why might the cartoonist have chosen a squirrel to represent a “wise economist”? what does this...
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THE CAUSES OF THE GREAT DEPRESSION Photos by photographer Dorothea LangeTRANSCRIPT
Why might the cartoonist have chosen a squirrel to represent a
wise economist?
What does this cartoon imply about who was to blame for the Great
Depression? Were the individuals the ones to blame? What is the
message of this cartoon? THE CAUSES OF THE GREAT DEPRESSION
Photos by photographer Dorothea Lange The Rise of Herbert
Hoover
By the late 1920s, Herbert Hoover was very popular Hoover was
became a hero during World War I for his leadership guiding the
Food Administration Hoover was Secretary of Commerce under both
Warren G. Harding and Calvin Coolidge during the 20s Given the
chance to go forward with the policies of the last eight years, we
shall soon with the help of God, be in sight of the day when
poverty will be banished from this nation. Herbert Hoover, 1928
Hoover Becomes President
Hoover defeats Democratic nominee Alfred E. Smith in the Election
of 1928 Prohibition and Religion big factors Hoover was for
Prohibition and was a Protestant; Smith was against Prohibition and
was a Catholic Warning signs There was an uneven distribution of
wealth.
There were numerous warning signs in the late 1920s that the
economy was beginning a downward turn: There was an uneven
distribution of wealth. Large companies dominated economy. Too many
Americans were buying on credit. Overproduction of goods. People
gambling on the stock market THE NATIONS SICK ECONOMY
1920s serious problems threatened the economy while Important
industries struggled Agriculture Railroads Textiles Steel Mining
Lumber Automobiles Housing Consumer goods FARMERS STRUGGLE Farmers
had to rent the land or move
No industry suffered as much as agriculture WWI European demand for
American crops soared After the war, demand plummeted Farmers were
producing more than American consumers were consuming Some farmers
lost so much money they couldnt pay the mortgage on theirfarm.
Farmers had to rent the land or move Photo by Dorothea Lange
UNDERCONSUMPTION Late 1920s American consumers were buying
less
Rising prices stagnant wages overbuying on credit Most people
lacked the income to purchase goods being produced, which drives up
unemployment. Overproduction in Industry
Factories were producing products, however wages for workers were
not rising enough for them to buy the goods Too few workers could
afford to buy the factory output The surplus products could not be
sold overseas due to high tariffs and lack of money in Europe
Companies produced more goods than could be sold.Businesses had to
lay off workers.Prices of goods being sold declined. Photo by
Dorothea Lange
GAP BETWEEN RICH & POOR The gap between rich and poor widened
The wealthiest 1% saw their income rise 75% The rest of the
population saw an increase of only 9% Not everyone who wanted
consumer goods could afford them.Most of the Americans were living
below the poverty line. Photo by Dorothea Lange High Tariffs and
War Debts
European nations owed $10 billion ($115 billion in current dollars)
to the U.S. in reparations Their economies were devastated and had
no way of paying the money back U.S. insisted on repayment. This
forced the allies to demand Germany pay reparations imposed by
Treaty of Versailles Europe could no longer purchase goods from the
U.S. 1922, U.S. passed the Hawley-Smoot Act Meant to protect U.S.
industry Had the opposite effect Other nations enacted their own
tariffs and soon world trade fell 40% The Stock Market The stock
market is a system for buying and selling shares of stock in a
company, thus owning a small piece of the company. By 1929, many
Americans were invested in the Stock Market 4 Million Americans
owned stocks. The Stock Markets bubble was about to break
SEEDS OF TROUBLE Late 1920s problems with the economy emerged
Speculation: buying stocks & bonds hoping for a quick profit
Buying on Margin: paying a small % of a stocks price as a down
payment and borrowing the rest The Stock Markets bubble was about
to break Banks Banks loaned stock brokers money for the margin
loans, they used the savings people had deposited in the bank for
these loans. The savings was not insured. THE 1929 CRASH During the
Summer of 1929, stock prices started to fall. By September, there
was serious problems. More and more investors began to sell. The
sell-off of stocks began on Oct 21. As more investors saw the value
of stock fall, more investors sold their stocks. On October 24, the
market took a plunge . . .the worst was yet to come As prices drop,
brokers call in their loans Investors do not have the cash to
payoff the loans Brokers enforce sales of stock to payoff the loans
Prices drop more, causing panic sales of stock On October 29, now
known as Black Tuesday, the stock market crashed 16.4 million
shares were sold that day prices plummeted People who had bought on
margin (credit) were stuck with huge debts Alabama family, 1938
Photo by Walter Evans
THE GREAT DEPRESSION The Stock Market crash signaled the beginning
of the Great Depression The Great Depression is generally defined
as: period from 1929 1940 economy plummeted unemployment
skyrocketed The crash alone did not cause the Great Depression But
it accelerated its arrival Alabama family, 1938 Photo by Walter
Evans FINANCIAL COLLAPSE After the crash many Americans panicked
and withdrew their money from banks Banks had invested in the Stock
Market and lost money In banks fail By 1933 11,000 of the 25,000
banks nationwide had collapsed Bank run 1929, Los Angeles To make
matters worse, a long drought hit the Great Plains
To make matters worse, a long drought hit the Great Plains. There
was little rain from Texas to N. Dakota. The grass that had once
held the soil in place was gone. When powerful winds swept across
the Great Plains, the soil simply blew away. This dry area of
blowing soil was called the Dust Bowl. Huge dust storms covered the
Great Plains and blew dust as far away as the East Coast Darkness
came when it hit us
Darkness came when it hit us. Picture taken from water tower one
hundred feet high. Yours Truly, Chas. P. Williams." Photo: Massive
Dark cloud approaching village Many came from Oklahoma, so migrant
workers were often called Okies
Many farmers packed up their belongings & headed for California
to look for work Many came from Oklahoma, so migrant workers were
often called Okies