Friday, May 19, 2017
Facts about The Great Depression
Herbert Hoover (1874-1964), a Republican, was president when the Great Depression began. He infamously declared in March, 1930, that the U.S. had “passed the worst” and argued that the economy would sort itself out. The worst, however, had just begun and would last until the outbreak of World War II (1939).
People who lost their homes often lived in what were called “Hoovervilles,” or shanty towns, that were named after President Herbert Hoover. There was also “Hoover Stew” (food dished out in soup kitchens), “Hoover Blankets” (newspapers that served as blankets), “Hoover Hogs” (jack rabbits used as food), and “Hoover Wagons” (broken cars that were pulled by mules).
Chicago gangster Al Capone (1899-1947), in one of his sporadic attempts at public relations, opened a soup kitchen during the Great Depression. For millions, soup kitchens provided the only food they would see all day.
The Wall Street Crash of 1929 was one of the main causes of the Great Depression. “Black Thursday,” “Black Monday,” and “Black Tuesday” are all correct terms to describe the Crash because the initial crash occurred over several days, with Tuesday being the most devastating.]
On “Black Tuesday,” October 29, 1929, the market lost $14 billion, making the loss for that week an astounding $30 billion. This was ten times more than the annual federal budget and far more than the U.S. had spent in World War I. Thirty billion dollars would be equivalent to $377,587,032,770.41 today.
After the initial crash, there was a wave of suicides in the New York’s financial district. It is said that the clerks of one hotel even started asking new guests if they needed a room for sleeping or jumping.
As news of the stock market crash spread, customers rushed to their banks to withdraw their money, sparking disastrous “bank runs.” Nobel prize-winning economist Milton Friedman argues that the 1930s market crash itself did not cause the depression, but rather it was the collapse of the banking system during waves of public panic during 1930-1933.
The Dow Jones market peaked at 381 on September 3, 1929, and bottomed out at 42 in 1932, which is an amazing 89% decline. It did not reach 381 again until 23 years later in 1955 (but that doesn’t include inflation losses).
Causes of the Great Depression are widely debated but typically include a weak banking system, overproduction, bursting credit bubble, the fact that farmers and industrial workers had not shared in the prosperity of the 1920s, and a government-held laissez faire policy.
One American sheep farmer found that he would not make money off of his sheep during the depression. Rather than watch his 3,000 sheep starve to death, he cut their throats and threw them in a canyon.
A new look in women’s fashion emerged in the 1930s. In response to the economic crisis, designers created more affordable fashions with longer hemlines, slim waistlines, lower heels, and less makeup. Accessories became more important as they created the impression of a “new” look without having to buy a new dress.
During the worst years of the Depression (1933-1934) the overall jobless rate was 25% (1 out of 4 people) with another 25% taking wage cuts or working part time. The gross national product fell by almost 50%. It was not until 1941, when WWII was underway, that unemployment officially fell back below 10%.
Today the typical household has two wage earners, so even a 25% unemployment rate such as occurred during the Great Depression may not mean the same thing as it did in the 1930s.
Scholars estimate that nearly 50% of children during the Great Depression did not have adequate food, shelter, or medical care. Many suffered rickets.
African-Americans were the hardest hit during the Great Depression, and they were often the first to get laid off.
The board game Monopoly, which first became available in 1935, became immensely popular perhaps because players could become rich - at least in their imagination.
The Three Little Pigs which was released May 27, 1933, and produced by Walt Disney, was seen as symbolic of the Great Depression, with the wolf representing the Depression and the three little pigs representing average citizens who eventually succeeded by working together.
Some people who became homeless would ride on railroad cars because they didn’t have money to travel. Some famous men who rode the rails were William O. Douglas (1898-1980), U.S. Supreme Court Justice from 1939-1975; novelist Louis L’Amour (1908-1988); and folk singer Woody Guthrie (1912-1967). Some scholars claim that more than 50,000 people were injured or killed while jumping trains.
Supreme Court Justice William O, Douglas
During the Great Depression, a record 60-80 million Americans went to the movies every week. One of the biggest blockbusters was Merian C. Cooper’s 1933 King Kong. Other popular movies included The Wizard of Oz (1939) and Gone with the Wind (1939).
Chain letters seemed to have first begun in 1935 as a get-rich-quick scheme. The source of the letters is unknown, but the letters became so popular that post offices around the nation had to hire extra help.
Between 1930 and 1935, nearly 750,000 farms were lost through bankruptcy or sheriff sales.
During the Depression, distressed farms were sometimes sold at “Penny Auction” (forced auctions) in which farmers would assure that a distressed neighbor would be able to buy back his own farm by holding bids down to pennies, nickels, and quarters. They would dissuade those who wanted to make higher bids, sometimes symbolically with dangling nooses at the auction scene.
Dorothea Lange’s (1895-1965) famous photographs of migrant workers in California during the 1930s remain a moving pictorial record of the Great Depression.
The Hawley-Smoot Tariff Act of 1930 increased U.S. tariffs which, in turn, decreased international trade (especially in the farming sector) and helped spread the Great Depression worldwide. As it spread, it became partly responsible for Nazism in Germany and for World War II (1939-1945).
As businesses and farms closed during the Great Depression, an alarming number of Americans began turning to crime such as Bruno Hauptmann, who kidnapped and murdered aviation hero Charles Lindbergh’s 20-month-old son; John Dillinger, a kind of Robin Hood hero; Lester M. Gillis (“Baby Face” Nelson); Machine Gun Kelly; Pretty Boy Floyd; Ma Barker and her Boys; and the famous Bonnie and Clyde, who were actually despised by other Midwestern bandits who felt they lowered the standard of the profession.
