Causes of the Great Depression
The period from 1920 to 1929 is known as the Roaring Twenties. Those years were exciting, fascinating, and entertaining for the U.S. population, whose sons had just fought and won World War I (1914–18), the war that had promised to end all wars. Everyone was enthralled with the new gasoline automobiles that Henry Ford (1863–1947) had made affordable. Women had gained the right to vote, and some had acquired new electric machines that made life easier, such as washing machines and vacuum cleaners. Every day more Americans brought a radio into their homes; the radio brought music and news that thrilled listeners. The new moving pictures captivated audiences in palace-like movie houses. Businesses and manufacturing industries continuously expanded. The prices of their stocks steadily increased through the 1920s, going on a wild ride upward between 1926 and October of 1929. Stock prices went far beyond realistic values and had little basis in the health of the companies. These skyrocketing stock prices signaled trouble for the U.S. economy.
As early as March 1929 a few financial experts warned that banks were making too many loans for stock speculation (the buying and selling of stock without regard for its actual value or the strength of the individual company). The Federal Reserve, the U.S. central bank, tried to rein in the country's banks but with no success. Several leaders of industry also...
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The New Deal
" I pledge you, I pledge myself, to a new deal for the American people. Let us all here assembled constitute ourselves prophets [dedicate ourselves to the development] of a new order of competence and courage." Franklin Roosevelt (1882–1945) spoke these words on July 2, 1932, at the Democratic National Convention. He was accepting the Democratic Party's nomination to be a candidate in the U.S. presidential election of 1932. The phrase "new deal," planted in the public's mind, became a label for the political and economic programs Roosevelt created to combat the Great Depression (1929–39) and return America to prosperity.
At the time of Roosevelt's speech, Herbert Hoover (1874–1964) was the U.S. president and the Republican candidate for reelection. Hoover (served 1929–33) had fallen into disfavor with the American public. He had not met the public outcry for economic relief during the early years of the Depression. In addition, with his cool and stern manner, he did not connect well with the public, and their resentment of him grew. In Roosevelt the public sensed hope and optimism. Desperate for a new approach to solve the economic hardships of the Great Depression, the American people elected Roosevelt to the presidency by a wide margin in November 1932. However, it would be four months between the November election victory and Roosevelt's inauguration as president in March 1933....
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Banking and Housing
Franklin D. Roosevelt had been inaugurated as president of the United States on March 4, 1933, a day that found the U.S. banking system paralyzed. On March 6, Roosevelt declared a nationwide "bank holiday," closing all U.S. banks until March 13. The "holiday" allowed a time-out in the rapid decline of the U.S. banking system. The Emergency Banking Act of 1933, passed by Congress on March 9, provided for government inspection of the nation's banks. The Banking Act of 1933, passed a few months later, and the Banking Act of 1935 laid the foundation for reform of the U.S. banking industry. The 1933 Banking Act provided for creation of the Federal Deposit Insurance Corporation (FDIC), which insured depositors against loss of their money in the event of a bank failure. The FDIC restored the public's confidence in the banking system.
All of these measures were part of the New Deal legislation developed under Roosevelt's administration. The New Deal programs were designed to bring relief and recovery to the American people and to industries that were struggling to survive in the Great Depression. The Great Depression was the most severe economic crisis the United State had ever experienced. It began with the crash of the stock market in October 1929 and lasted until the United States entered World War II (1939–45) in 1941.
The structure of the U.S. banking system in the 1920s...
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Throughout U.S. history farming has been an important way of life for American families and essential for the nation's economic health. During the first two decades of the twentieth century farmers experienced economic growth and prosperity. The period of 1909 through 1914 is often referred to as the golden age of agriculture. By then, the agricultural character of the various regions of the United States had become well established: Dairy and poultry farms dominated in the Northeast, tobacco and cotton farms in the South, corn and hog production in the Midwest, wheat farms in the Great Plains, open-range livestock grazing in the western states, and vegetables, cotton, and orchards in California.
When World War I (1914–18) disrupted food production in Europe, U.S. farmers supplied Europeans with food. However, at the conclusion of World War I, the resumption of European food production brought a rapid decline in demand for U.S. farm products. The decline led to large surpluses (more supply than was needed) and falling prices in the United States, but farmers continued to produce at their World War I levels to try to cover their operating expenses. Although most parts of the U.S. economy prospered during the 1920s, the decade proved to be a harsh, lean time for farmers. Farmers became angry and frustrated by the lack of action by President Calvin Coolidge (1872–1933; served 1923–29), who...
