Social Effects of the Depression

1
THE GREAT DEPRESSION BEGINS
2
THE NATIONS SICK ECONOMY
As the 1920s advanced, serious problems
threatened the economy while Important industries
struggled, including

• Agriculture
• Railroads
• Textiles
• Steel
• Mining
• Lumber
• Automobiles
• Housing
• Consumer goods

3
October, 1929

• Causes
• Uneven distribution of wealth
• Weak Farm economy
• Overproduction of Goods
• Excessive use of Credit
• Government Economic Policies
• Global Economic Depression
• Stock Market Abuses

4
GAP BETWEEN RICH POOR

• The gap between rich and poor widened
• The wealthiest 1 saw their income rise 75
• The rest of the population saw an increase of
  only 9
• More than 70 of American families earned less
  than 2500 per year

5
FARMERS STRUGGLE

• No industry suffered as much as agriculture
• During World War I European demand for American
  crops soared
• After the war demand plummeted
• Farmers increased production sending prices
  further downward

6
CONSUMER SPENDING DOWN

• By the late 1920s, American consumers were buying
  less
• Rising prices, stagnant wages and overbuying on
  credit were to blame. Remember the Installment
  Plan?
• Most people did not have the money to buy the
  flood of goods factories produced

Overproduction of Goods and Easy Credit
Hoover Flags
7
HOOVER WINS 1928 ELECTION

• Republican Herbert Hoover ran against Democrat
  Alfred E. Smith in the 1928 election
• Hoover emphasized years of prosperity under
  Republican administrations
• Hoover won an overwhelming victory

Government Policies
Harding, Coolidge and Hoover All practiced
laissez-faire economics Cut Taxes for the Wealthy
in hopes that wealth would trickle down with more
jobs and higher wages. It didnt
8
HAWLEY-SMOOT TARIFF
Global Depression

• The U.S. was not the only country gripped by the
  Great Depression
• Much of Europe suffered throughout the 1920s
• In 1930, Congress passed the toughest tariff in
  U.S. history called the Hawley- Smoot Tariff
• It was meant to protect U.S. industry yet had the
  opposite effect
• Other countries enacted their own tariffs and
  soon world trade fell 40

9
THE STOCK MARKET

• By 1929, many Americans were invested in the
  Stock Market
• The Stock Market had become the most visible
  symbol of a prosperous American economy
• The Dow Jones Industrial Average was the
  barometer of the Stock Markets worth
• The Dow is a measure based on the price of 30
  large firms

• Through most of the 1920s, stock prices rose
  steadily
• The Dow reached a high in 1929 of 381 points
  (300 points higher than 1924)
• By 1929, 4 million Americans owned stocks

10
SEEDS OF TROUBLE

• By the late 1920s, problems with the economy
  emerged
• Speculation Too many Americans were engaged in
  speculation buying stocks bonds hoping for a
  quick profit
• Margin Americans were buying on margin
  paying a small percentage of a stocks price as a
  down payment and borrowing the rest

• In September the Stock Market had some unusual up
  down movements
• On October 24, the market took a plunge . . .the
  worst was yet to come
• On October 29, now known as Black Tuesday, the
  bottom fell out
• 16.4 million shares were sold that day prices
  plummeted
• People who had bought on margin (credit) were
  stuck with huge debts

11
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12
Results

• GNP fell
• Unemployment rose
• National Income dropped
• Production declined
• Bank Systems failed
• US affected European economy

13
GNP DROPS, UNEMPLOYMENT SOARS

• Between 1928-1932, the U.S. Gross National
  Product (GNP) the total output of a nations
  goods services fell nearly 50 from 104
  billion to 59 billion
• 90,000 businesses went bankrupt
• Unemployment leaped from 3 in 1929 to 25 in
  1933

