, the banks were left with the debts of the crash. • Over $30 Billion lost on Tuesday October 29, 1929. • The worst tragedy was that people who never invested lost their money too when the banks went under.
Irresponsibility of the 20’s • The actions taken by government created a deeper problem. • Most companies overproduced, when the markets crashed they were left with warehouses full of goods nobody would buy. • High tariffs that had protected U.S. business made it impossible to trade with other countries. • Lowering of taxes on wealthy had created a “Pyramid of Wealth” • Nearly all the nation’s money belonged to a small number of people.
The Pyramid of Wealth Number of People: Percentage of Wealth: 2 % Upper Class 15 % Middle Class 90 % Upper Class 83% Lower Class 8% Middle Class 2 % Lower Class
The Farmer Suffers • Farmers had NOT experienced the wealth of the 20s • They were forced to take many loans to update their equipment and keep up at the time. • Massive droughts hit in 1931 and 1933, and a plague of locusts ravaged crops in 1932.
THREE Mistakes Made by President Hoover • Raised tariffs even higher to protect struggling American businesses. • Destroyed the much needed trade. • RFC: (Reconstruction Finance Corp.) • Through the RFC he gave major businesses and banks over $2 Billion • Only gave the money to companies that could pay it back, which most would’ve survived the depression anyway. • Hoover repeatedly vetoed bills that were intended to provide direct aid to struggling Americans. • He believed the average American would ultimately become dependent on the govt. if he simply gave them money.
Americans Begin to Hate Hoover • Hoovervilles: shacks, shanty-towns where poor Americans were forced to live when they lost their homes. • Term of resentment for Hoover, since they blamed him. • The Bonus Army: WWI soldiers that were promised bonus checks after the war. • They wanted their checks early, but Congress would allow it • Bonus Army protestors camped outside the White House • Hoover eventually ordered the National Guard to force them to leave and burned their tents when they refused to leave.
Social Impact of the Depression • Birth rate and divorces went down during the Depression. • This is because families couldn’t afford either. • More strict child labor laws were created • The government wanted to protect jobs for older Americans who were supporting families. • High School enrollment increased since kids couldn’t get jobs as easily. • The NYA (National Youth Administration) actually paid students to stay in school
Minorities During the Depression • Women: More women entered the work force as the need for money increased for each family. • As more men were laid off and women went to work, traditional roles within the home were reversed. • Unfortunately the Civil Rights movement struggled during the Depression. • FDR even tolerated job discrimination within government programs such as the CCC, and allowed segregation to continue without any attempt at reform. • Lynching became more popular in the South during the Depression.
Popular Culture During the Depression • Serious situations of the depression caused many artists to focus on realistic subjects. • John Steinbeck: Wrote Grapes of Wrath and Of Mice and Men. • Grapes of Wrath: was about Oklahoma farmers in the Dust Bowl during the depression. • Of Mice and Men: was about migrant farmhands trying to find work during the depression. • Margaret Mitchell: wrote Gone with the Wind. • About rebuilding life in the South after the Civil War. • Scarlet Ohara’s inner strength is supposed to represent Americans during the depression.
Popular Culture Cont. • Talkies: first movies with synchronized sound • Movie industry flourished during the depression. • Movies focused on fairy tales and happy situations • First movie stars and celebrities like Clark Gable, Mae West, Ginger Rogers, Fred Astaire, Shirley Temple, etc… • First soap operas developed over the radio. • Comic books and superheroes became popular. • Snow White and the Seven Dwarves became the first full length animated movie by Disney.
Crime During the Depression • Bank robbers became famous during this period since many Americans resented the banks after the stock market crash. • For an 18 month period robbers like John Dillinger, “Baby Face Nelson”, Bonnie and Clyde, and Machine Gun Kelly raided banks and harassed police departments from Michigan to Texas. • Eventually the FBI would be formed as a result of the interstate crime sprees.
