The Great Depression CRQ Preparation
The Great Depression was a period of time which changed a whole generation of Americans
Causes of The Great Depression: Credit People were purchasing all sorts of items on credit: automobiles, appliances, radios, and other high-cost goods Every year Americans accumulated more debt They no longer feared debt as they had in the past…..times were ROARING! This credit burden masked the problem of Americans living beyond their means
Causes of The Great Depression: Stock-Market Crash Too much money was being poured into stock SPECULATION SPECULATION: Investors gambling with money they didn’t have (borrowing it) in hopes of turning a quick profit. Compare it to taking money off a credit card (NOT a debit card) and then going to Vegas and gambling that money…..what’s wrong with that??? In a weak or unpredictable market, this could quickly lead investors to face IMMEDIATE economic devastation
Causes of The Great Depression: Uneven Distribution of Wealth Factory and industrial workers continued to work; however their wages didn’t increase as quickly as the number of goods being produced Industrial workers became “less poor” but were still unable to purchase luxury items such as radios and cars or ovens The wealthy WERE purchasing these luxury goods but in order to keep the economy strong they needed to purchase 50 of these items instead of just one This uneven distribution of wealth and an overproduction of goods left the American economy uncertain
Causes of The Great Depression: Agricultural Overproduction Farmers made up ¼ of the workforce in the 1920’s WWI created crop demands so farmers bought more land and machinery to farm, creating huge amounts of debt After WWI, the demand for American crops fell sharply Farms were continuing to produce crops at an extraordinary rate (bumper crops); however were unable to sell off the surplus to pay their debts due to lack of demand This created a rural depression that affected millions of Americans These people could not purchase the new consumer goods and lived largely on credit
The Great Depression Becomes Even WORSE….. Bank Closures: People did not trust the banks with their deposits Businesses Closed: Unemployment Rises Hawley-Smoot Tariff: Raised prices on foreign imports so people would buy American made goods The Great Depression Goes Global: Americans weren’t purchasing foreign goods which led to an imbalance of trade. War Debt Couldn’t Be Paid: Germany, France and Britain weren’t paying back their war debts to the US
Hoover’s Responses to The Great Depression Volunteerism: Asks for businesses to VOLUNTEER to keep people employed, to not lower wages and for everyone to VOLUNTARILY work toward a common goal. RESULT? Failure Hoover Dam: A project approved by Congress as part of a massive public works program RESULT? Successful
Hoover’s Responses to The Great Depression Bonus Army: A promise that veterans from WWI would receive a lump sum “bonus”. These vets petitioned to receive the bonus early due to unemployment and overall financial hardship. They were denied the pay. Riots broke out and the armed forces forced the veterans out of Washington DC RESULT? Failure