A number of great structures, including the Empire State Building and the Golden Gate Bridge, were completed during the Great Depression, providing many jobs to the unemployed.
The most famous demonstration during the Great Depression was held by the “Bonus Army.” It consisted largely of World War I veterans who requested financial bonuses that were scheduled to be given in 1945 to be paid instead in 1932. The U.S. Army was called in to disperse them.
Democrat Franklin Delano Roosevelt (1882-1945) became president in March 1933 and promised a “New Deal for the American people.” During his first hundred days, he attempted to create jobs by establishing federal organizations that were nicknamed “Alphabet Agencies,” such as the TVA, NRA, CCC, and WPA. Economists and historians continue to debate whether Roosevelt’s actions actually deepened and lengthened the Depression.
President Franklin Delano Roosevelt
Economist John Maynard Keynes (1883-1946) gained popularity during and after the Great Depression for consistently arguing for government intervention in the economy and for his suspicion of laissez faire policies.
John Maynard Keynes
In the mountain communities of Appalachia, whole families were reduced to dandelions and blackberries for their basic diet. Some children were so hungry, they chewed on their own hands.
An early form of Social Security began August14, 1935, to implement social insurance for the elderly who did not have enough money to support themselves.
By the 1930s, thousands of schools were operating on reduced hours or were closed down entirely. Some three million children had left school, and at least 200,000 took to riding the rails.
During the Great Depression, many people tried apple selling to avoid the shame of panhandling. In New York City alone, there were as many as 6,000 apple sellers.
When the Depression struck, Mexican-Americans were accused of taking jobs away from “real” Americans and of unfairly burdening local relief efforts. Some were “encouraged” to return to Mexico.
On May 6, 1929, Joseph Stalin predicted to a small group of American communists that America would experience a revolutionary crisis and that the American communist party should be ready to assume the leadership of the “impending class struggle in America.”
During the Great Depression, hundreds of thousands of families traveled west on Route 66 to California, following what John Steinbeck in his famous novel The Grapes of Wrath called “The Mother Road.”
In spite of the New Deal and the “Indian New Deal” of 1934, most Native Americans remained bitterly poor during the Great Depression. The “Indian New Deal” (which was also called the Indian Reorganization Act) was a complex and multi-faceted legislation which reversed the Dawes Severalty Act of 1887 and granted tribes more autonomy.
While the Great Depression affected most of the country, up to 40% of the country (the extremely wealthy) never faced real hardship during those years.
Discrimination during the Great Depression against women was common, both officially and unofficially, because they were seen as taking away jobs from men.
The Great Depression changed the family in several ways. Many couples delayed marriage, and divorce rates and birth rates dropped. Some men also abandoned their families; a 1940 poll revealed that 1.5 million married women were abandoned by their husbands.
In 1936, main economic indicators (except unemployment) regained the levels of the late 1920s. However, after the federal government cut spending with the expectation that the private sector would step in, the economy took another sharp downturn until World War II.
While John Steinbeck highlights the plight of migrant farm families in The Grapes of Wrath, in reality, less than half (43%) of the migrants were farmers. Most migrants came from east of the Dust Bowl and did not work on farms.
Californians tried to stop migrants from moving into their state by creating checkpoints on main highways called “bum blockades.” California even instated an “anti-Okie” law which punished anyone bringing in “indigents” with jail time.
In 1932, half of all workers in Cleveland, Ohio, were jobless. And in Toledo, Ohio, four out of five were jobless.
Every major country, including the United States, abandoned the gold standard during the Great Depression. In fact, leaving the gold standard was a predictor of a country’s economic severity and the length of time for its recovery. However, Herbert Hoover argued that abandoning the gold standard was the first step toward “communism, fascism, socialism, statism, and a planned economy.”
As he did during World War II, Joseph P. Kennedy (JFK’s father) amassed an enormous amount of wealth through real estate (among other ventures) during the Great Depression. Without this money, he could not have financed his son’s successful run for the presidency.
Some scholars speculate that a “Great Depression” in 2009 would lead to more T.V. watching as an escape, longer lines at the ER, laid-off office workers migrating to the country, and even online banking runs. Overall, it would be less visible and more isolating than the 1930s' Depression.
Severe drought and dust storms exacerbated the Great Depression because it dried out farmlands and forced families to leave their farms. On May 9, 1934, a dust storm carried an estimated 350 million tons of dirt 2,000 miles east ward and dumped four million tons of prairie dirt in Chicago. The drought and dust killed tens of thousands of animals.
Though the United States has only been in a recession for less than a year, some scholars state that there is no comparison between the current economic condition in 2009 and that of the 1930s. For example, in the 1930s, unemployment reached 25% and the GDP dropped 25%. In 2009, unemployment is currently at 8.1% and the GDP has so far dropped 2%. Additionally, the situation today is very different because the U.S. didn’t have the “social safety net” in the 1930s that it has today.
Some scholars find the 2009 economic condition more troubling than that of the 1930s' Great Depression because debt in 2009 includes not only stocks but also millions of homes, property, local governments, and entire nations. Also, in contrast to the 1930s, the U.S. is now a debtor nation and more households in the U.S. are in far greater debt.
". . . and in the eyes of the people there is the failure; and in the eyes of the hungry there is a growing wrath. In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage".- John Steinbeck, The Grapes of Wrath
Iconic Photographs of The Great Depression