the great depression 1929. 1920’s problems factories making too much, farms growing too much...
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The Great Depression
1929
1920’s Problems
Factories making Too Much, Farms growing too much
Factories Fire Workers (Don’t need them)
Farm Prices fall (Farmers can’t make $$)
Farmers & Factory Workers can’t pay back loans to
Banks: DEFAULT!!
Banks Close because they have no money: Loans have not been paid back, can’t give people their savings
BANKS Have NO $$
PEOPLE LOST SAVINGS & JOBS
NO ONE TO HELP!
Stock Market Crash
• Buying on margin– Buy stock by just paying a small portion of what the stock is worth
ex.- 100 shares at $10= $1000 only pay $300
but still owe $700
-Problem, stock crashes and you lose your money and can’t pay back stock broker
- stock broker can’t pay back bank
-banks forced to close
-depositors in banks lose everything
Stock Market Crash
• Oct. 29, 1929– Black Tuesday– Overvalued stocks
plummeted as investors panicked and tried to sell
Stock Market Crash
• Thousands of investors lost everything
• Banks demanded repayment of loans and stopped loaning money to anyone
• People couldn’t pay back loans
• Banks are forced to close
=+People Default on Loans
Banks have no money to give people
Banks Close
People Lose savings
• Causes– Overproduction– Bank closing
• Spark– Stock market crash
• Results– Unemployment– Life savings lost
The Great Depression
• Millions lost their savings when banks closed • Millions lost their jobs as businesses failed• Vast unemployment
– As high as 25% – 1930-1932 Jobless rate goes from 4 to 12 million
• People lose their homes• People become desperate• Loss of faith in capitalism and democracy gave rise to
dictatorships in Europe
The Great Depression
• President Herbert Hoover– Does nothing at first– Says it is the job of the
churches and other charities to help the poor, not the government
• Problem: people too poor to help the churches help the poor
» Problem too big for charities to handle
– Named poor places after Hoover
• Hoovervilles, Hoover blankets,
The Dust Bowl
• 1931 Drought hits the Great Plains
• Farms just blew away
• Farmers couldn’t pay the bank; bank took the land
• Many farmers packed up and went to California to try to find work – Jobs weren’t there either– Okies
The Dust Bowl
The Great Depression• Franklin D. Roosevelt becomes President• Starts New Deal programs to put people
back to work• Did not end the depression but helped to ease it• Most wealthy businessmen disliked the New
Deal
– Gave people confidence• Built infrastructure (buildings, roads,
parks, electricity, artwork)» Created ‘ABC’ programs
• Ended bank crisis
The Great Depression
• Connections to today– Government monitoring of and control of the nation’s
economy– Stricter controls on banks and the stock market– Continuation of social programs begun by the New
Deal• Social Security, Welfare, government food
distribution, subsidies