1. NOTES on the Great Depression

2. Causes of the Depression uneven distribution of wealth
Stock market mistakes
Speculation: buying cheap stocks hoping they will improve
Buying on Margin: borrowing money from broker to buy stocks
charge interest!
Stock must BOOM to make any $

3. 3. Overproduction… supply exceeds demand  price drop
a. Mass production = too efficient
4. Buying on Credit
Farmers buy equipment on credit
Prices drop  Cannot pay debt
Farm foreclosures!

4. Farms Foreclosed

5. 5. Panic! Stock Market Crash
Black Tuesday
16.4 million shares SOLD (Oct 29th, 1929)
Loss of $30 billion

8. 6. Bank Runs – everyone withdraws $
a. WORLD’s biggest lender falls
b. Stop lending to Europe  Europe cannot afford to buy American products
c. Europeans cannot sell goods in US … cannot pay back war debts

11. Great Depression – severe economic decline Widespread poverty
Factories close – 25% unemployed
Hoovervilles = shantytowns for homeless
gross national product (total value of goods and services a country produces) = cut in half

16. Welcome to Hoovervilles

17. “Prosperity cannot be restored by raids upon the public treasury”

18. Herbert Hoover’s response (R President) Helps business … not PEOPLE
a. Opposes welfare for poor
Bonus Army - 20,000 unemployed veterans marched on Washington
Want war pensions
Army burns camps – use tanks and tear gas
Hoover = horrified … but takes responsibility
Smoot Hawley Tariff – protectionist tax on foreign goods
Intended to help companies
BUT, hurts consumer

19. 4. Prohibition repealed (industry & jobs)

21. Stories of Survival Nothing was wasted  the “depression generation”
even those who recovered enough to live a very comfortable life, would continue to pinch pennies as if financial ruin were just around the corner
People pulled together and helped one another
Humor to cope
“When Wall Street took the tail spin, you had to stand in line to get a window to jump out of”

22. Dust bowl – drought and dust storms in plains states