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

Alabama family, 1938 Photo by Walter Evans 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 Good Business Cycle Bad Business Cycle Factories hire workers Able to buy goods Factories need workers to make goods Workers make money Bad Business Cycle Factories fire workers Demand Decreases (leads to surplus) Factories cut back on production Workers can’t afford to buy goods

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

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

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

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

Amount Broker Must Borrow Buying on Margin Stock Investor’s initial cost Amount Broker Must Borrow Investor 1 10 Shares $7.50 Investor 2 50 Shares $212.50 Investor 3 100 Shares $75.00 $42.50 $37.50 $425.00 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

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

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

Hoovervilles Hoover Blankets Hoover Flags Hoovervilles

Hoovervilles

Hoovervilles

Hoovervilles

Hoovervilles

Hoovervilles

Unemployed people flocked to find jobs. Unemployment Lines Unemployed people flocked to find jobs.

Unemployment Lines

Unemployment Lines

Bread Lines

Bread Lines

Bread Lines

Soup Kitchens

Soup Kitchens

Soup Kitchens

Soup Kitchens

Dinner is served….turtle soup. The Great Depression Dinner is served….turtle soup.

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

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 - 1934

Dust buried cars and wagons in South Dakota in 1936

Boy covers his mouth to avoid dust, 1935 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