The Great Depression

1. The Great Depression FROM BOOM, TO BUST, TO DUST…

2. Timer

3. Ranking the Causes • Stock Market Crash Of The Great Depression • High Unemployment Rates • People Stopped Spending Money • Overproduction of goods • False Sense Of Prosperity Before The Great Depression • Global Crisis / High National Debt • Speculation And Overleverage in the stock market • Bank Failures • Lack Of Available Credit • Dust Bowl / Drought conditions on farms

4. 2nd Hour – Review Crews • Velociraptors • Eric Robinson • Kymberley Leggett • John Couperthwaite • Ashley Kylman • Triceratops • Elijahwan Wilson • Carlos Clark • Lindsay Lore • Virginia Leinonen • Stegosaurus • Nathan Spears • Erin Douglas • Keaton Feil • Hunter Cole • T-Rex • Zachary Martin • Amber Severin • Tyler Barlow • Chase Duncan • Brachiosaurus • Austin Dale • Carla Crowe • Wesley LaPrarie • Abbey Bentley • Allosaurus • DaOnjra Patterson • John Toth • Benjamin Shingles

5. 3rd Hour – Review Crews • ManBearPigs • Fairchild, William E • Bragenzer, Clayton J • Beach, Devin M • Hinch, Kelsea E • Lions • Gorham, Marissa L • Kranz, Jordan A • Kibzey, Shyanne M • Lopez, Veronica A • Wolves • Anderson, Alexa M • Baker, Allie H • Stewart, Kayla M • Belton, MerSadie J • Jaguars • Carter, Carlisa R • McKean, Matthew M • Sackett, Alyssa M • Jackson, J'ante D • Bears • Walrath, Bryce S • Johnson, Kyle A • Fowler, Taryn M • Jackson, Keion A • Cheetahs • Keith Young, Tatyana L • Moon, Blair R • Akridge, Ryan N • Aldridge Jr, Paul E • Leopards • Johnson, Lashawn C • Townsend, Tanishia R • Harris, Arcell H • Perkins, Victoria E • Panthers • Parker, Amanda N • Fluker, Alicia D • Inthaphone, James S • Schultz, Aaron D • Gorillas • Morgan, Jerren • Dumas, Xavier C • Temple, Alec S • Daniel, Makayla N • Tigers • Clark, Aujonea V • Phillips, Kyron R • Gill, Juliet A • Jones, Pharoah A

6. 4th Hour Review Crews • Lincoln • Martinez, Anthony C • Turner, Mycah M • Cowan, Daniel M • Craig, Hayley E • Mercedes • Carr, Brendan • DeJesus, Angel L • Boone, Briece D • Powdhar Curry, Sierra S • Lexus • Richards, Jason R • Melms, Svan T • Hollis, Kendra • Daniels, Cynthia K • Chrysler • Mcmullen, Gracie J • Gaskins, Jacob C • Bullock, Jackson T • Pope, Ciara L • Jaguar • Phillips, Evan H • Duceac, Emmanuel • Melidosian, Bradley K • Butler, Jason A • Ferrari • Pohl, Ryan J • Jones, Jacoby K • Ochs, Trever L • Severin, Harley F • Cadillac • Morgan, Marquis J • Emerson, Kevin S • Riggs, Amanda L • Tarrow, Matthew A • Lamborghini • Kaminski, Noah J • Best, Kayla C • Young, Tylor D • Latham, Mecca C • Bentley • Cozart, Chase A • Davis, Cornell T • Wilson, Emerson A • Porsche • La Mothe, Dakota M • Nance, Douglas D • Banks, Jasmine B

7. 5th Hour Review Crews • Hawks • Aldridge, Pharrah E • Taylor, Damion • Sills, Scott A • Chandler, Ashley S • Eagles • Johnson, Celika D • Bellant, Brandon L • Przystup, Tracia • Ware, Michael D • Kites • Cook, Thomas D • McGee, Ashante B • Smith, A'Londre A • Spencer, Austin R • Ospreys • Cushing, Mariah K • Scott, Sheridan N • Hampton, Tabatha S • Lowe, Verniece • Falcons • Essex, Theotis K • Briske, Trevor L • Nowland, Madisen • Buzzards • Johnson, Arkalah M • Grishaber, Blake L • Kirchoff, Marie A

8. Thesis Question • Should the government invest more money to help ease the recession? • The government should invest more money to help ease the recession. • The government should not invest more money to help ease the recession. • State 3 reasons why you have this opinion…

9. Agricultural overproduction Industrial overproduction Unequal distribution of wealth Over-extension of credit International economic situation (lack of trade) Causes of the Great Depression

10. Great Depression Overview. Factors of the Great Depression • Economic factors • Geographic factors • Social factors

11. Economic factors • Overproduction • Farms and companies were producing more products than could be sold. More supply than demand leads to low prices. • Uneven economic growth • The rich were getting richer and the poor were staying poor • Unsound credit practices • People were buying on credit and not paying it back • Stock market speculation • Buying on margin. The stock exchange allowed people to buy stocks assuming they would go up. They would not and the stockholders never paid. This caused the stock market to crash • Deflation • The opposite of inflation. A general decrease in the price of goods.