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Works Progress Administration
Harry Hopkins (1890–1946) was President Franklin D. Roosevelt's friend, adviser, key relief coordinator, and head of the Works Progress Administration (WPA). In a 1933 radio address that was later published in June Hopkins's 1999 book, Harry Hopkins: Sudden Hero, Brash Performer, Hopkins said: "Who are these fellow-citizens? Are they tramps? Are they hoboes and ne'erdowells? Are they unemployables? Are they people who are no good and who are incompetent? Take a look at them, if you have not, and see who they are. There is hardly a person…who does not know of an intimate friend, people whom you have known all your life, fine hardworking, upstanding men and women who have gone overboard and been caught up in this.… They are carpenters, bricklayers, artisans, architects, engineers, clerks, stenographers, doctors, dentists, farmers, ministers."
It was for these carpenters, bricklayers, engineers, and other workers that President Roosevelt (1882–1945; served 1933–45) created the Works Progress Adminstration. Established in 1935, the WPA was a unique program designed to get the unemployed off relief rolls by providing jobs at minimal pay until workers could find jobs in private business. Besides employing regular laborers, the WPA extended its programs to include unemployed artists, musicians, writers, and actors. Innovative and controversial, these programs spurred growth in American...
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"I see no reason why every child from the day he is born, shouldn't be a member of the social security system. When he begins to grow up, he should know he will have old-age benefits direct from the insurance system to which he will belong all his life. If he is out of work, he gets a benefit. If he is sick, or crippled, he gets a benefit.… Cradle to the grave—from the cradle to the grave they ought to be in a social insurance system." —President Franklin Roosevelt, speaking to Secretary of Labor Frances Perkins.
President Franklin D. Roosevelt (1882–1945; served 1933–45) envisioned a social security program for the people of the United States. He eagerly shared his ideas with his secretary of labor, Frances Perkins (1882–1965), as the process of developing such a program got under way in 1934. The words that open this chapter, relayed by Perkins in her 1946 book, The Roosevelt I Knew, became known as Roosevelt's "cradle to grave" statement. The words reveal the deep sense of responsibility Roosevelt felt toward all Americans, who were caught in a desperate struggle to survive the Great Depression of the 1930s.
The Great Depression was the worst economic crisis in U.S. history. The stock market crashed in October 1929; a banking crisis followed. Stores closed, 25 to 30 percent of workers lost their jobs, and people could not pay their bills or buy...
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The Great Depression, the most severe economic crisis the United States had ever experienced, began in late 1929 with the crash of the stock market. Schools, like every other part of American society, were deeply affected, but the hardships of the Depression were only a temporary setback to upward trends in education that had begun earlier in the decade. For public schools the most difficult years of the Depression were between 1932 and 1936. Cuts in school budgets resulted in shortened school years or school days, lower teacher salaries, teacher layoffs, insufficient funds for books and supplies, cuts in the number and variety of classes offered, and increased class sizes. A significant number of schools, especially rural schools, closed altogether.
Yet through the upheaval several positive and long-lasting changes occurred. Membership in teachers' labor unions greatly increased as teachers organized to work for higher wages, better job opportunities, retirement benefits, and higher standards for teachers. State governments increased their contributions to local education, aiding local communities that were struggling to fund their schools. Many tiny rural schools were combined into larger school districts so that resources could be shared. A school district in the suburbs of Philadelphia, Pennsylvania, became the first to combine white and black schools. President Franklin Roosevelt (1882–1945;...
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Employment, Industry, and Labor
"Ican remember the first week of the CWA [Civil Works Administration] checks. It was on a Friday. That night everybody had gotten his check. The first check a lot of them had in three years. Everybody was celebrating.… I never saw such a change of attitude. Instead of walking around feeling dreary and looking sorrowful, everybody was joyous. They had money in their pockets for the first time. If Roosevelt had run for President the next day, he'd have gone in by a hundred percent." Hank Oettinger, who was laid off in 1931 and remained unemployed for two years, in Studs Terkel's 1986 book, Hard Times: An Oral History of the Great Depression.
