THE GREAT DEPRESSION. A24 7.3.12. THE GREAT CRASH. GUIDING QUESTION. What caused the Great Depression? the federal government during the 1920s?. STOCK MARKET CRASH. Stock Market Prices, 1921–1932. May 1928-September 1929, prices doubled in value beginning in Sept 1929, gradual slide
What caused the Great Depression?
the federal government during the 1920s?
Stock Market Prices, 1921–1932
Black Tuesday Wall Street, Oct. 29, 1929
Overproduction - Massive business inventories (up 300% from 1928 to 1929)
Lack of diversification in American economy
prosperity of 1920s largely a result of construction & auto industries
Uneven distribution of income and wealth - Poor distribution of purchasing power among consumers
Farm income down 66% in 20s
By 1929 the top 10% of the nation's population received 40% of the nation's disposable incomeUNDERLYINGCAUSESOF THEDEPRESSION
bank failures in late 1920s (farmers)
many had small reserves
low margins encouraged speculative investment by banks, corporations, and individual investors
total money supply
closing of over 9,000 American banks between 1930 and 1933
Federal Reserve system
Consumer Debt– middle class installment loans; buying on margin
Overspeculation in Stock Market– by wealthy and upper middle classUNDERLYINGCAUSESOF THEDEPRESSION
Consumer Debt, 1920–1931
How did the Great Depression alter the American social fabric in the 1930s?
“Give a man a dole and you save his body and destroy his spirit. Give him a job and pay him an assured wage and you save both the body and the spirit.”
Corporate profits - from $10 billion to $1 billon spirit. Give him a job and pay him an assured wage and you save both the body and the spirit.”
Business failures: 100,000 between 1929 and 1933
GNP – $104 billion in 1929 to $56 billion in 1933
Total national income – fell by over 50%Effects on Business & Industry
Depositors gathering outside a bank,April 1933
Bank Failures, 1929-1933
Great Crash spirit. Give him a job and pay him an assured wage and you save both the body and the spirit.”
Businesses and Workers
Overall U.S. production plummets.
Investors lose millions.
Businesses and workers cannot repay bank loans.
Consumer spending drops.
U.S. investors have little or no money to invest.
Allies cannot pay debts to United States.
Businesses lose profits.
Businesses cut investment and production Some fail.
Savings accounts are wiped out.
Banks run out of money and fail.
Workers are laid off.
Europeans cannot afford American goods.
U.S. investments in Germany decline.
Bank runs occur.
German war payments to Allies fall off.Effects of the Crash
Men Lined Up at the New York City Employment Bureau, 1932
Soup kitchen, Chicago, 1930
Soup kitchen, 1931 (Cleveland)
Dust storm, Springfield, CO, 1935
Aftermath of dust storms, South Dakota, 1936
Abandoned house, Kansas, April 1941
Dust Bowl Farm, Texas, 1938
A Destitute Family in the Ozark Mountains. 1935
“Okies” migrate west in 1939
Dorthea Lange, “Covered Wagon Again” 1935
"Cheap Auto Camp Housing for Citrus Workers“; Dorothea Lange, Tulare County, California, Feb. 1940
Migrant Auto Camp, California, 1936
"Boulder Dam, 1942“, Ansel Adams
Misery Sweeps Roosevelt into Office
Franklin D. Roosevelt, 1920 Vice Presidential nominee for Democratic Party
Roosevelt Campaigning for Office in Kansas 1932
Electoral Shift, 1928 and 1932