1. Mother of Seven by Dorthea Lange

3. The Great Depression
Many people like to point to one thing as the cause of the great depression, its was more like a perfect storm.

4. Causes
A big reason for the depression was the collapse of the stock market
Stocks: shares in ownership of a business
Shareholders: individuals who own one or more shares in a business
Ticker Tape: a way of transmitting stock information to the public

6. Stock market cont…..
Everyone had been making money. Overnight riches, everyone had learned the stories.
The markets were up well over 100% between 1927 and 1929.
Speculation: buying, trading and selling of stocks/bonds/real estate in the short term in order to make a quick profit
Potentially dangerous
Buying on Margin: investors would invest in the stock market using brokers, meaning they would only invest a fraction of their own money into a stock the rest was a loan

7. Investors only had to put down 5% of the current stock price
Investors counted on continued stock market prosperity to make cash
Stock was collateral and would be sold by the broker if the investor could not repay the loan
High amount of risk involved!

8. The end of the roaring twenties is met
The end of the roaring twenties is met. It took about a week before the people to realize the market was collapsing, but after Black Tuesday , October 29, 1929
Before it was all over and the slide had subsided the markets had lost over 89% of their value

9. Causes cont…..
The Federal Reserve Bank of the United States. This “government” institution expanded monetary supply during the 20’s
Making money easy to get
and then decided to tighten it right before the crash.
At Milton Freidman's 90th birthday party the chairman of the federal reserve bank of the US said this
“Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.”

10. Causes cont…..
. Much of the true wealth lay in the hands of the few and not the many. Many of the people were not able to buy the new goods that were available
 Many people who lived in agriculture were left behind during the boom of the 1920’s overproduction lead to surplus prices
The boom of the 1920’s had been possible by a new market transaction
Credit
People had overextended themselves with personal debt to buy

11. Causes cont….
The geniuses in government figured a way out of the problems they had to increase demand for products at home
Originally designed to protect American farmers from the massive increase in European production special interests got their hands into the mix and soon it covered everything

15. Causes cont….
The Smoot-Hawley tariff act of 1930 raised tariffs on all things coming into the US to historic levels
This shut down world trade deepening what may have been a relatively short recession

16. 20%

18. Initial Reaction Not President Hoovers fault but he gets the blame
He asks business not to cut wages or production
Unemployment goes from 5% to 25%
Aid to farmers Agricultural marketing Act Hoover doesn’t like for the gov’t to intervene but he has to do something
Reconstruction Finance Corporation (RFC). This government agency provided $2 billion

19. in 1932. The Emergency Relief and Construction Act first direct aid to people
Hoover's program, Roosevelt attacked the Republican for overspending and raising taxes. Hoover raised tariffs, income taxes, estate taxes, corporate taxes, and even slapped a tax on all bank checks.