The Great Depression 1929?

How was life in the 1920s?

Black Tuesday – October 29, 1929

By the end of November 1929, investors had lost over $30 billion That was more money than the U.S. had spend during World War I

For our “Consumer” economy to work (Then and today) people MUST HAVE MONEY TO SPEND If people don’t spend money, our economy slows down

Causes of the Depression 1). Farmers were struggling –There was less demand for their goods after World War I

2). Easy Credit –Americans were allowed to buy things on credit throughout the 1920s –Buy now on Installment Plans

3). Overproduction –People were expected to buy products and factories were producing a variety of new goods

4). Increased mechanization of factories

5). Stock market speculation = people were placing all of their money in the stock market –Buying on margin = borrowing money to invest in the stock market

6). Uneven distribution of wealth = The rich got richer during the 1920s, the poor did not

7). SICK Industries = Long term job sectors (Coal, Railroad, Cotton) were being replaced with new industries (Electricity, Car, Rayon) These job sectors often required fewer workers.

No regulation of the stock market No regulation of easy credit Signs of what economy philosophy of the 1920s? Laissez-faire economics

Bank Runs People began to worry about their money They went to the bank to get their money out What had the banks done with people’s money?

By 1933, 44% of America’s banks had failed What do bank failures mean for our economy?

1). What happened to stock prices over the course of the 1920s? 2). What happened to unemployment over the 1920s? 3). What group grew in the early 1920s because of unemployment? 4). Who was earning more money in 1920, farmers or factory workers? 5). Who was earning more money in 1932, farmers or factory workers? 6). What explains the difference between 4 and 5? 7). Why did the rate of bank closures deline in 1932?

Herbert Hoover President Hoover steps in His ideals –1). “Rugged Individualism” = You must take care of yourself and not rely on others –2). Private Humanitarianism = People will donate money to the needy

His plan = “Government should DO NOTHING, the economy will recover on its on” No direct aid to the people!!!!!!

Congress takes action Congress passed the highest tariff in U.S. history = Hawley-Smoot Tariff Other nations responded by passing tariffs on us Hawley-Smoot Tariff = Made things WORSE!

The homeless built shanty towns called Hoovervilles

HooverblanketHoovercars

The Bonus Army World War I veterans had been promised a pension in 1945 They needed the money then (1932) to survive They went to Washington D.C. to make their case to congress

Bonus Army March

The marchers were attacked and gassed by the police and U.S. Army Hoover stood no chance at being re- elected Instead America turned to a new leader

Franklin D. Roosevelt

Life in the Great Depression Dust Bowl = A massive dust storm that ravaged the American southwest, especially Oklahoma What caused the storm?

The Grapes of Wrath tells the story of “Okies” leaving the Dust Bowl and heading to California

Women were kicked out of their jobs, starved so their kids and husband could eat

Men often found no work Many left their families and became Hobos 50,000 men were killed by railroad companies and police during the Great Depression

Children – Schools closed and many children ran away from home and/or starved