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The Great Depression

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Hard Times. As the stock market became shaky, so did the credit market. Because the loans were backed by the stock itself, as the value decreased, the borrower had to ... – PowerPoint PPT presentation

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Title: The Great Depression


1
The Great Depression
  • Chapter 24

2
Hard Times
  • The economic depression that occurred in the
    1930s was more than financial
  • The psychological impact was called the
    invisible scar
  • Stock Market cracs WAS NOT the cause of the Great
    Depression
  • Buying on the margins (loans) allowed more people
    to afford stocks
  • Corporations with spending money would lend money
    to stockbrokers rather than re-invest in their
    own companies for new technologies, etc.
  • Why is this a problem?

3
Hard Times
  • Many assume that the stock market crash occurred
    over a few days
  • Not truethe crash had been at least a month in
    the making
  • It doesnt hit bottom until July 1932, falling
    89 from the Sept. 3, 1929 record
  • As the stock market became shaky, so did the
    credit market
  • Because the loans were backed by the stock
    itself, as the value decreased, the borrower had
    to pay the difference
  • Half the value of stocks was lost in a matter of
    10 weeks
  • In late Oct. Hoover stated that the country was
    on a sound and prosperous basis

4
Hard Times
  • Overproduction was the key cause of the
    depression
  • As more agricultural and industrial companies had
    been urged to make more, consumers were buying
    less
  • Wages rose 8 between 23 and 29 while worker
    output rose 32
  • An unequal distribution of wealth also
    contributed to the oncoming depression
  • 80 of the nations families didnt have any
    savings

5
Hard Times
  • The crash caused investors, businesses, and the
    wealthy to lose confidence
  • Manufactures decreased production and laid off
    workers
  • With higher unemployment, fewer people could buy
    goods and thus companies lost more money, which
    meant more layoffs
  • Banks began to fail as people began withdrawing
    the money (banks were not insured at the time)
  • 5000 bank failures occurred between 1929-1932

6
Hard Times
  • There is no such thing as unemployment benefits
    during this time
  • By 1933 16M people were without jobs (33
    unemployment rate)

7
Hard Times
  • Men, especially 35-55, found it more difficult to
    cope with
  • Women could get jobs easier because they were
    paid less
  • Local efforts to help were not sustainable
  • Money, resources, and staff could not deal with
    the 50 unemployment rate in some areas
  • Warmer areas like FL and CA could not deal with
    the jobless migrants seeking employment
  • By 1931 Los Angeles was seeing new arrivals at a
    rate of 1200 per day

8
Hard Times
  • Hoover seemed to ignore the severity of the issue
    by claiming that the local communities could
    handle it
  • The Presidents Organization for Unemployment
    Relief (POUR) was led by Walter S. Gifford who
    urged fundraising at the local level
  • FDRs administration created federal aid in the
    form of welfare, etc? Has it been a disservice?

9
Hard Times
  • Hoover believed that business confidence was the
    key
  • He created the Reconstruction Finance Corporation
    (RFC)
  • Government credit would be available for bank,
    RRs, insurance, and other businesses
  • In 1932 Congress passed the Emergency Relief Act
    allowing 300M to go to states who needed
    additional funds
  • Only 30M had been given out by Dec. 1933
  • Only a small portion went towards public works

10
Hard Times
  • By 1932, protests were occurring across the
    country
  • Farmers created the Farmers Holiday
    Associationrefused to sell goods until prices
    rose
  • Thousands marched on Ford River Rouge Factory in
    Detroitpolice killed 4
  • The Bonus Army marched on D.C. to demand that
    the WWI bonus of 1k be paid in cash now instead
    of in the form of a matured bond in 1945
  • The Senate refused to pass a bill
  • The remaining soldiers were removed by
    MacArthurs men providing a sad image for the
    heroes of 1918

11
Hard Times
  • It is easy to see why Hoover didnt get reelected
  • FDRs acceptance speech for the Democratic
    candidacy was I pledge you, I pledge myself to a
    new deal for the American people.
  • During the campaign, FDR called for addressing
    underconsumption and redistributing wealth
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