Ch. 25 The Great Depression

1. Ch. 25 The Great Depression The Perfect Storm

2. Causes of the Great DepressionUnfortunately, the same practices that caused economic prosperity also created deeper problems. • Decline in Demand: construction and automobiles were the most profitable industries during the 1920s • Industries built massive plants for production – but demand had dropped dramatically • Overproduction: companies left with warehouses full of goods they couldn’t sell. • Misdistribution of wealth: supply side wealth did not trickle to the lower classes • Created a pyramid of wealth • Unemployment fell during the 20’s, but wages did not rise

3. Pyramid of Wealth Percentage of People in America Percentage of $ Each Group Has 3% Upper Class • 92% Low Class • or below poverty 5% Middle Class 92% of the People only get 2% of the money Middle class controls 8% of the Money • Upper class controls • over • 90% of the Money

4. 5. Declining Exports: Yankee imperialism destroyed European ability to trade • As debts piled and American banks failed the depression spread to Europe as well. 6. Plight of Farmers : Many had to take loans to grow crops and keep up with agricultural technology • Poor growing seasons and volatile markets caused many to lose their farms

5. The Stock Market Crash • Market continuously rose over 8 years. • values more than tripled between 1925 & 1929. • Speculation became a popular: buy stocks low and then sell them high. • Many investors bought stocks On Margin since markets seemed stable. • Most stocks were purchased with money investors didn’t actually have.

6. Brokers knew the markets were inflated – panic ensued as they sold everything • Investors lost over $30 Billion nationwide on Black Tuesday • Banks folded as investors defaulted on their debts. • The biggest tragedy of Black Tuesday -many people who never bought stocks lost all their savings too.

7. Banking Collapse • 9,000 banks either went bankrupt or closed their doors to avoid bankruptcy. • Run on banks compounded the problems • Federal Reserve raised interest rates to protect their own interests - worsened flow of money further. • Unemployment rose above 25% during the depression and never went below 15% for ten years.

8. Unemployment and Relief • Many laborers had been accustomed to layoffs, but never so quickly and drastic. • Shame and helplessness became epidemic - poverty reflected personal responsibilities. • Local relief was ill-equipped to handle demands. • Many felt public welfare programs would not only harm the gov’t budgets, but also harm public morale.

9. The Dust Bowl • One of the worst droughts in the nation’s history also hit beginning in 1930. • Lack of geographical protection created massive dust storms • The dust bowl extended from north Texas all the way to the Dakotas. • Plagues of grasshoppers and locusts followed droughts the next year

10. Social Structure of the U.S. during depression • Birth rate and divorces went down during the Depression. • This is because families couldn’t afford either. • More strict child labor laws were created • The gov’t protected jobs for older Americans who were supporting families. • High School enrollment increased – no jobs for teenagers

11. The Role of Women • More women entered the work force as the need for money increased for each family. • Easier to find work as a housekeeper or nurse than a factory worker • Gender role reversal in many homes

12. Literature of the Depression • Serious situations of the depression inspired powerful literature • John Steinbeck: Grapes of Wrath and Of Mice and Men. • Grapes of Wrath: Oklahoma farmers leaving the Dust Bowl during the depression. • Of Mice and Men: migrant farmhands trying to find work during the depression. • Margaret Mitchell: Gone with the Wind. • rebuilding life in the South after the Civil War. • Scarlet Ohara’s inner strength symbolized American spirit

13. Entertainment • Americans idolized glamorous movie stars • Mae West, Clark Gable, Shirley Temple, Ginger Rogers, and Fred Astaire • Movies about happy and wealthy celebrities and fairy tales became popular • most people wanted to escape reality. • The first soap operas were created over the radio

14. Mae West

15. Clark Gable

16. Fred Astaire and Ginger Rogers

17. Snow White and the Seven Dwarfs • First full length animated feature film by Walt Disney.

18. Crime of the Depression • Bank robbers became famous - Americans resented the banks after the stock market crash. • John Dillinger, “Baby Face Nelson”, Bonnie and Clyde, and Machine Gun Kelly • FBI would be granted interstate jurisdiction to combat the problem.

19. George “Babyface” Nelson

20. The Hoover Administration • More or less the wrong man at the wrong time. • Initially tried to fund relief, but not enough • Tried to raise tariffs - protect American business • Felt too much direct gov’t relief would teach Americans dependency. • Proposed raisingtaxes when some of the programs cost the gov’t more money.

21. Hoover’s RFC • Reconstruction Finance Corporation: • Designed to give $1.5 Billion gov’t funding directly into industries to provide jobs. • Gov’t loans to banks, railroads and businesses. • Problems with the RFC • Never fully used all the money • Only gave money to institutions they felt would return on the investment.

22. Hoovervilles& Bonus Army • Hoovervilles: shacks, and shantytowns where many struggling Americans were forced to live when they lost their homes. • term of resentment towards Herbert Hoover. • Bonus Army:WWI veterans petitioned the gov’t to give them bonus checks early because of the depression. • Blamed Hoover when Congress refused • 2,000 had to be violently removed by National Guard