1. The Great Depression The period of time from 1929-1941 in which the economy faltered and unemployment soared.

2. Causes of the Depression 1.Crisis in the farm sector 2.Unequal Distribution of Wealth 3.Availability of Easy Credit 4.Tariffs and War Debt Policies 5.Stock Speculation

3. Agricultural Problems Farmers: ¼ of American workforce (25%) Post WWI demand for agricultural goods fell sharply –Prices for crops plummeted –Could not meet debts debts –Faced foreclosures –Lost land, equipment and equipment and livestock livestock

4. Uneven Distribution of Wealth Uneven distribution –65% under $1,999 –29% $2,000- $4,000 –5% $5,000- $9,999 –1% $10,000 and over

5. Easy Credit 1929 consumer debt was more than $6 Billion “Credit” was new and people started spending irresponsibly Too many used credit to buy the smaller credit to buy the smaller things things

6. Stock Speculation Stock Speculation: “gambling” in the stock market which unrealistically raised stock prices Black Tuesday: October 29, 1929 –Normal business cycle led to falling stock prices in early October –Investors sold and pulled money out of market and billions of dollars were lost

7. Banking Collapse Stock market crash led to people pulling their money out of the banks So many bank runs occurred that in 1929 641 banks failed, in 1930 1,350 banks failed, and in 1931 1,700 banks failed Bank failures were also caused by the Federal Reserve limiting the money supply which left banks without enough currency

8. The Great Depression Begins The stock market crash and less consumer spending led to the failure of many businesses Businesses responded by laying off workers and cutting wages By 1933 25% of workers had lost their jobs lost their jobs

9. Tariffs Hawley-Smoot Tariff: raised prices on foreign imports so that they could not compete in American markets markets European tariffs raised on imports from America The tariffs created closed The tariffs created closed markets and worsened markets and worsened the depression. the depression.

10. Global Depression Global Depression  Europe depended on the U.S. for loans to pay their war debts but the U.S. couldn’t help any longer pay their war debts but the U.S. couldn’t help any longer  Europe’s businesses failed and banks collapsed

11. Hard Times Bread Lines: line of people waiting for food handouts from charity or public changes Unemployment and cut hours forced families to hard times –Families starved

12. Poverty Whole families descend into hunger and homelessness Many sold most of their belongings Hoovervilles: makeshift shantytowns set up by homeless on public land (Central Park). Used scrap wood or cardboard to build shelter.

13. Dust Bowl Dust Bowl Migration from the dust bowl to the city –Okies: dust bowl refugees –800,000 left the Great Plains Central and Southern Great Plains during the 1930’s –Suffered drought and massive dust storms (“dirty 30’s”)

14. Family Life Men suffered in shame and sometimes shame and sometimes deserted their families deserted their families Birthrates plummeted

15. African Americans African Americans were hit the hardest –50% unemployment

16. Mexican Americans Encouraged/forced to repatriate (become Mexican citizens again) Faced discrimination in southwest Pushed out of the U.S.

17. Hoover’s Response Cautious response Hands-off policy- thought it was a natural part of the business cycle Called for lower interest rates, reduce taxes, create public-works programs Asked wealthy Americans to give to charity

18. Hoover’s Failed Plan Hoover realized his plan wasn’t working so he decided to reverse course and use federal money to fight depression Reconstruction Finance Corporation: gave Corporation: gave billions in loans to billions in loans to railroads, big railroads, big business, and banks business, and banks

19. Plan Cont’d… Trickle-Down Economics: –Belief that money lent to banks and businesses will trickle and businesses will trickle down to consumers (it didn’t!) down to consumers (it didn’t!) Hoover Dam: public works program in 1930 –Brought much needed employment to Southwest

20. Hoover Protest Americans called for change, and protested against Hoover Hoover lost the election in 1932 to FDR

21. Bonus Army WWI veterans marched on Washington in 1932 –Demanding payment of bonus promised by Congress Hoover ordered them out: MacArthur Responded –Drove them out with tear gas and bayonets Result doomed Hoover