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THE GREAT DEPRESSION

THE GREAT DEPRESSION. A24 7.3.12. THE GREAT CRASH. GUIDING QUESTION. What caused the Great Depression? the federal government during the 1920s?. STOCK MARKET CRASH. Stock Market Prices, 1921–1932. May 1928-September 1929, prices doubled in value beginning in Sept 1929, gradual slide

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THE GREAT DEPRESSION

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  1. THEGREAT DEPRESSION A24 7.3.12

  2. THE GREAT CRASH

  3. GUIDING QUESTION What caused the Great Depression? the federal government during the 1920s?

  4. STOCK MARKET CRASH Stock Market Prices, 1921–1932 • May 1928-September 1929, prices doubled in value • beginning in Sept 1929, gradual slide • Black Thursday(Oct.24) • largest sell-off in NYSE history • Black Tuesday(Oct.29) • $40 billion in stock value lost by Dec. • The Great Depression • Response of bankers, Hoover and business leaders Black Tuesday Wall Street, Oct. 29, 1929

  5. Overproduction - Massive business inventories (up 300% from 1928 to 1929) Lack of diversification in American economy prosperity of 1920s largely a result of construction & auto industries Uneven distribution of income and wealth - Poor distribution of purchasing power among consumers Farm income down 66% in 20s By 1929 the top 10% of the nation's population received 40% of the nation's disposable income UNDERLYINGCAUSESOF THEDEPRESSION

  6. Weakness of Banking Industry bank failures in late 1920s (farmers) many had small reserves low margins encouraged speculative investment by banks, corporations, and individual investors total money supply closing of over 9,000 American banks between 1930 and 1933 Federal Reserve system Consumer Debt– middle class installment loans; buying on margin Overspeculation in Stock Market– by wealthy and upper middle class UNDERLYINGCAUSESOF THEDEPRESSION Consumer Debt, 1920–1931

  7. UNDERLYINGCAUSESOF THEDEPRESSION • Decline in demand for American goods in international trade • European industry and agriculture gradually recovered from World War I • Germany so beset by financial crises/ inflation that could not afford to purchase US goods • High American protective tariffs • international debt structure

  8. IMPACT ON SOCIETY

  9. GUIDING QUESTION How did the Great Depression alter the American social fabric in the 1930s?

  10. “Give a man a dole and you save his body and destroy his spirit. Give him a job and pay him an assured wage and you save both the body and the spirit.”

  11. Corporate profits - from $10 billion to $1 billon Business failures: 100,000 between 1929 and 1933 GNP – $104 billion in 1929 to $56 billion in 1933 Total national income – fell by over 50% Effects on Business & Industry

  12. Effects on Business & Industry • Bank failures • about 20% all banks (over 6000) between 1929 and 1933) • over 9 million savings accounts lost($2.5 billion) Depositors gathering outside a bank,April 1933 Bank Failures, 1929-1933 1932

  13. Great Crash World Payments Investors Businesses and Workers Overall U.S. production plummets. Investors lose millions. Banks Businesses and workers cannot repay bank loans. Consumer spending drops. U.S. investors have little or no money to invest. Allies cannot pay debts to United States. Businesses lose profits. Businesses cut investment and production Some fail. Savings accounts are wiped out. Banks run out of money and fail. Workers are laid off. Europeans cannot afford American goods. U.S. investments in Germany decline. Bank runs occur. German war payments to Allies fall off. Effects of the Crash

  14. Effect on workers and families • Unemployment ~25% in 1932? • underemployment • patterns of reemployment and layoffs • hobos • “Depression mentality” Men Lined Up at the New York City Employment Bureau, 1932

  15. Effect on workers and families • Malnutrition • Disease: tuberculosis, typhoid and dysentery. • soup kitchens and bread lines Soup kitchen, Chicago, 1930 Soup kitchen, 1931 (Cleveland)

  16. Effects on Farmers • Drought hits Great Plains • “Dust Bowl” • “Okies” • Farmers destroy crops and move West Resettlement Adminstration Dust Bowl Dust storm, Springfield, CO, 1935

  17. Dust storm, Elkhart, KS, 1937

  18. The Dust Bowl Aftermath of dust storms, South Dakota, 1936 Abandoned house, Kansas, April 1941 Dust Bowl Farm, Texas, 1938

  19. Migrants A Destitute Family in the Ozark Mountains. 1935 “Okies” migrate west in 1939 Dorthea Lange, “Covered Wagon Again” 1935

  20. Migrants in California "Cheap Auto Camp Housing for Citrus Workers“; Dorothea Lange, Tulare County, California, Feb. 1940 Migrant Auto Camp, California, 1936

  21. “Migrant Mother”Dorothea Lange 1936

  22. Effects on American Culture • Reactions of most Americans • Effects on basic values (capitalism, democracy, individualism) • Alternatives: socialism, communism? • Whom to blame? • Popular Culture and Escapism • Frank Capra • Walt Disney • Gone With the Wind

  23. HOOVER’S RESPONSE

  24. Federal Response Under Hoover • Herbert Hoover(1929-1933) • Philosophy: limited government, individualism • Initial response? • public works programs • Hawley-Smoot Tariff (1930) "Boulder Dam, 1942“, Ansel Adams

  25. Evaluation of Hoover’s Response • Contemporary popular opinion • “Hoovervilles”

  26. Contemporary Political Cartoon

  27. Evaluation of Hoover’s Response • Modern Evaluations: • reluctance to spend large amounts of federal funds, expand the role of the federal government. • willing to intervene in the economy to an unprecedented degree.

  28. 1932 ELECTION Misery Sweeps Roosevelt into Office

  29. 1932 ELECTION • Franklin D. Roosevelt • philosophy • “New Deal” Franklin D. Roosevelt, 1920 Vice Presidential nominee for Democratic Party Roosevelt Campaigning for Office in Kansas 1932

  30. 1932 ELECTION • Hoover • “The Worst is Past" • "Prosperity is Just Around the Corner" • Results Electoral Shift, 1928 and 1932

  31. NEW DEAL • Relief, Recovery, Reform • Willing to experiment with government power = has more • First 100 Days: • Provides relief for people who can’t take care of selves: Fireside Chats “The Only Thing We Have to Fear is Fear Itself” • Creates jobs with Public works programs: Alphabet Soup • Closes Banks and insures the $ in them. (FDIC) • Increases people’s hope

  32. Criticisms • Gave the gov’t too much power – Socialism? • Supreme Court declares acts unconstitutional • Women and African Americans receive less aid • Does too much/ not enough • Brings about Second NEW DEAL: • Social Benefits, union support, higher taxes for rich • SOCIAL SECURITY • Doesn’t end the Depression

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