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History Beyond The Textbook
THE GREAT DEPRESSION
IN THE UNITED STATES
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History Beyond The Textbook
CAUSES OF THE GREAT
DEPRESSION
 The Stock Market Crash of 1929
 The Dust Bowl
Debt in the United States
The Smoot-Hawley Tariff Act
United States Federal Reserve
and Money Supply
United States Business
United States
President
Herbert Hoover
Tenants were
replaced from the
land during the
Depression
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THE STOCK MARKET CRASH
The Great Depression started in the United
States with the Stock Market Crash. The
crash took place on October 24, 1929, a
date that was called “Black Thursday.”
That day 12.9 million shares of stock were
traded after the stock market had been
surging since September with a record
high mark of 381.17. Many economic
leaders thought a stock market panic could
potentially occur. Richard Whitney, the
vice president of the stock market, hoped
to quell the solution by buying stock in
many businesses for more than the normal
price. This temporarily caused a halt in
trading, but this did not last long.
A large crowd gathers outside of the
New York Stock Exchange
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THE STOCK MARKET CRASH
Before long, national newspapers
began covering the activity with the
stock market. This prompted many
people to begin pulling out of the
market on Monday, October 28. The
market was down 13 percent by the
end of the day. The next day, known as
“Black Tuesday,” 16.9 million shares
of stock were traded, resulting in a loss
of $14 million on that one day. In total,
$30 million was lost during the fiveday period.
The trading room of the New York Stock
Exchange after the crash of 1929
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THE DUST BOWL
The Dust Bowl was a weather-related
occurrence that happened in the United
States from 1930 to 1936. It consisted of
dust storms that would cause much
damage to the American lands. There were
severe droughts, a normal occurrence in
these areas, made worse by unwise
farming practices. When deep plowing of
the land occurred, the grass was destroyed.
This caused the soil to dry up. When a
wind would come, the dried-up soil would
turn into dust and blow to the east and the
south. Some dark dust clouds reached as
far away as Washington, D.C., and New
This picture depicts a farmer and two of
York City. The states most affected by the
his sons during one of the Dust Bowl
Dust Bowl were Kansas, New Mexico,
storms in Oklahoma.
Oklahoma, Texas, and Colorado.
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DEBT IN AMERICA
The United States found itself in a
significant amount of debt at this time.
Americans had grown dependent on cheap
credit. In the short term, it seem liked a
good idea. But over time, both consumer
and commercial debt began to mount.
Those who were already in debt when the
prices for products decreased risked going
into default. A significant number of
layoffs occurred, resulting in an
unemployment rate of 25 percent. Those
who worried about their money began to
withdraw the majority of their money
from the bank. Banks were now in a panic,
and there was nothing that the Federal
Reserve could do to correct the situation.
Industrial production in the United States,
from 1928 to 1939
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DEBT IN AMERICA
The effect of the Stock Market Crash on the
Dow Jones Industrial Average in 1929
The debt continued to grow in the
United States. This was due to the
price of products and the average
income of a United States citizen
falling close to 20 to 50 percent. All of
the debts, however, remained at the
same dollar amount. In the aftermath of
the panic of 1929 and for the majority
of 1930, approximately 744 U.S. banks
failed. In total, about 9,000 banks
failed during the 1930s. Those who had
deposited money lost about $140
billion in deposits. Banks were now
forced to build up their reserves and
give out fewer loans to people.
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SMOOT-HAWLEY TARIFF
The Smoot-Hawley Tariff Act has been
blamed by many as one of the reasons
why the Great Depression was made
worse in the United States. The tariff
reduced international trade and caused
retaliatory tariffs to occur in other
countries. This tariff act caused American
exports to fall from $5.2 billion in 1929 to
$1.7 billion in 1933. Many products were
hit hard by this decline, such as cotton,
wheat, tobacco, and lumber. Historians
have stated that the decline in prices of
farm exports had caused many farmers in
the United States to default on their loans.
Representative W.C. Hawley (left) and
Senator Reed Smoot shake hands on their
Smoot-Hawley Tariff Act.
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U.S. FEDERAL RESERVE
& MONEY SUPPLY
Monetarists have accused the United States
Federal Reserve System of making poor
choices that allowed for problems in
banking in the United States to continue.
The Federal Reserve allowed the money
supply in the United States to shrink by
one-third from 1929 to 1933. Originally,
the downward turn of the economy, thanks
to the Stock Market Crash, would have
caused just another recession. But thanks to
large banks such as the Bank of the United
States failing, people began to panic.
The Seal of the United States
Federal Reserve System
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U.S. FEDERAL RESERVE
& MONEY SUPPLY
Businessmen were not able to get new
loans, nor could they renew their old ones
because there was little money available.
The amount of credit that the Federal
Reserve could give out was limited,
however, because there must be a little bit
of gold that backed the credit being issued.
By the time the Depression began, the
Federal Reserve had reached the limit.
The United States Federal Reserve
Building in Washington, D.C.
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UNITED STATES BUSINESS
When Franklin Delano Roosevelt was
elected United States president in
1932, he blamed the big businesses that
were prevalent in the United States.
Roosevelt, along with the majority of
Democrats, felt that business had too
much unregulated power. During his
many terms in office, Roosevelt would
try to fix the problems of the Great
Depression by implementing many
new programs and policies under the
New Deal.
