The Great Depression

1920s saw increase in consumerism, stock market

Farmers compiled huge debtsIndustrial workers’ wages

increased, but not as much as their productionCorporations saw most of the profitPeople owed a lot of credit

Begin to see some causes of the Great Depression*** 1) Uneven distribution of wealth***2) Overproduction in farming***3) Excess of credit

The Demise of the Roaring Twenties

Lots of stocks bought on speculation: high-risk with hopes of high profits in the future

Many stocks purchased on credit

October 29, 1929: confidence in stock market was lost Investors sold their stocksStock market crashedMany investors and

businesses lost everythingHelps mark the beginning of

the Great Depression

***4) Black Tuesday

Banks among the first to feel effectsPeople tried to withdraw their

money1929: Federal Reserve limited

money supply to discourage lending***5) Too little money in circulation

Businesses tried producing less, laying off workers

Businesses produce less -> fire workers -> people have less money -> don’t buy as many goods -> businesses produce even less -> fire even more workers, etc.

The Great Depression (1929-1941) Begins

Hawley-Smoot Tariff: Congress raises prices on importsKeeps foreign products out

of American marketForeign markets retaliate

by placing their own tariffsEurope already had

financial issues from WWIAmerica no longer able to

provide financial assistanceEurope experiences similar

financial collapse as a result

Depression Spreads Globally

Unemployment changed from 3.7% to 24.9%

People who kept jobs often experienced paycuts or reduced hours

Families struggle to sustain themselvesBreadline: people line up for

handouts from charities or public agencies

Hoovervilles: makeshift collection of tents/shacks in cities for homeless families

Betrayal of “American dream”

Americans in Poverty

Farmers had been suffering before the Great Depression

Many lost their properties, some became tenant farmers

Dust Bowl: huge drought in the Great PlainsBad farming practices made it

worseTowering dust storms

commonStorms killed animals, covered

houses, dirtied rivers

Many families had no choice but to migrateOkies: nickname for Dust Bowl

refugees

Rural America Devastated

Saw upswings and downswings of business cycles as normal Hoover believed in rugged individualism: all

individuals can succeed without gov’t help Volunteerism: donate $$$ and goods to charity

Most Americans instead thought of themselves

Hoover called for lower taxes, lower interest rates, more public works programsEncourage more production and

consumption with the R.F.C.Tried trickle down economics: money

from the top of the pyramid will trickle down to the base

Protests escalated with the Bonus Army MarchHoover re-election doomed

Hoover's Response