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THE GREAT DEPRESSION BEGINS

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... many people developed habits of savings & thriftiness SECTION 3: HOOVER STRUGGLES WITH THE DEPRESSION After the stock market crash, ... – PowerPoint PPT presentation

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Title: THE GREAT DEPRESSION BEGINS


1
THE GREAT DEPRESSION BEGINS
Photos by photographer Dorothea Lange
2
SECTION 1 THE NATIONS SICK ECONOMY
As the 1920s advanced, serious problems
threatened the economy while Important industries
struggled, including
  • Agriculture
  • Railroads
  • Textiles
  • Steel
  • Mining
  • Lumber
  • Automobiles
  • Housing
  • Consumer goods

3
FARMERS STRUGGLE
  • No industry suffered as much as agriculture
  • During World War I European demand for American
    crops soared
  • After the war demand plummeted
  • Farmers increased production sending prices
    further downward

Photo by Dorothea Lange
4
CONSUMER SPENDING DOWN
  • By the late 1920s, American consumers were buying
    less
  • Rising prices, stagnant wages and overbuying on
    credit were to blame
  • Most people did not have the money to buy the
    flood of goods factories produced

5
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
  • More than 70 of American families earned less
    than 2500 per year

Photo by Dorothea Lange
6
HOOVER WINS 1928 ELECTION
  • Republican Herbert Hoover ran against Democrat
    Alfred E. Smith in the 1928 election
  • Hoover emphasized years of prosperity under
    Republican administrations
  • Hoover won an overwhelming victory

7
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8
Young Hoover supporter in 1928
9
THE STOCK MARKET
  • By 1929, many Americans were invested in the
    Stock Market
  • The Stock Market had become the most visible
    symbol of a prosperous American economy
  • The Dow Jones Industrial Average was the
    barometer of the Stock Markets worth
  • The Dow is a measure based on the price of 30
    large firms

10
STOCK PRICES RISE THROUGH THE 1920s
  • Through most of the 1920s, stock prices rose
    steadily
  • The Dow reached a high in 1929 of 381 points
    (300 points higher than 1924)
  • By 1929, 4 million Americans owned stocks

New York Stock Exchange
11
SEEDS OF TROUBLE
  • By the late 1920s, problems with the economy
    emerged
  • Speculation Too many Americans were engaged in
    speculation buying stocks bonds hoping for a
    quick profit
  • Margin Americans were buying on margin
    paying a small percentage of a stocks price as a
    down payment and borrowing the rest

The Stock Markets bubble was about to break
12
THE 1929 CRASH
  • In September the Stock Market had some unusual up
    down movements
  • On October 24, the market took a plunge . . .the
    worst was yet to come
  • On October 29, now known as Black Tuesday, the
    bottom fell out
  • 16.4 million shares were sold that day prices
    plummeted
  • People who had bought on margin (credit) were
    stuck with huge debts

13
By mid-November, investors had lost about 30
billion
14
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15
The Cycles
  1. Once the market began to slide, stock brokers
    raced to sell stocks, which caused prices to drop
    further, and more stocks to sell, creating a
    downward spiral.
  2. Soon investors, lost tons of money, which led to
    stock brokers losing their money, which came from
    banks who then lost their money.

16
The Cycles
  • 3. Banks not only lost money from stock loans,
    but soon businesses and people could not repay
    their loans as well.
  • Banks began to fail and close, causing people who
    had kept their money in banks to lose everything
    as well.
  • With banks and businesses failing, unemployment
    rose, and the downward cycles continued.

