America and the Great Depression

“Brother, Can you spare a dime?”

The Great Depression- A Definition

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• THE GREAT DEPRESSION was a severe economic downturn that began in 1929 and lasted for over a decade.
• The Depression was characterized by a sharp decline in industrial production, high unemployment, widespread poverty and homelessness, and a decline in international trade.
• The Great Depression had a profound impact on the lives of millions of people around the world, and led to major changes in government policies and economic theory.

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Two men looking for work, Chicago, 1933.

Who is this? Photo dated 1936.

The Stock Market Boom of the 1920s.

• ECONOMIC GROWTH: The United States experienced significant economic growth in the 1920s, driven in part by new technologies and production methods, such as assembly-line manufacturing. This growth led to increased employment and rising wages, which in turn fueled consumer spending.
• EXPANSION OF CREDIT: The availability of credit increased significantly in the 1920s, making it easier for people to borrow money to invest in the stock market.
• CONFIDENCE IN THE ECONOMY: The booming economy of the 1920s created a sense of optimism and confidence among investors, who believed that the stock market would continue to rise indefinitely.
• GOVERNMENT POLICIES: The federal government implemented policies that were favorable to business, such as reducing taxes and reducing regulation. This created a favorable environment for investment and growth.
• SPECULATION: Finally, speculation played a major role in the stock market boom. Many investors bought stocks based on rumors and hearsay, rather than sound investment principles. This led to a SPECULATIVE BUBBLE in the stock market, with prices rising to unsustainable levels.

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New York Times Headline, 1928. Stock market fever!

Stockbrokers trading on the “Curb Market,” an outdoor trading area for non-NYSE stocks, 1927.

The Causes of the Great Depression

• STOCK MARKET SPECULATION AND OVERPRODUCTION: Prior to the Great Depression, the stock market experienced a speculative bubble- Investors buying unproven stocks based on rumors. This led to overproduction of goods, as companies tried to keep up with demand.
• BANKING CRISIS: The banking system in the United States was weak and under-regulated. Banks engaged in risky practices, such as lending money to speculators and investing heavily in the stock market themselves. When the stock market crashed in 1929, many banks failed, causing a domino effect that led to the collapse of the banking system.
• UNEQUAL DISTRIBUTION OF WEALTH: The 1920s were a time of great economic growth in the United States, but the wealthy became increasingly wealthy, while the middle class and working class saw their wages stagnate. This led to a decline in consumer spending, which contributed to the economic downturn.
• GOVERNMENT POLICIES: The federal government did not take significant action to address the Depression. Policies such as the Smoot-Hawley Tariff Act, which raised tariffs on imported goods, and the tight monetary policy of the Federal Reserve, which restricted the money supply, worsened the economic situation.

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Investors checking stock market prices, October 29th, 1929.

“The American Way”, black people waiting in a breadline, Cleveland, OH, 1937.

Immediate Effects of “Black Thursday”

• SHARP DECLINE IN STOCKS: On Black Friday (10-29-1929), American stock prices plummeted, with the Dow Jones Industrial Average falling by 11% in just one day. The decline continued in the following weeks and months, some estimates suggest that between September 1929 and July 1932, the stock market lost approximately 89% of its value. This decline wiped out billions of dollars in wealth and had a significant impact on the economy.
• PANIC SELLING: The sharp decline in stock prices caused panic among investors, who began selling off their shares in large numbers. This only served to speed the decline in stock prices and contributed to the severity of the economic downturn.
• BANK FAILURES: The panic selling triggered a wave of bank failures as investors withdrew their money from banks. This led to a loss of confidence in the banking system and further contributed to the economic instability.
• BUSINESS FAILURES: As the economy contracted and consumer spending declined, many businesses began to fail, leading to widespread job losses and a rise in unemployment.
• INTERNATIONAL EFFECTS: The economic downturn in the United States led to a decline in international trade, a contraction of the global economy and a worldwide depression.

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Selling a car for cash, 1930.

A crowd of depositors outside the American Union Bank in New York, having failed to withdraw their savings before the bank collapsed, June, 1931.

