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The Great Depression 1929-1940s

The Great Depression 1929-1940s. President Hoover. Election of 1928-Hoover elected-won in a landslide Enters in during a time of prosperity: 1920s experienced a strong bull market (stock prices are rising) Consumer culture of the 20s=credit/debt Highly popular in the beginning.

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The Great Depression 1929-1940s

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  1. The Great Depression1929-1940s

  2. President Hoover • Election of 1928-Hoover elected-won in a landslide • Enters in during a time of prosperity: 1920s experienced a strong bull market (stock prices are rising) • Consumer culture of the 20s=credit/debt • Highly popular in the beginning

  3. Causes of the Depression • What factors contribute to an economic downswing in an economy? • How might you represent this downswing in a visual diagram?

  4. Causes of the Depression • Overproduction-WWI, mechanization of industry • Under-consumption • Uneven distribution of wealth-wages rose little; top 5% received 33% of the income (2007: Top 1% 42.7%, next 19% 50.3%, Bottom 80% 7%)

  5. Causes of the Depression-cont. • Rising debt/lending issues • Govt. policies-Hawley-Smoot tariff-raised prices on foreign goods (Reason? Negative consequence?) • Global economic problems-had become more interdependent with one another; debts, reparations, etc. leads to further troubles and loss of overseas trade with the U.S.

  6. Causes of the Depression-cont. 7. Stock market speculation investment (promises satisfactory returns) vs. speculation (unsure of return) 8. “Buying stocks on margin”-many contributed as little as 10% down; 1/3 did • Stock Market Crash-Oct. 29, 1929-”Black Tuesday”-16 million shares sold, over $30 billion lost

  7. Effects • Between 1929-1933 -85,000 businesses close -400,000 farms foreclosed on -6,000 banks fail (1/4 of all banks) -GDP fell almost 50% (1929- 1932: $81 billion to $41 billion) -Unemployment: 16 million (1/3 of pop.) • Hardest hit -Minorities (Unemployment often 60%) -Women (3/4 ban women from teaching) -Teenagers

  8. Effects • Hoovervilles-dev. Outside cities; communities of tents and shacks • Civil unrest-Bonus Army (1932) Group of WWI veterans march on D.C., demanding early payment of a war bonus to be paid in 1945; Vets camped out and demanded they would stay until paid; Hoover sent in troops under Douglas MacArthur; they used tear gas and tanks, removed the protesters and burnt the camps; 1 dead; outraged the people • Breadlines

  9. Other Major Events • Dust Bowl: over-farming and climate • Took loose soil and spread it across the nation; took topsoil away • Huge dust storms • Farms were abandoned by the thousands • Okies left the south and mid-west to settle in the West, such as in California

  10. Hoover’s Response • Some govt. action was needed to pull the U.S. econ. out • “rugged individualism”-self-reliance; individuals can succeed on their own with some govt. assistance • Some tax breaks; asked churches to deal with charity • $800 million pushed toward public works -Boulder/Hoover Dam later named to honor him • Tries to stabilize prices by holding surplus farm products in storage=not enough for continued overproduction • Emergency loans to stabilize key businesses (ex. rr’s, banks) trickle-down economics-could “trickle down” to smaller businesses and bring recovery • “lame duck” president-powerless to cope with the Dep.

  11. FDR • 1932-worst year of the Depression • FDR elected in election of 1932 • 3 R’s: relief, recovery, and reform • Created a series of federal programs known as the New Deal (govt. role in the economy increased)

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