Prosperity and Crisis

Prosperity and Crisis
1919 - 1939
1.
2.
3.
The Jazz Age – 1920 - 1930
The Great Depression – 1929 - 1933
The New Deal – 1933 -1939
•The interwar years of the United States brought economic
prosperity followed by economic disaster to Americans.
From new forms of entertainment and the age of credit to
bank panics and the failure of Wall Street, the United
States experienced tremendous change economically,
socially, and politically. A new leader would emerge,
someone who would transform the American nation.
The Great Depression
1929-1933
1. Prosperity Shattered
2. Hard Times
3. Hoover’s Policies
• The prosperous economic times of the 1920’s came
to a devastating end with the stock market crash in
1929 and the Great Depression that followed.
President Hoover’s Republican policies failed, and
Americans would soon seek change.
1919-1939
1. Prosperity Shattered
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• Economic Troubles on the Horizon
Credit
– President Herbert Hoover, despite early
warnings of economic troubles, expressed
confidence and optimism that the
economy would continue to grow.
– Many Americans purchased many new
products on credit, and by 1929,
purchases on credit reached a total of 7
billion dollars.
“Ours is a land in resources;
stimulating in its glorious beauty;
filled with millions of happy homes;
blessed with comfort and
opportunity. . . .I have no fears for
the future of our country. It is
bright with hope.” Herbert Hoover,
Inaugural Address, 1929
1919-1939
Playing the Market
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Americans confidence in the economy was tested
in the stock market.
» Investors poured millions of dollars
into the stock market during the
1920’s. As stocks increased it
created an upward trend, known as a
bull market.
» Bear Market-downward trend in
stock market
1920’s-stock speculation-playing the market by
selling and buying stocks quickly-was widespread.
Margin Buying is the practice of purchasing stocks
with borrowed money; was commonplace and good
if there were a bull market; if not investors lost a
lot.
1919-1939
The Stock Market
Crash
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Black Thursday -October 24, 1929-large number
of investors, made nervous by factors such as
rising interest rates, suddenly sold their sharesPanic on Wall Street.
Black Tuesday -October 29, 1929-Panic investors
dumped 16 million shares of stock on the market.
1919-1939
The Depression Begins
• In the first few months of the stock market crash,
business leaders insisted the at the setback was only
temporary. Within the first months of 1920,
however, it became clear that the nation was slipping
into a severe economic depression.
1919-1939
Bank Fails
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Stock market crash affected bankingborrowers began to default on loans
forcing closures.
As a result, many Americans, in panic,
began withdrawing their monies, which
caused more bank failures.
1919-1939
Business fails
» Businesses suffered as well;
consumers were unable or unwilling
to buy their products.
» The Age of credit had ended.
Business cut inventories and laid off
employees.
1919-1939
What caused the Depression?
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Great Depression-economic troubles as a result in
crisis in banking, business failures, and massive
unemployment.
– Global Depression-economic troubles in
Europe as a result of WWI had hurt the
U.S. economy.
– Lack of world trade and lack of foreign
countries consuming American goods
because they were economically
strained.
Smoot-Hawley, 1930-highest tax on imports in
U.S. history accelerated global depression by
eliminating the foreign manufacturing in the
American market.
Unequal distribution of income contributed to the
economic chaos.
Consumer credit also contributed to the
depression.
Finally, the business cycle-regular up and down
trends of business in a free-enterprise economy.
1919-1939
2. Hard Times
•
“My father walked the streets everyday. . . . My mother
went to work. I even worked, playing the piano for dancing
class on Saturday mornings for fifty cents an hour. My
mother would find a few pennies and we would go to the
greengrocer and wait until he threw out the stuff that
was beginning to rot. We would pick out the best rotted
potato and greens and carrots that were already soft.
Then we would go to the butcher and beg a marrow bone.
And then with a few pennies we would buy a box of barley,
and we’d have soup to last us for three to four days. I
remember she would say to me sometimes, “You go out and
do it. I’m ashamed.”
» Clara Hancox, The Century, Peter Jenning and Tood
Brewster
Americans Face
Unemployment
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1919-1939
Increasing joblessness
One out of every four
– 1929-1.5 million were unemployed
– 1933-15 million were unemployed
– Immigration to the United States
greatly decreased.
The American Worker
African Americans were the first to be
unemployed.
Since women were paid less, more women entered
the workforce
1919-1939
Life in the City
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Mutualistas-Mexican American communities
formed mutual aid societies to help each other.
Poverty-stricken Americans wanted in breadlines
for bowls of soup and bread given out by
charitable organizations.
Homeless often gathered in shantytowns,
collections of makeshift shelters built out of
packing boxes, scrap lumber, corrugated iron, and
other throw away items.
Life on the Farm
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•
1919-1939
The impact of the depression affected the farm as
well.
– Shrinking demand for farm products caused
shrinking prices.
– Farmers were unable to pay mortgage
payments and banks began foreclosing on
farms.
Josefina Fierro de Bright
–
During the 1930’s, 500,000 Mexican Americans
were pressured into leaving the country.
–
Josefina de Bright led some Mexican American
families that remained in the United States in an
organization against discrimination in the
Southwest.