The Economics of the 1930s

• STOCK MARKET CRASH: The decline began on October 24, 1929, when the stock market crashed on what became known as Black Friday. Over the next few years, stock prices continued to decline, leading to significant losses for investors.
• BANKING CRISIS: The stock market crash triggered a wave of bank failures, as investors withdrew their money from banks. This led to a loss of confidence in the banking system and a contraction in the availability of credit. With no available credit, business had to slow down production and expansion.
• DECLINE IN PRODUCTION: The decline in consumer spending and the lack of credit leads to a decline in industrial production. Many businesses closed or reduced their operations, leading to widespread job losses and a rise in unemployment.
• DEFLATION: The decline in industrial production and consumer spending led to a general decline in prices, known as deflation. This made it difficult for businesses and individuals to pay off debts, further contributing to the economic instability.

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A “One Penny Restaurant,” New York, 1933. This four floor restaurant could serve 9000 customers per day, every item on the menu was 1 penny. It was funded by the government and local charities.

Businesses in the 1930s

• Many businesses were forced to close or reduce their operations due to a decline in consumer spending and a contraction in the availability of credit.
• Unemployment rose sharply, which further reduced consumer spending and worsened the economic downturn.
• Some businesses that were able to survive the downturn did so by reducing wages and benefits, which contributed to social unrest.
• INCREASED COMPETITION: With many large businesses also struggling during the Great Depression, there was an increase in competition with small businesses. This made it difficult for small businesses to differentiate themselves and to attract customers.

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A local business announcing closure, Nevada, 1931.

Abandoned bank building, Haverhill, Iowa, 1933.

Farmers and Ranchers in the 1930s

• FALLING CROP PRICES: Farmers faced a sharp decline in crop prices. With fewer people able to afford food, demand for agricultural products decreased, leading to a surplus of crops and a decline in prices. This meant that farmers were often unable to make a profit from their crops.
• SOIL EROSION AND DROUGHT: Many areas of the country experienced severe drought conditions, which made it more difficult for farmers to grow crops.
• FORECLOSURES AND EVICTIONS: Due to falling crop prices, many farmers could not make mortgage payments on their land, meaning many farmers lost their land and homes.
• AGRICULTURAL SURPLUSES: The decline in demand for agricultural products led to significant surpluses of crops and livestock. These surpluses were often destroyed or left to rot, which meant that farmers were unable to benefit from their hard work and investment.
• MIGRATION AND DISPLACEMENT: Many farmers were forced to leave their homes and communities in search of work elsewhere. This led to a wave of migration and displacement, with many farmers and their families traveling to cities in search of employment opportunities.

Soil erosion, Richardson County, Nebraska, 1936.

Farm Auction announcement, New Carlisle, OH, 1933. More than 750,000 farms were lost between 1930 and 1935 in America.

Farmers Fight Back

• PENNY AUCTIONS: One strategy that farmers used to resist foreclosure was the Penny Auction. In a Penny Auction, farmers would gather to bid on foreclosed properties, with each bidder offering only a small amount of money (such as a penny). The idea was to prevent the properties from being sold at market value, and to create a sense of community resistance to foreclosure.
• FARMER’S STRIKES: In some parts of the country, farmers organized strikes to demand better prices for their crops and to resist eviction. In some cases, these strikes involved the withholding of crops from the market or the blocking of roads to prevent the transport of goods.
• COOPERATIVE ORGANIZATIONS: Some farmers formed cooperative organizations to pool resources and to negotiate better prices for their crops. These organizations allowed farmers to work together to protect their interests and to resist the pressures of the market.
• POLITICAL ACTIVISM: Many farmers became politically active during the Great Depression, working to elect officials who supported agricultural policies that would benefit their communities. This included support for the New Deal programs implemented by President Franklin D. Roosevelt.

One of the first “Penny Auctions,” Madison County, Nebraska, 1931.

Farm protesters blocking the road to the local market, Sioux City, Iowa, 1933.

