The Great Depression

Causes of the Great Depression

The Long Bull Market

Election of 1928

The election of 1928 was one of the many factors leading up to the Great Depression. Republican Herbert Hoover, former leader of the Food Administration, and Democrat Alfred E. Smith, former New York governor, were the two candidates for the election. Herbert Hoover won the election by a landslide and he gave much hope for the future of the United States.   

Stock Market Soars

After Hoover was elected president, the stock market met grew drastically, this was known as a bull market. As the stock market kept rising, more and more people were starting to invest in stock by making small down payments. But once the prices fell just slightly, people felt they must sell their stocks fast so they could pay their loans. Some people who needed money fast participated in speculation, which is where they would buy and sell stock quickly when it was increasing the most.

The Great Crash

Stock Market Crashes

Once investors stopped investing, the stock market began to drop. People were having to sell their stock quickly because soon enough they could loose all of it and be stuck in debt. On October 24, otherwise known as Black Thursday, the sock market had gone down even more and the following week, later known as Black Tuesday, prices had gone to an all time low. The plummeting of the stock market continued and so did the economy's capability to triumph over other weaknesses.

Banks Close

When the stock market crashed, the banks began to loose money that they loaned to inverters. One way that the banks dealt with this was to put a halt to how many loans they gave out. For other banks this was not enough, some were forced to close down because of their extreme losses. Once the work got around that banks were closing, people began to withdraw all of their money from the banks and this was known as a bank run. What the people did not know was that when excessive amounts of money are with-drawled from a bank, the banks close down. By 1932 about 35,000 banks had closed down.

The Roots of the Great Depression

Uneven Distribution of Income

As producing products became easier to do because of machinery, consumers didn't have the money to buy what they needed. Thirty percent of the nations income was earned by American people in 1927. When people started to make high-costing purchases in the 1920s, they often used the installment plan. With the installment plan, people could make small payments on high-costing items and then eventually pay off the rest monthly. Since so many people were either in debt or without jobs, purchases occurred less often.

Loss of Export Sales

Because we unsuccessfully sold manufactured goods abroad, there were not many jobs for Americans. Hoover wanted to fix this crisis in 1929 by lowering tariffs, but the most Republicans wished to increase tariffs to prevent foreign competition. In the end, the Hawley-Smoot Tariff was passed which increased the tariff rate to the highest point in history. This tariff was unsuccessful in which it did not help American businesses.

Mistakes by the Federal Reserve

The Federal Reserve was also held responsible for the Great Depression because the low rates caused banks to give out loans that may or may not benefit them. A second reason why the Federal Reserve was partly at fault for the Great Depression was because they refused to increase the money supply. This caused people to withdraw their money from the banks because of the low supply, but this just supported the events that decreased the money supply.

Life During the Great Depression

The Depression Worsens

Struggling to Get By

Since more and more Americans were becoming in debt, they didn't have and food or shelter. To help these people the New York City's YMCA set up soup kitchens and offered free food to those who had none. Americans who could not afford rent or mortgage were forced on the streets by court officers known as bailiffs.

The Dust Bowl

To prepare farm land worth planting on, farmers had to abolish all the grasses that kept the soil from becoming dry. Along with that, the Great Plains endured a heavy drought that caused dust to form in the atmosphere from the Dakotas to Texas. This nasty storm was known to Americans as the "Dust Bowl." During the Dust Bowl, livestock and crops were buried by the blowing earth and people were killed from allowing the dust to fill there lungs. In a matter of three years from 1934, the number of dust storms grew from 22 to 72. Farmers who still had their land had no choice but to give it to the banks because they were mortgaged. Families in this situation had little to nothing so they decided to migrate to California for a better life. These Oklahoma migrants, known as "Okies," continued to be homeless.

Americans took great action to help prevent another Dust Bowl to occur. Even though they were still going through a drought, the dust subsided just by plowing the land planting trees. In the fall of 1939, rain finally settles on the dust infested lands causing moods

Art and Entertainment

Hollywood

To escape the harsh reality of the 1930s, Americans used entertainment as their escape. There were 60 to 80 million people going to movies per week. Popular featured entertainment of this time were Shirley Temple, the movie Animal Crackers, King Kong, and The Wizard of Oz. The "superhero" stories of Superman and Batman were to be discovered in comic books in the late 1930s. The man responsible for creating the cartoon of Mickey Mouse was Walt Disney who later created Snow White and the Seven Dwarfs, the first animated film in 1937.

