Great Depression

The Cruelest Year-1932

Underconsumption& Overproduction

• Mass production had increased efficiency per man hour by over 40%

• In 1929, a family needed $2000/year for the bare necessities (60% of families not earning that much)

• People could not afford to buy new products• Overproduction led to layoffs, led to more

underconsumption• Could have raised wages so more people

could afford to buy goods

Other Causes

• Unequal distribution of wealth– 1% of the population owned 59% of the

wealth– Middle class not large enough

• Deflation- prices of goods were falling (partly due to overproduction & underconsumption)

• Stock Market Crash (more of a symptom of the underlying causes)

Effects on Businesses

• Stock market- investors lost $74 billion, • 86,000 businesses closed• US Steel producing at 19.1% of

capacity• Industries doing well: phonograph

recording, movies, cigarettes, contraception, miniature golf

Immigration• Emigration exceeded immigration (more

people left America than came into America), 350 applications per day to Russian trading agency for Americans who wanted to move to Russia.

Farmers

• Destroying crops because cheaper to burn crops for heat rather than buying coal

• Montana rancher who shot his livestock because he did not have $ to feed them.

• Taking revolutionary actions: blocking highways, kidnapping judges, calling for a “Revolution like they had in Russia.”

"Farmer and sons walking in the face of a dust storm. Cimarron County, Oklahoma" (Also known as "Fleeing a

Dust Storm," Arthur Rothstein, 1936)

Image Source: http://www.edb.utexas.edu/resources/team/lesson_1.html

Welfare- social stigma• Lewiston, ME. barred recipients from

voting

• Kids not allowed in schools

• Not allowed in hospital in WV unless guaranteed payment

Effect on Schools

• Chicago Teachers worked without pay (owed teachers $20 million)

• Schools closed for 10 or more months in Arkansas, or only open 3 days/week

• Teachers boarding with their students

Effect on Children

• Children called drowsy, lethargic, …. Possible mental retardation because of hunger”

• Teacher told student to go home for lunch, student replied: “It’s my sister’s turn to eat.”

• Boy brought his pet rabbit for show & tell; Sister: “He doesn’t know we are going to eat it.”

Children in a “Hooverville”

Image Source: http://www.picturehistory.com/product/id/879

"Children who live in a migrant camp on U.S. Highway No. 31, near Birmingham, Alabama" (Arthur Rothstein, 1937)

Image Source: http://www.edb.utexas.edu/resources/team/lesson_1.html

Responses of the wealthy

• President Hoover: “no one is actually starving”

• It was considered benevolent to give your garbage (food scraps) to fellow countrymen who were hungry

• Played polo, Republican governor candidate “too much prosperity ruins the moral fiber of the people”

Corruption of the Wealthy

• 1% of the population owned 59% of the nation’s wealth

• Samuel Insull’s utility companies were a “pyramid of holding companies” and his stock dropped to 4% of its 1931 value

• Insull fled to Europe, held a Paris press conference, snuck out back door to Greece (no treaty but then US signed extradition treaty), fled to Turkey