Workers in the 1930s

• UNEMPLOYMENT: At the height of the Great Depression in 1933, the unemployment rate reached 25%: 1 of every 4 Americans was out of work, up from 3% unemployment prior to the Depression.
• JOB LOSSES: Many industries experienced significant job losses during the depression, including manufacturing, construction, and agriculture. Even industries that were thought to be relatively stable, such as banking and finance, experienced significant job losses.
• LONG-TERM UNEMPLOYMENT: One of the most significant challenges during the Great Depression was that many people who lost their jobs during the Depression were out of work for years, with little hope of finding new employment.
• SOCIAL/ECONOMIC IMPACTS: The high rates of unemployment during the Great Depression had large social and economic impacts, including increased poverty and homelessness, a decline in consumer spending, and a rise in crime and social unrest.

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“White Man Slave.” Robley D. Stevens, 30-years-old, wears a sign that reads: "I am for sale. I must have work or starve," Baltimore, MD, 1931.

Thousands gather in a food line in Times Square, NY, 1931

The Workers Respond

• STRIKES: One of the most significant actions taken by workers during the Great Depression was to organize strikes to demand better wages and working conditions. In many cases, these strikes led to violent confrontations with police or company guards.
• LABOR UNIONS: Many workers during the Great Depression joined labor unions, which allowed them to negotiate collectively for better wages and working conditions. Some of the most prominent unions of the time included the American Federation of Labor (AFL) and the Congress of Industrial Organizations (CIO).
• JOB LOSSES AND LAYOFFS: Many workers during the Great Depression experienced job losses and layoffs, which made it difficult to support themselves and their families. Some workers turned to day labor or odd jobs to make ends meet, while others migrated to other parts of the country in search of work.
• POLITICAL ACTIVISM: Many workers became politically active during the Great Depression, working to elect officials who supported policies that would benefit workers and their families. This included support for the New Deal programs implemented by President Franklin D. Roosevelt, which provided relief to those affected by the depression and helped to stabilize the economy.

Newspaper declaring Labor Victory during strike, “The Timber Worker,” Washington, 1935.

The Artist Union strike, New York City, 1934. The Artists Union was made up of musician, artists and writers.

Hoover and the Start of the Great Depression

• HOOVER IGNORES THE DEPRESSION: President Hoover at first believed that the economy would recover on its own and that government intervention was not necessary. He encouraged voluntary actions by businesses, banks, and charities to provide relief to those affected by the crisis. He also tried to promote public confidence in the economy through speeches and other forms of public relations.
• HOOVER BEGINS TO INTERVENE: Hoover eventually supports more interventionist policies. He signed into law the SMOOT-HAWLEY TARIFF ACT OF 1930. This raised tariffs on imported goods to protect American businesses, but ended up hurting American exports and making the Depression worse.
• HOOVER’S PROGRAMS: Hoover creates some federal agencies to provide relief and stimulate the economy, such as the Reconstruction Finance Corporation and the Federal Farm Board, but these are too limited in scope and not providing sufficient support to those most in need.
• THE ELECTION OF 1932: Hoover's response to the Great Depression was marked by a reluctance to embrace more aggressive government intervention in the economy and he was defeated in a landslide in the 1932 presidential election by Franklin D. Roosevelt, who promised a more comprehensive and ambitious response to the crisis.

President Hoover in the White House, 1930.

World War 1 veterans and their families protesting Hoover’s policies, Washington, DC, 1932.

Hoovervilles

• HOOVERVILLES: Makeshift communities of shacks, tents, and other makeshift shelters that sprang up across the United States during the Great Depression. They were named after President Herbert Hoover, who was blamed by many for the economic crisis and the widespread suffering that it caused.
• LOCATIONS AND INHABITANTS: Hoovervilles were typically located in urban areas, near factories, rail yards, and other industrial centers. They were inhabited by a mix of homeless individuals, unemployed workers, and other marginalized groups who had been displaced by the economic crisis.
• VIEWS FROM SOCIETY: By some, Hoovervilles were seen as a symbol of the failure of the government and the economic system to provide for its citizens. Many people sympathized with the plight of those who were forced to live in such terrible conditions and recognized the need for more comprehensive government action to address the crisis.
• NEGATIVE VIEWS: On the other hand, Hoovervilles were also seen as a reflection of the perceived moral failings of those who lived in them. Many people believed that those who lived in Hoovervilles were lazy or undeserving, and that their poverty was the result of their own personal shortcomings.

The largest Hooverville in America, St. Louis, 1931, made primarily out of orange crates.

COMPARISON: Shantytown in NY, 1932; Homeless Tents in LA, 2022.

