Devastating Chapter in Devastating Chapter in American HistoryAmerican History

Life in the 1920’s• Economy Booming• Business thriving• People spending money• Using Credit and Investing• Huge changes in American life

– Dance – Music– Radio– Entertainment– Sports– Dress

Boom Time

Presidential Election 1928• Coolidge decides not to run for re-election• Republican Herbert Hoover against Democrat

Albert E. Smith• Secretary of Commerce Hebert Hoover wins

Herbert Hoover (1929-1933)– 31st U.S. President

– mining engineer who never served as politician

– served as Secretary of Commerce under Presidents Harding and Coolidge

– gained notoriety for his efforts during the 1927 Mississippi flood

The 31st US President

Hoover Inherits Prosperity

• He becomes He becomes president at the most president at the most prosperous time in prosperous time in American History.American History.

• ““A chicken in every A chicken in every pot, a car in every pot, a car in every garage.”garage.”

• “We in America are nearer to the final triumph over poverty than ever before.”

Economic Troubles Looming1.1. Uneven prosperity –Uneven prosperity – the money was in the money was in

the hands of the few.the hands of the few.

-”Rich got richer -”Rich got richer and poor got and poor got poorer.”poorer.”

-Most Americans -Most Americans could not could not partake in the partake in the economic economic advances of advances of 19201920

Economic Troubles Looming

2. Overproduction of Overproduction of goodsgoods - not enough - not enough consumersconsumers-Businesses -Businesses producing high producing high amounts of goods, amounts of goods, but Americans were but Americans were buying less and lessbuying less and less

-Farming, Coal Mining, Steel, railroads, textiles hit the hardest

Economic Troubles Looming

3. Living on Credit– “Buy now, pay later”

• Credit easily available• Rise in products

people want to buy• Huge rise in

consumer debt• Most are not able to

pay off debt

Economic Troubles Looming

• Loans, debt, property seizure, foreclosure, rural bank failures,

• McNary-Haugen Bill-price-supports on wheat, corn, cotton, and tobacco

4. Agricultural Struggles

• Demand for wheat and corn declined after WWI

• Farmers boosted production to sell more– FAILED!

Economic Troubles Looming5. Buying Stocks on

Margin.

- Many hope to get rich quick by investing in stocks and bonds

- Not regarding the risks

- Led to more debtGreedy stockbrokers fish for new clients from the NYSEGreedy stockbrokers fish for new clients from the NYSE

New York Stock Exchange

Stock Market Struggles

• September 1929 stock prices peaked and then fell

• Many rushed to sell their stocks

• Many lost a lot of money when they sold their stocks

• Many attempted to wait it out

The Stock Market Crashes!!!

Oct 29,1929Oct 29,1929

• People frantically trying to sell their shares

• Many were stuck with huge debts

• Signaled the beginning of the Great Depression

The Stock Market The Stock Market Crash Crash DID NOT DID NOT

CAUSE CAUSE DEPRESSION!!!!!DEPRESSION!!!!!

Financial Collapse

Chaos in NYC

Some Famous LosersSome Famous Losers

• JP Morgan Jr. JP Morgan Jr. $20 - $60 million$20 - $60 million

• Vanderbilt Family Vanderbilt Family $40 million$40 million

• Rockefeller FamilyRockefeller Family 4/5 of fortune4/5 of fortune

• Eddie CantorEddie Cantor (actor) (actor) $2 million$2 million

• Winston ChurchillWinston Churchill $500,00$500,00

• Groucho Marx (actor)Groucho Marx (actor) $240,000 $240,000

• Clarence DarrowClarence Darrow left penniesleft pennies

Effects of the Crash• Gross National

Product plummeted • 90,000 business went

bankrupt• Unemployment sky

rocketed• Black Tuesday sent

shock waves around the World– Hawley-Smoot Tariff

Act

Bank Closures

• Many raced to banks to withdraw their money “Bank Run”• Banks had invested in the stock market resulting in many losing

their money with the crash• Bank accounts were not insured or protected by the government• Millions lost their savings accounts

Causes of Great Depression

• Tariffs and war debt policies that cut down the foreign market for American goods

• Agricultural Crisis• Credit system, loans, and

debt• Unequal distribution of

income• Government keeping

interest rates low

The Depression Hits• Across American

people lost their jobs• People could no

longer afford housing and many were evicted

• Many were forced to live in the streets

• People sleeping in parks, sewer pipes, benches, cars

• Shantytowns or little towns of sheds built of scraps

• Shantytowns referred to as “Hoovervilles”

• Living conditions were awful

Finding Meals• Dug through garbage

cans and begged for food

• Hunger lines, Soup Kitchens and Bread Lines are provided by charitable organizations

“Two or three blocks along Times Square, you’d see these men, silent, shuffling along in a line. Getting this handout of coffee and doughnuts, dealt out from great trucks... I’d see that flat, opaque, expressionless look which spelled for me, human disaster. Men... Who had responsible positions. Who had lost their jobs, lost their homes, lost their families... They were destroyed men.”