United States President
Franklin D. Roosevelt
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LIFE DURING THE
DEPRESSION
The Great Depression was physically and
psychologically devastating to people.
People were losing their homes, in addition
to not having enough food and clothing to
meet their needs. Starvation became a
problem during this time. It was very
common to see people digging through
dumpsters for food. While starvation was
fairly common, few people died from it.
Many people began to blame themselves for
not achieving success during the Depression.
They felt success only went to those who
deserved it.
Men walking around in search of jobs
during the Great Depression
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LIFE DURING THE
DEPRESSION
Children were greatly affected by the Great
Depression. They now had to accept
responsibilities at a younger age than normal.
In a few instances, teenagers were able to find
jobs before their parents could, and in a sense,
became the “breadwinners” of the family. In
these instances, the children would have to
help comfort their parents who were suffering
from the effects of the Great Depression.
Minorities were hurt as well. Half of all black
workers in 1932 were unemployed.
Older children had to take
care of younger siblings.
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HOOVERVILLES
Hoovervilles were names given to small,
rundown towns in the United States during
the Great Depression. Hundreds of tiny
shacks and tents populated the Hoovervilles,
which were comprised of people who had lost
most of their possessions. Named after former
United States President Herbert Hoover,
people who dwelled in the Hoovervilles
would sleep anywhere. Even though the lands
were on private property most of the time, the
authorities would allow the people to stay
there, mostly because they had nowhere else
to go. Many different terms came out of the
Hoovervilles, such as the “Hoover wagon,”
which was a car with horses tied to it.
A Hooverville near Portland, Oregon
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FDR AND THE NEW DEAL
President Franklin D. Roosevelt began
to argue that the United States
economy must be restructured in order
to help prevent another depression.
Roosevelt then instituted the New
Deal, which was a policy that created a
series of programs to help employ
people in America, in addition to
giving them relief and reform. One
program, the National Recovery
Administration, provided work to
Americans through government
spending. Minimum prices and wages
were set in all lines of work. Labor
codes and standards for the work place
were also set up.
President Roosevelt signs the Tennessee
Valley Authority, part of the New First Deal,
in action
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FIRST NEW DEAL PROGRAMS
 (FDIC) Federal Deposit Insurance Corporation
 (CCC) Civilian Conservation Corps
 (FERA) Federal Emergency Relief Administration
 (CWA) Civil Works Administration
 (AAA) Agricultural Adjustment Administration
 (TVA) Tennessee Valley Authority
 (NRA) National Recovery Administration
 (PWA) Public Works Administration
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Members of the CCC
(Civilian Conservation
Corps) doing road
construction in Ohio
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THE SECOND NEW DEAL
Many people were still demanding that
steps be taken to improve the economy.
The Second New Deal, passed in 1935,
focused more on pro-labor movements and
not being in favor of businesses. The
National Labor Relations Act (Wagner
Act) helped protect collective bargaining.
This caused growth in labor unions in the
American Federation of Labor. The Works
Progress Administration (WPA) created
many blue-collar jobs for men in the
United States. The National Youth
Administration (NYA), under the direction
of future United States President Lyndon
B. Johnson, provided the same benefits for
children and young adults.
The symbol of the Works Progress
Administration (WPA)
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THE SOCIAL SECURITY ACT
President Roosevelt signs the Social Security
Act into effect on August 14, 1935
Congress passed the Social Security
Act in 1935. This created a pension
that would be given to someone when
they retired. It also created a plan
where those who were temporarily out
of employment would still be able to
get a paycheck. Money was also made
available to those who had physical
problems. This plan had a significant
lasting effect on the American culture.
Those who were suffering in society
would be granted aid and helped. This
act also made people think differently
about retirement.
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THE RECESSION OF 1937
In 1936, the majority of the economy had
regained its positions to the time before
the Stock Market Crash. Unemployment,
however, was still at a high rate. The
American economy fell again in 1937 and
lasted through 1938. Unemployment rose
from 14.3 percent in 1937 to 19 percent in
1938. Roosevelt, citing his and the
Democrats’ dislike of big business, fought
against the various monopolies, which
they believed were the cause of the Great
Depression. This maneuver was short
lived. World War II soon began and the
government focused its efforts there.
The total employment in the United States
from 1920 to 1940. This graph does not
include farms and the WPA.
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THE RECESSION OF 1937
When World War II broke out,
employment in the manufacturing
segment jumped from 11 million in
1940 to 18 million in 1943. At this
time, President Roosevelt changed his
balancing plans. He instituted a $5
billion program in order to increase
purchasing power. There were many
who feared that when World War II
ended, the United States would return
to a depression. This never occurred as
there was a significant amount of
growing consumer demand in the
aftermath of both the Great Depression
and World War II.
The graph depicts the amount of
manufacturing employment in the United
States from 1920 to 1940.
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THE AFTERMATH OF THE
GREAT DEPRESSION
Thanks to an exorbitant amount of government
military spending in the United States, due to
World War II, the Gross National Product
(GNP) doubled. It hid the effects of the Great
Depression. However, the national debt in the
United States continued to grow. This prompted
the implementation of new taxes to pay down
the debt. Wartime demand caused people to
work extra hours in order to earn more money.
Costs for wartime supplies were also reduced
due to increased volume, ensuring that the
businesses made higher profits. Businesses also
hired as many people as possible, causing U.S.
unemployment to fall below 2 percent.
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Roosevelt’s reforms helped
allow him to be elected for
four terms as president.