The Great Depression

1
The Great Depression
2
The Great Crash

• Prelude to the stock market crash
• In 1927, the economy had a recession but govt
  business leaders ignored warning signs
• The Federal Reserve lowered interest rates for
  loans to stimulate the economy, but this easy
  credit led speculators to buy stock
  on-the-margin

3
The Great Crash

• An initial stock market crash on Oct 24, 1929
  (Black Thursday) led to a catastrophic drop in
  stocks on Oct 29 (Black Tuesday)
• Panicked investors sold stocks, causing stock
  prices to plummet
• Banks lent less money, factories produced less,
  workers were fired or paid less ? consumers had
  less money to spend ? factories businesses
  closed

4
The Great Crash

• Reasons for the depression
• Overproduction of consumer durable goods
  agriculture
• The post-war conditions in Europe decreased
  foreign trade
• Unequal distribution of wealth, high consumer
  debt, stock market over speculation led to an
  overall decrease in consumer purchase power

Consumers already owned durable goods were not
buying more
5
(No Transcript)
6
Effects of the Great Depression

• The Depression hit all classes
• Many families lost their homes or farms were
  forced to live in Hoovervilles
• The U.S. saw unprecedented poverty suicide
  rates fathers abandoned their families
  lawlessness ensued
• The U.S. govt offered relief checks to the
  unemployed

7
Effects of the Great Depression

• African-Americans who had migrated to North were
  laid off
• Mexican immigrants faced competition
  deportation from angry Americans
• The middle class was hit hard
• Refused relief checks charity
• Many lost their homes
• Health care declined doctor dentist visits
  were luxuries

8
Employment Agencies Relief-Check Lines
9
Soup Kitchens Breadlines
10
Mortgage Foreclosures
11
(No Transcript)
12
Hoovervilles Hoover Flags
13
Hoover and Voluntarism

• President Hoovers initial response was to
  reassure Americans that prosperity would return
• Hoover rejected bold govt action called for
  volunteerism among charities, local govt,
  business
• As the depression worsened, Hoover called for
  govt projects like the Reconstruction Finance
  Corps (RFC) which loaned money to failing
  businesses

Rugged individualism
14
The Hoover administration initiated job-creation
programs, like building the Hoover Dam
15
Hoover and Voluntarism

• In 1932, Hoovers presidency suffered two final
  blows
• When 22,000 war veterans marched to the capital
  to demand their WW1 bonus checks early, Hoover
  ordered this Bonus Army to be forcibly removed
• The steady rise of bank failures led to a
  complete collapse of the U.S. banking system

16
Bonus Army
Douglas MacArthur
Dwight Eisenhower
17
Bank Failures, 1929-1933
18
The Dust Bowl (1931-1939) worsened the effects of
the Depression
Areas Affected by the Dust Bowl drought
19
Fighting the Depression

• The inability of Republicans to resolve the
  economic depression opened the door for a
  Democratic takeover in politics
• Once in power, Democrats succeeded in relieving
  some suffering, restored hope, created an
  unprecedented level of govt intervention in the
  process

20
The Election of 1932

• The depression made Hoover the victim while
  Franklin Roosevelt emerged as the savior
• In the 1932 election, FDR was able to unite the
  rural urban factions of the Democratic party
  won a landslide victory
• FDR appealed to Protestants Catholics, farmers
  workers, native-born immigrants

21
I pledge youI pledge myself to a new deal for
the American people.
22
Conclusions

• The Depression of the 1930s came as a shock to
  Americans
• The consumer revolution led to confidence that
  1920s economic prosperity would continue
• When the stock market crashed in 1929, businesses
  closed millions were unemployed
• Americans began to look to the govt for
  unprecedented support