The Great Depression

Chapter 14 Notes

Black Tuesday

Warning Signs:• Farm crisis• Consumers’ over reliance on credit• Stock speculation

– Bull market – Bear market– Margin buying

New York City Stock Exchange:

Black Thursday• October 24, 1929

• Lg. no. of investors (nervous about rising interest rates) began rapidly selling stocks– Stock prices dropped automatically

– Huge sell off w/ few buyers• Black Tuesday--more stocks dumped;

prices dropped more; loans called in; people go bankrupt

Wall Street

At high noon on Black Thursday, October 24, 1929, all eyes on Wall Street were turned imploringly to the House of Morgan.

Great Depression Begins:• Banks failed

– Heavy defaults, margin calls & massive w/drawals (bank runs)

• Businesses closed– Mass

unemployment (25% or more)

Great Depression Begins: • Prices dropped for farm products

– Farms lost to banks

(Continued)

• Income gap– Avg. income drops– Reduced purchasing power– Consumer debt

• Global depression – Banks call in European war loans– can’t export (European

depression)– Smoot-Hawley Tariff (highest in

U.S. history)

Hardships:• Unemployment or reduced wages

• Immigration decreased

–Migrants returned to Mexico

• Increased discrimination

Hardships:

• Malnutrition--esp. in children

• Homelessness

–Shantytowns (Hoovervilles)

–Hoboes

Families:

• Relatives helped one another

• Marriage rate fell

• Birthrates decline

• Suicide rose 28% (1929-1932)

• Feelings of guilt & shame

The Dust Bowl, 1931

The Dust Bowl

• 1931 began several years of drought

• Poor farming practices left land w/out grass

Wind storms blew away topsoil (sometimes as far as Atlantic Coast)

Dust Bowl Region: OK, KS, CO, NM, TX

The Dust Bowl

• Many people migrate west along Rt 66 to CA (promised land)

Efforts to help poor:• Salvation Army, gov. agencies, religious

groups– Mutualistas– Bread lines– Rent parties– Community rice barrels

Unemployment Offices:

Selling Apples

Breadlines and Soup Kitchens

Hoovervilles

Pop Culture:• Entertainment--means of escape

– Movies • gangsters, strong women, cartoons

– Radio • Woodie Guthrie

– Literature • John Stienbeck

Theories/Solutions:

• Business Cycle--regular ups & downs of business in a free enterprise system

• President Hoover--felt people should help themselves not the govt.

–Rugged individualism

–Associative state

Hoover Administration:Program: Actions: Effects:

Public Works Program

Public construction projects (Boulder Dam)

Failed to have much effect

Federal Farm Loan Board

Loans, co-ops, bought surplus goods

Helped some but didn’t end crisis

Reconstruction Finance Corp.

Loaned money to industry

Helped some avoid bankruptcy

Public response to Hoover

• Protests– Communists, Socialists– Scottsboro Trial– Bonus Army

• Legal action

Bonus Army

Scottsboro Boys

Election of 1932:

• Rep: Herbert Hoover

• Dem: Franklin D. Roosevelt