17
THE GREAT DEPRESSION
  • The Stock Market crash signaled the beginning of
    the Great Depression
  • The Great Depression is generally defined as the
    period from 1929 1940 in which the economy
    plummeted and unemployment skyrocketed
  • The crash alone did not cause the Great
    Depression, but it hastened its arrival

Alabama family, 1938 Photo by Walter Evans
18
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 1929- 600 banks fail
  • By 1933 11,000 of the 25,000 banks nationwide
    had collapsed

Bank run 1929, Los Angeles
19
GNP DROPS, UNEMPLOYMENT SOARS
  • Between 1928-1932, the U.S. Gross National
    Product (GNP) the total output of a nations
    goods services fell nearly 50 from 104
    billion to 59 billion
  • 90,000 businesses went bankrupt
  • Unemployment leaped from 3 in 1929 to 25 in
    1933

20
HAWLEY-SMOOT TARIFF
  • The U.S. was not the only country gripped by the
    Great Depression
  • Much of Europe suffered throughout the 1920s
  • In 1930, Congress passed the toughest tariff in
    U.S. history called the Hawley- Smoot Tariff
  • It was meant to protect U.S. industry yet had the
    opposite effect
  • Other countries enacted their own tariffs and
    soon world trade fell 40

21
CAUSES OF THE GREAT DEPRESSION
  • Tariffs war debt policies
  • U.S. demand low, despite factories producing more
  • Farm sector crisis
  • Easy credit
  • Unequal distribution of income

22
HOOVERS RESPONSE
  • Hoover believed that the economic downturn would
    soon pass.
  • He called for voluntary action
  • Hoover asked business leaders to pledge not to
    cut wages or production.
  • He urged city and state governments to stimulate
    local economies through building projects.
  • - However, because this was not mandatory many
    did not listen and it did not work!

23
HOOVERS RESPONSE
  • Hoover funneled aid to farmers through the
    Agricultural Marketing Act, which helped farmers
    set up cooperative marketing associations.
    However, the act could do nothing to help the
    thousands of individual farmers who went bankrupt
    in the early 1930s.
  • Hoovers efforts, did not work! The early 1930s
    saw declining incomes, rising unemployment, and
    mounting business failures.

24
HOOVER TAKES ACTION TOO LITTLE TOO LATE
  • Hoover gradually softened his position on
    government intervention in the economy
  • He created the Federal Farm Board to help farmers
  • He also created the National Credit Organization
    that helped smaller banks
  • His Federal Home Loan Bank Act and Reconstruction
    Finance Corp were two measures enacted to protect
    peoples homes and businesses

Hoovers flurry of activity came too late to save
the economy or his job
25
TOO LITTLE, TOO LATE
  • Reconstruction Finance Corporation (RFC). The RFC
    was authorized to dispense 2 billion in
    loansmore in federal aid than ever requested by
    a Presidentto faltering banks, insurance
    companies, and railroads.
  • - This upset everyday workers because the
    money was going to big businesses not in
    there pockets.
  • - This trickle-down approach failed.

26
TOO LITTLE, TOO LATE
  • Emergency Relief Act, which approved additional
    loans to state governments for unemployment
    relief. However, state governments did not
    qualify for the loans unless they were on the
    verge of bankruptcy.
  • With wages dropping, unemployment growing, and so
    little money trickling down from relief measures,
    resentment grew among those hardest hit by the
    Depression.

27
BONUS ARMY
  • A 1932 incident further damaged Hoovers image
  • That spring about 15,000 World War I vets arrived
    in Washington to support a proposed bill
  • The Patman Bill would have authorized Congress to
    pay a bonus to WWI vets immediately
  • The bonus was scheduled to be paid in 1945 ---
    The Army vets wanted it NOW

28
BONUS ARMY TURNED DOWN
  • Hoover called the Bonus marchers, Communists and
    criminals
  • On June 17, 1932 the Senate voted down the Putnam
    Bill

Thousands of Bonus Army soldiers protest Spring
1932
29
BONUS MARCHERS CLASH WITH SOLDIERS
  • Hoover told the Bonus marchers to go home most
    did
  • 2,000 refused to leave
  • Hoover sent a force of 1,000 soldiers under the
    command of General Douglas MacArthur and his aide
    Dwight Eisenhower

30
AMERICANS SHOCKED AT TREATMENT OF WWI VETS
  • MacArthurs 12th infantry gassed more than 1,000
    marchers, including an 11-month old baby, who
    died
  • Two vets were shot and scores injured
  • Americans were outraged and once again, Hoovers
    image suffered

