THE%20GREAT%20DEPRESSION

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THEGREAT DEPRESSION
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GUIDING QUESTION

• What caused the Great Depression?
• the federal government during the 1920s?

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Stock Market Banks Margins

• In 1927 banks did two stupid, greedy things
• 1) Banks began letting customers borrow money to
  buy stocks.
• 2) Banks started to use depositors money to
  speculate in the stock market. Normally banks pay
  you interest for savings. Then they loan it to
  businesses or families that were good risks to
  buy homes or start companies etc.

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STOCK MARKET CRASH
Stock Market Prices, 19211932

• May 1928-September 1929, prices doubled in value
• beginning in Sept 1929, gradual slide
• Black Thursday (Oct. 24)
• largest sell-off in NYSE history
• Black Tuesday (Oct. 29)
• 40 billion in stock value lost by Dec.

Black Tuesday Wall Street, Oct. 29, 1929
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UNDERLYING CAUSES OF THE DEPRESSION

• Overproduction companies produced way too much
  and could not sell there inventory (up 300 from
  1928 to 1929)
• Lack of diversity in American economy
• prosperity of 1920s largely a result of
  construction auto industries
• Uneven distribution of income and wealth gap
  between poor and rich increases drastically
• Farm income down 66 in 20s
• By 1929 the top 10 of the nation's population
  received 40 of the nation's disposable income

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UNDERLYING CAUSES OF THE DEPRESSION

• Consumer Debt middle class taking out loans
  they could not pay back buying on credit
• Over speculation in Stock Market by wealthy and
  upper middle class

Consumer Debt, 19201931

• Weakness of Banking Industry
• bank failures in late 1920s (farmers)
• many had small reserves (very little cash on
  hand)
• total money supply
• closing of over 9,000 American banks between 1930
  and 1933
• Federal Reserve system

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UNDERLYING CAUSES OF THE DEPRESSION

• Decline in demand for American goods in
  international trade
• European industry and agriculture gradually
  recovered from World War I
• Germany so beset by financial crises/ inflation
  that could not afford to purchase US goods
• High American protective tariffs

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IMPACT ON SOCIETY
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GUIDING QUESTION

• How did the Great Depression alter the American
  social fabric in the 1930s?

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Effects on Business Industry

• Total national income fell by over 50

• Corporate profits - from 10 billion to 1 billon
• Business failures 100,000 between 1929 and 1933

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Effects on Business Industry

• Bank failures
• about 20 all banks (over 6000) between 1929 and
  1933)
• over 9 million savings accounts lost(2.5 billion)

Depositors gathering outside a bank, April 1933
Bank Failures, 1929-1933
1932
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Effects of the Crash
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Effect on workers and families

• Unemployment 25 in 1932?
• underemployment
• Depression mentality

Men Lined Up at the New York City Employment
Bureau, 1932
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Effects on Farmers

• Dust Bowl

Dust Bowl
Dust storm, Springfield, CO, 1935
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Dust storm, Elkhart, KS, 1937
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The Dust Bowl
Aftermath of dust storms, South Dakota, 1936
Dust Bowl Farm, Texas, 1938
Abandoned house, Kansas, April 1941
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HOOVERS RESPONSE
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Federal Response Under Hoover

• Herbert Hoover (1929-1933)
• Philosophy limited government
• Hawley-Smoot Tariff raised tariffs on overseas
  goods.
• Congress believed the tariff would make imports
  too expensive and Americans would buy American
  goods, increasing demand
• European countries retaliated with their own
  tariffs and U.S. exports fell by almost 70

"Boulder Dam, 1942, Ansel Adams
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Evaluation of Hoovers Response

• The general public felt that Hoover didnt do
  enough to fix the depression
• Hoovervilles

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The Bonus Army/March

• World War One veterans were denied their pensions
• Marched on Washington, 1932
• Congregated around White House
• Military evicted them from D.C.
• Deep anger at govt
• http//www.youtube.com/watch?vxqevdBZCbcQ

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Evaluation of Hoovers Response

• Hoover was reluctant to spend large amounts of
  federal funds, expand the role of the federal
  government.
• Should a President intervene in the economy if
  the nation is in a depression?
• 2008 financial crisis
• Contrary to popular history Hoovers commitment
  to (laissez fair/hands off approach) made the
  Depression worse

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1932 ELECTION

• Misery Sweeps Roosevelt into Office

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1932 ELECTION

• Franklin D. Roosevelt
• philosophy
• New Deal

Franklin D. Roosevelt, 1920 Vice Presidential
nominee for Democratic Party
Roosevelt Campaigning for Office in Kansas 1932
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1932 ELECTION

• Hoover
• The Worst is Past"
• "Prosperity is Just Around the Corner"
• Results

Electoral Shift, 1928 and 1932
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SOURCES

• Brinkley, American History A Survey (10th ed)
• Wadsworth-Thompson http//www.wadsworth.com/histor
  y_d/special_features/image_bank_US/1929_1939.html
• Library of Congress American Memory Project
• Rutgers Univ. Teaching Politics Image Bank
  http//teachpol.tcnj.edu/amer_pol_hist/.html
• Divine America Past and Present Revised 7th Ed.
• Faragher, Out of Many, 3rd Ed.
  http//wps.prenhall.com/hss_faragher_outofmany_ap/
  
• Kennedy, American Pageant 13e