1919-1939
Families in the 1930s
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Family strains
– Economic hardship took its tool on the
American family.
– The marriage rate declined and so did
the birthrate.
Psychological effects
–
The depression affected the mental health
and attitudes of many Americans.
–
More than 200,000 Americans committed
suicide in 1932.
•“Do you realize how many people in my generation are not
married? . . . It wasn’t that we didn’t have a chance. I was
going with someone when the Depression hit. We probably
would have gotten married. . . . Suddenly, he was laid off.
It hit him like a ton of bricks. And he just disappeared.
•Elsa Ponselle, America’s History
1919-1939
Popular Culture
• Many Americans looked to popular culture and
entertainment to escape
1919-1939
The Sound Explosion
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Movie and Radio became increasingly popular.
1919-1939
Literature
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The depression was also felt in popular
literature.
James Hilton, The Lost Horizon, -discovery of
a perfect world, a utopia. ( Easton)
William Faulkner, The Sound and the Furytragic events in a small town in Mississippi.
William Faulkner, The Sound and the FuryAs I Lay Dying
Justin Scourzo
Mr. Kruczek
1919-1939
3. Hoover’s Policies
• “”What the country needs is a
good big laugh. There seems to
be a condition of hysteria. If
someone could get off a good
joke every ten days I think our
troubles would be over.
• Herbert Hoover, The Century
Peter Jennings and Todd
Brewster.
1919-1939
Philosophy
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His Philosophy-economic recovery through
individualism not government
Opposing direct relief
– Rugged individualism -success of
capitalism comes through individual
effort and private enterprise
– Private characters, local communities,
and a voluntary deed
Encouraging voluntarism
–
1930’s-President’s Committee for
Unemployment Relief (PCUR) assist state and
local relief efforts
–
Community Chest, Red Cross, Salvation Army,
YMCA
1919-1939
Boosting the economy
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Secretary of Treasury
Andrew Mellon government must take a
hands off approach;
President Hoover-must
do something, but how
much government
interference?
Congress and states
government funded
several public works
programs -Hoover Dam,
Colorado River/800
public buildings/37,000
miles of highways
$800 million for public
works
No direct relief
1919-1939
Coping with the Farm
Crisis
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Agricultural Marketing Act -created the
Federal Farm Board (FBB) -$500 million-find
ways for farmers to help themselves
Despite indirect relief, Hoover still opposed
direct relief to farmers.
1919-1939
The Reconstructive
Finance Corporation
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Corporation created by Congress to lend up to
$2 billion for taxpayer money to stabilize
troubled banks, insurance companies, railroad
companies, and others.
The RFC did prevent many large corporation
from collapsing, but it did not provide relief to
small businesses or industries.
Once again, no direct relief
1919-1939
Government Activism
•
Government Activism-Hoover’s policies failed to
end the depression, but his policies represented a
major shift in government.
•“I do not believe that the
power and duty of the
[federal] Government ought to
be extended to the relief of
individual suffering. . . . The
lesson should be constantly
enforced that though the
people support the
Government the Government
should not support the people.”
1919-1939
Rumbles of Discontent
•
As public confidence in Hoover ended, radical
parties, like the Communist and the Socialist
Parties, condemned capitalism and grew more
favorable in the lower working class eyes.
1919-1939
The Bonus Army
•
The Bonus Army- 10,000 WWI veterans
encamped in Washington, D.C. to receive early
payment on their pension bonuses owed to them
for fighting.
• After Congress rejected the bonus bill
many left, but 2,000 remained and violence
erupted in the capitol.
• Hoover ordered General Douglas Macarthur
to drive the veterans out; many Americans
were outraged at the government
treatment of veterans
“My husband went to
Washington. To march
with . . . The bonus boys.
He was a machine gunner
in the war. He’d say them
. . . Germans gassed him
in Germany. And [then]
his own government . . .
gassed him and run him
off the country up there
with a water hose, half
drowned him.”
Wife of Bonus
Army member, Hard
Times, Studa Terkel
• The troops drove the
veterans from the
building, broke up the
encampment, and
burned their shacks.
•Hundreds were
injured and three died,
including an 121-week
old baby.
•Across the nation,
anger against the
president grew.
•As the presidential
election approached,
Americans said
bitterly, “In Hoover we
trusted and now we are
busted.”
1919-1939
The Election of 1932
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Republicans reluctantly nominated Herbert
Hoover
Democrats nominated Franklin Delano Roosevelt,
New York Governor
– Eleanor Roosevelt-social reform
– FDR-polio stricken in 1932
A Change in Leadership DEMOCRATIC CONTROL
Roosevelt captured 472 electoral votes to
Hoover’s 59 votes.
Congress-Democrats captured a majority in both
houses
Republicans accredited for 1920’s success, but
blamed for the 1930’s depression.
Franklin Roosevelt
• “Republican leaders not only
have failed in material things,
they have failed in a national
vision, because in disaster they
have held out no hope. . . . I
pledge to you, I pledge myself,
to a new deal for the American
people.
– Franklin D. Roosevelt,
Democratic Nomination
Acceptance Speech