the great depression 1929-1939. impacts of depression prices of stock dropped 40% 86,000 businesses...
TRANSCRIPT
The Great Depression
1929-1939
Impacts of Depression Prices of stock dropped 40% 86,000 businesses failed 9,000 banks went out of business 9 million saving accounts Wages were decreased by at least
60% Unemployment from 9% to 25% 15 million people unemployed
The 6 Causes1. Unequal distribution of Wealth
- 2% owned 3/5 (60%) of wealth…- … 98% shared the remaining 2/5 (40%)- ½ population living
below poverty level- unequal balance
between productionand consumption
The 6 Causes2. Unequal distribution of
corporate power- mergers reduced competition
- when company fell = loss of jobs & stock
- 200 corporations controlled 50% of all products being made
The 6 Causes3. Poor banking structure
- no regulations- small banks “owed” to larger banks- unequal loan to deposit ratio (esp. small towns)
.
http://www.youtube.com/watch?v=qu2uJWSZkck
The 6 Causes4. High Tariffs and War Debts
- Hawley-Smoot Tariff = tax on imports- What was the goal?- Led to unbalanced foreign trade &
…- economic warfare = other countries did same
- war debt: U.S. as creditor; E. couldn’t repay
The 6 Causes5. Overproduction in Industry & Agriculture
- farmers bought machinery on credit…to increase
production - >> overproduction - >> no jobs = no $ to buy - >> couldn’t pay off debt... - … foreclosures on farms
The 6 Causes6. Stock Market Crash - Reasons for investing in
market- had $ already to invest- Buying on margin- Stock Speculation
- October 24th: Black Thursday -Bunk Runs- October 29th: Black Tuesday ($16
mil)
BUYING ON MARGIN
Who did they need to attract? HOW?
Investors only had to pay for 10% of the stock's actual value at time of purchase
If a stock is $100 you can pay $10 now and the rest later when the stock rose
balance was paid at a later date
Buying on margin
High interest rates
Demand payment anytime
If stocks fall then don’t have money to pay back
Stocks go up Borrowers sell at
high price Pay off
Loan Interest + make extra $$$
The good The bad
STOCK SPECULATION
people would buy and sell stocks quickly to make a quick buck
b/c of all this buying & selling, stock value increased Ex: G.E stock $130
$396/share
BLACK TUESDAY, Oct. 29th, 1929 - NYC Stock market crashed, causing a depression that would last until 1942
THE CRASH
STOCK MARKETCRASH Loss of confidence Uneven wealth Rising debt Stock speculation Overproduction Hardships of farmers and factory
workers
The Effects
Widespread unemployment > poverty > hunger
- What led to this????
- national income:1929 = $81 billion1932 = $41 billion
- 15 million jobless
The Effects
Breakdown of Families1. personal suffering >> suicide2. high school drop out rate >>
- kids working in sweatshops3. runaways (Hobos riding the rails)
The Effects
Organized Protests
- farmers marching on banks with pitchforks and gun
- tried to prevent foreclosures- Dairy farmers frustrated w/low
price of milk refuse to sell so they
dump it- Bonus Army
The Bonus ArmyWho were they?
What did they want?What did they do?
What happened to them?
The Effects
The Bonus Army
- WWI soldiers promised $1 per day extra served
- To be paid in 1945- Allowed to borrow
against it in 1931- 1932 asked for full
amount = denied
-Thousands from all over U.S. marched with their familieson Capitol Building in D.C. to protest
- Sent home with money from their bonus pay
-Calvary, tanks-Used tear gas and bayonets
http://www.youtube.com/watch?v=dWvCCxOUsM8
Many waited in unemployment lines hoping for a job.
People in cities would wait in line for bread to bring to their family.
Some families were forced to relocate because they had no
money.
“Hooverville”
Some families were forced to live in shanty towns A grouping of shacks
and tents in vacant lots They were referred to
as “Hooverville” because of President Hoover’s lack of help during the depression.
1931-1940
A drought in the Central and Southern Great Plains led to dust storms that
destroyed crops.
“The Dust Bowl”
Central and SouthernGreat Plains
The South Was Buried Crops turned to dust=No food
to be sent out Homes buried 60% lost their farms Many moved South in state of emergency Dust Bowl the #1 weather crisis
of the 20th century
Two Families During the Depression
A Farm Foreclosure
Some families tried to make money by selling useful crafts like baskets.