2.1 Spread Of The Depression

Question 1

THE SPREAD OF THE DEPRESSION 1929-32
growth of unemployment

Answer 1

(only a small population was directly affected by wall street crash , not everyone owned shares)
500,000-> 4million unemployed in 2 months
1933: 15million (25%)
before collapse: working fewer hours+better pay BUT not applied to all sectors

• main help came from voluntary organisations HOOVER encouraged voluntarism
  = did not have old age pensions or unemployment welfare as was responsibility of the state
• people who lost money on crash = spent less = less demand in economy = company output reduced & workers needed (particularly in luxury industry + motor cars)
• banks went bankrupt (1600)= BANK RUNS: queues of people wanting to withdraw money but had lost savings = reduced money supply+ deflation
  : people hoarded cash in their homes =delayed spending
  -real value of debt increases = further fall in output & unemployment

CYCLICAL UNEMPLOYMENT

Question 2

THE SPREAD OF THE DEPRESSION 1929-32
collapse of GDP

Answer 2

real wages fell 16% (how much money is worth if want to spend it)
= not spending = not selling = reduced employment

-GNP fell: $200billion to $140 billion
- manufactoring fell 54%
-growth rate went into decline (6.7% -> -14.7%)
- investment fell 98%
*hit all industries (coal,textile,steel) BUT cigarettes

gov reluctant to intervene - hoover believed the depression would be short lived : not want to change LAISSEZ-FAIRE POLICY

Question 3

THE SPREAD OF THE DEPRESSION 1929-32
effects on workers and families

Answer 3

1 million left home to look for work
1931:Colorado :children’s insufficiently fed -> spread of disease associated with poor diet & living conditions

-suicides rates rose 14%
(23,000)
- marriages fell 10% + drop in birth rate
-migration of workers moving state to state = friction as believed should help their own members of the state not newly joined ones

Question 4

THE SPREAD OF THE DEPRESSION 1929-32
gangsterism

Answer 4

collapse of economy encouraged development in organized crime
(started in 1920 with decline in law and order)
1930: developed widespread network of illegal activities (alcohol , gambling &black market)

• Chicago: 1300 gangs = turf wars + violent activities (Al Capone)
  -bonnie &Clyde
  -Machine Gun Kelly
  = ‘outlaw hero’s’ and inspiration for Hollywood films even lost were labeled ‘public enemies’ of the state

increased due loss of faith in the government

Question 5

THE SPREAD OF THE DEPRESSION 1929-32
effects on ethic minorities

Answer 5

Before: low paying jobs = less of a financial cushion to fall on during the crash

economic decline = increased racial discrimination
- employees favored whites vs “last hired ,first fired”
- 50% unemployment + more in south (70% in Atlanta)
- low entry level jobs with low pay filled with whites

CHICAGO WHIPS - organized boycott of department stores that refused to employee African Americans
“dont buy where you ant work” motto spread across the North
“most blacks didnt know that the great depression had even come”- always had it bad

• discrimination = rise in activism
  Louisiana: white mobs attacked railway workers & killed 10
• lynching increased
  -500,000 Mexicans forced to leave
• encourage Spanish speakers to leave -> states barred non-us citizens from public work + willing to ay for railway fare to boarder
• boycotted Chinese laundries to drive them out of work

Question 6

THE SPREAD OF THE DEPRESSION 1929-32
affect on agriculture

Answer 6

a global supply glut = reduced prices + became uneconomical
1929-32:
- income fell by 2/3
- cotton prices fell 2/3 (6 cents a pound)
- Iowa: 1/8 farms were for auction
- 58 farms in every 1000 changes hands
- reduced demand
- could not afford to harvest their crops = left to rot in fields + farm animals were killed instead of taken to market