President Herbert Hoover wasn't doing much to help the depression so the homeless built Hoovervilles which were houses made of cardboard to try to open the president's eyes so he would help. This led to Hoover's end of presidency when FDR beat him in the fall election easily because he planned to make Public Works programs. FDR's Public Works helped to turn around the GNP and to make unemployment drop.
To this day economists have not been able to explain exactly why the stock market crashed in the first place, which is what caused the depression to start. This is the question that made me choose the Great Depression as my topic. In this report I will answer the question, what was the effect of the Great Depression on Washington's economy and unemployment?
The Great Depression started with the crash of the stock market on Oct. 24, 1939. The losses for that day totaled, 16 billion dollars. A year later the Federal Reserve drops its interest rate from 6% to 4%. So as you can see, the entire economy of Washington has collapsed, and earlier, rather than later people are going to lose their jobs. In 1930 the GNP, which is the general net profit, has dropped 9.4% and unemployment is now at 8.7%. So let's say that if Washington has 1 million people then there are 8,700 people without jobs. And we are only 1 year into this mess. Hoover still hasn't passed any legislation or bills to help with the economic collapse.
In 1931 the GNP falls another 8.5% and unemployment is now up to 15.9%. If you think this is bad there is much worse to come. Now in 1932 the GNP has dropped its worst ever drop of 13.4% which now totals 31.1% and unemployment is up to 23.6%. Now that is over 230,000 people out of work if we stick to our same example.
Here is a little fact to put in perspective how bad the Depression was. Industrial stocks have dropped 80% and over 10,000 banks have failed. Also in 1932 the top tax rate rises from 25% to 63% and over 13 million Americans have lost their jobs. FDR is elected on March 4, 1933. The same year he has created 3 new groups to help with the unemployment. He created the Civilian Conservation Corps, Farm Credit Act and the Federal Emergency Relief Administration and a few others. Because of these New Deal programs the GNP only falls 2.1% and unemployment only rises a little to 24.9%.
This next year FDR must have done something right because the GNP rises 7.7% and unemployment drops to 21.7%. In 1935 congress authorizes the Workers in Progress Administration. This New Deal program created jobs for people and helped to improve our state. The GNP rises 8.1% and unemployment drops to 20.1% in 1935. FDR then makes a mistake by trying to enlarge and liberalize the Supreme Court and his political power weakens because people think he has gone mad in 1936.
The top tax rate is again raised to 79% and the GNP grows a record 14.1% and unemployment is now at 16.7%. In 1938 no New Deal legislation is passed because FDR has lost his reputation. Because of this the GNP drops 4.5% and unemployment grows to 19%. WWII starts in 1939 causing U.S. manufacturing to increase for the war effort, and the Great Depression ends.
My first source is a timeline that starts in the 1920's and goes to 1945. This timeline was written by Steve Kanqas an Oct 27, 1992. This timeline fits with my guiding question very well because it talks about Washington's economy during the Depression. I would say that this article was written to show people how drastic the Depression was. I know that this article is authentic because it was written by a newspaper.
My first artifact and only one is a picture of a woman sitting outside her shack that is made of mismatched boards and cardboard. I know that this artifact is authentic because the picture was taken by a very important photographer of the time, D. Lange. This photo show the poverty people lived in because of the economic collapse.
Also the woman inside the shack looks very sad and that shows how emotional the time had to be. My second source is an encyclopedia article from the Britannica Elementary encyclopedia. This article goes a bit more in detail about the economic side of the Great Depression and the impact it had on Washington's people.
I think the intended audience was supposed to be elementary kids because the article was from an elementary encyclopedia. Robert Samuelson wrote this encyclopedia paper. My third source is an interview that has little stories of people who actually were in the Depression and a few tidbits of information at the beginning of the interview. Alexandra Harding wrote the article. This article relates to my guiding question because the interviews are about how peoples' businesses collapsed.
I know that this info is trustworthy because there are actually interviews of people who were in the depression. My fourth and final source is a clothing distribution report that was written by the Washington Emergency Relief Foundation. This report is related to my guiding question because it is about money and how our economy is going. The report shows how much money is spent on certain clothing items.
The cause of the Great Depressions economic collapse was the stock market crashing. Economists believe that the cause of the stock market crash was because people bought out a lot of stock, but they still aren't sure about the exact cause. When the stock market crashed the effect it had on the economy was huge.
Since people lost all of their money and didn't buy things, business failed making people lose their jobs. Now people did not have steady income so people stopped buying things and the GNP dropped in consequence.
In case you didn't know, GNP means how much money is made selling things within the country. The GNP dropped about 40% during the depression. So, sales were cut in half during the Great D. The Great Depression was like dominos, the first one tips over and the rest come down as a result.
Washington State was my question at the beginning of this report and I think I have come up with an answer. As you can tell the GNP went down so much that businesses weren't making money so they closed or fired workers to make up for the lost sales, not to mention the money they lost in the stock market.
I would say that Washington economy suffered greatly from the economic collapse. If it wasn't for WWII the Great Depression could have gone on a lot longer. I hope my report has helped you to get a clearer picture of how bad the economy was during the Depression.
