my history lecture notes

1. LN 1.1- THE GREAT DEPRESSION
1929-1941

2. The Great Depression in the United States
Panics were normal. From 1819 onwards there was at least one
panic every decade right up to the Great Depression.
After panic of 1911, the economy continued to grow until 1929
when the stock market crashed.
The Great depression was the longest and deepest economic
downturn in U.S. history.

3. 4 phases of the Great
Depression in USA
Phase 1: Leading up to the crash of 1929
Phase 2: late 1929to 1933: from panic to deep depression
Phase 3: 1933-1937: recovery
Phase 4: 1937-1941: further recovery ending with joining ww1

4. Phase 1: Causes of the Great
Depression
the 1920’s was a time of
economic growth and political
conservatism in the United States
For eight years stock prices rose
and for the first time many
ordinary people owned stock
So what happened?

5. 5 Main Causes of Great
Depression
Politics
Speculation and Easy Credit
Expansion of Credit
Overproduction
Income disparity

6. Politics
Calvin Coolidge (R) was
president from 1921-1929 and
was very pro-business.
Practiced a hands off policy
towards the nations economy
However, insurmountable tariff
walls are built around the United
States- 32 tariff hikes in 6 years
Hoover, elected in 1928,
initially keeps same conservative
policies

7. Speculation and Easy Credit
Instead of buying stocks with
cash, investors borrowed
money from banks: buying
on margin
Buyer would put down 10%
of the stock price and borrow
90% from bank
Banks also willing to expand
consumer loans

8. Expansion of Credit
Easy credit fueled consumer
demand
Many new household
appliances such as washing
machines, refrigerators, and
air conditioners arrived in
stores
consumer loans allowed these
new products into homes, but
increased personal debt

9. Overproduction
Farm prices were dropping
from overproduction
We had been producing tons
of food to feed the nations of
Europe during WWI, but now
they can make their own food
again
Machines revolutionize
farming and allow bigger
crops on larger areas

10. Income Disparity
Uneven distribution of income
through the 20’s resulted in
wealth becoming concentrated
in the upper classes
by 1929, almost one-half of
families in the United States
lived at subsistence level of
below
the declining income of lower
classes reduced their
purchasing power

11. The Crash
September 3, stock market reaches an
all-time high
October 24, first big crash. Banks
announce funds are available to
purchase more stock
October 29, Black Tuesday, the market
crashed and banks could not stop sell off
Small investors lost their life savings. By
the end of 1929, stock holders lost $40
Billion.
The crash did not cause the great
depression- but signals the beginning

12. Phase 2: 1930-1933
From Bad to Worse
Hoover was president at the time; he was elected a year before
the crash promising to continue Coolidge’s policy of minimum
government involvement.
Hoover and the Federal Reserve Policy
In the months following the crash, Hoover reduced government
spending; the panic became the deepest depression in the
nations history

13. Stupidity Abroad
In an attempt to save domestic producers,
Congress passed the Hawley-Smoot tariff act in
June 1930. This established a high protective
tariff
this caused other nations to retaliate with their
own tariff
exports worldwide drop 50% and cause a
deepening of the depression

14. What hurt the most?
Bank closings- in one year, 1,300 banks closed
Hard-earned savings disappeared as thousands
of banks close across the country
without banks to extend credit and capital,
businesses and factories close
9,000 banks closed in the 1930s
by 1933, depositors saw $140 billion
disappear in bank closures

15. Social Effects of the Depression
Economic downturn affected the entire
country
Major cities saw unemployment rise above
50% by 1932
In some cities, unemployment hit 80%
Men walked the streets looking for work
many families lost their houses, forcing
them to move to the outskirts of towns.

16. In the Heartland
A long term drought struck much of the middle of the
country at the same time as the depression, hitting
farmers who were already suffering from a devastating
drop in income
drought started in 1930 and lasted for a decade
This drought combined with bad farming practices to
form a devastating series of dust storms called the
Dust Bowl (1930-1936)
Worst environmental disaster in United States history
Millions of people flee the heart land to escape the
dust bowl
The Grapes of Wrath

17. The Effect of the Depression of
Minorities
The Great depression his minority
groups even worse
Overall, the 1930s set all groups
back, whatever economic gains
have come about during the
previous decades were lost

18. African Americans
In certain regions of the United States, African Americans had seen
improvements in the 1920s
50% of blacks life in the south
Rural souther blacks lost farms as cotton prices fell. In cities, blacks lost jobs as
white men took the jobs as janitors and street cleaners
Some whites formed groups to keep blacks out of work
by 1932, 75% of black people are unemployed. The general unemployment
number is 25%
Lynchings start to increase
As a result of worsening economic and social conditions, close to half a million
blacks moved to northern cities to find work- joined the Great Migration

19. Hispanic Americans
At the start of Great Depression, there were
between 1.5-2m Latinos in the United
States
“last hired first fired”
Like African Americans, many move to the
cities when their agriculture jobs disappear
As city populations swell, local governments
have raids and try to force Mexican
Americans out
Close to a half-million Latinos moved to
Mexico during the great depression

20. Women
The Great Depression causes a
worsening of circumstances, and
increased their responsibility
the number of working married
women increase by 50% in the
1930s
Black women had it especially hard
Survivalist Entrepreneurship

21. Phase 3:1933-1937 Recovery
The episode with the Bonus Army sealed the final nail in the
coffin for Hoover’s chances of being re-elected in 1932
FDR, New York’s Democratic Governor, won the 1932
Presidential election in a landslide.
FDR tried many different programs over the next two terms to try
to pull America out of the Great Depression, but it took the entry
of the United States into WWII to finally achieve real recovery

22. FDR
Longest serving president in U.S. history
(1933-1945)
Elected to four terms
contracted Polio in 1921, refused to let
the public see him in a wheelchair.
Wanted to appear vigorous.
Gov. responsible for individual welfare
People felt connected with him- fireside
chats

23. The New Deal
At first it was a vague campaign
promise, then it became a dramatic
change in policy.
First New Deal (1933-1935)
focused on economic activity.
The Three R’s- Relief, Recovery,
Reform
See chart

24. Second New Deal
1935-1938
As attacks on the new deal mounted from
Conservatives and Liberals, FDR
abandoned the middle and moved left.
This new deal focused on social justice
critiqued “money class”
higher taxes for corporations and higher
incomes
examples?

25. Roosevelt and the Court System
The supreme court ruled the AAA unconstitutional in January,
1936. Also struck down 10 other New Deal agencies.
The court showed itself to be hostile to a large government role
in the economy
FDR wanted to name a new justice to the bench for every justice
over 70
this means he would be able to name 6 more justices
This idea dies in congress, and is seen an overreaching

27. Opposition to the New Deal
The New Deal was attacked by both the left and the right
Why from each?
While the majority of Americans supported the president’s
policies, the strength of opposition did limit New Deal
Legislation