THE CAUSES OF THE GREAT DEPRESSION Photos by photographer Dorothea Lange What is a Depression?

THE GREAT DEPRESSION period from 1929 – 1940 in which the economy plummeted and unemployment skyrocketed Alabama family, 1938 Photo by Walter Evans

What is a depression? Gross Domestic Product- total amount of goods and services produced within a country in a given year Recession- a 6 month period when GDP decreases Depression- a severe long lasting recession

The Great Depression

GDP DROPS, UNEMPLOYMENT SOARS Unemployment leaped from 3% in 1929 to 25% in 1933 Unemployment Rate today about 7.6%

The Cycle of Money Factories hire workers Able to buy goods Factories need workers to make goods Workers make money Good Business Cycle Factories fire workers Demand Decreases (leads to surplus) Factories cut back on production Workers can’t afford to buy goods Bad Business Cycle

GDP During the Great Depression The Great Depression was a worldwide event

Causes of the Depression Causes Of The Great Depression Gambling On Stocks Overproduction Uneven distribution of income Sinking International Trade Poor banking system

Causes of the Depression Causes Of The Great Depression Gambling On Stocks People who bought on credit couldn’t repay what they owed when the market crashed. Overproduction Farms and factories were producing more goods than were being sold. No one was willing to spend their money. Uneven distribution of income For all the prosperity, 1/2 of America lived below the poverty level during the 20s Sinking International Trade High U.S. tariffs forced other countries to raise tariffs. U.S. Businesses couldn’t sell goods overseas. Poor banking system Bankers put depositors’ money into unsound investments. $$ was gone and banks closed when the market crashed

STOCK PRICES RISE THROUGH THE 1920s Bull Market By 1929, 4 million Americans owned stocks New York Stock Exchange

SEEDS OF TROUBLE Speculation And Margin The Stock Market’s bubble was about to break

Buying on Margin Stock Investor’s initial cost Amount Broker Must Borrow Investor 1 10 Shares $7.50 Investor 2 50 Shares $ Investor Shares $75.00 Shares are being sold at $5.00 each. Initially, the investor owes 15%.

THE 1929 CRASH October 29, Black Tuesday, the bottom fell out 16 million shares were sold. Prices plummeted $30 billion was lost

By mid-November, investors had lost about $30 billion

Bank Closings Banks had invested in the Stock Market and lost money By 1933 – 11,000 of the 25,000 banks nationwide had collapsed Bank run 1929, Los Angeles

HAWLEY- SMOOT TARIFF Hawley- Smoot Tariff In 1930, toughest tariff in U.S. history Other countries enacted their own tariffs and soon world trade fell 40%

Herbert Hoover wins the 1928 election Hoover emphasized years of prosperity under Republican administrations

HOOVER’S PHILOSOPHY rugged individualism the idea that people succeed through their own efforts People should take care of themselves, not depend on governmental hand- outs Hoover believed it was the individuals job to take care of themselves, not the governments

“people should pull themselves up by their bootstraps” “Have faith the economy will get better in 6 months” 6 months things were worse

Hooverisms Hoovervilles Today’s term of destitution with my name in it is…

Hoovervilles Hoover Flags Hoover Blankets

Hoovervilles

Unemployment Lines Unemployed people flocked to find jobs.

Unemployment Lines

Bread Lines

Soup Kitchens

The Great Depression Dinner is served….turtle soup.

The Great Depression Christmas on East 12 th Street, New York City

TOO LITTLE TOO LATE public works projects Reconstruction Finance Corporation – created to strengthen banks and businesses through government loans prosperity would “trickle down” to the average citizen Hoover’s flurry of activity came too late to save the economy or his job

HOOVER’S SUCCESSFUL DAM PROJECT The $700 million project was the world’s tallest dam (726 feet) and the second largest (1,244 feet long) The dam currently provides electricity, flood control and water for 7 western states

BONUS ARMY ,000 World War I vets arrived in Washington to support a proposed bill Live in Hoovervilles Patman Bill would pay the bonus immediately instead of 1945

BONUS ARMY TURNED DOWN Hoover called them “Communists and criminals” On June 17, 1932 the Senate voted down the Putnam Bill Thousands of Bonus Army soldiers protest – Spring 1932

BONUS MARCHERS CLASH WITH SOLDIERS 2,000 refused to leave Hoover sent a force of 1,000 soldiers to force them to leave

AMERICANS SHOCKED AT TREATMENT OF WWI VETS Army under General Douglas MacArthur and Major Dwight D. Eisenhower use tear gas to break up the marchers. - An 11 month-old died, an 8 year-old boy was paralyzed, 2 were shot, many injured.

The Bonus Army

Hoover reputation is destroyed and has no chance of winning re-election

THE DUST BOWL A severe drought gripped the Great Plains in the early 1930s Wind scattered the topsoil, exposing sand and grit The resulting dust traveled hundreds of miles Kansas Farmer, 1933

Dust storm approaching Stratford, Texas

Dust buried cars and wagons in South Dakota in 1936

HARDEST HIT REGIONS Kansas, Oklahoma, Texas, New Mexico, and Colorado were the hardest hit regions during the Dust Bowl Many farmers migrated to California and other Pacific Coast states Boy covers his mouth to avoid dust, 1935