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THE GREAT DEPRESSION

Explore the causes, impact, and government response during the Great Depression in the 1930s, including the Stock Market Crash, overproduction, and weak banking industry. Learn about the effects on businesses, workers, farmers, and Hoover's limited government response. Discover how FDR's New Deal brought hope and change to the nation.

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THE GREAT DEPRESSION

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  1. THEGREAT DEPRESSION

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

  3. Stock Market: Banks & Margins • In 1927 banks did two stupid, greedy things • 1) Banks began letting customers borrow money to buy stocks. • 2) Banks started to use depositors money to speculate in the stock market. Normally banks pay you interest for savings. Then they loan it to businesses or families that were good risks to buy homes or start companies etc.

  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. Black Tuesday Wall Street, Oct. 29, 1929

  5. Overproduction – companies produced way too much and could not sell there inventory (up 300% from 1928 to 1929) Lack of diversity in American economy prosperity of 1920s largely a result of construction & auto industries Uneven distribution of income and wealth – gap between poor and rich increases drastically 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 (very little cash on hand) total money supply closing of over 9,000 American banks between 1930 and 1933 Federal Reserve system Consumer Debt– middle class taking out loans they could not pay back; buying on credit Over speculation 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

  8. IMPACT ON SOCIETY

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

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

  11. 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

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

  13. Effects on Farmers • “Dust Bowl” Dust Bowl Dust storm, Springfield, CO, 1935

  14. Dust storm, Elkhart, KS, 1937

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

  16. HOOVER’S RESPONSE

  17. Federal Response Under Hoover • Herbert Hoover (1929-1933) • Philosophy: limited government • Hawley-Smoot Tariff: raised tariffs on overseas goods. • Congress believed the tariff would make imports too expensive and Americans would buy American goods, increasing demand • European countries retaliated with their own tariffs and U.S. exports fell by almost 70% "Boulder Dam, 1942“, Ansel Adams

  18. Evaluation of Hoover’s Response • The general public felt that Hoover didn’t do enough to fix the depression • “Hoovervilles”

  19. The Bonus Army/March • World War One veterans were denied their pensions • Marched on Washington, 1932 • Congregated around White House • Military evicted them from D.C. • Deep anger at gov’t • http://www.youtube.com/watch?v=xqevdBZCbcQ

  20. Evaluation of Hoover’s Response • Hoover was reluctant to spend large amounts of federal funds, expand the role of the federal government. • Should a President intervene in the economy if the nation is in a depression? • 2008 financial crisis… • Contrary to popular history Hoover’s commitment to (laissez fair/hands off approach) made the Depression worse

  21. 1932 ELECTION Misery Sweeps Roosevelt into Office

  22. 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

  23. 1932 ELECTION • Hoover • “The Worst is Past" • "Prosperity is Just Around the Corner" • Results Electoral Shift, 1928 and 1932

  24. SOURCES • Brinkley, American History: A Survey (10th ed) • Wadsworth-Thompson http://www.wadsworth.com/history_d/special_features/image_bank_US/1929_1939.html • Library of Congress American Memory Project • Rutgers Univ. Teaching Politics Image Bank http://teachpol.tcnj.edu/amer_pol_hist/.html • Divine America Past and Present Revised 7th Ed. • Faragher, Out of Many, 3rd Ed.; http://wps.prenhall.com/hss_faragher_outofmany_ap/ • Kennedy, American Pageant 13e

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