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GREAT DEPRESSION 1929-1932

GREAT DEPRESSION 1929-1932. CAUSES. SUFFERING. EFFECTS. HOOVER. TERMS. Imbalance of Foreign Trade. CAUSES. Availability of Easy Credit. Stock Market Crash. Uneven Distribution of Income. Mechanization Of Industry. IMBALANCE OF FOREIGN TRADE. Fordney-McCumber Tariff

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GREAT DEPRESSION 1929-1932

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  1. GREAT DEPRESSION 1929-1932 CAUSES SUFFERING EFFECTS HOOVER TERMS

  2. Imbalance of Foreign Trade CAUSES Availability of Easy Credit Stock Market Crash Uneven Distribution of Income Mechanization Of Industry

  3. IMBALANCE OF FOREIGN TRADE Fordney-McCumber Tariff Effort to protect U.S. industry but caused retaliatory agricultural tariffs from other countries causing agricultural prices to fall hurting farmers but creating high surpluses. Hawley-Smoot Tariff 1930 to protect U.S. industries from foreign imports. This act brought retaliatory tariff acts from foreign countries, U.S. foreign trade suffered a sharp decline.

  4. UNEVEN DISTRIBUTIONOF INCOME More than 70% of American families earned less than the amount considered the minimum needed for a decent standard of living. While production increased on average by 32%. Workers wages increased only 8%. In 1929 the top 5% of all American households earned 30% of the nation’s income.

  5. Farmers in Trouble • After WWI the demand for crops declined and crop prices fell 40% • Farmers went into debt = couldn’t pay their loans = foreclosure on their land. • As farmers defaulted on their loans rural banks failed.

  6. MECHANIZATION OF INDUSTRY Most economists agree that overproduction was a key cause of the depression. Labor saving machinery took jobs and increased the supply of products. Increase in production plus low buying power by consumers led manufacturers to cut production and lay off employees. Unemployed men marching in protest in New Jersey 1931.

  7. AVAILABILITY OF EASY CREDIT • Although many Americans appeared prosperous during the 20s, they were actually living above their means. • Often bought on credit and paid in installment plans. Businesses encouraged consumer debt.

  8. ELECTION OF 1928

  9. PRESIDENT HERBERT HOOVER

  10. "WE IN AMERICA TODAY ARE NEARER TO THE FINAL TRIUMPH OVER POVERTY THAN EVER BEFORE IN THE HISTORY OF ANY LAND.“ HERBERT HOOVER, ONE YEAR BEFORE THE GREAT DEPRESSION BEGAN WITHIN SIX MONTHS OF TAKING OFFICE THE STOCK MARKET CRASHED AND THE GREAT DEPRESSION BEGAN. HOOVER WAS PHILOSOPHICALLY UNEQUIPPED TO TAKE THE NEEDED ACTIONS TO RELIEVE THE SUFFERING OF THE UNEMPLOYED AND FARMERS NOR INITIATE LEGISLATION TO REMEDY THE FACTORS THAT CAUSED THE DEPRESSION.

  11. STOCK MARKET CRASH

  12. THE STOCK MARKET, SYMBOL OF PROSPERITY, CAME CRASHING DOWN IN OCTOBER OF 1929 BRINGING ON THE GREATEST DEPRESSION IN WORLD HISTORY.

  13. A Look at the Market

  14. The NYC Stock Exchange • A “bull market” – a period of rising stock prices, through most of the 20s. • By 1929, about 4 million Americans were invested in the market. • People were engaged in speculation—they bought stocks on the chance of a quick profit and ignored the risks. • Many began buying on margin – paying a small percentage of the stock and borrowing the rest from the banks.

  15. Buying on Margin • This political cartoon, symbolic of the stock market frenzy, shows greedy brokers “fishing” for new clients from the top of the New York Stock Exchange building.

  16. Early September 1929 – stock prices peaked and then fell! • Confidence in the market wavered and some investors quickly sold their stock • October 24th 1929 – market took a plunge and again investors unloaded their shares.

  17. Black Tuesday • October 29, 1929. • 16.4 million shares were dumped on this day. • Many had bought on margin and were now stuck with huge debts and others lost their entire savings. • Brokers called in the money.

