1. The Great Depression
What do these two images reveal about the Great Depression?

2. The Great Depression
Severe worldwide economic depression from 1929-late 1930s/early 1940s
It was the longest, most widespread, and deepest depression of the 20th century!

3. Roaring 20s Economy
The booming economy of the 1920s led to overconfidence (Americans thought the good times would last forever)
Americans bought goods on credit and went into deep debt
The Stock Market climbed higher and more people invested in the market (bull market)

4. Roaring 20s Economy
The stock market went up
Consumption went up
Gross National Product went up
All economic indicators showed increased prosperity

5. 31st- Herbert Hoover (Republican)
Took the presidency in 1929 Promised continued prosperity “A Chicken in Every Pot” Highly qualified for the position Orphan No one could predict the stock market crash would happen a few months after Hoover took office 
Hoover was a self-made man, highly qualified to serve in the office.
Iowa, Quaker, orphaned—lost his father and then his mother 2 years later. He went to live with relatives and never graduated from high school. He went to work bookkeeping and typing, but continued to study at night
--He wanted to go to college but failed every entrance exam except math at the newly established Stanford University. A sympathetic professor got him a tutor and he was accepted to Stanford.
--During his college years he earned money by running a laundry business, a baggage service, a newspaper route, a waiter, typist and handyman. He managed funds for the baseball and football teams and paid off the entire student body debt. He also attacked fraternities. He majored in engineering and met and married Lou Henry –a geologist and daughter of a banker
--They traveled around the world as he worked his way up in mining—Australia, Africa, Burma, China—where he and his wife were trapped inside the embassy during the Boxer Rebellion and had to fight off the Boxers while trying to protect and feed 600 trapped Chinese Christian refugees.
--By the age of 27 he was the highest paid man of his age in the world and by 1918 he was worth $4 million dollars.
--He was in Europe when WWI broke out and he helped Americans escape and then organized the food relief for 7 million starving Belgians and French. He took no pay and even used part of his own fortune and operated at great risk to his own life. He was one of the key Americans in the rebuilding of Europe after the war.
--He served as Sec of Commerce and embraced new technology—radio and TV. He ehlped the ermergin airliesn and

6. Herbert Hoover
“You can’t make a Teddy Roosevelt out of me. My boyhood ambition was to be able to earn my own living without the help of anybody, anywhere.”
What does Hoover mean by this quote?
How do you think this will influence his policies?

7. The Stock Market Crashed, 1929
September 1929 stock prices began to fall rapidly
Investors started to sell shares—which led to more decline in the market
October 29(Black Tuesday)—the bottom fell out of the market. Over 6 million shares were sold and entire fortunes were lost.
The Crash did not cause the Depression!

8. “Brother Can You Spare a Dime?” (1931)
They used to tell me I was building a dream
With peace and glory ahead
Why should I be standing in line
Just waiting for bread?
Once I built a railroad, I made it run
Made it race against time
Once I built a railroad, now it's done
Brother, can you spare a dime?
Once I built a tower up to the sun
Brick and rivet and lime
Once I built a tower, now it's done
Oh, say, don't you remember? They called me 'Al'
It was 'Al' all the time
Say, don't you remember? I'm your pal
Buddy, can you spare a dime?
What the major problem does the song address?

9. If the stock market crash did not cause the Great Depression, then what did?
Wealth was not evenly divided among Americans
*How did Social Darwinism influence this problem?
Overproduction of agricultural crops and consumer goods; farmers were in debt
Lack of diversification in the economy
Americans were buying on credit
U.S. trade suffered when Congress passed the Hawley-Smoot Tariff which reduced international trade
Weak International economy- WWI debt cycles led to global economic depression
Monetary Policy of the Federal Reserve –raised interest rates instead of lowering them

10. Could the Great Depression have been prevented?

11. Warning Sign #1-Farmers were in Trouble
During WWI farmers had increased production
Overproduction after the war led to a drop in farm prices
Many farmers could not pay their debts and
lost their land to foreclosures
1 in 4 Americans were farmers
*Why is this significant?

12. Warning Sign #2-Wealth Was Not Evenly Distributed in Society
Only a few Americans were wealthy
5% of Americans held 33% of all income
Most families still lived on the economic edge and did not have the money to buy goods being produced
There were too many goods and not enough consumers to buy them (under consumption)

13. Warning Sign #3-Americans Were Buying on Credit
Farmers were already in debt Americans bought cars, radios, and appliances on credit and went deeper and deeper into debt Americans even bought stock on credit buying on margin—they were gambling on the stock market Banks were in financial trouble because they had invested in the stock market

14. Warning Sign #4-Several Major Industries Were at Risk
Some industries were barely breaking even
(clothing, steel, and mining)
Many were losing money
(automobile manufacturing, construction, consumer goods)
The U.S. economy was not DIVERSIFIED—it depended on the automobile and steel industries to drive the economy!
*Why is this such an issue?

15. Warning Sign #5-Weak International Economy & Trade Problems
Europe was still struggling to recover from WWI There was a cycle of international debt as countries borrowed from one to pay off another The U.S. passed the Smoot-Hawley Tariff to help American industries, but it reduced international trade and hurt the economy
--America was producing more than 40% of the worlds manufactured products. U.S. production was driving the global economy.

16. So What Happened after the Stock market Crashed?
DOMINO EFFECT!

17. After the Stock Market Crash…
Americans panicked and took money out of banks ->Banking system collapsed
Money supply dropped
Salaries and prices were cut -> Americans lost their jobs -> unemployment rose to 25%
Federal Reserve (government) was toooooooooooo slow to act to solve the problem
Farm income dropped by ½
Gross National Product –industrial output fell drastically
The entire economy collapsed and the Great Depression set in and lasted for a decade

18. Change in economic indicators 1929–32
United States
Great Britain
France
Germany
Industrial production
–46%
–23%
–24%
–41%
Wholesale prices
–32%
–33%
–34%
–29%
Foreign trade
–70%
–60%
–54%
–61%
Unemployment
+607%
+129%
+214%
+232%
Which country was hit the hardest?
Why is that significant?

19. The Debate: What Caused the Great Depression?
Economists disagree and argue about the true causes
John Maynard Keynes believed that the government failed
Keynes recommended in hard times, the government should spend more money to keep people employed.