The Great Depression

Causes A. Under consumption 1. consumers not purchasing goods during the boom time of the economy  2. buying on credit:  many people cannot pay back the debts they owe due to credit purchasing. 

Over production 1. surplus is created 2. business cycle is created a. cut prices  b. freeze wages  c. no new employees hired  d. fire employees  e. former employees can’t afford to buy goods 

Market Speculation 1. Speculators (stock brokers) are incorrect on the value of stocks  2. buying “on margin” 

Black Tuesday 1. Stock Market (Dow Jones) starts to drop on Friday 2. gets worse over the weekend  3. Monday starts to fall drastically  4. Tuesday stock brokers race to sell their stock, floods the market and collapses 

Consequences A. Dust Bowl 1. dry conditions and drought like conditions in the Midwest to west  2. Okies  a. farmers struck by no income and drought conditions   b. move further west (California) for work and or other opportunities  c. lost everything in the depression 

President Herbert Hoover’s attempts to stop it 1. Relief to business’s not the people  a. Trickle Down Economics:  give business’ tax breaks to encourage them to pay employees more.  In return, business’ would pay employees more or hire more people – doesn’t work.  2. Hooverville's  a. shantytowns / shacks or places where homeless people would gather  3. Hoover Blankets  a. newspapers used as blankets by homeless 

5. Bonus Army – Bonus Army March on Washington 4. Hoover Flags  a. pockets turned inside out to be a visual protest or demonstration of having no money  5. Bonus Army – Bonus Army March on Washington  a. WWI veterans pushing for war pensions owed by the government  b. Hoover refuses to give them, and in result loses election to FDR 

Who experiences the most impact of the Depression? 1. Children  a. malnutrition  b. lack of funding for schools  2. Middle Class  a. wealthy feel it some  b. middle class become poor  c. the one already poor remain poor