I. Industries in trouble
a) Equipment becomes out of date: has to be replaced.
b) less demand for goods after WWI
c) Americans have less money to spend and are buying less.
II. Farming Crisis
Farmers produce food, more food than they are able to sell.
Crop prices decline by 50% or more
Lower prices cause farmers to go into debt and many start to lose their farms
The government tries to help with price supports.
III. Buying on easy credit
Consumers buy new appliances and products on the installment plan, with money they don't have
Investors buy stocks on margin with money they don't have
When stock prices go down investors can't pay off their loans.
Many Americans are in debt
IV. Unequal Distribution of Wealth in America
Huge industrial profits went primarily to the wealthiest few Americans
These wealthy Americans invested their money to make industries bigger and produce more goods
Most Americans remained relatively poor. They couldn't afford to buy much of anything
Industries don't have enough buyers
-lose money-
Go Bankrupt!
The Stock market Crash of 1929
Fear creates the snowball effect.
*September 1929
- a few smart investors realize that the economy is weak and begin to sell their stock
*October 24, 1929
stock market takes a plunge as many investors sell
*October 29, 1929(Black Tuesday) Investors panic!
Stock market crashes
The Depression: key ideas
STOCK MARKET CRASHES-->BANKS SHUT DOWN-->BUSINESSES GO BANKRUPT-->PEOPLE LOSE THEIR JOBS-->UNEMPLOYMENT
Shacks
People lose their homes and live in shacks made of cardboard or scraps.
Especially in cities
Hooverville/Shantytown
Bread Lines
Many stand in line all day for their only meal from a charitable organization
Racial Tensions
Whites compete for scarce jobs with African Americans, Latinos, and Asians causing more racial tensions.
Increase in racial violence and deportations of immigrants.
The Great Depression- Key Ideas (Cont.)
The Dust Bowl
Drought, winds, and too many abandoned farms cause huge dust storms on the Great Plains.
Forces many farmers to leave their land.
"Riding the rails"
During the depression some men abandon their families: become homeless wanderers.
They ride on empty boxcars to look for work.
Women
Women were not supposed to stand on the street and ask for food. Some were so ashamed of their condition or fearful, that they stayed hidden and starved to death
Often it was twice as hard for them to find work!
Children
Poor diets
Poor health
Low government budgets mean no child welfare
Many schools close
-Child labor continues
Pyschological effects
Increased mental illness and suicides
Desire never to be poor again.
Depression- Hoover
Democrats win in midterm elections
-public opinion grows against Hoover
Measures by Hoover were too little too late:
Boulder Dam
-to help economy and create jobs
Federal Farm Board
-tried to help farmers from going bankrupt
Federal Home Loan Bank Act
Lowered mortgage rates to boost the housing industry.
Reconstruction Finance Corporation
Money goes to help banks and big business not the poor and unemployed
The Bonus Army
Hoover uses tear gas and violence against protesting WWI veterans- loses more public support
President Hoover Policies:
Finding solutions to problems outside goverment strengthens "real government".
Belief in "rugged individualism"-opposed any form of federal welfare and aid to the needy.
Encouraged business and labor to work together to solve the problem
Secretary of treasury Andrew Mellon: "do nothing" approach to solving the depression problems.
The depression will purge the system of its weaker elements
Minorities during the Great Depression
African Americans:
-lose jobs to whites
-riots when they take jobs as strike breakers
-CIO labor union encourages blacks not to work as strikebreakers.
Some unions begin to admit blacks
Latino Americans:
-lose jobs as agricultural workers in California and the southwest to white farmers
-many deported
-discrimination, prejudice in hiring
Asian Americans:
-cant own land
-cant find jobs except low paying work
-lose jobs to whites
All:
economic marginalizationm
-lowest paying jobs
-most undesirable jobs
-first fired
discrimination
Socialism and the American Communist Party
-membership increases
-capitalism seems to be a failure
-strongest advocates for racial injustice
-still connected to Stalinst Soviet Union
-fear of radicals and government
suppression of communists still exists in the U.S.
