1. The Great Depression

2. The Great Crash Prelude to the stock market crash
In 1927, the economy had a recession but gov’t & business leaders ignored warning signs
The Federal Reserve lowered interest rates for loans to stimulate the economy, but this easy credit led speculators to buy stock “on-the-margin”
The Great Depression came as a shock to Americans, but there were warning signs:
In 1927, the economy had a recession but gov’t & business leaders failed to respond
The Federal Reserve lowered interest rates for loans to stimulate the economy, but this easy credit led speculators to buy stock “on-the-margin”

3. The Great Crash
An initial stock market crash on Oct 24, 1929 (Black Thursday) led to a catastrophic drop in stocks on Oct 29 (Black Tuesday)
Panicked investors sold stocks, causing stock prices to plummet
Banks lent less money, factories produced less, workers were fired or paid less → consumers had less money to spend → factories & businesses closed
Stock market only had about 3 million active buyers & sellers but the spillover into the greater economy led to the Great Depression

4. Consumers already owned durable goods & were not buying more
The Great Crash
Reasons for the depression:
Overproduction of consumer durable goods & agriculture
The post-war conditions in Europe decreased foreign trade
Unequal distribution of wealth, high consumer debt, stock market over speculation led to an overall decrease in consumer purchase power
Consumers already owned durable goods & were not buying more
Economic conditions in Europe, Agricultural decline since 1919, corporate mismanagement, excessive speculation all contributed to the GD as well

6. Effects of the Great Depression
The Depression hit all classes:
Many families lost their homes or farms & were forced to live in “Hoovervilles”
The U.S. saw unprecedented poverty & suicide rates; fathers abandoned their families; lawlessness ensued
The U.S. gov’t offered relief checks to the unemployed

7. Effects of the Great Depression
African-Americans who had migrated to North were laid off
Mexican immigrants faced competition & deportation from angry Americans
The middle class was hit hard:
Refused relief checks & charity
Many lost their homes
Health care declined; doctor & dentist visits were “luxuries”

8. Employment Agencies & Relief-Check Lines

9. Soup Kitchens & Breadlines

10. Mortgage Foreclosures

12. “Hoovervilles” & “Hoover Flags”

13. Hoover and Voluntarism
President Hoover’s initial response was to reassure Americans that prosperity would return
Hoover rejected bold gov’t action & called for volunteerism among charities, local gov’t, & business
As the depression worsened, Hoover called for gov’t projects like the Reconstruction Finance Corps (RFC) which loaned money to failing businesses
“Rugged individualism”

14. The Hoover administration initiated job-creation programs, like building the Hoover Dam
Boulder Dam was renamed Hoover Dam

15. Hoover and Voluntarism
In 1932, Hoover’s presidency suffered two final blows:
When 22,000 war veterans marched to the capital to demand their WW1 bonus checks early, Hoover ordered this Bonus Army to be forcibly removed
The steady rise of bank failures led to a complete collapse of the U.S. banking system

16. Bonus Army
Douglas MacArthur
Dwight Eisenhower

17. Bank Failures,

18. The Dust Bowl (1931-1939) worsened the effects of the Depression
Areas Affected by the Dust Bowl drought
Woody Guthrie

19. Fighting the Depression
The inability of Republicans to resolve the economic depression opened the door for a Democratic takeover in politics
Once in power, Democrats succeeded in relieving some suffering, restored hope, & created an unprecedented level of gov’t intervention in the process

20. The Election of 1932
The depression made Hoover the “victim” while Franklin Roosevelt emerged as the “savior”:
In the 1932 election, FDR was able to unite the rural & urban factions of the Democratic party & won a landslide victory
FDR appealed to Protestants & Catholics, farmers & workers, native-born & immigrants

21. “I pledge you—I pledge myself to a new deal for the American people.”

22. Conclusions The Depression of the 1930s came as a shock to Americans:
The consumer revolution led to confidence that 1920s economic prosperity would continue
When the stock market crashed in 1929, businesses closed & millions were unemployed
Americans began to look to the gov’t for unprecedented support