Unit IV:

America Between The Wars

The Nation’s Sick Economy

• Economic troubles on the Horizon

• Industries were struggling and farmers were growing more crops and raised more livestock than they could sell at a profit

Industries in Trouble

• Key industries (railroads, textiles, and steel) barely made a profit

• Coal mining was hit hard due to new forms of energy

• Housing starts (an important economic indicator) declined during this time (the number of new dwellings being built)

• When housing falls many other industries soon follow

Farmers Need a Lift

• Agriculture suffered the most

• During WWI, prices rose along with demand for crops

• Because of this farmers planted more and took out loans for more land and equipment

• Demand fell and prices dropped by 40%

• Farmers then planted more crops

• Farmers lost the farm

Farmers

• McNary-Haugen Farm relief Bill called for federal price supports for key products such as wheat, corn, cotton, and tobacco

• Government would buy surplus crops at guaranteed prices and sell them on the world market

• President Coolidge vetoed the bill twice

Less Money to Spend

• As incomes fell, farmers spent less on goods and services

• Rising prices, stagnant wages, unbalanced distribution of income, and overbuying on credit

• Widening gap between rich and poor

Hoover Takes the Nation

• Election of 1928: Hoover was the former secretary of commerce. He was a mining engineer from Iowa who had never run for public office.

• Hoover was Republican, and most Americans were happy with the leadership.

Dreams

• By 1929, some economists were warning of weakness in the economy. Most Americans believed in the nation’s economic health.

• The stock market had become the most visible symbol of a prosperous American economy.

• The Dow Jones Industrial Average was the most widely used barometer of the market’s health.

• The Dow is a measure based on the stock prices of 30 representative large firms trading on the New York Stock Exchange.

Stock Market

• The market was in a “bull market,” meaning that it was on the rise.

• People began to engage in speculation (they bought stocks and bonds on the chance of a quick profit, while ignoring the risks).

• Many bought on margin (paying a small percentage of a stock’s price as a down payment and borrowing the rest).

• The government did little to discourage this buying or to regulate the market.

Stocks

• Rising prices did not reflect a companies true worth.

• Those that speculated and bought on margin had no way to pay off the loans if the prices declined.

The Stock Market Crashes

• Early September 1929, stock prices peaked and then fell.

• Confidence waivered and investors quickly sold their stocks and pulled out.

• Oct. 24 the market took a plunge; panic ensued and investors unloaded.

• Black Tuesday, Oct. 29th, the bottom fell out of the market.

• People who had bought stocks on credit were stuck with huge debts. Others lost their savings.

Financial Collapse

• Bank and business failures: Many withdrew their money from the banks. Some could not get their money because the banks had invested it in the market.

• Millions lost everything because the government did not insure accounts.

Depression: "Runs on Banks" people milling about outside of bank (National Archives and Records Administration, n.d.c)

Millions Lose Their Jobs

• The US was not the only country in a depression.

• Because of this, America had difficulty selling American farm products and manufactured goods abroad.

• Hawley-Smoot Tariff Act was passed in 1930, which established the highest protective tariff in U.S. history.

Depression: Unemployed: Typical picture capturing the number of people who were unemployed and looking for a job

(National Archives and Records Administration, n.d.b)

Hardship and Suffering During the Depression

Depression-Unemployed, man dressed poorly walking with head down, shacks in background

(National Archives and Records Administration, n.d.a)

Devastated People’s Lives

• In the early 1930s, a drought hit the Great Plains destroying crops and leaving the earth dry and cracked.

• The drought and winds lasted more than 7 years.

• Dust storms hit Kansas, Colorado, New Mexico, Nebraska, the Dakotas, Oklahoma, and Texas. Dust Storm in Spearman Texas

(U.S. National Oceanic and Atmospheric Administration, 1935)

Devastation

• The Depression brought hardship, homelessness, and hunger to millions.

• In the cities, some slept in parks or sewer pipes, wrapping themselves in newspapers.

• Many lived in makeshift shacks built out of scrap materials.

• Shantytowns were little towns consisting of shacks.

Cities

• The poor dug through garbage cans or begged.

• Soup kitchens offered free or low-cost food.

• Bread lines: lines of people waited to receive food provided by charitable organizations or public agencies.

• African American and Latino rates were higher and dealt with racial violence.

• Twenty-four African Americans died by lynching in 1933.

Rural Areas

• Most farmers could grow food for their families.

• Thousands lost their land. Between 1929-1932, 400,000 were lost to foreclosure.

• Many turned to tenant farming to barely make a living.

Dust Bowl

• Farmers began using tractors in the previous decade to break up the grasslands.

