Stock market crash and depression    

The depression era lectures

BUSINESS IN THE LATE 1920 IS STRONG

COOLIDGE DOES NOT CHOOSE TO RUN AGAIN FOR PRESIDENT, AND HEBERT HOOVER ELECTED IN 1928. IN 1925 STOCK WAS VALUED AT 27BILLION AND THEN 1928 VALUES ROSE ABOUT 11.4 BILLION IN OCTOBER OF 1929 THE VALUED AMOUNT WAS UP TO 87 BILLION

WORKING PEOPLE WAGES SEEMED TO IMPROVE AS WELL INCREASING BY 40 PERCENT UNEMPOLYMENT WAS ONLY 4 %

WITH WORKERS WAGES INCREASING THE NUMBER O MEMBER SO LABOR UNIONS DECREASED AND INDUSTRY KEPT THE LABOR NUMBERS LOW BY USING A NEW CONCEPT, WELFARE CAPITALISM.

THE MANAGEMENT WOULD FORESEE PROBLEMS AND MEET DEMANDS BEFORE THE LAOBR UNIONS WOULD ADDRESS THEM.

DANGER SIGNS OF ECONOMY, THE RICH KEPT GETTING RICHER AND THE POOR KEPT GETTING POORER. 1/10 OF A PERCENT HAD INCOMES OVER 100,000, WHILE 71% HAD INCOMES LESS THAN 2,500 A YEAR. IN THESE FAMILIES MOST OF THE FAMILY MEMBERS WORKED TO MAKE ENDS MEET.

INSTALLMENT PLANS AND EASY TO MAKE PAYMENTS CREDIT ACROSS AMERICA WAS GROWING. PERSONAL DEBT WAS GETTING OUT OF HAND FOR PEOPLE. BEFORE THE GREAT WAR, ONLY THE WEALTHY PEOPLE BOUGHT STOCKS, BUT DURING THE 1920, PEOPLE GAMBLED ON THE STOCK MARKET. SPECULATION BUYING WAS THE HIGH-RISK HIGH RETURN WAY OF BUYING HIGH-RISK STOCKS AND HOPING THEY WOULD GROW IN PRICE.

Companies wanting the less-wealthy investor to invest would sell stocks on margin. This is known as “buying on margin”.

http://www.lowrisk.com/crash/1929crash3.htm

The stock market crashes prices soared way above their actually value. Black Thursday price fell slowly  banks continued to loan money to investors. On Wednesday the average had drooped 21 points in an hour,  stocks that were bought for 400.00 were sold for 283.00.  It occurred over and over; on Friday to stop the skid bankers pooled their money to help the stock prices. But on Tuesday October 29 Black Tuesday 16.4 million stocks ere traded when the average amount before that day was 4 to 8 million per day. It was known as the great crash.

After the crash the period was known as the Great Depression. Factories closed banks failed farmers lost their farms farm prices dropped to very low levels.

This was not only felt tin the United States, but the world as felt the effects of the depression. Germany stopped paying reparations and led to the rise to power of Hitler.

The causes of the great depression were as follows.

            Over speculation of stocks bought with borrowed money. Loans in the mid 1928 were under 5 million went to 850 million in September of 1929.

            Government policies the government cut interest rates to spur economic growth, like Alan green span, worried about over speculation government limited the money supple to discourage lending, when the crash hit the there was too little money available to help in the economy recover

The unstable economy lead to split in haves and have-nots

National wealth was unevenly distributed.

Because Hoover was president at the time of the great crash, he was blamed for the troubles faced by the people, poverty after the crash crossed all social groups. However those hit hardest were those at the bottom of the economic ladder. Many people lost their homes and moved in with their relatives and some of these homeless people built shantytowns with shacks of tar paper cardboard or scrap material. These were known as Hoovervilles. 

Farmers lost their homes and in protest of the low prices the farmers dumped thousands of gallons of mild and destroyed other crops. 

