The Great Depression

Causes and Effects

Causes1. False Prosperity

2. Speculation

3. Stock Market Crash

4. Banking Crisis

5. Unemployment

6. Trade Collapse

7. Republican Policy

False Prosperity

Overdependence on mass production

Overproduction in textiles, farming, autos

60% population earned less than the $2000 poverty minimum

Top 5% earned 33% income - spending by the rich essential

Broker loans on call rose from $3.5b in 1927 to $8.5b in 1929

Only 1.5m of 120m population were investors

Charles Mitchell of National City Bank: "I know of nothing fundamentally wrong with the stock market." (Oct. 21, 1929)

Speculation

Stock Market Crash

Sep. 3 Dow high of 381

Oct. 23 - J.P. Morgan buys to stop price decline

Oct. 24 - panic selling began - 12.8m shares

Oct. 29 - "Black Tuesday" - 16.4m shares

Banking Crisis

Deposits withdrawn: leads to deflation

9000 banks fail in 1930

Unemployment

Ripple effect as leading factories close

Rose to 25-35% of total labor force

− 80% in Toledo

Farm income declined 60%

− 1/3 lost their land

Trade Collapse

Foreign countries retaliate with high tariffs

Weimar Republic unable to pay reparations or U.S. banks loans

U.S. had been a creditor with $638m annual surplus

Republican Policy

"The Ordeal of Herbert Hoover"

Laissez-Faire

Balanced budget

Trickle down

Voluntarism

Hawley-Smoot tariff

Social Problems • Unemployment and poverty

• Breakdown of families

• Soaring high school dropout rates (2 to 4 million)

• Homelessness

• Organized protests

• Around the country, the homeless built settlements of cardboard and tar-paper shacks, called "Hoovervilles" in reference to President Hoover

• Farmers armed with guns and pitchforks marched on the local banks to prevent foreclosures

Laying the Blame

The American public found the "Three B's" responsible for the Crash and the

Depression:

1. Bankers

2. Brokers

3. Businessmen

Effects

Unemployment grew to record proportions. 1

in 4 people were unable to find

work.

People waited in all day lines at the unemployment office.

Lines would wrap around the buildings and hardly move at all.

If you were lucky enough to get in, you would be interviewed to determine your need.

With word of banks failing, people stormed the banks, demanding their savings.

Unable to withdraw

their money from the

banks, and not getting

enough unemployment to live off of, people

had no choice but to sell

their farms.

There were huge evacuation auctions where people sold all of their possessions.

Many people

packed up everything they had left and

lived out of their cars.

This car was the home for a family of

nine.

They traveled from place to place willing

to do any type of work. All they worried

about was how they

were going to get their next

meal.

Many performed intense manual labor on farms. Picking cotton was one of the hardest jobs.

Dust storms continually popped up due to severe droughts. This one was in eastern Colorado.

The sand would pelt your face and sting your skin. It would often block

out the sun and make noontime

seem like midnight.

Those who couldn’t sell their farms simply abandoned them. These were in Oklahoma.

Farmers hurriedly

built fences to keep the sand

away from their farm

houses and to protect their

livestock.

Sand drifts would pile up

along the roads and

fences. This was taken in

Texas.

This used to be a road. Again, in

Texas.

Shanty towns, or

“Hoovervilles” began

popping up along major highways.

People made make-shift shelters out of whatever material they could find.

The government

set land aside where people

could establish tent cities, small communities of homeless people living under tents.

In these tent cities, people were

unable to bath, there was poor sanitation, and everything was

dirty.

Proud men were forced to humble themselves and stand in line at soup kitchens.

On special occasions, some families may have gotten some food. This is Christmas dinner in a “Hooverville”.

Then there were the children

ANALYZING THE IMAGES

HOOVER VS. FDR

President Herbert Hoover

Rags to riches - American dream

Orphaned at an early age

Very bright

Worked his way through Stanford University

Made a fortune as a mining engineer and consultant

President Herbert Hoover

Head of the Food Administration during WWI

Conducted relief efforts in Europe during and after WWI

Earned a stellar reputation for efficiency and diplomacy

Very popular politician Believed in local solutions and private

initiatives to solve social problems

President Franklin Delano Roosevelt

Distant (5th cousin) relative of Teddy Roosevelt

Privileged Child: Family name was well known

Married Eleanor Roosevelt - TR's Niece

TR was basically a father to Eleanor

President Franklin Delano Roosevelt

Elected to the senate for NY in 1910 Ran for Vice-President in 1920 with James

Cox Struck down by polio in 1921 Paralyzed from the waist down Dropped out of public life for 7 years Left him with a strong empathy for suffering Got into politics in 1928 - elected governor

of NY Ran for President in 1933

Hoover-------------------------

-“Every time we

find solutions outside of the

government, we have not only strengthened our character, but we have

preserved our sense of real government.”

FDR--------------------------

“The test of our progress is not whether we

add more to the abundance of those who have

much, it is whether we  provide enough for those who have little.”