The Great Depression (1929–41) was a time of crisis and change for the American worker. The number of unemployed workers rose to a level never before seen in the United States. With few other options for assistance, many turned to the federal government for relief. However, during the early years of the Great Depression, 1929 to 1932, President Herbert Hoover (1874–1964; served 1929–33) appealed to private charities and local government relief agencies to tend to the needy. He also called for voluntary efforts from industry
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Electrifying Rural America
For many Americans in the 1930s one of the most memorable experiences of a lifetime was the day electric power came to their home. Often with great anticipation homes were readied for "zero hour," the moment the lines were energized. Homes were wired, bulbs were hung, a radio was in place, and, if the family could afford them, appliances such as electric ranges and refrigerators were installed and ready.
The push to bring electricity to all corners of America—including isolated rural farms—began with the presidential campaign of 1932. The Democratic candidate, Franklin D. Roosevelt (1882–1945), promoted the goal of rural electrification, and in November he won the presidency by a landslide. Americans caught in the depths of the Great Depression (1929–41), the worst economic crisis in U.S. history, had pinned all their hopes on the new president.
Few electrified farms
Electric power began to serve American industry, businesses, and homes in the cities by the 1880s. However, for many years electrification was regarded as a luxury. But by the 1920s electric power was becoming an essential part of modern life. More than half of all urban homes had electric lights, and many of those homes had electric appliances. Despite these...
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Women of the New Deal
When Franklin D. Roosevelt (1882–1945) was inaugurated as president in March 1933, the United States was at the depth of the Great Depression, the most severe economic downturn the nation had ever experienced. Almost immediately President Roosevelt and his advisers presented Congress with a series of programs designed to bring relief, recovery, and reform to the nation's ailing economy. Together these programs became known as the New Deal. As the New Deal legislation passed through Congress, many new government agencies were established to carry out the relief programs. In order to accomplish their goals, these agencies needed experienced relief workers. In America the most experienced relief workers were those trained in social work; and most trained social workers were women. Hence the New Deal agencies brought a wealth of new opportunities for these women, who were highly qualified to deal with the problems of the Great Depression. By the end of 1933 thirty-five women had received appointments to prominent government positions. By the end of the decade, fifty-five women held key positions in government.
A few women had played active roles in government before the 1930s. Since 1921 Grace Abbott (1878–1939) had served as chief of the Children's Bureau in the Department of Labor. Mary Anderson had led that same department's Women's Bureau since 1920. Women had won the right to vote in 1920, and...
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Minority Groups and the Great Depression
As difficult as the economic crisis of the Great Depression was for white Americans, it was even harder on racial minorities, including black Americans, Mexican Americans, American Indians, and Asian Americans. In 1933 the general unemployment rate in the United States was over 25 percent; at the same time, unemployment rates for various American minorities ranged up to 50 percent or more. Given the severe racial discrimination in almost every facet of daily life in America through the 1920s, it was hard for many minorities to distinguish much difference between the Great Depression and "normal" economic times. Nonetheless, for these groups the Great Depression was worse than "normal" economic hardships they had suffered.
During the Depression racial discrimination was widespread, and minority workers were normally the first to lose jobs at a business or on a farm. They were often denied employment in public works programs supposedly available to all needy citizens. They were sometimes threatened at relief centers when applying for work or assistance. Some charities refused to provide food to needy minorities, particularly to blacks in the South. Violence against minorities increased during the Depression, as whites competed for jobs traditionally held by minorities. Minorities were excluded from union membership, and unions influenced Congress to keep antidiscrimination requirements out of New...
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In the 1930s the economic crisis known as the Great Depression rippled through the United States, affecting almost all American families. The crash of the New York Stock Exchange in October 1929 marked the beginning of the most severe economic downturn in U.S. history. Thousands of banks closed; manufacturing slowed greatly because no one could buy goods; stores closed; 25 to 30 percent of workers lost their jobs. It would be the middle of 1933 before the government took action to halt the downward spiral and offer some relief. President Franklin D. Roosevelt (1882–1945; served 1933–45) began his term of office in March of that year. In the next one hundred days he and his advisers proposed a series of measures that Congress passed into laws. The new legislation created programs for immediate relief as well as programs that would aid in the gradual recovery of America's prosperity. These programs, known as the New Deal, would reach into the lives of almost all Americans.
The harsh economic times affected all but the very wealthy. The working class, middle class, and upper middle class who managed to keep their jobs saw their salaries decrease. Families figured out ways to "cut corners," "make do," and "keep up appearances." Frequently people who had employment supported family members who had lost their jobs; almost all families had a close relative who suddenly was without an income. Farm...