ARE THERE STILL “HOOVERVILLES?”

The Election of 1932

• HOOVER’S PLATFORM:
• Focused on his record as President, emphasizing his efforts to address the economic crisis of the Great Depression.
• He emphasized the importance of maintaining balanced budgets and limiting government intervention in the economy.
• Hoover also emphasized the importance of personal responsibility and self-reliance, arguing that individuals and businesses needed to take responsibility for their own success and prosperity.
• ROOSEVELT’S PLATFORM:
• Centered around his "New Deal" vision for America. He promised voters a comprehensive program of GOVERNMENT INTERVENTION in the economy and the creation of new social welfare programs to address the suffering caused by the Great Depression.
• Roosevelt promised to use the power of the federal government to create jobs, stabilize the banking system, and promote economic recovery.
• Roosevelt also promised to provide direct relief to those in need, including the creation of a national social insurance program and the expansion of public works programs to create jobs and stimulate the economy.

Political Cartoon: “It’s his baby now!” FDR defeats Hoover in the 1932 Election.

Roosevelt’s New Deal

• The New Deal included a wide range of programs and policies, including:
• The creation of the Civilian Conservation Corps (CCC), which provided jobs for young men in conservation projects and reforestation efforts.
• The establishment of the Federal Emergency Relief Administration (FERA), which provided direct relief to individuals and families in need.
• The implementation of the National Industrial Recovery Act (NIRA), which regulated business practices and established fair labor standards.
• The creation of the Agricultural Adjustment Administration (AAA), which provided subsidies to farmers and helped to stabilize agricultural prices.
• The establishment of the Tennessee Valley Authority (TVA), which provided jobs and economic development in the Tennessee Valley region.
• The implementation of the Social Security Act, which created a national social insurance program to provide benefits to retirees and those with disabilities.
• The creation of the Works Progress Administration (WPA), which provided jobs for millions of Americans in a variety of public works projects.
• The New Deal represented a significant departure from traditional American values of limited government and individualism, and marked the beginning of a more expansive and activist role for the federal government in American life.

Artist Eric Mose on a scaffold with mural “Power” at Samuel Gompers Industrial High School for Boys, Bronx, New York, WPA Project, 1935. This mural was plastered over in the 1960s and then restored in 2013.

Successes of the New Deal

• ECONOMIC RECOVERY: The New Deal succeeded in stabilizing the financial system and restoring economic growth, leading to the end of the Great Depression by 1939.
• JOB CREATION: The New Deal created millions of jobs through public works projects and employment programs, such as the Civilian Conservation Corps and the Works Progress Administration.
• SOCIAL SECURITY: The New Deal established Social Security, which provides retirement benefits and disability insurance to millions of Americans.
• LABOR RIGHTS: The New Deal strengthened labor rights through the National Labor Relations Act, which protected workers' right to organize and collectively bargain with their employers.
• FINANCIAL REGULATION: The New Deal introduced regulations on banks and the stock market, such as the Glass-Steagall Act and the Securities Act, which aimed to prevent another financial crisis.

A WPA art poster, created in 1937

Unearthing dinosaur bones in Texas, part of a WPA project in 1939.

Criticisms of the New Deal

• INEFFECTIVENESS: Some critics argue that the New Deal did not go far enough in addressing the root causes of the Great Depression and that it failed to create long-term solutions to the country's economic problems.
• NATIONAL DEBT: Critics argue that the New Deal led to a significant increase in the national debt, which could have negative long-term consequences for the economy and is still being felt in 2023.
• RACIAL DISCRIMINATION: The New Deal programs did not always treat all Americans equally. For example, some programs discriminated against African Americans and other minority groups.
• LIMITATIONS OF BUSINESSES: Critics argue that the New Deal limited business opportunities and innovation, which could have negative long-term consequences for the economy.
• POLITICAL OPPOSITION: The New Deal faced significant political opposition from conservatives, who believed that the government should not interfere with the economy and that the New Deal's policies were unconstitutional.

