■essential question: –what caused the great depression & how did the federal government...
TRANSCRIPT
■ Essential Question:
–What caused the Great Depression & how did the federal government respond?
The Great Depression
The Great Depression■ The Depression of the 1930s
came as a shock to Americans:–The consumer revolution led to
confidence that 1920s economic prosperity would continue
–When the stock market crashed in 1929, businesses closed & millions were unemployed
–Americans began to look to the gov’t for unprecedented support
The Great Crash■ Prelude to the stock market crash
–In 1927, the economy had a recession but gov’t & business leaders ignored warning signs
–The Federal Reserve lowering interest rates for loans would stimulate the economy, but this easy credit led speculators to buy stock on-the-margin
The Great Crash■ An initial stock market crash on
Oct 24, 1929 (Black Thursday) led to a catastrophic drop in stocks on Oct 29 (Black Tuesday)–Panicked investors sold stocks,
causing stock prices to plummet–Banks lent less money, factories
produced less, workers were fired or paid less → consumers had less money to spend → factories & businesses closed
This downward spiral continued for 4 years; By 1932 unemployment was at 25%
Unemployment, 1929-1942
The Great Crash■ Reasons for the depression:
–U.S. factories overproduced consumer durable goods
–The post-war conditions in Europe decreased foreign trade
–Unequal distribution of wealth, high consumer debt, stock market over speculation led to an overall decrease in consumer purchase powerconsumer purchase power
Consumers already owned durable goods & were not buying more
In 1929, the total market debt of the USA was 210% of the
value of GDP
By 1934, U.S. debt rose to
265% of GDP
In 2005, the value of U.S. debt was 303% of GDP
Effects of the Great Depression■ The Depression hit all classes:
–Many families lost their homes or farms & were forced to live in “Hoovervilles”
–The U.S. saw unprecedented poverty & suicide rates; fathers abandoned their families; lawlessness ensued
–The U.S. gov’t offered relief checks to the unemployed
Effects of the Great Depression■ African-Americans who had
migrated to North were laid off■ Mexican immigrants faced
competition & deportation from angry Americans
■ The middle class was hit hard:–Refused relief checks & charity–Many lost their homes–Health care declined; doctor &
dentist visits were “luxuries”
Employment Agencies & Relief-Check Lines
Soup Kitchens & Breadlines
Mortgage Foreclosures
These 4 potatoes are Christmas Dinner
Where’s daddy?
“Hoovervilles” & “Hoover Flags”
Hoover Struggles to Fight the Depression
Hoover and Voluntarism■ Hoover’s initial response was to
reassure Americans that prosperity would return
■ Hoover rejected bold gov’t action & called for volunteerism among charities, local gov’t, & business
■ As the depression worsened, Hoover called for gov’t projects like the Reconstruction Finance Reconstruction Finance CorpsCorps (RFC) which loaned money to failing businesses
“Rugged individualism”
The Hoover administration initiated job-creation programs, like building the Hoover Dam
Hoover and Voluntarism■ In 1932, President Hoover
suffered two final blows:–When 22,000 war veterans
marched to the capital to demand their WW1 bonus checks early, Hoover ordered this Bonus ArmyBonus Army to be forcibly removed
–The steady rise of bank failures led to a complete collapse of the U.S. banking system
Bonus Army
Douglas MacArthur Dwight
Eisenhower
Bank Failures, 1929-1933
Fighting the Depression■ The inability of Republicans to
resolve the economic depression opened the door for a Democratic takeover in politics
■ Once in power, Democrats succeeded in relieving some suffering, restored hope, & created an unprecedented level of gov’t intervention in the process