  18. Bank Failure • After the crash many people panicked and withdrew their money from banks. Some couldn’t get their money because banks had invested it in the market. Crowd gathered at failed bank

  19. Bank Failure cont. • In 1929, 600 banks closed. • By1933, 11,000 of the nation’s 25,000 banks had failed. • Millions lost their savings accounts. Police guarding failed bank.

  20. SUFFERING FARMERS CHILDREN WOMEN WWI VETERANS

  21. DUST BOWL “The air is just full of dirt coming, literally, for hundreds of miles. It sifts into everything. After we wash the dishes and put them away, so much dust sifts into the cupboards we must wash them again before the next meal…Newspapers say the deaths of many babies and the old people are attributed to breathing in so much dirt”. --Ann Marie Low/Dust Bowl Diary

  22. Dust Bowl Farms • Drought created the Dust Bowl. Farmers could not grow crops and therefore made no money. Many did not own their farms (were in a mortgage). Farms were seized by the banks. Between 1929 and 32, about 400,000 farms were lost through foreclosure – the process by which a mortgage holder takes back property if an occupant has not made payments.

  23. Migrant Families • Because many farmers lost everything during the Dust Bowl, they became homeless. • Many packed up all belongings that they could and headed to California in hopes of finding work at an orchard.

  24. Farmers • Many took their families and headed to California. Because so many had this idea, they found that there were no jobs left in CA.With so much competition, pay was very little. • Many men became “hoboes”.

  25. Men • Men had a difficult time coping with unemployment because they were accustomed to working and supporting their families. • They would walk the streets and stand in lines for jobs. Many gave up.

  26. “These were the wanderers from town to town, the riders of freight trains, the thumbers of rides on highways, the uprooted male population of America. They … gathered in the big cities when winter came, hungry, defeated, empty, hopeless, restless…always on the move, looking everywhere for work, for the bare crumbs to support their miserable lives, and finding neither work nor crumbs.”Thomas Wolfe

  27. Women • Women worried about feeding their children. • Some tried to find work outside the home, however, they faced resentment from society because there were so many men withoutjobs. • Women had to be creative. • Many canned food, sewed clothes, budgeted.

  28. Children • Poor diets and lack of money for health care led to serious health problems—malnutrition and diet related diseases such as rickets. • Many schools were shut down, 300,000 students out of school and often entered the workforce. • Teenagers became “Hoover Tourists” – children touring the country looking for work and adventure.

  29. Social and Psychological Effects • Between 1928 and 1932 the suicide rate rose 30 percent. • Three times as many people were admitted to state mental hospitals as in normal times. • Adults often stopped going to the doctor or dentist • Children put off dreams of college • Many put off getting married or having children. • Families came together to help one another by sharing resources. • Americans developed habits of saving and thriftiness that came to shape a whole generation of Americans.

  30. Effects of Depression

  31. Effects • The Gross National Product (GNP)—the total annual value of goods and services a country produces—was $103 billion in 1929. By 1933, it was only $56 billion. • By 1932, nearly 13 million were unemployed (about ¼ of the workforce). • The poor dug through garbage cans or begged. Soup kitchens and breadlines only offered minor relief.

  32. Hoovervilles-- Shantytowns consisting of shacks made from scrap materials sprang up throughout the U.S New York City Seattle, Washington Portland, Oregon Circleville, Ohio

  33. Herbert Hoover • When the stock market crashed in 1929, he tried to reassure Americans that the nation’s economy was on sound footing.

  34. Hoover’s Answers for the Depression “Any lack of confidence in the economic future… …is foolish”

  35. Hoover’s Answers cont. • Hoover believed the government could/should play a limited role in helping to solve the economic problems. • Hoover believed that giving handouts would weaken people’s self respect and “moral fiber” • After the crash, he called together key leaders in the fields of business, banking and labor. He asked employers not to cut wages or layoff employees and labor not to demand higher wages.

  36. Hoover’s Answers cont. • Hoover’s initial response did little to help. People began to blame him for their poor conditions. • By 1931, with the presidential election looming, Hoover appealed to Congress to pass a series of measures to reform banking, provide mortgage relief and funnel more federal money into business investment.

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