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UNIT 12- The Great Depression and the New Deal

UNIT 12- The Great Depression and the New Deal. Unequal Distribution of Wealth: Why is this a problem?. 1920s- rich got richer ; poor got poorer 70% of nation below $2,500. 2007. Overproduction- Factories and Farms . 1- Overproduction Farm goods- surplus, prices drop, can’t get out of debt

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UNIT 12- The Great Depression and the New Deal

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  1. UNIT 12- The Great Depression and the New Deal

  2. Unequal Distribution of Wealth:Why is this a problem? • 1920s- rich got richer ; poor got poorer • 70% of nation below $2,500 2007

  3. Overproduction- Factories and Farms • 1- Overproduction • Farm goods- surplus, prices drop, can’t get out of debt • Manufactured goods- Americans buying less • Orders slow; factories lay off workers

  4. Consumer debt • Consumer goods bought on credit throughout 1920s (living beyond means) • growing debt- people cut back on spending LAST 50 YEARS

  5. Stock Market speculation • speculation- trying for quick profit; ignoring risks • Buying on margin- pay a small percentage of a stock’s price & borrow the rest from a bank

  6. Stock Market Crash- Onset of Great Depression • “Black Tuesday”- October 29, 1929 • $30 Billion in “wealth” disappears

  7. New York Stock Exchange, Black Tuesday:

  8. Bank Failures • “Bank runs”- people panic- run to get $$ out of banks • Banks had lost $$ in stock market • 11,000 banks close- people lose all their savings http://www.youtube.com/watch?v=qu2uJWSZkck

  9. Business failures/ production falls/ unemployment • 90,000 businesses went bankrupt • “GDP” (national production) cut in half from 1929- 1933 • 13,000,000 unemployed by 1933 (25%) • Those with jobs- pay cuts, fewer hours…

  10. “Hardship and Suffering” • Cities: 1000s evicted from homes- live in shantytowns (“Hoovervilles”)

  11. “Hardship and Suffering” • Cities…- soup kitchens/ breadlines

  12. “Hardship and Suffering” • Rural areas: At least they could eat • 1000s of farmers lose land through foreclosure

  13. “Hardship and Suffering” • Dust Bowl- Drought hits in early 1934- destroys overfarmed land • “Okies”- 1000s of farmers pack up and head to CA

  14. Life in Depression • Unemployment soars- • Hunger • Homelessness • “hobos” on freight trains…

  15. Cycle of disaster • How are these connected? • Banks fail--- • Businesses fail- • Unemployment up— • Consumer spending/ income down--

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