Great Depression

The Great Depression was a severe worldwide economic depression in the decade preceding World War II.

The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s. It was the longest, most widespread,

and deepest depression of the 20th century.

The Great Depression

Where did it start?The depression

originated in the U.S., starting with the fall in stock prices that began around September 4, 1929 and became worldwide news with the stock market crash of October 29, 1929 (known as Black

Tuesday).

From there, it quickly spread to almost every country in the world

Unstable Banking system 1% of banks controlled over 46% of

bank resourcesUneven distribution of Income

5% of the pop. Received 30% of total income

Low wages for industrial workers and farmers

Overproduction of goods by manufacturersConsumers begin to spend less – under

consumptionMany warehouses were full of products

that could not be sold

Long-Term Causes

Weak IndustriesNew material affected the Cotton

industry Automobile affected the Railroad

industryLow food prices affected the Farmers

Weak International EconomyHawley-Smoot tariff (1930) created

highest tariff in U.S. history

Causes of the Great Depression

As stock prices fell with little hope of recovery, panic struck. Masses of people tried to sell their

stock, but no one was buying. The stock market, which had

appeared to be the surest way to become rich, quickly became the path to bankruptcy.

Stock Market

BanksThe Stock Market Crash 

was just the beginning.Since many banks had

also invested large portions of their clients' savings in the stock market, these banks were forced to close when the stock market crashed.

1932- 5,761 banks had failed (22% of total)

Banks Seeing banks close

caused another panic across the country. Afraid they would lose

their own savings, people rushed to banks that were still open to withdraw their money.

This massive withdrawal of cash caused additional banks to close.

Since there was no way for a bank's clients to recover any of their savings once the bank had closed, those who didn't reach the bank in time also became bankrupt.

Businesses 1929- 20,000 failed

1932- 30,000 failed

Businesses and industry were also affected. Having lost much of

their own capital in either the Stock Market Crash or the bank closures, many businesses started cutting back their workers' hours or wages.

Reached as high as 25% nation wide in 1932For farmers-- 33%Chicago-- 50%Low skilled workers were affected most!!

Unemployment

Considering what you know so far about the Great Depression…What class of people do you think were hit the hardest by the economic downturn? Why?

Question?

Families broke-up, marriage rate and birth rate dropped

3 million people became “hobos” and lived in “Hoovervilles” or Shantytowns

Malnutrition is rampant in areas

Loss of Self-Worth

During the Great Depression, millions of people were out of work across the United States.

Unable to find another job locally, many unemployed people hit the road, traveling from place to place, hoping to find some work. A few of these people had cars, but most

hitchhiked or "rode the rails."They would board freight trains and crisscross

the country, hoping to find a job in one of the towns along the way.

What do people do?

14,000 unemployed veterans marched on Washington in summer of 1932

They wanted the bonuses they were promised… wouldn’t receive them until 1945

Bonus Army (WWI Veterans)

Years of overgrazing combined with the effects of a drought caused the grass to disappear.

With just topsoil exposed, high winds picked up the loose dirt and whirled it for miles.

The dust storms destroyed everything in their paths, leaving farmers without their crops.

Dust Bowl

Late 1933 HUGE drought strikes Great Plains area

Top soil was blown all the way to BostonIn 5 years time 350,000 “Okies” and “Arkies”

moved to Southern California

Dust Bowl

Small farmers were hit especially hard. Even before the dust storms hit, the invention of the

tractor drastically cut the need for manpower on farms.

These small farmers were usually already in debt, borrowing money for seed and paying it back when their crops came in.

When the dust storms damaged the crops, not only could the small farmer not feed himself and his family, he could not pay back his debt. Banks would then foreclose on the small farms and

the farmer's family would be both homeless and unemployed.

Dust Bowl

Volunteerism Hoover believed voluntary cooperation would

enable the country to overcome the depressionPublic Work

1930 Congress appropriated $750 million for public areas

1930 Hoover Dam began to be builtReconstruction Finance Corporation

RFC 1932 International debt

Freeze European debts for a year

Hoover and the Great Depression

Just as the shantytowns were named “Hoovervilles” after him, newspapers became known as "Hoover blankets," pockets of pants turned inside out (to show they were empty) were called "Hoover flags," and broken-down cars pulled by horses were known as "Hoover wagons."

Hoover and the Great Depression

During the 1932 presidential election, Hoover did not stand a chance at re-election and Franklin D. Roosevelt won in a landslide.

People of the United States had high hopes that President Roosevelt would be able to solve all their problems.

As soon as Roosevelt took office, he closed all the banks and only let them reopen once they were stabilized.

Next, Roosevelt began to establish programs that became known as the New Deal.

Change in Power