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Riding the Rails
It was 1932 in the United States. Hard times of the Great Depression had hit. Pulling into a rail yard of a small town on an early misty morning was a long freight train. Even before the train came to a complete stop, shadowy figures began jumping from boxcars to the gravel below. Not five or six but sixty or more tumbled from the train with small bundles in hand. Many of their faces were not lined with age; they were the fresh faces of America's youth. Many were teenagers—teenagers "on the bum." They were part of an army of youthful transients, numbering roughly 250,000, who were riding the rails through America.
Along the rails homeless boys and a scattering of girls experienced adventure, awesome glimpses of the American countryside, and a thrilling sense of freedom. But they also experienced hunger, danger, boredom, despair, and hostile railroad security guards known as the "bulls." Three out of four of America's wandering young people said the hard times of the Great Depression caused them to "hit the road."
The crash of the U.S. stock market in October 1929 signaled the start of the most severe economic crisis in U.S. history. By 1932 and early 1933 many banks had closed, manufacturing had slowed greatly, and millions of people had lost their jobs, money, and homes. Twenty-five percent of American workers were unemployed. Almost everyone suffered some decrease in...
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News Media and Entertainment
The American population became increasingly concentrated in cities in the early twentieth century. Because cities had more public schools than rural areas did, the population's shift to the cities meant that more children had access to education. The literacy (ability to read and write) rate increased accordingly and spawned a thirst for knowledge. To satisfy their need for information, the American public looked to newspapers. Newspaper circulation increased in large cities and small communities. By the 1920s, newspapers could take advantage of improved printing techniques, expanded communication systems, more-efficient news gathering, and increased advertising revenues. Newspaper organizations became big corporate businesses and enjoyed huge profits.
By the early 1920s radio stations started making regularly scheduled broadcasts; two early leaders were KDKA of Pittsburgh and WWJ of Detroit. Radio programming grew steadily in the 1920s. Hollywood movies, which had previously been only novelties, also became big business in the 1920s. On October 6, 1927, the first talkie (a movie with sound), The Jazz Singer, premiered. Many people predicted that sound was a passing fad, but theaters wired up and the American public was hooked.
The Great Depression began in October 1929 with the crash of the stock market. It was the worst economic crisis in U.S. history, lasting until...
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Prohibition and Crime
In October 1929 the crash of the stock market triggered a crisis in the U.S. economy. By 1930 Americans were starting to realize how severe the economic depression would be. Every day more banks failed, businesses folded, factories closed their doors, and increasing numbers of Americans lost their jobs. This depression was to become the Great Depression that lasted for more than a decade. Those who managed to keep their jobs saw their income greatly decrease. Americans' hope for prosperity faded as they struggled to hold on to a minimal standard of living. To most people the U.S. government seemed distant and ineffective, providing no solutions to the difficulties and no relief.
In addition to the nation's economic troubles, for many Americans there was another source of distress: Prohibition. Prohibition began in 1920 when the Eighteenth Amendment (the Prohibition amendment) to the U.S. Constitution took effect. Prohibition banned the manufacture, sale, and (with the Volstead Act) possession of alcoholic beverages, including beer and wine. The new law did nothing to lessen Americans' desire to drink; people wanted their favorite beverages at meals, at parties, and at their neighborhood bar or saloon. Responding to the public's desire, gangs in the cities organized and delivered the liquor. As a result, by the late 1920s organized crime was established and prospering. Gangsters such as Alphonse...
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End of the Great Depression
The 1930s were a troubled decade, economically and politically, throughout much of the world. In the United States the stock market crash in 1929 and the economic depression that followed brought widespread unemployment reaching up to 25 percent of the workforce (over twelve million workers) by early 1933. Most other workers experienced pay cuts. President Herbert Hoover (1874–1964), who served during the early years of the Depression (1929–33), made only a limited response. As economic conditions worsened, Americans lost faith in Hoover, and there was considerable social unrest. Franklin Roosevelt (1882–1945) was elected as president in 1932, and when he took office in early 1933, he brought hope with his massive New Deal social and economic recovery programs. But even with Roosevelt's aggressive approach, the depression did not significantly improve. In Europe, the economic hard times led to radical politics, including the rise of Adolf Hitler (1889–1945) and the Nazi Party in Germany. Germany and Italy as well as Japan began programs of military expansion, forcefully taking control of other nations.
Finally in September 1939 another world war erupted in Europe, only two decades after the end of World War I (1914–18). This new global war would pit the Allies—primarily the United States, Britain, China, and the Soviet Union—against Germany, Japan, and Italy, the Axis powers. After...
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