14
Brother, Can You Spare a Dime
15
Hoovers Response to the Great Depression
October 29, 1929 16,000,000 shares of stock were
traded
Rugged Individualism
Agricultural Marketing Act
Hawley-Smoot Tariff
Hoover Dam Project
Reconstruction Finance
Corporation Emergency
Relief and Construction Act
Federal Home Loan Bank Act
The Bonus Army
pull themselves up by their bootstraps
16
Societal Effects
"We tried to struggle along living day by day.
Then I couldn't pay the rent. I had a little car,
but I couldn't pay no license for it. I left it
parked against the court. I sold it for fifteen
dollars in order to buy some food for the family.
I had three little children
Bank accounts disappeared, parents lost their
jobs and could not pay the mortgage so families
were evicted. All levels of society suffered.
Professionals and white collar workers suddenly
had no prospect of finding another position
17
Hoovervilles named after President Hoover, who
was blamed for the problems that led to the
depression, sprung up throughout the United
States. Ragged Individuals slept under Hoover
Blankets (newspapers), fought over the content
of garbage cans, or cooked their findings in old
oil drums in tin-and-paper shantytowns.
18
Farmers Distress
Peace brought an end to government guaranteed
high prices and massive purchases from foreign
nations. New farm machinery and expanded acreage
also caused overproduction of crops. A withering
depression swept through the Midwest. The
Capper-Volstead Act exempted farmers
cooperatives from anti-trust prosecution and the
McNary-Haugen Bill sought to keep farm prices
high by allowing the government to buy up surplus
and sell them abroad BUT Coolidge vetoed this
last bill twice.
19
Dust Bowl 1931 - 1940 Only added to the Farmers
Problems
With the onset of drought in 1930, the
over-farmed and overgrazed land began to blow
away. Winds whipped across the plains, raising
billowing clouds of dust. The sky could darken
for days, and even well-sealed homes could have a
thick layer of dust on the furniture. In some
places, the dust drifted like snow, covering farm
buildings and houses. Nineteen states in the
heartland of the United States became a vast dust
bowl. With no chance of making a living, farm
families abandoned their homes and land, fleeing
westward to become migrant laborers.
20
With crops drying in the fields and cattle
starving, the Dust Bowl farmers had little choice
but to abandon their farms and move elsewhere.
Loading as many of their belongings as they could
carry, the farmers and their families joined
thousands of others migrating to other parts of
the country.
Squatters along the Highway in California
Okies Oklahoma Dust Bowl Refugees
21
Penny Auctions
Some farmers in Madison County, Nebraska, took
action against bank foreclosures. In 1931, about
150 farmers showed up at a foreclosure auction at
a family farm. The bank was selling the land and
equipment because the family couldn't repay a
loan. The bank expected to make hundreds, if not
thousands of dollars. As those who were there
remember it, the auctioneer began with a piece of
equipment. The first bid was 5-cents. When
someone else tried to raise that bid, he was
requested not to do so forcibly. All bids were
ridiculously low. The proceeds for that first
"Penny Auction" were 5.35, which the bank was
supposed to accept to pay off the loan.
The idea caught on. Harvey Pickerel remembers
going to a Penny Auction where "some of the
farmers wouldn't bid on anything at all because
they were trying to help the man that was being
sold out." At auctions across the Midwest,
farmers showed up as a group and physically
prevented any real bidders from placing bids
22
Riding the Rails
Many people forced off the farm heard about work
hundreds of miles away ... or even half a
continent away. Often the only way they could get
there was by hopping on freight trains,
illegally. More than two million men and perhaps
8,000 women became hoboes.
Riding the rails was dangerous. The bulls were
hired to keep hoboes off trains, so you couldn't
just go to a railroad yard and climb on. Most
hoboes would hide along the tracks outside the
yard. They'd run along the train as it gained
speed, grab hold and jump into open boxcars.
Sometimes, they missed. Many lost their legs or
their lives. As the train was reaching its
destination, the hoboes had to jump off before a
new set of bulls to arrest them or beat them up.
23
Hobo Camps
Finding food was a constant problem. Hoboes often
begged for food at a local farmhouse. If the
farmer was generous, the hobo would mark the lane
so that later hoboes would know this was a good
place to beg
"I was sitting on a railroad track, somewhere in
Montana, waiting for a freight train. I was
nineteen years old. It was getting dark, and as I
looked down at a village below, I saw a Christmas
tree lit up in a window and children playing
around it. Tears ran down my cheeks as I
remembered a Christmas Day when I was the age of
those children."
24
Dorothea Lange the Depression
Dorothea Lange is best known for her chronicles
of the Great Depression and for her photographs
of migratory farm workers. Here are photographs,
taken for the U.S. Farm Security Administration
(FSA), investigating living conditions of
families hired to work in cotton fields and farms
in Arizona and California. Many of the families
had fled the Dust Bowl,
25
1932 Bonus Army 20,000 jobless veterans and their
families camped in D.C. They wanted their
pension bonus from WWI. Hoover called out the
army to disperse the Bonus Army
26
The Mighty had Fallen
Bread Lines
Flop Houses
Unemployed men wait in line for food this
particular soup kitchen was sponsored by Al Capone
27
African Americans affected most
The problems of the Great Depression affected
virtually every group of Americans. No group was
harder hit than African Americans. By 1932,
approximately half of black Americans were out of
work. In some Northern cities, whites called for
blacks to be fired from any jobs as long as there
were whites out of work. Racial violence again
became more common, especially in the South.
Lynchings, which had declined to eight in 1932,
surged to 28 in 1933.
28
1932 ElectionThe Democrats sweep with FDR
A New Deal for the Forgotten Man
29
Franklin Delano RooseveltThe Only thing we have
to fear is Fear Itself
3 rs
30
Hundred Days
FDR and his Brain Trust

• Bank Holidays Emergency Banking Act
• Federal Deposit Insurance Act (FDIC)
• Federal Securities Act Securities and Exchange
  Commission
• Federal Emergency Relief Administration

