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UNIT 12- The Great Depression and the New Deal

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1 UNIT 12- The Great Depression and the New Deal

2 Unequal Distribution of Wealth: Why is this a problem?
1920s- rich got richer ; poor got poorer 70% of nation below $2,500 2007

3 Overproduction- Factories and Farms
Farm goods- surplus, prices drop, can’t get out of debt Manufactured goods- Americans buying less Orders slow; factories lay off workers

4 Consumer debt Consumer goods bought on credit throughout 1920s (living beyond means) growing debt- people cut back on spending LAST 50 YEARS

5 Stock Market speculation
speculation- trying for quick profit; ignoring risks Buying on margin- pay a small percentage of a stock’s price & borrow the rest from a bank

6 Stock Market Crash- Onset of Great Depression
“Black Tuesday”- October 29, 1929 $30 Billion in “wealth” disappears

7 New York Stock Exchange, Black Tuesday:

8 Bank Failures “Bank runs”- people panic- run to get $$ out of banks
Banks had lost $$ in stock market 11,000 banks close- people lose all their savings

9 Business failures/ production falls/ unemployment
90,000 businesses went bankrupt “GDP” (national production) cut in half from 13,000,000 unemployed by 1933 (25%) Those with jobs- pay cuts, fewer hours…

10 “Hardship and Suffering”
Cities: 1000s evicted from homes- live in shantytowns (“Hoovervilles”)

11 “Hardship and Suffering”
Cities…- soup kitchens/ breadlines

12 “Hardship and Suffering”
Rural areas: At least they could eat 1000s of farmers lose land through foreclosure

13 “Hardship and Suffering”
Dust Bowl- Drought hits in early destroys overfarmed land “Okies”- 1000s of farmers pack up and head to CA

14 Life in Depression Unemployment soars- Hunger Homelessness
“hobos” on freight trains…

15 consumer income and spending
A cycle of disaster businsess faliures unemployment consumer income and spending Bank failures Cycle of disaster How are these connected? Banks fail--- Businesses fail- Unemployment up— Consumer spending/ income down--

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