1. The Great Depression
In the 1920s the science of economics was fairly young. Few recognized the warning signs of a looming crisis--- by 1929, those warning signs became a reality

2. 1920s prosperity ends---stocks plunge in 1929
The Great Crash
In the 1920s stock market grew on speculation and people who bought on margin
1920s prosperity ends---stocks plunge in 1929

3. Buying on margin - only paying a small amount for a stock with the rest of the money borrowed from brokers
The stocks profit would pay itself off
This only worked if profits continued

4. Many people could not meet the demand to cover their loans
Led to panic selling
Black Tuesday- October 29, stock values fall $14 billion
Stocks continue to fall after

9. Causes of the Great Depression
Overproduction
Over expansion of credit
Fragile corporate structures
Ineffective government action

10. Weaknesses in the Overall Economy
Agriculture had been depressed throughout the 1920s- worldwide drop in prices
Unemployment hindered railroad coal and textile

11. Real estate and building declined
Automobile sales slowed
Under consumption leads to crowded warehouses--- demand drops

12. Unequal Distribution of Income
1 percent of the nation owned 59 percent of the nation’s wealth
87% of the population owned only 10%.
Economy was dependant on the spending of a small portion of the population

13. Workers did not benefit from the profits gained by the wealthy
Workers could not afford what they produced
Leads to a severe decline in demand of over produced products

14. Weak Corporate Structure
Consolidated companies held control of various stocks
They depended on their profits
When one company collapsed it set off a domino effect

15. Inadequate Government Polices
Little regulation by government
Taxes favored the wealthy
Business consolidation not challenged
Federal Reserve Board raised discount rates which discouraged spending

16. Weak International Economy
International economies dependant on US
US had less money to lend and invest in Europe
Foreign nations had less money to buy American goods and defaulted on loans

17. Hoover’s Response to the Great Depression
Hoover was the first president to deal with Depression. He served as Coolidge’s secretary of commerce and was a self made millionaire and humanitarian. He successfully aided in relieving starving Europeans and helped them recover economically.

18. Hoover’s Economic Plan
Gov’t should not be involved in economy
Promoted programs to help business – “trickle down” effect
Lent money to railroads, mortgage and insurance companies and banks to avoid bankruptcy

19. Sets an example for FDR with use of federal work projects to create jobs and stimulate the economy
Halted the payment of war debts by European nations

21. Failure of Hoover’s Program
Refusal to provide direct relief
Hoover insisted that the economy was improving even as it worsened
His response to WWI veterans demands to receive their bonus early destroyed the little popularity he had left

22. WWI vets take camp in Washington, D.C.
Bonus Army:
WWI vets take camp in Washington, D.C.
Insist to receive bonus payments early
Congress refuses their request
Vets refuse to leave D.C.
Hoover orders army to break up the Bonus Army

26. Hoover had faith economy would fix itself
Believed hard work would earn rewards
Believed in self-help and that direct relief would destroy peoples “rugged individualism”

27. Human Impact of Depression
By % of the nation was unemployed (12 million people)
People lost their life savings
Waited on bread lines for hours for food

28. African American unemployment 30 to 60% greater than white unemployment
Women jobs less affected than men's

30. Families moved in together, marriages were postponed, birth rate dropped as did college enrollment
Families in cities lost their homes and lived in unheated shacks know as Hoovervilles

36. Farmers suffer a severe income drop because people were unable to buy food
The Dust Bowl devastated the Great Plains.
Droughts and poor farming methods led to giant dust storms that swept across the Great Plains

41. Culture of the Great Depression
Spectator sport became too expensive to watch
People played miniature golf, board games, etc. (Monopoly)
Movies dealt with grim realities (King Kong, Gone with the Wind, Wizard of Oz)
Disney cartoons become popular (Mickey Mouse)