1. The Great Depression

2. Main Causes of the Great Depression in the U.S.
Overproduction of business and farm goods in the United States.
Uneven distribution of wealth in the United States.
Lessened demand for consumer goods.
Protectionism – Series of tariffs passed by the U.S. Congress between 1913 and 1930 to protect American business against European competition; Smoot-Hawley Tariff of 1930 led to 66% decline in global trade between 1930 and 1934.
Bank failures resulting from farmers’ inability to pay back loans

3. Life in The Roaring 20’s The new concept of “credit”
People were buying:
Automobiles
Appliances
Clothes
Fun times reigned
Dancing
Flappers
Drinking

4. Why was this bad? Credit system
People didn’t really have the money they were spending. Most were spending beyond their economic means.

5. How World War I Contributed to Great Depression
United States emerged as a major creditor and financier of post-War restoration.
US banks were more than willing to loan money.
However, once US banks began failing ... the banks not only stopped making loans, they wanted their money back. This put pressure on European economies, which had not fully recovered from WWI, contributing to the global economic downturn.

6. Effects of losing WWI on Germany
Political
Lost Overseas
Colonies
Social
Food Rationed
Economic
Must pay billions
In Reparations

7. German Inflation after WWI
PRINTING MASSIVE AMOUNTS OF PAPER MONEY CAUSING INFLATION
War reparations were required by the Treaty of Versailles, specifically Article 232, to be repaid in hard currency and not the rapidly depreciating Papiermark, so one strategy Germany employed was the mass printing of bank notes to buy foreign currency which was in turn used to pay reparations, greatly exacerbating inflation rates (value decreased) of the paper mark and resulting in economic depression.

8. Look at page 802 Inflation causes Crisis in Germany

9. The Great Depression greatly effected inflation in Germany
Germany did not increase their wartime taxes
To pay for the war Germany simply printed $$$
After Germany’s defeat, the paper money steadily lost its value
Sever inflation set in. Germany needed more & more $$$ to pay for basic goods

10. In Berlin the price of a loaf of bread cost …
1918 less than 1 mark
marks

11. In Berlin in 1923 the price for a loaf of bread cost 200 Billion marks

12. Sweeping money into the sewage filling the holes in the wall

13. GREAT DEPRESSION IN GERMANY

14. The Stock Market and the Great Depression
People bought stocks on margins
If a stock is $100 you can pay $10 now and the rest later when the stock rose
Stocks fall
Now the person has less than $100 and no money to pay back

15. And then…. Stock Market Crash of 1929 - $30 billion loss in FOUR days
With people panicking about their money… investors tried to sell their stocks
This leads to a huge decline in stocks
Stocks were worthless now
People who bought on “margins” now could not pay.
Investors were average people that were now broke.
And then…. Stock Market Crash of $30 billion loss in FOUR days

16. What about the people?
Farmers were already feeling the effects of depression
Prices of crops went down
Many farms foreclosed
People could not afford luxuries
Factories shut down
Businesses went out
Banks could not pay out money
Bank failures resulting from farmers’ inability to pay back loans
Overproduction of business and farm goods in the United States
People could not pay their taxes
Schools shut down due to lack of funds
Many families became homeless and had to live in shanties

17. Many waited in unemployment lines hoping for a job.

18. OPTICs in your Spiral
People in cities would wait in line for bread to bring to their family.

19. Some families were forced to relocate because they had no money.

20. “Hooverville” Some families were forced to live in shanty towns
A grouping of shacks and tents in vacant lots
They were referred to as “Hooverville” because of President Hoover’s lack of help during the depression.

21. Welcome to Hooverville

22. Out of the Dust
The South
and the
Dust Bowl

24. A drought in the South lead to dust storms that destroyed crops.
OPTICs in your Spiral
A drought in the South lead to dust storms that destroyed crops.
“The Dust Bowl”

25. The South Was Buried Crops turned to dust = No food to be sent out
Homes buried
Fields blown away
South in state of emergency
Dust Bowl the #1 weather crisis of the 20th century

26. 1) 2) 3) 6) 5) 4)
In your Spiral, explain in one sentence what you see in each picture and how you would feel if this was you and your home?

27. International Response of Government’s to the Great Depression
MASSIVE SPENDING PROGRAM
United States
Franklin Roosevelt’s New Deal: Government spending would create jobs and start a recovery
Public works projects
Government agencies that gave financial help to businesses and farms
Welfare and relief programs including Social Security
Regulations to reform the stock market and banking

28. International Response of Government’s to the Great Depression
Great Britain
The National Government: multi-party coalition led by Ramsay MacDonald,
Stanley Baldwin, and Neville Chamberlain
High protective tariffs
Increased taxes
Regulation of currency
Lowered interest rates
France
The Popular Front (1936): Coalition of moderates, Socialists, and Communists
Workers reforms including pay increases, 40 hour work week, paid holidays
Unemployment remains high as price increases offset wage increases
Scandinavian countries
Cooperative community action including public works projects
Pensions for the elderly
Increased unemployment insurance and housing subsidies
All citizens taxed to pay for benefits
All of these models resulted in keeping democratic governments intact