Great Depression

Great Depression Stock Market Crash early 1928 DJIA 191 3/29 up 122 by Sept. 381 Black Thursday begins in slow fall banks begin to call in loans 10/23 drop 21 points in an hour sell off begins Black Thursday - big drops Black Tuesday panic as bankers - like Morgan pool $ to stop slide 10/29 collapse regular day 4mm share - up to 16mm sold 381 down to 198 on DJIA After the Crash as biz down factories close and ppl laid off as ppl lose jobs ripple thru econ as they stop spending on everything GNP-value of all goods made goes from $103 b in '29 to $56b in 1933 Banks close had been hurt by bad farm loans now rush on banks to pay back loans - no deposits 5500 banks close adn 9mm accounts vanish World Impact US demands repayment by Allies Allies couldn't trade over our high tariffs-no$ coming in Europe too poor to buy Rely on Ger. repayments as long as US invests in Ger. -okay US investment drops w/ Depression Ger. Can't repay Allies Allies can't repay US or buy our goods Rest of World goes down too Causes of Depression Overspeculation buy stock with borrowed $ prices up too high loans for market went from $5mm in mid'28 to $850mm by 9/29 boom based on borrowing and optimism - NOT value Gov't policies first cut rates to stimulate growth then raises to curb speculation kept $ tight so recovery diff. Unstable Economy no firm base wealth unevenly distributed - wealthy saved rather than invest or buy more goods than ppl wanted/could afford were made farmers not included recovery diff. Social Effects poverty spreads - banks close, savings gone, job gone, no work Hoovervilles-15k homeless in NYC Farm prob. low food prices - lose farm tried to protest and destroy milk/crops make hungry mad at farmers Dust Bowl over farming combined with drought nothing to hold soil - blows away! Documenting the crisis Dorthea Lange, Gordon Parks gov't employes them, and others to take pictures/paint what's going on p.339 famous pix Strain on Society Health long term effects on ppl. from poor diet Stress on Family moved in with others or extended family give up pleasures men can't provide for family - feel bad leave to find work Women forced out of jobs for emn Blacks have to compete with whites for jobs increased discrimination Scottsboro Boys - accused falsely & nearly killed of rape 56% black unemployment Surviving Depression- Pull together-help each other "depressed...but not beaten" political solutions-generally not looking for radcal change -NOT LIKE EUROPE - trouble there! communist party gains support socialists gain support - poll 2.2% or vote in '32 Depression Humor Hoover blankets-newspaper Hoover flags - empty pockets inside out Signs of Change repeal Prohibition - 21st amendment build Empire State Bldg. End of the "Boom of the Twenties" Election of '32 - Hoovers limited Strategy Voluntary Action Fails get biz to keep wages up and ppl working didn't work Hawley-Smoot tariff highest yet-sharp slowdown in int'l trade suspend Allied payments but too weak get weaker sets up Reconstruction Finance Corp. (RFC)'32 gov't credit to banks to give loans looks like help to bankers not real people wants state and local to help Hoover's Unpopularity grows Keynes says gov't spending can help - no one accepts ides Bonus Army marches burned out by army and MacArthur Hoover gets blame New Deal-FDR - theme song "Happy Days Are Here Again" Run against Hoover in '32 FDR had been VP candidate in '20-lost gov. of NY 29-32 upbeat & optimistic - worked hard for Depression relief in NY 1st state agencies to aid poor Turning Point - '32 Election two philosophies Hoover - federal gov could not and should not fix ppl's problems FDR - large scale problems like Depression required federal gov. help FDR - "the only thing we have to fear is fear itself". ppl believe him! Forging a New Deal(s) New Deal Critics - Limits falls short of expectations - isn't as far reaching as hoped or cover as many ppl. ex: $.25 min wage below what most ppl made mostly helped white men not women or minorities did't cover domestic workers programs in South reinforced segregation FDR did not want to risk fight with Southern Democrats Political Critics Feel ND goes too far - too much gov't Wealthy and Republicans regard FDR as an enemy raised taxes on income over $50k and corp. profits Social Security seen as first step to control (SS#) and penalize hard work(everyone gets it) next step dog tags American Liberty League - outspoken against FDR the ND - Un-American ND doesn't go far enough Upton Sinclair-Socialist ppl afraid he might win so discredited him LaFollette also Demogogues-manipulate with lies and half truth Coughlin-Radio Priest contridiction nationalization of banks and redistrib. wealth sanctity of private property becomes anti-Jewish praises Hitler and Mussolini begins to lose support in late 30s Huey Long-from Louisiana Share the Wealth Program limit inheritance and income high taxes on wealthy give every family $5000 minimum annual income of $2000 consider run for prez but assassinated FDR never threatened but must keep ND working Court Packing Scheme Roosevelt's Programs invalidated by Supremes wants to reform the Court 1937 Constitution doesn't say how many Justices on Supreme Court FDR wants to add to the number of Justices will appoint new ones who support ND Everyone critical-gets it from all sides compare FDR to dictators in Europe Political damage Republicasn and Southern Dems unite against him oppose further ND legislation as Justices retire FDR appoints new ones 2nd ND fares better old court had also approved of 2nd ND laws better written/not so hastily put together public opinion more in favor too