Depression Effects Families• Stresses of the

Depression brought many families closer yet split some families apart

• Most men embarrassed they are unable to find work and support family

• Working women faced resentment

• Children faced inadequate food and health care.

• Schools are closing everywhere leaving a lot of children out of school.

Psychological Effects• Suicide rates

increased.• People stopped

going to dentist or doctors.

• Teenage boys and some girls who left home as teenagers to travel the US looking for work

• “Hoover Tourists”-People traveling around country looking for work also known as “Hobos”

• Best and worst of people were exposed

“Hobo Lingo”

“Bone polisher” – dog

“Chuck a dummy” – to faint

“Graybacks” – lice

“Grease the track” – to be run over by a train

“Punk” – any young kid

“Rum Dum” – a drunkard

1. “Decide your own life, don’t let another person rule you”

2. “When in town, be gentleman. Respect local law and officials at all times.”

3. “Try to stay clean and boil up whenever possible” (boil up!? Huh?)

4. “Help all runaway children and try to induce them to go back home”

5. “Do not allow other hobos to molest children, expose to authorities all molesters, they are the worst garbage to infest any society.”

Dust Bowl

• Long severe drought hitting the Midwest “Bread basket”

• Farmers had exhausted and overproduced land

• High Winds caused massive dust storms • Land Covered with dirt and dust

– Dust found as far as New York and on the pacific coast

• Kansas, Oklahoma, Texas, New Mexico, and Colorado known as “Dust Bowl”

Dust Bowl

Dust Bowl

• Many farmers hit the road for the sunny Many farmers hit the road for the sunny climes of Californiaclimes of California

• Because the first migrant farmers were Because the first migrant farmers were from Oklahoma, all migrants were calledfrom Oklahoma, all migrants were called

OkiesOkies

Okies to California

Hoover’s Answer to the Depression

-Little government involvement

-People should take care of themselves and not depend on the government

Hoover’s Approach

• Opposed to federal welfare or direct relief to the needy

• Government hand outs would weaken self respect and “moral fiber”

View of Hoover

• Public opinion for Hoover continually dropped

• Cost the Republicans Congress

• “Hoovervilles”-Shanty towns• “Hoover Blanket”-Newspaper

blankets for homeless• “Hoover Flags”-Empty inside

out pockets-Hoover wagons: automobiles

pulled by horses

So, what did Hoover do…

1. 1. Hawley-Smoot Hawley-Smoot Tariff ActTariff Act meant meant to protect to protect American products American products from imports. from imports.

• Furious European Furious European countries quit countries quit buying American buying American goods.goods.

19301930

2. Began the Began the building of building of Boulder/Hoover Boulder/Hoover DamDam

Colorado River Colorado River between Arizona between Arizona and Nevadaand Nevada

-$700 million public -$700 million public work programwork program

-provides electricity -provides electricity and food control, and food control, waterwater

3. Urged private charities, business3. Urged private charities, business

leaders and unions to help.leaders and unions to help.

Empire State Building

New York19301930

Tallest building in US

Symbolof Hope

Depression’s Depression’s greatest greatest

photographerphotographer

The Migrant Mother

Hoover’s Action Plan

• Banks cooperatives

-Helping farmers

• Federal Home Loan Bank Act– Lower mortgage rate

and allowed farmers to refinance their farm loans

Hoover’s Action Plan

• Reconstruction Finance Corporation (RFC)– 2 billion dollars for

emergency financing for banks, life insurance companies, railroads, and other large businesses

Bonus ArmyBonus Army• The US governmentThe US government

had promised WWI vets a had promised WWI vets a bonus in 1945 when they bonus in 1945 when they retired.retired.

• 20,000 unemployed 20,000 unemployed

vets went to Washington vets went to Washington to demand their bonus to demand their bonus early.early.

1932

• After the government said, “No” many of the After the government said, “No” many of the people stayed.people stayed.

• General Douglas MacArthurGeneral Douglas MacArthur and the US Army was and the US Army was called out to disperse the vets.called out to disperse the vets.

• MacArthur MacArthur used tear gas, used tear gas, tanks, and tanks, and guns on the guns on the vets.vets.

• Hoover was Hoover was furious but took furious but took the blame.the blame.

• Two veterans had been shot and killed. Two veterans had been shot and killed. • An 11 week old baby was in critical condition An 11 week old baby was in critical condition

resulting from shock from gas exposure. resulting from shock from gas exposure. • Two infants had died from gas asphyxiation. Two infants had died from gas asphyxiation. • An 11 year old boy was partially blinded by tear gas. An 11 year old boy was partially blinded by tear gas. • One bystander was shot in the shoulder. One bystander was shot in the shoulder. • One veteran's ear was severed by a Cavalry saber. One veteran's ear was severed by a Cavalry saber. • One veteran was stabbed in the hip with a bayonet. One veteran was stabbed in the hip with a bayonet. • At least twelve police were injured by the veterans. At least twelve police were injured by the veterans. • Over 1,000 men, women, and children were Over 1,000 men, women, and children were

exposed to the tear gas, including police, reporters, exposed to the tear gas, including police, reporters, residents of Washington D.C., and ambulance residents of Washington D.C., and ambulance drivers.drivers.