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The Great Depression Begins

The Great Depression Begins. End of the Roaring 20’s. serious problems threatened the economy Low wages Farmers raisin more livestock and produce than they can sell Rise in debt Industries not making a profit Lower demand New technology. Farmers’ Struggles. Still producing at WWI levels

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The Great Depression Begins

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  1. TheGreat DepressionBegins

  2. End of the Roaring 20’s • serious problems threatened the economy • Low wages • Farmers raisin more livestock and produce than they can sell • Rise in debt • Industries not making a profit • Lower demand • New technology

  3. Farmers’ Struggles • Still producing at WWI levels • Weren’t able to pay back loans • Government tried to help them through price-supports • Government buys surplus crops and sells them around the world

  4. Income Distribution • 1920s – rich get richer, poor get poorer • 70% of the nation earned less than $2500 • Still not enough to buy adequate clothing, pay for electricity or heat

  5. Late 1920s • 1928 – Herbert Hoover elected as president • People invested in the stock market • Prices continued to climb (bull market) • People began speculating or buying on margin • Speculating - buying risky stocks for a quick profit • Buying on margin – paying a percentage of a stock’s price and borrowing the rest • September 1929 – stock prices rose and then fell • October 29-1929 – stock market crashed

  6. The Great Depression (1929-1940) • unemployment • economy • People panicked and withdrew savings from the bank • Banks closed • Weren’t insured by the government, people lost more $$ • 90,000 business closed • Unemployment – 25%

  7. Meanwhile…in Europe • Germany – paying reparations from WWI • Most countries were paying back war debts • Weren’t buying American goods

  8. Harley-Smoot Tariff • Designed to protect American farmers and manufacturers from foreign competition • Mistake! • Reduced imports which means other countries don’t have American currency to buy American goods • Made the depression worse everywhere

  9. Great Depression in cities • Many lost jobs, were evicted and ended up on the street • Some built shantytowns • Old railcars, crates, scrap metal • Soup kitchens and bread lines offered free or low-cost food • Provided by charities or public agencies • Minorities had higher levels of unemployment • Had to deal with more racial violence

  10. Great Depression in rural areas • Only slightly better than cities • People were able to grow their own food • Thousands of farmers lost their land • Many became migrants and worked on others’ farms • Many moved to west coast

  11. Dust Bowl drought in early 30s removal of prairie grasses overproduction exhaustion of soil winds DUST BOWL • Nothing can grow, so farmers left their land and headed to California (Grapes of Wrath) • Nicknamed “Okies”

  12. Effects on the family • Americans found new ways to entertain themselves • Board games (Monopoly invented 1933), listened to radio, card games • Families without jobs struggled to pay bills • Would grow own food • Simplified recipes and got more creative with ingredients • Direct Relief – federal system of distributing cash or food to the poor • Fell to individual cities and charities

  13. Men – • used to working • some ran away from their families • some wandered the country looking for work (hoboes) • Women – • did what they could to help their families survive • Canned foods, sewed clothes • worked outside the home • Children - • Poor diets and no health care • School years shortened or schools shut down • Kids went to work in sweatshops • “wild boys”, “hoover tourists” boys would run away from home

  14. Social/Psychological Effects • Suicide rate rose 30% • People put off doctor/dentist visits • Many gave up on going to college, getting married or having children • Many people who lived through the Great Depression lived their lives determined ot never be poor again

  15. Herbert Hoover’s Presidency • Wanted to reassure Americans that the economy was going to be OK • many politicians believed in the boom-and-bust cycle • Thought economy would fix itself • Hoover thought it would take some government assistance • Didn’t want to give hand-outs • Not a popular decision

  16. Herbert Hoover’s Presidency • Hoover called together leaders to figure out a solution • Asked employers not to cut wages or lay people off • Asked unions not to go on strike or demand higher wages • Created an organization to help charities • Proposed the Boulder Dam (Hoover Dam)to employ people

  17. Herbert Hoover’s Presidency • People became extremely upset with Hoover • Some farmers would try to raise prices • Throw out produce, prevent goods from getting to the market or refuse to work • Named signs of poverty after Hoover • Hoovervilles, Hoover blankets, Hoover flags • Criticism was widespread • Hoover finally changed his mind and decided to support cooperative efforts to help the economy

  18. Government Intervention • Hoover supported attempts by non-government groups • Federal Farm Board – organization of farm cooperatives working to raise prices of farm products • National Credit Corporation – loaned money to smaller banks to prevent bankruptcy • Federal Home Loan Bank Act – lowered mortgage rates and allowed farm owners to avoid foreclosure • Reconstruction Finance Corporation – gave money to banks and large businesses • Was too little too late

  19. Bonus Army (Spring 1932) • 10,000-20,000 WWI veterans and families arrived in Washington DC • Came to support the Patman Bill • Gave bonuses to veterans who had not been paid enough • About $500 a person • Hoover did not support the bill, but provided the Bonus Army with supplies and food

  20. Bonus Army (Spring 1932) • Congress did not pass the bill • 2,000 remained behind hoping to meet with Hoover • Hoover had the army kick them out • People were injured during the event • Hoover’s popularity suffered even more

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