1929 - 1941

Great DepressionGreat Depression

• Economic disaster that hit the United States following the stock market crash of 1929

• It involved widespread business failure and massive unemployment

Causes of the Great Causes of the Great DepressionDepression

Cause #1Cause #1

1. Over speculation on stocks• Stocks bought on margin – part

cash/part credit• Loans could not be repaid after

Stock Market Crash• People’s homes repossessed

Cause #2Cause #2

2. Black Tuesday October 29,1929• Stock Market crashed • 16 million shares traded (daily

average 4 million)• Many businesses instantly went

bankrupt

Cause #3Cause #33. Failure of Federal Reserve

• Failed to supply banks with enough money to prevent the banking system from collapsing

• Caused Americans to lose their savings

Cause #4Cause #44. Smoot-Hawley Act

• Put high tariffs (taxes) on imported goods to force people to buy American products

• Other countries placed retaliatory tariffs on American products

• These actions stopped world trade and caused businesses to fail

Impact of the Great Impact of the Great DepressionDepression

Unemployment & Unemployment & HomelessnessHomelessness

• 25% of Americans unemployed

• Hoovervilles – neighborhoods of homeless people; named after President Herbert Hoover

Businesses FailedBusinesses Failed• Surviving

businesses had to cut wages and fire most employees

• Labor unions became militant

Businesses FailedBusinesses Failed• Demanded

companies rehire workers

Collapse of Financial Collapse of Financial SystemSystem

• Banks did not have any money for people to borrow

• Federal Reserve did not have money to loan banks so they could stay open

Farm Foreclosures and Farm Foreclosures and MigrationMigration

• Dust Bowl – farm area of U.S. which experienced a drought in 1920’s and 1930’s

• Farmers went bankrupt and couldn’t pay bank loans

Farm Foreclosures and Farm Foreclosures and MigrationMigration

• Farmers moved west to California to work on fruit farms

Political UnrestPolitical Unrest• Bonus Army –

20,000 WWI veterans marched on Capital demanding pension payments

Political UnrestPolitical Unrest• People

demanded government do something to create jobs and generate money