Chapter 23 Flashcards
Causes of the Depression
Immediate cause was Black Tuesday, October 29th 1929 when the stock market crashed, but there were other more important causes.
- Lack of Diversification-Prosperity had depended excessively on a few industries (automobiles, construction). Those industries began to decline in the late 20s. Newer industries were developing but not to the point where they could compensate for that loss.
- Maldistribution of Wealth-maldistribution in purchasing power and as a result a weakness in consumer demand, which was too small to create an adequate market for the goods the economy was producing. More than half the families in America leaved on the edge or below the sustenance level, too poor to buy the goods the industrial economy was producing.
- Credit Structure of the Economy-Farmers were deeply in debt. Small banks, were in constant trouble in the 20s as their customers defaulted on loan; many of these small banks failed. Large banks were in trouble too. Some of the nation’s biggest banks were investing recklessly in the stock market or making unwise loans. When the stock market crashed, many of these banks suffered losses they could not absorb.
- America’s Position in International Trade-late in 20s, European demand for American goods began to decline. That was partly because of high American Tariffs, partly because European industry and agriculture were becoming more productive, and partly because some European nations were having financial difficulties and could not afford to buy goods from overseas.
- International Debt Structure-After WW1, all the European nations allied with the US owed vast sums to the US. Germany needed to pay reparations to European countries, but it couldn’t because it had no money. American banks began making large loans to European governments, with which they paid off their earlier loans. Thus debts and reparations were being paid only by piling up new and greater debts. In the late 1920s, particularly after the economy weakened, the European nations found it much more difficult to borrow money from the US. At the same time, high American tariffs were making it difficult for them to sell their goods in American Markets. Without any source of foreign exchange with which to repay their loans, they began to default. The collapse of the international credit structure was one of the reasons the Depression spread to Europe and got much worse in America
collapse of the banks
Collapse of much of the banking system followed the stock market crash. More than 9,000 banks either went bankrupt or closed their doors to avoid bankruptcy between 1930 and 1933. The declining money supply meant a decline in purchasing power and thus deflation. Manufacturers and merchants began reducing prices, cutting back on production, and laying off workers.
historians’ explanations of GD’s causes
During the Depression, different groups offered different interpretations.
- Some claimed it was a lack of “business confidence” (businessmen were hesitant to invest because they feared gov. regulation and high taxes
- Hoover administration blamed international economic forces
- New Dealers argued that the Depression was a crisis of “underconsumption”—that low wages and high prices had made it too difficult to buy the products of the industrial economy
Scholars in the years since also have their own ideas
- Milton Friedman and Anna Schwartz, in “Monetary History of the US” argued for the monetary interpretation, the Depression, they claimed, was a result of a drastic contraction of the currency. These deflationary measures, turned an ordinary recession into the Great Depression
- the “spending” interpretation Peter Temin “Did Monetary Forces Cause the Great Depression” Temin’s answer is no. He says the cause was not monetary contraction but a drop in investment and consumer spending, which preceded the decline in the money supply and helped to cause it
In the end, no single explanation of the Great Depression has ever seemed adequate to most scholars. The event, is simply “inexplicable” by any rational calculation.
personal and family responses
Most Americans had been taught to believe that every individual was responsible for his or her own fate, so they took a personal responsibility in their failure.
An increasing number of families were turning to state and local public relief systems, just to be able to eat. But those systems were totally unequipped to handle new demands.
Dust Bowl
Beginning in 1930, a large area of the nation from Texas into the Dakotas, came to be known as the “Dust Bowl.” It began to experience a steady decline in rainfall and an accompanying increase in heat. The drought continued for a decade, turning what had once been fertile farm regions into deserts. In Kansa, the soil in some places was without moisture as far as three feet below the surface. In Nebraska, Iowa, and other affected states, summer temperatures were averaging over 100°. Swarms of grasshoppers were moving from region to region, devouring what meager crops farmers were able to raise, often even devouring fenceposts or clothes hanging out to dry. Great dust storms “black blizzards” swept across the plains, blotting out the sun and suffocating livestock as well as people unfortunate or foolish enough to stay outside
“Okies”
Because farmers were producing way more goods than the market could absorb, farm prices fell so low that few growers made any profit at all on their crops. As a result, many farmers left their homes in search of work. In the south in particular, many dispossessed farmers wandered from town to town, hoping to find jobs or handouts. Hundreds of thousands of families from the Dust Bowl (often known as “okies” since many came from Oklahoma) traveled to California and other states, where they found found conditions little better than those they had left. Many worked as agricultural migrants, traveling from farm to farm picking fruit and other crops at starvation wages
Scottsboro case
An example of racism that attracted national attention. In March 1931, nine black teenagers were taken off a fright rain in Alabama and arrested for disorder. Later, two white women who had also been riding the train accused them of rape. In fact, there was overwhelming evidence, medical and otherwise, that the women had not been raped–they made their accusations out of fear of being arrested themselves. Nevertheless, an all white jury in Alabama quickly convicted all nine of the “Scottsboro boys” and sentenced eight of them to death.
