The Great Depression

1. The Great Depression The Great Depression And World War II 1929-1945

2. 1928: Peace and Prosperity • Continuation of good times • Helps Hoover get re-elected • Prosperity in business was good for country • Debt stimulated economy through the purchase of goods as well as stocks on credit

3. “Everybody ought to be rich” • Confidence in business is high • Companies keep workers by offering decent wages, benefits and even providing English lesson to immigrants: welfare capitalism

4. “Everybody ought to be rich” • Stock market soars • Working people made decent wages • Real wages: money with which they could actually purchase things, grew. • Unemployment was low

5. Signs of Trouble • Too many goods • Warehouses become stockpiled with surplus goods. • Wages didn’t allow people to purchase goods as fast as they were made = credit. • Especially harmful to the auto industry and those industries that depended on automobile production such as steel, rubber and glass.

6. Signs of Trouble • Economy is out of balance in the amount of rich vs. poor people. • Buying on credit leads to an increase in personal debt. • Speculation: taking risky chances in the stock market. • Buying stocks on margin: or on credit

7. Stock market crash • Thursday, October 24, 1929: Black Thursday panic selling leads to a huge drop in stock prices.

8. Stock market crash • Hoover says not to worry, economy is sound. • Efforts to stabilize the economy fail. By the following Tuesday, October 29, aka Black Tuesday, another 16.4 million shares of stock were sold.

9. What caused the Great Depression? • Over speculation: stocks were bought with borrowed money. • Those stocks were then used as collateral to secure more loans to buy more stocks. • Investors lose confidence: stock market crashes. • Government policies: Interest rates are cut in the 1920’s to stimulate economic growth. In 1929, the government reverses policy and introduces a “tight Money” policy to dry up credit.

10. National effects • Farmers: Post War demand for food is low. • Crop prices continue to fall and farms held for generations in families are lost to creditors.

11. National effects • Severe drought affects the Great Plains • Turning the area into a dust bowl

12. The Dust Bowl • America’s Breadbasket • Long growing season, deep fertile and dry soil. • Heavy plows brought in to break the topsoil and get to the fertile soil underneath • Excellent atmosphere for wheat.

13. The Dust Bowl • More land is plowed than ever with the modern plow. • Drought occurs early 1930’s and lasts for 7 years. • Dust storms called “Black Blizzards” hurl dust as far as New England. • 60% lose their farms due to the combination of drought and over plowing that blew the fertile soil once enjoyed by the farmers away forever.

14. National Effects • Banks close as nervous depositors rush banks to withdraw their savings.

15. Americans Live through the Depression • Henry Ford closes down his auto factories in Detroit leaving 75,000 people out of work. • No unemployment insurance available for Americans. • Jobs, savings, all disappeared. • Rise of homeless: New York 15,000 • Shanty towns develop across the country made of tar paper shacks nicknamed: Hoovervilles after the president for whom they held blame for their predicament.

16. National Effects • Families face real challenges as generations forced to live together in tight quarters • Suicide rate soars, depression and fear linger in the hearts of Americans.

17. National Effects • African Americans fared the worst during the depression. • Continue migration from the South to the North. • Most menial jobs they had been able to get were now being taken by whites. • Discrimination in the south heightened as no African American was entitled to a job as long as a white man was out of work.

18. Women and Minorities live through the Depression • Women secure domestic positions and the burden to support families often times rests on their shoulders. • Married women continued to be discriminated against, though, as they were considered to be taking jobs away from men.

19. Getting through it together! • Twenty-first amendment repeals prohibition. • Empire State building is begun in 1930 and seen as a symbol of hope. • Federal government funds and action to help relieve the misery in the country are lacking under Hoover. • People look to the election of 1932 as hope for their future.

20. Worldwide Repercussions • U.S. was the world’s leading economic system • Nations were interdependent: through international banking , manufacturing and trade. • France and Britain unable to repay war debt as U.S. investment in Germany wanes and therefore reparations cease to be paid to the Allies.

21. Worldwide Repercussions • Riots occur and lead to political upheaval and shifts in power in a variety of European countries. Red Scare (Fear of communism) begins here in the U.S.

22. What Does Hoover Do? • At first nothing • Economy is Lassie-Faire • Will take care of itself • Hoover Dam • Work too late • Not enough jobs • Temporary jobs • Hoovervilles, Hoover flags and Hoover Blankets • Bonus Army

23. Election of 1932 • FDR & the New Deal: promises of real help for Americans. • Popularity rises over Hoover and the Republicans. • Hoover’s actions were seen as weak. • Didn’t provide work to those who needed it most.

24. FDR: Continued • Compassion towards working class. • Felt the Government had a responsibility to its citizenry to take a more active role in economic recovery. • Wanted to implement similar programs on a National level as those he had found success with as Governor of New York.

25. FDR Wins the Election and a New Era Begins. • Inaugural Address: “…So first let me assert my firm belief that the only thing we have to fear is fear itself.” • Promises a future of governmental involvement in people’s lives. • People are tired of trying to make it on their own and look for the government for help.