1. The Great Depression 1928 - 1932

2. Causes of The Great Depression

3. 1. Uneven Distribution of Wealth Workers output increased 32%, wages increased 8% Workers output increased 32%, wages increased 8% Corporate profits increased 65% Corporate profits increased 65% 60% of families earn less than $2,000/yr. 60% of families earn less than $2,000/yr. The wealthy minority did not buy enough to keep the economy going The wealthy minority did not buy enough to keep the economy going

5. 2. Easy Credit People accumulated more and more debt each year People accumulated more and more debt each year 80% of all radios and 60% of all cars purchased were bought using credit 80% of all radios and 60% of all cars purchased were bought using credit

6. 3. Stock Speculation/ Crash Soaring stock prices were based on confidence rather than reality of profits Soaring stock prices were based on confidence rather than reality of profits Investors continued to buy on margin Investors continued to buy on margin These led to the Stock Market Crash These led to the Stock Market Crash

7. Stock Market Crash October 23, 1929 – Dow Jones drops 21% in 1 hour October 23, 1929 – Dow Jones drops 21% in 1 hour October 24, 1929 – Black Thursday, Investors lost confidence and began to sell October 24, 1929 – Black Thursday, Investors lost confidence and began to sell October 29, 1929 – Black Tuesday, the Stock Market Crashed when over 16 million shares of stock were sold that day October 29, 1929 – Black Tuesday, the Stock Market Crashed when over 16 million shares of stock were sold that day

8. From 1921 to 1929, the Dow Jones rocketed from 60 to 400 From 1921 to 1929, the Dow Jones rocketed from 60 to 400 In October 1929, the Dow sank from 400 to 145 In October 1929, the Dow sank from 400 to 145 $140 billion of depositor money disappeared because banks had invested depositors money in stocks $140 billion of depositor money disappeared because banks had invested depositors money in stocks The Dow Jones finally surpassed its 1929 high, a full 26 years later in 1955. The Dow Jones finally surpassed its 1929 high, a full 26 years later in 1955.

10. By October 27, 1929 RCA was trading at $58.50 per share when the first wave of selling on “Black Monday“, October 28, 1929 brought the shares down ($18.375) to close at $40.25 per share on the day. By August 11, 1932, RCA was trading at $8.875 and hit a 1932 low of $2.50 per share By October 27, 1929 RCA was trading at $58.50 per share when the first wave of selling on “Black Monday“, October 28, 1929 brought the shares down ($18.375) to close at $40.25 per share on the day. By August 11, 1932, RCA was trading at $8.875 and hit a 1932 low of $2.50 per share

11. Stock prices on Sept. 3, 1929, Oct. 29, 1929 and Nov. 15, 1929 Stock prices on Sept. 3, 1929, Oct. 29, 1929 and Nov. 15, 1929 General Electric- $396.25, $210.00, $201.00 General Electric- $396.25, $210.00, $201.00 Hershey Chocolate-$128.00, $108.00, $68.00 Hershey Chocolate-$128.00, $108.00, $68.00

13. 4. Banks Collapse Depositors rushed to withdraw money from banks Depositors rushed to withdraw money from banks The Fed limited the money supply to discourage lending The Fed limited the money supply to discourage lending Banks did not have sufficient reserves Banks did not have sufficient reserves 1929 – 641 banks failed 1929 – 641 banks failed 1930 – 1,350 banks failed 1930 – 1,350 banks failed 1931 – 1,700 banks failed 1931 – 1,700 banks failed

15. 5. Tariffs Hawley-Smoot Tariff 1930 Hawley-Smoot Tariff 1930 –Extremely high tax imposed on imported goods –Destroyed international trade by closing off markets

16. The resulting drop in world trade only made the glut of American factory and farm products harder to sell. The strategy was a mistake. Other nations retaliated and raised tariffs as well. Congress passed the Hawley-Smoot Tariff to protect American manufacturers from foreign competition.

17. 6. Businesses Close When businesses closed people lost their jobs When businesses closed people lost their jobs By 1933, unemployment reached 25% By 1933, unemployment reached 25%

18. The stock market crash didn’t start the Great Depression by itself. Instead, it quickened the collapse of the U.S. economy. The stock market crash didn’t start the Great Depression by itself. Instead, it quickened the collapse of the U.S. economy.

19. Effects of Great Depression in Rural and Urban Areas

20. Bread lines were run by Churches and Private Charities Bread lines were run by Churches and Private Charities

22. Dust Bowl

24. Hoovervilles

25. Hoover asks for Volunteerism Businesses should maintain employment Businesses should maintain employment Wealthy give to charity Wealthy give to charity Local governments provide jobs Local governments provide jobs

26. Volunteerism Fails Businesses continue to fail and lay off workers Businesses continue to fail and lay off workers Local governments cannot provide jobs Local governments cannot provide jobs

27. Hoover Creates the RFC Reconstruction Finance Corporation gives loans to big businesses and banks Reconstruction Finance Corporation gives loans to big businesses and banks Businesses and banks were supposed to hire new employees and give loans to more businesses Businesses and banks were supposed to hire new employees and give loans to more businesses This policy is known as Trickle-down Economics This policy is known as Trickle-down Economics Was this effective? Was this effective?

28. RFC was ineffective Businesses do not hire workers Businesses do not hire workers Bankers keep money for themselves Bankers keep money for themselves Unemployment remains high Unemployment remains high

30. Hoover’s Success Boulder Dam (Hoover Dam) Boulder Dam (Hoover Dam) Created much needed jobs in Southwest Created much needed jobs in Southwest Provided electricity and irrigation Provided electricity and irrigation