• The protective layer of prairie grasses was gone.

• The land became exhausted due to over production of crops.

• When the winds hit, it gathered the topsoil exposing the sand and grit underneath.

• Storms gathering on the grasslands would move all the way to the East coast.

Dust Bowl

• Because of the storms and evictions, thousands would leave the land and head west on Route 66 to California.

• Migrants known as Okiesfound work as farmhands.

• Others continued to wander in search of jobs.

Dust Bowl winds pile up against barn in Kansas(Rothstein, n.d.)

Effects on the American Family

• Stood as the source of strength for most Americans

• Traditional values and the importance of family

• Most stayed home and played board games (Monopoly, 1933) and listened to the radio

Monopoly game tokens(Oberger, 2012)

Men in the Streets

• Many men had problems coping with being unemployed.

• Frederick Lewis Allen wrote in Since Yesterday:“Men who have been sturdy and self-respecting workers can take

unemployment without flinching for a few weeks, a few months, even if they have to see their families suffer; but it is different after a year…two years…three years.”

• As many as 300,000 transients, or hoboes, wandered the country hitching rides on railroad boxcars and sleeping under bridges.

• There was no direct relief (cash or food) or federal system in place during this time.

Women Struggle to Survive

• Many women canned food and sewed clothes and carefully managed household budgets.

• Many women worked outside the home.

• Many believed that women, especially married women, had no right to work when there were men who were unemployed.

Children Suffer Hardships

• Poor diets and lack of money for health care led to serious problems

• School year was shortened

• Children went to work in sweatshops

• “Wild boys” or “Hoover tourists” were teenage boys and girls who hopped on trains to escape

School children line up for free issue of soup and a slice of bread in the Depression

(Hood, 1934)

Social & Psychological Effects

• Many lost their will to survive.

• Between 1928 and 1932, the suicide rate rose more than 30%, with three times as many being admitted to mental hospitals.

• Many made long-range compromises.

• Achieving financial security became most important.

• Many showed great kindness during this time.

Hoover Struggles with the Depression

Herbert Clark Hoover listening to a radio (U.S. Department of Commerce, 1925)

Hoover Tries to Reassure

• Hoover tried to tell the nation that the economy was on a sound footing

• “Any lack of confidence in the economic future…is foolish”

• Important for Americans to remain optimistic and go about their business as usual

• Depressions were part of the normal business cycle

• Periods of rapid economic growth were naturally followed by periods of depression

Hoovers Philosophy

• He was an engineer and had great faith in the power of reason

• Believed that one of government’s chief functions was to foster cooperation between competing groups and interests of society

• Governments role was to encourage and facilitate cooperation, not to control it

Hoover

• Americans valued “rugged individualism” and should succeed through their own efforts

• Opposed any form of federal welfare

• Believed that handouts would weaken people’s self-respect and moral fiber

• Individuals, charities, and local organizations should help out

• The federal government should direct such efforts but not with a huge federal bureaucracy

Hoover Takes Cautious Steps

• Called together key leaders in the fields of business, banking, and labor

• Urged them to work together and find a solution

• None of his steps made much of a difference

Boulder Dam

• Construction of a dam on the Colorado River

• Proposed using the profit from sales of electricity from the dam and helped arrange an agreement on water rights among the seven states of the Colorado River basin (Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming)

• Later to be called “Hoover Dam”

• 726 ft. high and 1,244 ft. long

• It would be the world’s tallest dam and the second largest

Photograph of the Boulder Dam from Across the Colorado River, 1941(Adams, 1941)

Democrats win in 1930 Congressional Election• Anti-Hoover sentiment sets in

• Republicans lost control of the House and their majority in the Senate dwindled to one vote

• Farmers began to burn their crop and dump their milk rather than sell it at a loss

• “Farm holidays” where farmers refused to work their fields

• Some blocked roads hoping that a food shortage would raise prices

Hoover

• Shantytowns = Hoovervilles

• Newspapers = Hoover blankets

• Empty pockets = Hoover flags

Hooverville Portland, Oregon(Rothstein, 1936)

Hoover Takes Action

• Backs cooperatives: backed the creation of the Federal Farm Board (an organization of farm cooperatives)

• This was intended to raise prices by helping members buy crops and keeping them off the market until prices rose

• National Credit Corporation: meant for nation’s largest banks to loan money to the smaller banks

Direct Intervention

• Federal Home Loan Bank Act: lowered mortgage rates for homeowners and allowed farmers to refinance their farm loans and avoid foreclosure