12. Geographic factors • Inappropriate farming practices – cultivation of marginal farmland. • Over-farming and exhaustion of topsoil • Drought • Erosion due to wind and dust storms • In the Dust Bowl, drought, wind and dust eroded millions of acres of topsoil contributing to a 60% percent decline in farm income and one-third of farmers losing their land.

13. Social factors • uneven distribution of wealth • unemployment • disruption of family life • homelessness due to foreclosures • interdependence • Herbert Hoover’s belief in laissez faire capitalism limited his willingness to involve the federal government in direct intervention in the economic crisis.

14. THE BOOM

15. The Roaring 20’s • The new concept of “credit” • People were buying: • Automobiles • Appliances • Clothes • Fun times reigned • Dancing • Flappers • Drinking

16. Why was this bad? • Credit system • People didn’t really have the money they were spending • WWI • The U.S. was a major credit loaner to other nations in need • Many of these nations could not pay us back

17. 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 Market’s worth • The Dow is a measure based on the price of 30 large firms

18. 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

19. The Stock Market • People bought stocks on margins • If a stock is $100 you can pay $10 now and the rest later when the stock rose • Stocks fall • Now the person has less than $100 and no money to pay back

20. And then…. • With people panicking about their money investors tried to sell their stocks • This leads to a huge decline in stocks • Stocks were worthless now • People who bought on “margins” now could not pay • Investors were average people that were now broke

21. THE BUST

22. 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

23. By mid-November, investors had lost about $30 billion

24. 1929-1939 • Stock market crash • Didn’t realize the effect it would have • No money to replenish what was borrowed Many found being broke humiliating.

25. President Hoover • Herbert Hoover was president at the start of the Depression • Philosophy: We’ll make it! • What He Did: Nothing • The poor were looking for help and no ideas on how to correct or help were coming

26. Voluntary Measures • Hoover eventually established two privately-funded organizations: • The National Credit Association provided $1/2 billion to businesses for emergency loans, but it was too under-funded to do much good. • The Organization for Unemployment Relief was a clearing house for relief agencies. However, state and local governments were already in too much debt to benefit from it.

27. Limited Government Intervention • In the end, Hoover resorted to government intervention: • The Reconstruction Finance Corp gave $1-1/2 billion in federal loans to banks, insurance companies, and industry to prevent bankruptcies, but it was too little, too late. • The Home Loan Bank Act provided federal loans to homeowners to prevent foreclosures, but got bogged down in red tape.

28. Reasons for Ineffectiveness • Hooverthought business should be self-regulating. • He had a mania for a balanced budget. • He lacked political finesse.

29. What about the people? • Farmers were already feeling the effects • Prices of crops went down • Many farms foreclosed • People could not afford luxuries • Factories shut down • Businesses went out • Banks could not pay out money • People could not pay their taxes • Schools shut down due to lack of funds • Many families became homeless and had to live in shanties

31. Many waited in unemployment lines hoping for a job.

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

33. Some families were forced to relocate because they had no money.

34. “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.

35. Hooverville

36. THE DUST

37. A drought in the South lead to dust storms that destroyed crops. “The Dust Bowl”

38. The South Was Buried • Soil turned to dust = No food to sell • Homes buried • Fields blown away • South in state of emergency • Dust Bowl the #1 weather crisis of the 20th century

40. Two Families During the Depression

41. A Farm Foreclosure

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

43. Agricultural overproduction Industrial overproduction Unequal distribution of wealth Over-extension of credit International economic situation REVIEW:Causes of the Great Depression

44. The New Deal

45. *FDR* • Franklin Delano Roosevelt • When he was inaugurated unemployment had increased by 7 million. • Poor sections (like Harlem) had 50% of the pop. unemployed • Instated the “New Deal” • Yea! Frankie!

46. Franklin D. Roosevelt’s Appeal • In 1932 presidential election, FDR was perceived as a man of action. • Hoover was viewed as a “do-nothing president.” • Norman Thomas, the Socialist candidate, was viewed as a radical. • Results: a landslide for Democrats and a mandate to use government as an agency for human welfare.

47. A Landslide Victory for FDR

48. Situation When FDR Entered Office • In March 1933, the country was virtually leaderless and the banking system had collapsed.

49. FDR Restored Confidence • In his inaugural address, he said “The only thing we have to fear is fear itself….” • He promised vigorous leadership and bold action, called for discipline and cooperation, expressed his faith in democracy, and asked for divine protection and guidance.

50. FDR’s Personal Qualities • He was a practical politician who practiced the art of the possible. • He was a charismatic person who exhibited a warmth and understanding of people. • He knewhow to handle press by focusing attention on Washington. • He provided dynamic leadership in a time of crisis. • He was willing to experiment