The Dust Bowl

• CAUSES: The Dust Bowl was caused by a combination of natural and human factors, including drought, over-farming, and poor soil conservation practices.
• IMPACT: The Dust Bowl had a devastating impact on the Great Plains region, causing widespread economic and environmental damage. It led to the displacement of millions of people and forced many farmers to abandon their land.
• DUST STORMS: The dust storms were caused by high winds picking up dry soil and blowing it across the region, often blocking out the sun and reducing visibility to almost zero.
• MIGRATION: The Dust Bowl led to a mass migration of people from the Great Plains to other parts of the country in search of work and a better life. Many of these migrants ended up in California, where they faced discrimination and hardship.
• GOVERNMENT RESPONSE: The federal government responded to the Dust Bowl with a number of programs and policies, including the Soil Conservation Service and the Civilian Conservation Corps. These programs aimed to restore the soil and prevent further erosion.

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House covered in soil from a dust storm, North Dakota, 1936.

Dust Storm approaching Rolla, Kansas, 1935.

The Impact of the Depression on American Society

• ECONOMIC POLICY: The Great Depression led to a fundamental shift in economic policy in the United States, with the government playing a larger role in regulating the economy and providing social welfare programs.
• NEW DEAL PROGRAMS: Many of Roosevelt’s New Deal programs, such as Social Security and the minimum wage, remain in place today.
• LABOR RIGHTS: The Great Depression helped to advance labor rights in the United States, with the passage of the National Labor Relations Act, which protected workers' right to organize and collectively bargain with their employers.
• BANKING REGULATION: The Great Depression led to the creation of the Federal Deposit Insurance Corporation (FDIC) and other banking regulations, which aimed to prevent another financial crisis.
• CONSUMER CULTURE: The Great Depression had a lasting impact on American consumer culture, with many people becoming more frugal and cautious with their spending.
• ART AND LITERATURE: The Great Depression inspired a generation of writers and artists, including John Steinbeck and Dorothea Lange, who documented the struggles of the American people during the era.

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1st Edition of “The Grapes of Wrath,” story of farmers fleeing OK to move to California during the Depression, 1939.

WPA Poster explaining Social Security, 1935.

How to study for an essay test when you don’t know the essay questions.

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How to write a good answer to an essay question on a history test.

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How to write a good answer to an essay question on a history test.

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FOR INSTANCE: Consider the question "How did the Treaty of Versailles in 1919 lead to the rise of the Nazi Regime in the 1930s?" The following would be an excellent example of an introduction, supporting evidence and a conclusion in an essay answer.

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The Treaty of Versailles, signed in 1919, brought an end to World War I, but it also sowed the seeds for the rise of the Nazi regime in Germany in the 1930s. The treaty imposed harsh penalties on Germany, leading to economic and political instability that helped pave the way for the Nazi party's rise to power.

�One of the most significant provisions of the Treaty of Versailles was the war guilt clause, which placed full responsibility for the war on Germany and Austria-Hungary. This clause led to the imposition of significant financial reparations on Germany, which crippled the German economy and contributed to hyperinflation and economic instability in the country.

�The Treaty of Versailles also led to the loss of significant territories for Germany, including parts of the Rhineland and West Prussia. The loss of these territories was a source of national humiliation for Germany and contributed to a sense of resentment and anger that helped fuel the rise of the Nazi party.

�In addition, the Treaty of Versailles imposed severe restrictions on Germany's military capabilities, including limits on the size of the German army and navy. This restriction weakened Germany's ability to defend itself and contributed to a sense of vulnerability that was exploited by Nazi propaganda.

�The harsh penalties imposed by the Treaty of Versailles, combined with economic instability and political fragmentation in Germany, created an environment in which extremist political movements could thrive. The Nazi party, led by Adolf Hitler, capitalized on this environment by promising to restore German pride and prosperity.

�Hitler's rise to power in 1933 was facilitated by a weak and divided political establishment, as well as by the use of propaganda and intimidation. Once in power, the Nazi regime embarked on a campaign of militarization and expansionism that ultimately led to World War II.

�In conclusion, the Treaty of Versailles was a significant contributing factor to the rise of the Nazi regime in the 1930s. The harsh penalties imposed on Germany, combined with economic and political instability, created an environment in which extremist political movements could thrive. The lessons of the Treaty of Versailles continue to underscore the importance of promoting international cooperation and understanding in preventing conflict and promoting peace.

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