The Great Depression The period of time from 1929-1941 in which the economy faltered and...
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Transcript of The Great Depression The period of time from 1929-1941 in which the economy faltered and...
The Great The Great DepressionDepression
The period of time The period of time
from 1929-1941 in which thefrom 1929-1941 in which the
economy faltered and economy faltered and
unemployment soared.unemployment soared.
Causes of the DepressionCauses of the Depression
1.Crisis in the farm sector
2.Unequal Distribution of Wealth
3.Availability of Easy Credit
4.Tariffs and War Debt Policies
5.Stock Speculation
Agricultural ProblemsAgricultural Problems
Farmers: ¼ of American workforce (25%)Farmers: ¼ of American workforce (25%)Post WWI demand for agricultural goods fell Post WWI demand for agricultural goods fell sharplysharply– Prices for crops Prices for crops plummetedplummeted– Could not meet Could not meet debtsdebts– Faced foreclosuresFaced foreclosures– Lost land, Lost land, equipment and equipment and
livestocklivestock
Uneven Distribution of WealthUneven Distribution of Wealth
Uneven distributionUneven distribution– 65% under $1,99965% under $1,999– 29% $2,000- $4,00029% $2,000- $4,000– 5% $5,000- $9,9995% $5,000- $9,999– 1% $10,000 and over1% $10,000 and over
Easy CreditEasy Credit
1929 consumer debt was more than $6 1929 consumer debt was more than $6 BillionBillion““Credit” was new andCredit” was new and
people started spending people started spending irresponsiblyirresponsibly
Too many usedToo many used credit to buy the smaller credit to buy the smaller thingsthings
Stock SpeculationStock Speculation
Stock Speculation: “gambling” in the stock Stock Speculation: “gambling” in the stock market which unrealistically raised stock prices market which unrealistically raised stock prices
Black Tuesday: October 29, 1929Black Tuesday: October 29, 1929– Normal business cycle ledNormal business cycle led
to falling stock prices in earlyto falling stock prices in early
OctoberOctober– Investors sold and pulled Investors sold and pulled
money out of market and money out of market and
billions of dollars were lostbillions of dollars were lost
Banking CollapseBanking Collapse
Stock market crash led to people pulling Stock market crash led to people pulling their money out of the bankstheir money out of the banks
So many bank runs occurred that in 1929 So many bank runs occurred that in 1929 641 banks failed, in 1930 1,350 banks 641 banks failed, in 1930 1,350 banks failed, and in 1931 1,700 banks failedfailed, and in 1931 1,700 banks failed
Bank failures were also caused by the Bank failures were also caused by the Federal Reserve limiting the money supply Federal Reserve limiting the money supply which left banks without enough currencywhich left banks without enough currency
The Great Depression BeginsThe Great Depression Begins
The stock market crash and less The stock market crash and less consumer spending led to the failure of consumer spending led to the failure of many businessesmany businesses
Businesses responded by laying off Businesses responded by laying off workers and cutting wagesworkers and cutting wages
By 1933 25% of workers hadBy 1933 25% of workers had
lost their jobslost their jobs
TariffsTariffsHawley-Smoot Tariff: raised prices on foreign Hawley-Smoot Tariff: raised prices on foreign imports so that they could not compete in American imports so that they could not compete in American
marketsmarketsEuropean tariffs raised on imports from AmericaEuropean tariffs raised on imports from America
The tariffs created closedThe tariffs created closed markets and worsenedmarkets and worsened the depression.the depression.
Global DepressionGlobal Depression
Europe depended on the U.S. for loans to Europe depended on the U.S. for loans to pay their war debts but the U.S. couldn’t help pay their war debts but the U.S. couldn’t help
any longerany longer
Europe’s businesses failed and banks collapsedEurope’s businesses failed and banks collapsed
Hard TimesHard Times
Bread Lines: line of Bread Lines: line of people waiting for people waiting for food handouts from food handouts from charity or public charity or public changeschanges
Unemployment and Unemployment and cut hours forced cut hours forced families to hard timesfamilies to hard times– Families starvedFamilies starved
PovertyPovertyWhole families descend Whole families descend into hunger and into hunger and homelessnesshomelessnessMany sold most of their Many sold most of their belongings belongings Hoovervilles: makeshift Hoovervilles: makeshift shantytowns set up by shantytowns set up by homeless on public land homeless on public land (Central Park). Used (Central Park). Used scrap wood or cardboard scrap wood or cardboard to build shelter.to build shelter.
Dust BowlDust Bowl
Migration from the dust Migration from the dust bowl to the citybowl to the city– Okies: dust bowl refugeesOkies: dust bowl refugees– 800,000 left the Great 800,000 left the Great
Plains Plains
Central and Southern Great Central and Southern Great Plains during the 1930’sPlains during the 1930’s– Suffered drought and massive Suffered drought and massive
dust storms (“dirty 30’s”)dust storms (“dirty 30’s”)
Family LifeFamily Life
Men suffered in Men suffered in
shame and sometimesshame and sometimes
deserted their familiesdeserted their families
Birthrates plummetedBirthrates plummeted
African AmericansAfrican Americans
African Americans were hit the hardestAfrican Americans were hit the hardest– 50% unemployment50% unemployment
Mexican AmericansMexican Americans
Encouraged/forced to Encouraged/forced to repatriate (become repatriate (become Mexican citizens Mexican citizens again)again)
Faced discrimination in Faced discrimination in southwestsouthwest
Pushed out of the U.S.Pushed out of the U.S.
Hoover’s ResponseHoover’s Response
Cautious responseCautious responseHands-off policy- thought it Hands-off policy- thought it
was a natural part of the was a natural part of the business cyclebusiness cycle
Called for lower interest rates, reduce Called for lower interest rates, reduce taxes, create public-works programstaxes, create public-works programsAsked wealthy Americans to give to Asked wealthy Americans to give to charitycharity
Hoover’s Failed PlanHoover’s Failed Plan
Hoover realized his plan wasn’t working so he Hoover realized his plan wasn’t working so he decided to reverse course and use federal decided to reverse course and use federal money to fight depressionmoney to fight depression
Reconstruction Finance Reconstruction Finance
Corporation: gave Corporation: gave
billions in loans to billions in loans to
railroads, big railroads, big
business, and banksbusiness, and banks
Plan Cont’d…Plan Cont’d…
Trickle-Down Economics: Trickle-Down Economics: – Belief that money lent to banks Belief that money lent to banks
and businesses will trickle and businesses will trickle
down to consumers (it didn’t!)down to consumers (it didn’t!)
Hoover Dam: public works Hoover Dam: public works program in 1930program in 1930– Brought much needed employment Brought much needed employment
to Southwestto Southwest
Hoover ProtestHoover Protest
Americans called for change, and Americans called for change, and protested against Hooverprotested against Hoover
Hoover lost the election in 1932 to FDRHoover lost the election in 1932 to FDR
Bonus ArmyBonus Army
WWI veterans marched WWI veterans marched on Washington in 1932on Washington in 1932– Demanding payment of Demanding payment of
bonus promised by bonus promised by CongressCongress
Hoover ordered them Hoover ordered them out: MacArthur out: MacArthur RespondedResponded– Drove them out with tear Drove them out with tear
gas and bayonetsgas and bayonets
Result doomed HooverResult doomed Hoover