Presentation on theme: "Causes of the Depression 1.A Weak Economy: People bought everything they needed during the 1920’s. goods sat on the shelf. 2. Unbalanced Business System:"— Presentation transcript:
Causes of the Depression 1.A Weak Economy: People bought everything they needed during the 1920’s. goods sat on the shelf. 2. Unbalanced Business System: Greedy investors tried to boost stock prices.
Get Rich Schemes Margin Buying: investors would give their brokers a fraction of the value of the stock they wanted to purchase.The broker would then borrow the rest to buy the stocks. Stock Pool: a group of wealthy investors would join together and buy a large amount of stock. They would then trade back and forth with each other to drive up the price and then sell.
3.Stock Market Crash: Stock prices dropped so sharply that investors lost $5 billion in five hours of trade. 4. Internal Debt: More was being spent than taxed.
5.Poor Distribution of Purchasing Power: one of the biggest causes of the depression was over-speculation in the stock market. 6. International Debt: The United States was owed money by Germany from the war. The U.S. was assisting European countries to recover from the war.
Black Thursday Thursday, October 24, 1929: stock prices began to plummet. That day became known as Black Thursday. That afternoon five of the nation's most powerful bankers pledged to restore the market with a quick fix. The bankers spent millions to try to make the market appear to be on the rebound and restore the confidence of the American people.
Stock Market Crash Tuesday October 29, 1929: The Stock Market Crashed. Too many investors were selling their stocks and not enough people were buying. Prices fell to an unimaginable low.
Economic Terms Dow Jones Industrial Average: the average value of stocks from 30 of the nation's largest firms. GNP: Gross National Product, the amount of goods and services produced in the U.S. in one year. Some investors lost millions of dollars worth of stocks. People who were extremely wealthy were now ruined
Worldwide Crisis Shock waves were sent throughout the world when the depression hit. When the United States could no longer send money to the European countries they too began to suffer. Many countries in Europe were already on the verge of economic collapse.
Smoot-Hawley Tariff The Smoot-Hawley Tariff: high tariff rates that were enacted by Congress in 1930. Congress did not realize that raising the tariffs only made the situation worse. European nations retaliated by raising their own tariffs. In 1931 Europe suffered an economic crisis and Hoover had to sponsor a moratorium on the payment of war debts.
Farm Crisis During WWI they were producing enough food to feed the American people, U.S. troops, and struggling European nations who were affected by the war. When the war was over the farmers were still producing war time amounts of food and were left with too much. The problem was addressed to the U.S. government but no action was taken to solve the situation. During the Depression thousands were going hungry in the city while at the same time farmers had more food than they could sell. Many consumers could not afford to buy much food.
Farmers Lose Their Farms In some cases farmers had no choice but to shoot and bury their livestock and to let their crops rot in the fields. Farmers could not pay their debts and had their farms repossessed by the bank.
Dust Bowl Strong winds stirred up the loose soil and created horrible dust storms in the Great Plains. The Dust Bowl was caused by the following human activities: 1. Farmers plowed up the deep rooted prairie grass. 2. The crops they planted could not take root. 3.Overgrazing destroyed much of the grassland. 4. Drought
Dust Day During the Depression, schools across the Plains sent students home because of the dust storms. Some school administrators were worried about what might happen to the students' health. There had been cases of "dust pneumonia" where dust clogged up the lungs just like the disease. Other administrators and teachers, especially in the southern Plains, knew that people had gotten lost in dust storms when visibility went to zero
Okies Many farmers from Oklahoma moved to the west to California hoping to find a better life. They were given the name Okies. They were driven west by desperation. This situation inspired the book Grapes of Wrath by John Steinbeck.
Dorothea Lange Dorothea Lange was a famous female photographer in the 1930’s. She took photographs of the suffering people during the Depression. Lange’s photographs of the rural poor helped raise awareness about the poorest of the poor – sharecroppers and tenant farmers. In 1937 the federal government finally began to provide help to sharecroppers and tenant farmers.
Rugged Individualism rugged individualism: belief that people should not be put on public funds with unemployed. Hoover believed that government assistance was not needed to solve the depression. The American public had to wait it out.
Hoovervilles These were makeshift tent cities for the homeless.
Plight of the Homeless Many people who had no relatives to take them in had no where to go. People resorted to living in shacks with no heat or running water. The makeshift homes were often constructed of scrap metal, cardboard, or crates. Several groupings of these shacks started to form around the country to form shantytowns.
African Americans Half of all African Americans were living in the cities at the time of the crash. The proportion of African Americans who were unemployed during the depression was 30 to 60 percent higher than that of white Americans.
Reasons: 1.Many were not skilled workers. 2. Many people who had servants could no longer afford them and had to lay them off. Most servants were black. 3. Discrimination kept many African Americans out of work. They would be fired from jobs and then replaced by whites when times were hard.
Rent Parties *In Harlem people held rent parties. They would charge a nickel or dime at the door to help get the rent money together.
Bonus Army In 1924, Congress approved of bonus payments to all World War I veterans to be paid in 1945. When the country fell on hard times the veterans demanded that they be paid early. In June 1932 about 15,000 marched in Washington.
Veterans brought their families and lived in shacks around the city. Hoover called on the policed to clear the city. Two veterans were killed and then Hoover called in the army with tanks, rifles, and tear gas.
Election of 1932 The Republican Party nominated Herbert Hoover who had no opponent within the party. It was a common practice that the current president would be nominated. The Republicans knew there was very little chance that Hoover would be re- elected.
The Democrats The Democrats had three choices for nomination: 1. Al Smith2. John Garner 3. Franklin D. Roosevelt Roosevelt was the distant cousin of Theodore Roosevelt the former President. Roosevelt had an outstanding record of dealing with the depression as the Governor of New York. This increased his popularity with the Democrats. When Roosevelt gave his acceptance speech at the Democratic Convention he promised: “A New Deal for the American People.”
Franklin Roosevelt Franklin Roosevelt was born into a wealthy and well-known family in New York. He studied law at Harvard. In 1921 Roosevelt became ill with polio, a crippling disease that often was deadly. For some time he was completely without the use of his arms and legs. He never was able to regain the complete use of his legs. He always needed the assistance of braces and crutches.
War of the Worlds On Halloween 1938, Orson Welles produced a play called Invasion from Mars. Welles played a frightened and horrified news reporter who was describing the landing of spaceship full of Martians who were going on a killing spree. People who tuned in to the program after it was in progress were caught off guard. Welles was so convincing in his descriptions that many people believed that it was an actual report.
War of the Worlds There were no disclaimers before the program aired explaining that it was just a play. As the news was broadcast thousands of rational adults began to panic. People ran out of their homes screaming in terror. Although Welles was reprimanded for his role in the event he was propelled to instant fame.
The Hindenburg Some of radio’s greatest moments occurred as a reporter commented live at an event where something unexpected happened. On May 6, 1937 in Lakehurst, New Jersey a huge German zepplin, the Graf Hindenburg was scheduled to land. The ship was supposed to represent the greatness of the German Reich and it leader Adolf Hitler. The early part of the recording was Herb Morrison giving background information about the airship.
At 7:25, a few witnesses saw the fabric ahead of the upper fin flutter as if gas were leaking. Witnesses also reported seeing blue discharges—possibly static electricity— moments before the fire on top and in the back of the ship near the point where the flames first appeared. [
Of the 97 people on board, 35 people died. There was one additional fatality on the ground.