• Glass-Steagall Banking Act: separated investment from commercial banking

• Reconstruction Finance Corporation: $2 billion for emergency financing for banks and other big businesses. $805 million in first 5 months

Gassing the Bonus Army

• They called themselves the Bonus Expeditionary Force (WWI Vets and families went to D.C. spring 1932)

• Led by Walter Waters

• The Patman Bill authorized the government to pay a bonus to WWI vets who had not been compensated adequately for their wartime service

Members of the Bonus Army on the U.S. Capitol lawn, Washington, D.C.(Underwood & Underwood, 1932)

Bonus Army

• Hoover called them “Communists”

• Felt they had a right to peaceful assembly and even gave them food and supplies

• Bill voted down June 17th; Hoover called for them to leave (most did)

• 2000 stayed and on July 28th a force of 1000 soldiers under Douglas MacArthur and Major Dwight D. Eisenhower were sent to disband the “Army”

• They were gassed; an eight month old baby died and an eight year old boy was partially blinded

FDR’s New Deal

• Franklin Delano Roosevelt elected as the 32nd President in 1932

• He will take the United States through the Depression into WWII and almost out of the War

• Elected to office four times

Roosevelt in wheelchair(Suckley, 1941)

ReferencesAdams, A. (1941). Photograph of the Boulder Dam from Across the Colorado River, 1941 [Image]. Retrieved October 12,

2015, from https://commons.wikimedia.org/wiki/File:Adams_Boulder_Dam_1942.jpg

Hood, S. (1934). School children line up for free issue of soup and a slice of bread in the Depression, Belmore North Public School, Sydney [image]. Retrieved October 12, 2015, from https://commons.wikimedia.org/wiki/File:Schoolchildren_line_up_for_free_issue_of_soup_and_a_slice_of_bread_in_the_Depression,_Belmore_North_Public_School,_Sydney,_2_August_1934_-_Sam_Hood_(3550268287).jpg

National Archives and Records Administration. (n.d.a). Depression-Unemployed, man dressed poorly walking with head down, shacks in background [Image]. Retrieved October 12, 2015, from https://commons.wikimedia.org/wiki/Category:Great_Depression#/media/File:Depression-Unemployed,_man_dressed_poorly_walking_with_head_down,_shacks_in_background,_no_credit_Typical_picture..._-_NARA_-_195916.tif

National Archives and Records Administration. (n.d.b). Depression: Unemployed: Typical picture capturing the number of people who were unemployed and looking for a job [Photograph]. Retrieved October 12, 2015, from https://commons.wikimedia.org/wiki/File:Depression-Unemployed,_Typical_picture_capturing_the_number_of_people_who_were_unemployed_and_looking_for_a_job_-_NARA_-_195512.tif

National Archives and Records Administration. (n.d.c). Depression: "Runs on Banks": people milling about outside of bank [Image]. Retrieved October 12, 2015, from https://commons.wikimedia.org/wiki/File:Depression,_%22Runs_on_Banks%22,_people_milling_about_outside_of_bank_-_NARA_-_195559.tif

ReferencesOberger, B. (2012,). Monopoly game tokens [Image]. Retrieved October 12, 2015, from

https://commons.wikimedia.org/wiki/File:Monopoly_game_tokens_01.JPG

Rothstein, A. (1936) Hooverville Portland Oregon [Image]. Retrieved October 9, 2015, from https://commons.wikimedia.org/wiki/File:Hooverville_Portland_Oregon_1936.jpg

Rothstein, A. (n.d.). Dust Bowl winds pile up against barn in Kansas [Image]. Retrieved October 12, 2015, from https://commons.wikimedia.org/wiki/File:Dust_Bowl_winds_pile_up_against_barn_in_Kansas.jpg

Suckley, M. (1941). Roosevelt in wheelchair [Image]. Retrieved October 12, 2015, from https://commons.wikimedia.org/wiki/File:Roosevelt_in_a_wheelchair.jpg

Underwood, & Underwood. (1932). Members of the Bonus Army on the U.S. Capitol lawn, Washington, D.C. [Image]. Retrieved October 12, 2015, from https://commons.wikimedia.org/wiki/File:Bonus_army_on_Capitol_lawn_cph.3a00515.jpg

U.S. Department of Commerce (1925). Herbert Clark Hoover listening to a radio [Image]. Retrieved October 12, 2015, from https://commons.wikimedia.org/wiki/File:HerbertClarkHoover.jpg

U.S. National Oceanic and Atmospheric Administration. (1935). Dust Storm in Spearman Texas [Image]. Retrieved October 12, 2015, from https://commons.wikimedia.org/wiki/File:DustStormInSpearmanTexas19350414.jpg