The Great Depression

1929-1939

Impacts of Depression Prices of stock dropped 40% 86,000 businesses failed 9,000 banks went out of business 9 million saving accounts Wages were decreased by at least

60% Unemployment from 9% to 25% 15 million people unemployed

The 6 Causes1. Unequal distribution of Wealth

- 2% owned 3/5 (60%) of wealth…- … 98% shared the remaining 2/5 (40%)- ½ population living

below poverty level- unequal balance

between productionand consumption

The 6 Causes2. Unequal distribution of

corporate power- mergers reduced competition

- when company fell = loss of jobs & stock

- 200 corporations controlled 50% of all products being made

The 6 Causes3. Poor banking structure

- no regulations- small banks “owed” to larger banks- unequal loan to deposit ratio (esp. small towns)

.

http://www.youtube.com/watch?v=qu2uJWSZkck

The 6 Causes4. High Tariffs and War Debts

- Hawley-Smoot Tariff = tax on imports- What was the goal?- Led to unbalanced foreign trade &

…- economic warfare = other countries did same

- war debt: U.S. as creditor; E. couldn’t repay

The 6 Causes5. Overproduction in Industry & Agriculture

- farmers bought machinery on credit…to increase

production - >> overproduction - >> no jobs = no $ to buy - >> couldn’t pay off debt... - … foreclosures on farms

The 6 Causes6. Stock Market Crash - Reasons for investing in

market- had $ already to invest- Buying on margin- Stock Speculation

- October 24th: Black Thursday -Bunk Runs- October 29th: Black Tuesday ($16

mil)

BUYING ON MARGIN

Who did they need to attract? HOW?

Investors only had to pay for 10% of the stock's actual value at time of purchase

If a stock is $100 you can pay $10 now and the rest later when the stock rose

balance was paid at a later date

Buying on margin

High interest rates

Demand payment anytime

If stocks fall then don’t have money to pay back

Stocks go up Borrowers sell at

high price Pay off

Loan Interest + make extra $$$

The good The bad

STOCK SPECULATION

people would buy and sell stocks quickly to make a quick buck

b/c of all this buying & selling, stock value increased Ex: G.E stock $130

$396/share

BLACK TUESDAY, Oct. 29th, 1929 - NYC Stock market crashed, causing a depression that would last until 1942

THE CRASH

STOCK MARKETCRASH Loss of confidence Uneven wealth Rising debt Stock speculation Overproduction Hardships of farmers and factory

workers

The Effects

Widespread unemployment > poverty > hunger

- What led to this????

- national income:1929 = $81 billion1932 = $41 billion

- 15 million jobless

The Effects

Breakdown of Families1. personal suffering >> suicide2. high school drop out rate >>

- kids working in sweatshops3. runaways (Hobos riding the rails)

The Effects

Organized Protests

- farmers marching on banks with pitchforks and gun

- tried to prevent foreclosures- Dairy farmers frustrated w/low

price of milk refuse to sell so they

dump it- Bonus Army

The Bonus ArmyWho were they?

What did they want?What did they do?

What happened to them?

The Effects

The Bonus Army

- WWI soldiers promised $1 per day extra served

- To be paid in 1945- Allowed to borrow

against it in 1931- 1932 asked for full

amount = denied

-Thousands from all over U.S. marched with their familieson Capitol Building in D.C. to protest

- Sent home with money from their bonus pay

-Calvary, tanks-Used tear gas and bayonets

http://www.youtube.com/watch?v=dWvCCxOUsM8

Many waited in unemployment lines hoping for a job.

People in cities would wait in line for bread to bring to their family.

Some families were forced to relocate because they had no

money.

“Hooverville”

Some families were forced to live in shanty towns A grouping of shacks

and tents in vacant lots They were referred to

as “Hooverville” because of President Hoover’s lack of help during the depression.

1931-1940

A drought in the Central and Southern Great Plains led to dust storms that

destroyed crops.

“The Dust Bowl”

Central and SouthernGreat Plains

The South Was Buried Crops turned to dust=No food

to be sent out Homes buried 60% lost their farms Many moved South in state of emergency Dust Bowl the #1 weather crisis

of the 20th century

Two Families During the Depression

A Farm Foreclosure

Some families tried to make money by selling useful crafts like baskets.