The Great Depression

Impacts of Depression Prices of stock dropped 40% 86,000 businesses failed 9,000 banks went out of business 9 million saving accounts Wages were decreased by at least 60% Unemployment from 9% to 25% 15 million people unemployed

The 6 Causes 1. Unequal distribution of Wealth - 2% owned 3/5 (60%) of wealth… - … 98% shared the remaining 2/5 (40%) - ½ population living below poverty level - unequal balance between production and consumption

The 6 Causes 2. Unequal distribution of corporate power - mergers reduced competition - when company fell = loss of jobs & stock corporations controlled 50% of all products being made

The 6 Causes 3. Poor banking structure - no regulations - small banks “owed” to larger banks - unequal loan to deposit ratio (esp. small towns).

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The 6 Causes 4. High Tariffs and War Debts - Hawley-Smoot Tariff = tax on imports - What was the goal? - Led to unbalanced foreign trade & … - economic warfare = other countries did same - war debt: U.S. as creditor; E. couldn’t repay

The 6 Causes 5. Overproduction in Industry & Agriculture - farmers bought machinery on credit…to increase production - >> overproduction - >> no jobs = no $ to buy - >> couldn’t pay off debt... - … foreclosures on farms

The 6 Causes 6. Stock Market Crash - Reasons for investing in market - had $ already to invest - Buying on margin - Stock Speculation - October 24 th : Black Thursday -Bunk Runs - October 29 th : Black Tuesday ($16 mil)

BUYING ON MARGIN Who did they need to attract?  HOW? Investors only had to pay for 10% of the stock's actual value at time of purchase  If a stock is $100 you can pay $10 now and the rest later when the stock rose  balance was paid at a later date

Buying on margin High interest rates Demand payment anytime If stocks fall then don’t have money to pay back Stocks go up Borrowers sell at high price Pay off  Loan  Interest  + make extra $$$ The good The bad

STOCK SPECULATION people would buy and sell stocks quickly to make a quick buck b/c of all this buying & selling, stock value increased  Ex: G.E stock $130  $396/share

BLACK TUESDAY, Oct. 29th, NYC Stock market crashed, causing a depression that would last until 1942 THE CRASH

STOCK MARKETCRASH Loss of confidence Uneven wealth Rising debt Stock speculation Overproduction Hardships of farmers and factory workers

The Effects Widespread unemployment > poverty > hunger - What led to this???? - national income: 1929 = $81 billion 1932 = $41 billion - 15 million jobless

Breakdown of Families 1. personal suffering >> suicide 2. high school drop out rate >> - kids working in sweatshops 3. runaways (Hobos riding the rails)

Organized Protests - farmers marching on banks with pitchforks and gun - tried to prevent foreclosures - Dairy farmers frustrated w/low price of milk refuse to sell so they dump it - Bonus Army

The Bonus Army Who were they? What did they want? What did they do? What happened to them?

The Effects The Bonus Army - WWI soldiers promised $1 per day extra served - To be paid in Allowed to borrow against it in asked for full amount = denied

-Thousands from all over U.S. marched with their families on Capitol Building in D.C. to protest

- Sent home with money from their bonus pay -C-Calvary, tanks -U-Used tear gas and bayonets

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Many waited in unemployment lines hoping for a job.

People in cities would wait in line for bread to bring to their family.

Some families were forced to relocate because they had no money.

“ Hooverville ” Some families were forced to live in shanty towns  A grouping of shacks and tents in vacant lots They were referred to as “Hooverville” because of President Hoover’s lack of help during the depression.

A drought in the Central and Southern Great Plains led to dust storms that destroyed crops. “The Dust Bowl”

Central and Southern Great Plains

The South Was Buried Crops turned to dust=No food to be sent out Homes buried 60% lost their farms Many moved South in state of emergency Dust Bowl the #1 weather crisis of the 20th century

Two Families During the Depression

A Farm Foreclosure

Some families tried to make money by selling useful crafts like baskets.