What was life like during

The 1920’s Following the Great War(1914-1918), the 1920’s were a time of peace and great prosperity. After World War I, the “Roaring Twenties” were fueled by increased industrialization and new technologies, such as the radio and the automobile. Air flight was also becoming widespread, as well. The economy benefited greatly from the new life changing technologies..

Easy money… As the Dow Jones Industrial Average soared, many investors quickly snapped up shares. Stocks were seen as extremely safe by most economists, due to the powerful economic boom.

Life during this time? Many people saw their lifestyle improve greatly. They had access to cars and other luxuries. Many borrowed and credit cards became common. Life was good…

Who invested? Everyone… Investors soon purchased stock on margin. Margin is the borrowing of stock for the purpose of getting more leverage. For every dollar invested, a margin user would borrow 9 dollars worth of stock. Because of this leverage, if a stock went up 1%, the investor would make 10%!

The Dow Jones skyrocketed… From 1921 to 1929, the Dow Jones rose from 60 to 400! Millionaires were created instantly. Soon, stock market trading became America’s favorite pastime as investors jockeyed to make a quick killing. Investors mortgaged their homes, and foolishly invested their life savings in hot stocks, such as Ford and RCA.

Did anyone fear that the bubble would burst? Most investors never even thought a crash was possible. To them, the stock market “always went up”.  Greed and a powerful optimism fueled the market and everyone believed that this was the road to the American Dream.

Beginning of the end… By 1929, the Federal Government raised interest rates several times to cool the overheated stock market. By October, the fall of the market had commenced. On Thursday, October 24 1929, panic selling occurred as investors realized the stock boom had been an over inflated bubble.

Millionaire margin investors became bankrupt instantly, as the stock market crashed on October 28th and 29th. By November of 1929, the Dow Jones sank from 400 to 145. In three days, the New York Stock Exchange erased over 5 billion dollars worth of share values! By the end of the 1929 stock market crash, 16 billion dollars had been shaved off stock capitalization.

The banks collapsed To make matters worse, banks had invested their deposits in the stock market. Now that stocks were obliterated, the banks had lost their depositors money! Bank runs started, where bank patrons tried to withdraw their savings all at once.

DESPERATE TIMES… Many bankrupt speculators, who were once aristocracy, committed suicide by jumping out of buildings. Even bank patrons who had not invested in shares became broke as $140 billion of depositor money disappeared and 10,000 banks failed. Some desperate men walked into the banks and killed their stock traders.

Who didn’t go bankrupt Jesse Livermore (world’s greatest stock trader) correctly forecasted the economic crisis and shorted. He made over 100 million dollars! Joseph Kennedy, John F. Kennedy’s father, sold before the 1929 stock market crash and kept millions in profit.

Did everyone suffer during the depression?

Of course not… The stock market crash of 1929 and the ensuing economic depression turned the country into a nation of "haves" and "have-nots."

Life went on for the rich and famous…and some of the working class whose jobs were spared. Movies continued to be made and shown in the big cities… Those who could afford to go to the new talking movies, and enjoy stars such as Jean Harlow, Greta Garbo, Fred Astaire, and the Marx Brothers who provided a respite from the dreariness of daily life.

Shopping… It's human nature to wish for things we don't have, and the 1930s were a time of enormous wishing. The harsh reality of day-to-day life during the Depression was juxtaposed with the silver-screen elegance of the movies and by those wealthy enough to afford lavish lifestyles. Sex appeal jumped bravely from the screen and glamour into mainstream consciousness.

What was the Great Depression? The worst economic crisis of the century In the U.S.A. over 13 million people became unemployed. In Canada the unemployment rate was 26.5 %. “Dust bowl” as a result of drought Farmers lost crops Many lost their homes

What caused the Great Depression? Unequal distribution of wealth Stock market crash of 1929

Stock Market Crash Many stocks purchased Stock prices fell Huge sums of money lost Thursday, October 24, 1929

Unequal Distribution of Wealth No middle class Supply not equal to demand Credit cards created false demand

The Results Bank Failure

Unemployment

Loss of homes “Hoovervilles” Here were all these people living in old rusted-out car bodies. ... One family ... [was] living in a piano box. This wasn't just a little section, this was maybe 10 miles wide and 10 miles long. People living in whatever they could junk together. ..."

The dirty thirties... Dustbowls A traveler noticed a nice new hat by the side of the road, and he stopped to pick it up. Under the hat was a man, buried up to his neck in the dust! As he dug the poor fellow out, the traveler asked if he wanted a ride into town. "No, I'll get there myself," the man replied, "I'm on a horse." (Excerpt from THE DUST BOWL by Tricia Andryszewski, p. 33.)

Depression

Social outcomes… The depression produced lasting effects in North America that are still apparent more than half a century after it ended. In the United States, it led to the election of President Franklin Delano Roosevelt who created the programs known as the New Deal to overcome the effects of the Great Depression. These programs expanded government intervention into new areas of social and economic concerns and created social-assistance measures on the national level. The Great Depression fundamentally changed the relationship between the government and the people, who came to expect and accept a larger federal role in their lives and the economy.

“The only thing we have to fear is fear itself” Franklin D. Roosevelt “Our greatest primary task is to put people to work”

FDR’s New Deal Relief for the needy Jobs provided Business and government reformed

In Canada… Social Assistance programs were started… Healthcare programs for welfare recipients in 5 provinces… 1927, the Old Age Pension Act was passed… 1930, the Unemployment Relief Assistance Act was passed to allow the Federal Government to make payments to provinces to help them provide relief for the unemployed. This became Unemployment Insurance in 1940.

Tommy Douglas Thomas Clement Douglas arrived in Weyburn 1930 as the minister for Calvary Baptist Church at the beginning of the Great Depression. He set up a job and food distribution centre at the church, and moved into political involvement. He ran and lost under the Co-operative Commonwealth Federation (CCF) in 1934, but was successful in the 1935 federal election.

The great depression would finally end in 1939 with the beginning of WWII in Europe.