On the Air

Those Americans who were not enjoying the movie aspect of entertainment were listening to the radio. Popular comedians on the air were Jack Benny, George Burns, and Gracie Allen along with the superhero tales of the Green Hornet and the Lone Ranger. Soap operas also became popular at this time, nicknamed that because their sponsors were apart of the laundry soap industry.

Literature and Art

In the 1930s the homeless and unemployed became hot topics for journalists, novelists, and artists like John Steinbeck and William Faulkner. Steinbeck's book, later to be movie, The Grapes of Wrath was about a family leaving their life trapped in the Dust Bowl to flourish in California. William Faulkner won the Nobel Prize for Literature with help from his story, The Sound and the Fury. This story uncovers the thoughts of whites and African Americans in the South. Photographers like Henry Luce and Dorothea Lange uncovered the horrifying outcome that the Great Depression had bestowed on the American people. Painters like Grand Wood settled on the ideas of American values.

Responces to the Great Depression

Promoting Recovery

In 1929 President Herbert Hoover attempted to calm the citizens of America by reassuring them that the negative effects of the depression would subside in the next sixty days. Although his attempts were unsuccessful, Hoover continued to lighten the mood and set up conferences including the leaders of railroads, banks, labor leaders, government officials, and other businesses to discuss tactics. Hoover had industry leaders promise to keep their factories open, but when this promise was broken, Hoover used public works projects to create jobs. In order for public works projects to work, people had to pay for it. This meant a raise in taxes and the borrowing of money that could be put towards growing businesses.

Trying to Rescue the Banks

Hoovers ideas to help increase the money supply revolved around the government helping banks make loans to corporations. In October 1931, Hoover established the National Credit Corporation (NCC) to provide money to bank who were struggling to support their communities. In 1932 Hoover established the Reconstruction Finance Corporation (RFC) meant to loan money to businesses. These Corporations failed to help the declining economy.

Direct Help for Citizens

Money was never given to poor family from the beginning because Hoover was against it. At this time businesses , state government, and local government were short on money so in July 1932, Congress established the Emergency Relief and Construction Act. This act offered direct relief funds to people funded from emergency loans.

In an Angry Mood

The Bonus Marchers

Section One Resources

Appleby, Joyce Oldham., Alan Brinkley, Albert S. Broussard, James M. McPherson, and Donald A. Ritchie. The American Vision: Modern times. New York, NY: Glencoe/McGraw-Hill, 2006. Print.  

"Causes of the Stock Market Crash and Great Depression." Causes of the Stock Market Crash and Great Depression. N.p., n.d. Web. 04 Mar. 2013.

"The Great Depression Of 1929." About.com US Economy. N.p., n.d. Web. 04 Mar. 2013.

"Google Images." Google Images. N.p., n.d. Web. 04 Mar. 2013.


Section Two Resources

"About The Dust Bowl." About The Dust Bowl. N.p., n.d. Web. 04 Mar. 2013.     

Appleby, Joyce Oldham., Alan Brinkley, Albert S. Broussard, James M. McPherson, and Donald A. Ritchie. The American Vision: Modern times. New York, NY: Glencoe/McGraw-Hill, 2006. Print. 

"Digital History." Digital History. N.p., n.d. Web. 04 Mar. 2013.

"Google Images." Google Images. N.p., n.d. Web. 04 Mar. 2013.
 

Section Three Resources

Appleby, Joyce Oldham., Alan Brinkley, Albert S. Broussard, James M. McPherson, and Donald A. Ritchie. The American Vision: Modern times. New York, NY: Glencoe/McGraw-Hill, 2006. Print.

"The Bonus Army." The Bonus Army. N.p., n.d. Web. 04 Mar. 2013.

"The Great Depression Of 1929." About.com US Economy. N.p., n.d. Web. 04 Mar. 2013.

"Google Images." Google Images. N.p., n.d. Web. 04 Mar. 2013.

After World War I was over, $1,000 bonuses were given to veterans in 1945 initiated by Congress. But in 1931 Wright Patman, Texas congressman issued a bill restricting early payment of bonuses. Veterans then made their way east along highways or by train singing war songs as they went, and these veteran marchers were later known as the "Bonus Army." The Senate denied the new bill and some veterans began to make their way home and others refused to give up the fight and marched on. Many veterans turned to unoccupied buildings for a place to say, and when Hoover heard about this he sent officers to clear them. When it became out of hand, the army was ordered to finish the job and clear all the buildings and camps of veterans. This action hurt president Hoovers reputation and he unsuccessfully recovered the dying economy.