1. THE GREAT DEPRESSION

2. GUIDING QUESTION What caused the Great Depression? the federal government during the 1920s?

3. Stock Market: Banks & Margins In 1927 banks did two stupid, greedy things 1) Banks began letting customers borrow money to buy stocks. 2) Banks started to use depositors money to speculate in the stock market. Normally banks pay you interest for savings. Then they loan it to businesses or families that were good risks to buy homes or start companies etc.

4. STOCK MARKET CRASH May 1928-September 1929, prices doubled in value beginning in Sept 1929, gradual slide Black Thursday (Oct. 24) largest sell-off in NYSE history Black Tuesday (Oct. 29) $40 billion in stock value lost by Dec. Stock Market Prices, 1921–1932 Black Tuesday Wall Street, Oct. 29, 1929

5. UNDERLYING CAUSES OF THE DEPRESSION Overproduction – companies produced way too much and could not sell there inventory (up 300% from 1928 to 1929) Lack of diversity in American economy prosperity of 1920s largely a result of construction & auto industries Uneven distribution of income and wealth – gap between poor and rich increases drastically Farm income down 66% in 20s By 1929 the top 10% of the nation's population received 40% of the nation's disposable income

6. UNDERLYING CAUSES OF THE DEPRESSION Weakness of Banking Industry bank failures in late 1920s (farmers) many had small reserves (very little cash on hand) total money supply closing of over 9,000 American banks between 1930 and 1933 Federal Reserve system Consumer Debt – middle class taking out loans they could not pay back; buying on credit Over speculation in Stock Market – by wealthy and upper middle class Consumer Debt, 1920–1931

7. UNDERLYING CAUSES OF THE DEPRESSION Decline in demand for American goods in international trade European industry and agriculture gradually recovered from World War I Germany so beset by financial crises/ inflation that could not afford to purchase US goods High American protective tariffs

8. IMPACT ON SOCIETY

9. GUIDING QUESTION How did the Great Depression alter the American social fabric in the 1930s?

10. Effects on Business & Industry Corporate profits - from $10 billion to $1 billon Business failures: 100,000 between 1929 and 1933 Total national income – fell by over 50%

11. Effects on Business & Industry Bank failures about 20% all banks (over 6000) between 1929 and 1933) over 9 million savings accounts lost($2.5 billion) Bank Failures, 1929-1933 Depositors gathering outside a bank, April 1933 1932

12. Effects of the Crash Great Crash Investor s Businesses and Workers Investors lose millions. Businesses lose profits. Consumer spending drops. Workers are laid off. Businesses cut investment and production Some fail. Banks Businesses and workers cannot repay bank loans. Savings accounts are wiped out. Bank runs occur. Banks run out of money and fail. World Payments Overall U.S. production plummets. U.S. investors have little or no money to invest. U.S. investment s in Germany decline. German war payments to Allies fall off. Europeans cannot afford American goods. Allies cannot pay debts to United States.

13. Effect on workers and families Unemployment ~25% in 1932? underemployment “Depression mentality” Men Lined Up at the New York City Employment Bureau, 1932

14. Effects on Farmers “Dust Bowl” Dust Bowl Dust storm, Springfield, CO, 1935

15. Dust storm, Elkhart, KS, 1937

16. The Dust Bowl Aftermath of dust storms, South Dakota, 1936 Dust Bowl Farm, Texas, 1938 Abandoned house, Kansas, April 1941

17. HOOVER’S RESPONSE

18. Federal Response Under Hoover Herbert Hoover (1929-1933) Philosophy: limited government Hawley-Smoot Tariff: raised tariffs on overseas goods. Congress believed the tariff would make imports too expensive and Americans would buy American goods, increasing demand European countries retaliated with their own tariffs and U.S. exports fell by almost 70% "Boulder Dam, 1942“, Ansel Adams

19. Evaluation of Hoover’s Response The general public felt that Hoover didn’t do enough to fix the depression “Hoovervilles”

20. The Bonus Army/March World War One veterans were denied their pensions Marched on Washington, 1932 Congregated around White House Military evicted them from D.C. Deep anger at gov’t http://www.youtube.com/watch?v=xqevdBZCb cQ

21. Evaluation of Hoover’s Response Hoover was reluctant to spend large amounts of federal funds, expand the role of the federal government. Should a President intervene in the economy if the nation is in a depression? 2008 financial crisis… Contrary to popular history Hoover’s commitment to (laissez fair/hands off approach) made the Depression worse

22. 1932 ELECTION Misery Sweeps Roosevelt into Office

23. 1932 ELECTION Franklin D. Roosevelt philosophy “New Deal” Franklin D. Roosevelt, 1920 Vice Presidential nominee for Democratic Party Roosevelt Campaigning for Office in Kansas 1932

24. 1932 ELECTION Hoover “The Worst is Past" "Prosperity is Just Around the Corner" Results Electoral Shift, 1928 and 1932

25. SOURCES Brinkley, American History: A Survey (10 th ed) Wadsworth-Thompson http://www.wadsworth.com/history_d/special_features/ image_bank_US/1929_1939.html Library of Congress American Memory Project Rutgers Univ. Teaching Politics Image Bank http://teachpol.tcnj.edu/amer_pol_hist/.html http://teachpol.tcnj.edu/amer_pol_hist/.html Divine America Past and Present Revised 7 th Ed. Faragher, Out of Many, 3 rd Ed.; http://wps.prenhall.com/hss_faragher_outofmany_ap/ Kennedy, American Pageant 13e