31
Agricultural Adjustment Act (AAA)
Protect farmers from falling prices by providing
crop subsidies to reduce production. Plowing up
fields and eliminated extra beef and pork thus
increasing prices and eliminating surplus.
Subsidies were paid from a new tax on food
processors and this was the reason the Supreme
Court ruled the AAA unconstitutional.
Killing surplus livestock was viewed as wasteful
even though meat was donated. People also
objected to farmers plowing up fields while
others went hungry.
32
National Relief Administration
Created under the National Industrial Recovery
Act, (NIRA) 540 voluntary codes for businesses
were established, including freezing wages to
promote fair competition. Anti-trust laws were
suspended to promote collective bargaining, and
recognize unions.
Did not help Blacks or Women

• Set a 40 hour work week for clerical workers, a
  36 hour
• work week for industrial workers
• Set minimum wage at 40 cents an hour
• Abolished child labor

33
Civilian Conservation Corp
Put unmarried men, between the ages of 18 and 26
to work maintaining and restoring American
forests, state and national parks, and beaches.
Workers sent home 25 per month
FDRs favorite program
We Can Take It!
34
Public Works Administration
Allotted money to state and local governments for
building roads, bridges, dams, and other public
works.
Grand Coulee Dam
Replaced by WPA
Built roads bridges, hospitals, schools, parks,
military bases, city halls, court houses
35
Tennessee Valley Authority
Even by Depression standards, the Tennessee
Valley was in sad shape in 1933. Much of the land
had been farmed too hard for too long, which had
worn out the soil. Many farmers were barely
growing enough food to feed their families.
The TVA played an important role in helping the
families, farms, and businesses in the Tennessee
Valley recover from the nationwide economic slump
known as The Great Depression.
During its early years, TVA developed
fertilizers and new agricultural methods that
helped farmers grow more food. TVA also improved
habitats for wildlife and fish. The most dramatic
change in Valley life, however, came from the
electricity generated by the hydroelectric dams
built by TVA. For the first time, rural areas of
the Tennessee Valley were able to have electric
lights and modern appliances such as
refrigerators. This made life easier and farms
more productive.
36
Second New Deal
37
Works Progress Administration
The largest and most important of the New Deal
cultural programs was the Works Progress
Administration (WPA), a massive employment relief
program launched in the spring of 1935 -- the
beginning of FDR's "Second New Deal.
The WPA put the unemployed back to work in jobs
that would serve the public good and conserve the
skills and the self-esteem of workers throughout
the U.S. Work began immediately on the WPA's
Federal Project Number One. "Federal One,was a
project comprised of five major divisions the
Federal Art Project, the Federal Music Project,
the Federal Theatre Project, the Federal Writers
Project and the Historical Records Survey. Just
one year after the five national directors first
met in Washington, some 40,000 WPA artists and
other cultural workers were employed in projects
throughout the United States.
38
Social Security Act
Signified a sharp departure from prior American
tradition. The United States had customarily
stressed "pulling oneself up by the bootstraps"
and voluntarism to alleviate social ills.
Previous to 1929, the federal government did not
furnish such programs as old-age pensions, public
assistance, unemployment compensation, or health
insurance except for war veterans.
However, the depression of the early 1930s
generated nationwide misery, and sparked a
popular crusade for old-age pensions coordinated
by a retired California doctor, Francis Townsend.
The Roosevelt administration responded by
securing the Social Security Act in 1935. The
program would basically be funded by payroll
taxes. The act has been amended numerous times,
notably in 1939 when surviving spouses and minor
children were included as beneficiaries. Payroll
taxes grew to pay for it.
39
Eleanor Roosevelt
Policies she affected Increased number of women
in FDRs administration Women could hold jobs
even if husbands had work Lobbied for National
Labor Relations Board (WAGNER ACT Relief programs
for women Encouraged formation of NYA Championed
Civil Rights and African Americans Federal Aid to
the Arts (WPA)
She visited coal mines, migrant camps, and the
homes of sharecroppers and slum-dwellers. She
inspected government programs and projects. She
reported to FDR on conditions during the
Depression and on the success or failure of New
Deal programs,
40
Critics
New Deal Did not Do Enough Upton Sinclair wanted
to reform entire economic system Robert
LaFollette claimed unequal distribution of wealth
would continue
New Deal went too far TVA was too
Socialistic Wealth Tax Act aimed at
wealthy Social Security Act penalized hard
workers, too militaristic American Liberty League
led by Al Smith claimed the New Deal limited
individual freedoms, was unconstitutional and
Un-American
41
Huey LongThe Kingfish
Helped underprivileged by supporting education,
medical care and public services Demanded
redistribution of wealth to limit individual
income to 1 million and government take the rest
giving every family a minimum of 5000
SHARE OUR WEALTH
42
Father Coughlin the Radio Priest and a
Contradiction
Wanted government takeover and ownership of banks
then later supported sanctity of private
property First supported New Deal, later he
attacked FDRs recklessness Became Anti-Semitic
supporting Hitler and Mussolini
43
COURT PACKING FIASCO
Because the Supreme Court had declared the NIRA
and AAA unconstitutional, FDR proposed a
court-reform bill that he claimed would lighten
the burden on the aging justices. FDR asked
Congress to allow him to appoint as many as six
additional justices with judges who would support
the New Deal. This cost FDR support as many felt
he was garnering too much power.