Not only did the United States endure the stock market crash, but also the dust bowl added to the nations problems 440,000 people left Oklahoma to go to California while another 300,000 leave Kansas 

  Draw the dust bowl on page 645. 

Surviving the great depression

Working their way through the hard times Americans develop work groups. Some of the greatest buildings are built during this time, the Empire state building Was one of the accomplishments during the depression many more skyscrapers were built during this economic upheaval?

During this time period humor about the depression was obvious.  Hoover blanket was an old newspaper. Empty pockets turned inside out, were know as Hoover flags. Babe Ruth was criticized for getting $80,000, higher than Hoover, Ruth said I had a better year than he did.

One way for government to raise funds was to pass the 21^st amendment that repealed the prohibition.

 In 1932, Charles Lindbergh’s son was kidnapped and killed.

The election of 1932

Hoover tried to get business leaders to keep wages high in order to stabilize the economy this worked for a while. Hawley-Smoot tariff, the highest import tax in history was passed. Foreign countries did the same and created a slowdown in international trade.  Hoover and the republicans were blamed for the financial mess the U.S. found it in.

Veterans march on Washington D.C., the Bonus Army wanted immediate payment of pension bonus that had been promised for 1945. general Macarthur used force to move the protesters out.

Roosevelt won all the country except 6 states.  

Chapter 23 the new deal

Shortly after the election a second bonus march was held, the wife of the president met them and told them  how she respected them but now was not the time to ask for money

 During his speech he stated that the only thing we have to fear is fear its self.

The first hundred days, called for new sweeping changes. Closed the banks for four days. Most banks were solid and the fdic started insuring deposits.

During this time the dust bowl drought of the central plains added to the woes of the American people. Use map on page645 of new book.

Public works programs the alphabet soup of agencies. The CWA   the CCC   NIRA   TVA

Many roads and bridges are built during this time. List the programs on page 664 of new book

The second new deal included more social welfare programs.  The Wagner act set up national labor groups.

Those who criticized the new deal included women, African American women were the least affected by the changes of the new deal.

Political critics of the New Deal.  Said that the programs did not do enough. 

During the depression, the growth of the socialist philosophy also led to the spread of the progressives in America

Demagogues, leaders who manipulate people with half truths deceptive promises and scare tactics. One such leader was Charles E. Coughlin a dynamic speaker known as the Radio Priest. He wanted to nationalize the banks and redistribute the wealth. He began showering praise on Hitler and making anti-Jewish remarks.

Huey Long was a country lawyer. He wanted to share the wealth from Louisiana.

Court packing scheme

The laws of the progressive period had been invalidated by the Supreme Court. FDR placed judges who were favorable to the New Deal in the courts.

 With actions in Europe people were afraid that the United States would allow the President to become like a dictator. 

The last days of the new deal began in 1937. Although before this the Wagner Act gave more power to labor unions. Membership in unions grew from 3.2 m in 1933 to 10.5 m in 1941. There were strikes although more peaceful than in the past. Sit down strikes were workers refused to leave the workstation. Wives even joined the strikes.

At a GM plant women organized to bring food to the striking workers.  One strike however did not go peaceful, in Chicago at republic steel company 10 killed 84 injured.

Cultural affects of the depression.

Literature of  mice and men is written about the era.

Grapes of wrath is about he era too. Movies made during the decade are mostly comedies with some drama mixed in. the wizard of oz  gone with the wind.

The new deal changed America. New work programs, the social security, and hope for the future is what the New Deal gave America. Unfortunately, it will take a world war to get the United States out of the depression.

Telling students about the results of the crash of the stock market.

Have them tell me some types of programs needed.

Farmers. Factory workers. Laborers. Women and. jobs

Children

Have students come up with ideas for various programs.

Have them create alphabet soup of programs. How do they pay for each program?  Who will be eligible to work in each program? How long will they be able to work in the program? Will they have to work to get funds? Can more than one male member of family get assistance?