Supreme Court overturned the convictions in 1932 and a series of new trials began that attracted increasing national attention. Eventually they all were freed.
Blacks, Chicanos, Asians, & the Depression
- Blacks were largely discriminated against. They migrated to cities to avoid harsh racism in the South “No Jobs for Niggers Until Every White maMan Has a Job.” But conditions in most respects were little better than in the South. In some cases Black unemployment was higher than 50%
- Similar patterns of discriminations confronted the large and growing population of Mexicans and Mexican Americans,. Mexican Americans filled many of the same menial jobs in the West and elsewhere that African Americans filled in other regions. Some farmed small, marginal tracts, some became agricultural migrants. But most lived in urban areas and occupied the lower ranks of the unskilled labor force. Some Mexicans were in effect forced to leave the country by officials who arbitrarily removed them from relief rolls or simply rounded them up and transported them across the border
- Asian Americans, the Depression also reinforced long standing patterns of discrimination and economic marginalization. Japanese American College graduates often found themselves working at fruit stands.
Japanese American Citizens League
Japanese American businessmen and professionals tried to overcome obstacles by encouraging other Japanese to become more assimilated. They formed the Japanese American Citizens League in 1931 to promote those goals.
Women, families, and the GD
GD served to strengthen the widespread belief that a woman’s proper place was in the home. Most men and many women believed that what work there was should o to men. Many people believed that no woman whose husband was employed should accept a job.
But the widespread assumption that married women, at least, should not work outside the home did nots top them from doing so. Both single and married women worked in the 1930s, despite public condemnation of the practice, because they or their families needed the money. In fact, the largest new group of female works consisted of wives and mothers. The increase occurred despite many obstacles.
For feminists, the depression was a time of frustration.
Economic hardships of the Depression placed great strains on American families, many of whom had become accustomed in the 20s to the steady rising standard of living. Families had to retreat from their consumer patterns. Women often returned to sewing clothes rather than buying products in stores. Many households expanded to include distant relatives. Marriage and birth rates declined.
Middletown
Displayed the value system of the Depression–sociologists Robert Lynd and Helen Merrell Lynd published a celebrated study of Muncie Indiana, “Middletown” in 1929, returned there in the mid 1930s to see how the city had change. They concluded in their 1937 book, “Middletown in Transition” that in most respect the texture of the culture had not changed. Middletown is overwhelmingly living by the same values. Above all the men and women remained committed to the traditional American emphasis on the individual.
Dale Carnegie
Many people responded eagerly to reassurances that they could, through their own efforts, restore themselves to prosperity and success. Dale Carnegie’s self help manual “How to Win Friends and Influence People” (1936) was one of the best selling books of the decade. Carnegie’s message was not only that personal initiative was the route to success; it was also that the best way for people to get ahead was to fit in and make other people feel important.
Farm Security Assn.
Many Americans were shocked during the 30s at their discovery of debilitating rural poverty. Among those who were most effective in conveying the dimensions of this poverty was a group of documentary photographers, many of them employed by the federal Farm Security Administration in the late 1930s, who traveled through the South recording the nature of Agricultural life.
Dorothea Lange
Photographed Depression families
John Steinbeck
novels portrayed the trials of workers and migrants in California. Wrote “The Grapes of Wrath” 1939 about the Dust Bowl. In telling the story of the Joad family, migrants from the Dust Bowl to California who encounter an unending string of calamities and failures, he offered not only a harsh portrait of the exploitive features of agrarian life in the West, but also a tribute to the endurance of his main characters and to the spirit of community they represent.