31
SECTION 2 HARDSHIPS DURING DEPRESSION
  • The Great Depression brought hardship,
    homelessness, and hunger to millions
  • Across the country, people lost their jobs, and
    their homes
  • Some built makeshifts shacks out of scrap
    material
  • Before long whole shantytowns (sometimes called
    Hoovervilles in mock reference to the president)
    sprung up

32
SOUP KITCHENS
  • One of the common features of urban areas during
    the era were soup kitchens and bread lines
  • Soup kitchens and bread lines offered free or
    low-cost food for people

Unemployed men wait in line for food this
particular soup kitchen was sponsored by Al Capone
33
CONDITIONS FOR MINORITIES
  • Conditions for African Americans and Latinos were
    especially difficult
  • Unemployment was the highest among minorities and
    their pay was the lowest
  • Increased violence (24 lynchings in 1933 alone)
    marred the 1930s
  • Many Mexicans were encouraged to return to
    their homeland

As conditions deteriorated, violence against
blacks increased
34
RURAL LIFE DURING THE DEPRESSION
  • While the Depression was difficult for everyone,
    farmers did have one advantage they could grow
    food for their families
  • Thousands of farmers, however, lost their land
  • Many turned to tenant farming and barely scraped
    out a living

Between 1929-1932 almost ½ million farmers lost
their land
35
THE DUST BOWL
  • A severe drought gripped the Great Plains in the
    early 1930s
  • Wind scattered the topsoil, exposing sand and
    grit
  • The resulting dust traveled hundreds of miles
  • One storm in 1934 picked up millions of tons of
    dust from the Plains an carried it to the East
    Coast

Kansas Farmer, 1933
36
Dust storm approaching Stratford, Texas - 1934
37
Storm approaching Elkhart, Kansas in 1937
38
Dust buried cars and wagons in South Dakota in
1936
39
HARDEST HIT REGIONS
  • Kansas, Oklahoma, Texas, New Mexico, and Colorado
    were the hardest hit regions during the Dust Bowl
  • Many farmers (Okies) migrated to California and
    other Pacific Coast states

Boy covers his mouth to avoid dust, 1935
40
Photographer Dorothea Lange captures a family
headed west to escape the dust storms
41
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42
HOBOES TRAVEL AMERICA
  • The 1930s created the term hoboes to describe
    poor drifters
  • 300,000 transients or hoboes hitched rides
    around the country on trains and slept under
    bridges (thousands were teenagers)
  • Injuries and death was common on railroad
    property over 50,000 people were hurt or killed

43
EFFECTS OF DEPRESSION
  • Suicide rate rose more than 30 between 1928-1932
  • Alcoholism rose sharply in urban areas
  • Three times as many people were admitted to state
    mental hospitals as in normal times
  • Many people showed great kindness to strangers
  • Additionally, many people developed habits of
    savings thriftiness

44
SECTION 3 HOOVER STRUGGLES WITH THE DEPRESSION
  • After the stock market crash, President Hoover
    tried to reassure Americans
  • He said, Any lack of confidence in the economic
    future . . . Is foolish
  • He recommended business as usual

Herbert Hoover
45
HOOVERS PHILOSOPHY
  • Hoover was not quick to react to the depression
  • He believed in rugged individualism the idea
    that people succeed through their own efforts
  • People should take care of themselves, not depend
    on governmental hand-outs
  • He said people should pull themselves up by
    their bootstraps

Hoover believed it was the individuals job to
take care of themselves, not the governments
46
HOOVERS SUCCESSFUL DAM PROJECT
  • Hoover successfully organized and authorized the
    construction of the Boulder Dam (Now called the
    Hoover Dam)
  • The 700 million project was the worlds tallest
    dam (726 feet) and the second largest (1,244 feet
    long)
  • The dam currently provides electricity, flood
    control and water for 7 western states

47
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48
Hoover had little chance to be re-elected in 1932
49
Coping with the Depression
  • Books popular books such as Gone with the Wind
    allowed people to forget their circumstances
  • Movie and radio became an escape from everyday
    life

50
Automobiles
  • People held onto their cars despite their dire
    economic circumstances as a way to feel like they
    were not so bad off and as a status symbol
  • This allowed the auto industry to avoid big
    losses during the depression
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