1. The Nation’s Sick Economy OBJECTIVE: Understand the causes of the Great Depression

2. Economic Troubles Brewing Big industries (steel, textiles, railroads) not making profits Diminishing demand for new products and new construction Agricultural business withering Congress passes price supports for farmers Pres. Coolidge vetoes price supports twice, 1927 & 1928 HOW ARE THESE BUSINESS CHANGES RELATED TO WWI?

3. CONSUMERS BAD HABITS Americans are buying less. Why? Business are producing more. Why? Americans use credit more. Why? OUTCOME: The gap between rich and poor was rapidly spreading. FACT: In 1929 5% of US controlled nearly a third of its wealth, while 40% of US only has 10% of its wealth.

4. “To get a sense of how the very wealthy have prospered over the past generation, consider this: The share of total income going to the top-earning 1 percent of Americans went from 8 percent in 1980 to 16 percent in 2004. That doesn't mean that the average family is worse off than a generation ago; more people own homes, go to college, drive reliable cars and have access to sophisticated health care than ever before. But while the average family has done well, the very rich have done much, much better.” http://www.npr.org/templates/story/story.ph p?storyId=7180618

6. ELECTION OF 1928 CANDIDATES: Al Smith runs for Democrats Herbert Hoover runs for Republicans ISSUES: Smith’s Catholicism, opposition to prohibition, and connections to NYC VERSUS the apparent prosperity under Republicans OUTCOME: Hoover wins handily.

7. President Herbert Hoover, 1928-32 Hoover runs for Republicans Efficient bureaucrat/businessman Well-known humanitarian Quaker Isolationist, “dry,” conservative Preaches “rugged individualism” Al Smith runs for Democrats His Catholicism is an issue New Yorker Liberal, “wet,” progressive CAMPAIGN UGLY IN ANTI-CATHOLIC BIGOTRY

8. http://fisher.lib.virginia.edu/collections/stats/elections/maps/1928.gif

9. STOCK MARKET CRASH CAUSES Buying on margin Speculation Global System of Debt and Reparations EFFECTS Black Tuesday (10/29/29) Run on banks Great Depression

10. TARIFFS AND REPARATIONS Allies struggle to pay Back loans Fordney- McCumber Tariff !!! Allies cannot make a profit or pay loans US demands repayment Allies demand reparations from Germany Germany bankrupt US loans $ to Germany Germany gives $ to Britain and France US paid in its own $ OUTCOME: Bad feelings all around. Unstable economic house of cards.

11. http://www.ambrosevideo.com/resources/docs/56.JPG

12. BEGINNING OF THE GREAT DEPRESSION CAUSESEFFECTS Old and decaying industrial base A crisis in the farm sector The availability of instant credit An unequal distribution of income Hawley –Smoot Tariff Falling demand for consumer goods Gross Nat. Product cut in half!!! Unemployment rises to 25%!!! Interests rates fall, people borrow $ and fall into deeper debt Collapse of investment and banks Global Depression

13. Unemployment, in millions 15 12 9 6 3 0 1928 1929 1930 1931 1932 1933

14. Bank Failures, in thousands 543210543210 1928 1929 1930 1931 1932 1933

15. Business Failures, in thousands 35 30 25 20 15 1928 1929 1930 1931 1932 1933

16. STOCK MARKET CRASH STOCK MARKET CRASH

17. HARDSHIP AND SUFFERING DURING THE DEPRESSION OBJECTIVE: Understand the conditions during the Great Depression http://www.weru.ksu.edu/new_weru/multimedia/multimedia.html

18. Depression in the Cities CAUSES: Debt, unemployment and inflation  People loose their homes and apartments EFFECTS: Shantytowns (AKA Hoovervilles) Bread Lines and Soup Kitchens Minorities suffer the most Race Riots Deportations 50% unemployment (vs. 25%)

19. http://content.answers.com/main/content/wp/en/thumb/e/e8/270px-Hoovervilles_big.jpg A Hooverville in Central Park, NYC

20. Soup Kitchens and Bread Lines http://www.americanpresident.org/history/franklindelanoroosevelt /biography/resources/images/FDRCampaigning.image.jpg http://www.elderweb.com/history/images/acoffee_sm.jpg

21. Depression in Rural Areas CAUSES: Falling crop prices  Rising Rural Debt Dust Bowl EFFECTS: 400,000 Farms foreclosed b/w 1929- 1932 More tenant farmers / sharecroppers “Okies” = migration West from Dust Bowl

22. Map: The Dust Bowl The Dust Bowl From the Dakotas southward to the Mexican border, farmers in the Great Plains suffered from a lack of rainfall and severe soil erosion in the 1930s, worsening the hardships of the Great Depression Copyright © Houghton Mifflin Company. All rights reserved.

23. http://www.weru.ksu.edu/new_weru/multimedia/multimedia.html

24. Dorothea Lange photo of migrant mother and child Dorothea Lange became one of the most famous photographers of the Depression. Her photo of a migrant mother and her children at a migrant camp in Nipomo, California, captured the human tragedy of the Depression. Seeking jobs and opportunities, over 350,000 people traveled to the state, most finding few opportunities. (Library of Congress) Dorothea Lange photo of migrant mother and child Copyright © Houghton Mifflin Company. All rights reserved.

25. Hoover’s Philosophy Depressions were normal, healthy part of business cycle Depression will correct itself Belief in “rugged Individualism” and voluntary action Government should do as little as possible No Direct Relief

26. PROBLEM: Depression does not “fix itself” Hoover asks businesses to voluntarily hold wages and employment Economy continues to collapse Democrats win 1930 Congressional Elections Farmers rioting & destroying crops Starvation & Homelessness haunts US

27. Hoover Acts: Too Little, Too Late Authorizes public works projects: dams, bridges, roads 1932: Reconstruction Finance Corp. (RFC) 1933: Federal Home Loan Bank Act CRITICISM: This aid goes to big companies and banks, does not “trickle down” to average citizens

28. Construction of a Dam by William Gropper. (Smithsonian American Art Museum,Washington,D.C. Art Resource, NY) Construction of a Dam by William Gropper Hoover does direct some government aid to major construction projects, such as the Boulder Dam (now called Hoover Dam)

29. Gassing of Bonus Army IMPACT? Hoover’s popularity falls lower. Helps FDR win in 1932.

30. EVALUATION OF HOOVER HOOVER’S RESPONSE RESULT