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The Great Depression 1929-1939. Depression Begins. 1 st months after stock market crash – business leaders & public officials insisted that setback minor & temporary. Banking Crisis. Large banks suffered significant losses Borrowers were defaulting on their loans

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The Great Depression 1929-1939

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depression begins
Depression Begins
  • 1st months after stock market crash – business leaders & public officials insisted that setback minor & temporary
banking crisis
Banking Crisis
  • Large banks suffered significant losses
  • Borrowers were defaulting on their loans
  • Banks left with depreciating assets & little income
  • Banks forced to close – customers lost entire life savings
    • 1930-1932: 5,000 banks failed
business failures
Business Failures
  • Industries had lost money in stock market
  • Consumers unwilling or unable to buy their products
  • Companies force to trim inventories & scale back production schedules & lay off employees
  • Factories & mines stood idle
  • Gross National Product – total value of all goods & services produced in one year
  • From $103 billion (1929) to $56 billion (1933)
  • Reached staggering levels
global depression
Global Depression
  • Economic trouble in Europe & other parts of the world brought down U.S. economy
    • Massive war debts
    • World trade on decline
u s policy global depression
U.S. Policy & Global Depression
  • U.S. contributed to worldwide economic downturn
    • Slapped high tariffs on imported goods
    • Smoot-Hawley Tariff – highest tariffs in U.S. history
    • Protected American industries from inexpensive imports
    • Accelerated global depression by eliminating American market for foreign manufactures & industries
income gap consumer debt
Income Gap & Consumer Debt
  • Unequal distribution of income another central cause of Great Depression
    • Small class has wealth & rest have debts
    • Income gap meant that most people did not have the buying power needed to boost the economy
    • If workers received higher wages & farmers better prices depression would have been less severe
    • Reliance on credit
business cycle
Business Cycle
  • Depression seen as inevitable part of business cycle – regular ups & downs of business in a free-enterprise economy
  • Length & severity of the Great Depression went far beyond the normal rhythms of business cycle
business cycle1
Business Cycle










hard times
Hard Times
  • 1929 – 1.5 million Americans unemployed
  • 1933 – 15 million
  • Chicago – 50% of city’s workforce was unemployed
  • Toledo, OH – 80% searching for jobs
  • Wages fell to $.10 per hour
  • Factory workers – annual income fell by 1/3
  • Reduced number of hours
american worker
American Worker
  • African Americans particularly hard hit
  • Women hired more cheaply than men
trying to make
Trying to Make $
  • Some unemployed workers took to selling apples on the street
  • In fall of 1930 – 6,000 unemployed workers sold apples in NYC
  • Traveled from city to city hopping freight trains or hitchhiking
life in the city
Life in the City
  • Federal gov’t did little to assist struggling city-dwellers
  • City gov’t, religious groups, & charitable organizations tried to provide direct relief
helping one another
Helping One Another
  • Mexican Americans – mutualistsas (mutual aid societies)
  • Chinese Americans – open barrels of rice
  • Harlem – rent parties
  • Avoid eviction
  • Passed out bowls of soup & pieces of bread
  • 1 out of 5 children in NYC suffered from malnutrition
    • Long-term health effects with teeth & eyes
  • Collections of makeshift shelters built out of packing boxes, scrap lumber, corrugated iron, & other thrown-away items
  • “Hoovervilles”
life on the farm
Life on the Farm
  • Shrinking demand for farm products caused prices to drop
  • Farmers had more products than they could sell
    • Crops are rotting in the fields & animals slaughtered
  • Banks foreclosed on farms
selling the farm
Selling the Farm
  • Bank auctions – residents banded together in order to fight foreclosures
    • Bid absurdly low prices
    • Neighbors would give back goods to original owners
migrant farmers
Migrant Farmers
  • Gov’t officials wanted to remove illegal aliens & recent Mexican immigrants from U.S.
    • Believed would ease strain of depression
  • Authorities provided funds to transport Mexican migrants to Mexico
family life
Family Life
  • Economic hardship led to families being broken apart
    • Marriage rate fell dramatically
    • Young people put off getting married & starting families
    • Birthrates declined
psychological impact
Psychological Impact
  • More than 20,000 Americans committed suicide in 1932
  • Shame associated with losing businesses, homes & being unable to provide for family
  • Guilt with not being able to provide for family
hoover s policies
Hoover’s Policies
  • Economic recovery through individual effort not from government assistance
    • Rejected idea of direct government aid
  • Feared direct federal aid would create large bureaucracy & inflate federal budget
  • Americans should lift themselves up through hard work & strength of character
rugged individualism
Rugged Individualism
  • Success comes through individual effort & private enterprise
  • Private charities & local communities, not federal government, could best provide for those in need
  • Local government forced to stretch already inadequate funds to cover growing numbers of needy families
president s committee for unemployment relief
President’s Committee for Unemployment Relief
  • Designed to assist state & local relief efforts
  • Appointed experienced philanthropists & businesspersons to encourage donations to private relief organizations
boosting the economy
Boosting the Economy
  • Cabinet continued to propose laissez-faire approach to economy
  • Urged business leaders to maintain pre-depression levels of production, employment, & wages voluntarily
  • Started to found some public-works programs (Hoover Dam)
coping with farm crisis
Coping with Farm Crisis
  • Agriculture Marketing Act – established Federal Farm Board
    • Find ways to help farmers help themselves
    • Offered loans & financed creation of farmers’ cooperatives
    • Allowed for purchase of necessary materials
    • Provided storage facilities & instructed to buy up surplus
    • Farmers refused to limit production
home loan bank act
Home Loan Bank Act
  • Established Home Loan Bank Board – provided money to savings banks, building & loan associations, & insurance companies for low-interest mortgages
    • Encourage home construction
    • Reduce foreclosures
reconstruction finance corporation
Reconstruction Finance Corporation
  • Lend $2 billion to stabilize trouble banks, insurance companies, railroad companies & financial institutions
    • Hoped to reduce business failures & create more jobs
  • Provided no direct aid to industries or to small businesses
  • Money did not trickle down quickly enough to help ordinary citizens
bonus army
Bonus Army
  • 10,000 WWI veterans & families protested in Washington D.C.
    • Support of veteran’s bill that would have granted veterans early payment of pension bonuses owed for services during war
bonus army1
Bonus Army
  • Demonstrators lived in empty gov’t buildings & camped in open area across Potomac River
  • Congress rejected bill
  • 2,000 veterans refused to leave
  • Authorities clash – 2 veterans & 2 police officers killed
  • Hoover orders army to disperse squatters
  • U.S. Army moved in with machine guns, tanks, & tear gas – burned shacks
    • Hundreds injured & 3 died (11-week-old baby)
  • Americans shocked at government’s treatment