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The Great Depression The Great Depression was the worst economic depression in US history The Great Depression was the worst economic depression in US.

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Presentation on theme: "The Great Depression The Great Depression was the worst economic depression in US history The Great Depression was the worst economic depression in US."— Presentation transcript:

1 The Great Depression The Great Depression was the worst economic depression in US history The Great Depression was the worst economic depression in US history It lasted from late 1929 to about 1939 It lasted from late 1929 to about 1939 Photo by Dorthea Lang

2 Great Depression

3 5 Causes of the Great Depression 1. Unequal Distribution of Wealth 1. Unequal Distribution of Wealth 2. High Protective Tariffs 2. High Protective Tariffs 3. Overspeculation on the Stock Market 3. Overspeculation on the Stock Market 4. Stock Market Crash 4. Stock Market Crash 5. Failure of the Federal Reserve 5. Failure of the Federal Reserve

4 1. Unequal Distribution of Wealth Money was unequally divided between the rich, middle class, and the poor Money was unequally divided between the rich, middle class, and the poor The top 0.1% of the population earned 58% of all earned income The top 0.1% of the population earned 58% of all earned income Example: Henry Ford earned 14 million/year Example: Henry Ford earned 14 million/year Average middle class income was $ /yr Average middle class income was $ /yr Poor income was $ /yr working 56 hrs. per week. Poor income was $ /yr working 56 hrs. per week.

5 75% of all Americans spent all income in order to survive 75% of all Americans spent all income in order to survive Yet, during the 1920’s, 60% of all cars and 80% of all radios were purchased on credit ( on the installment plan), resulting in more debt Yet, during the 1920’s, 60% of all cars and 80% of all radios were purchased on credit ( on the installment plan), resulting in more debt Installment debt doubled between 1925 and 1929 reaching to over 3 billion dollars per/yr. Installment debt doubled between 1925 and 1929 reaching to over 3 billion dollars per/yr.

6 Money was also unequally divided between industry and agriculture Money was also unequally divided between industry and agriculture By 1929, only 200 corporations controlled 50% of all corporate wealth By 1929, only 200 corporations controlled 50% of all corporate wealth The Auto industry and related businesses flourished during the 20’s while farming steadily declined The Auto industry and related businesses flourished during the 20’s while farming steadily declined

7 Example: Farmers were paid $2.00 per bushel in 1919 and 47 cent per bushel by Example: Farmers were paid $2.00 per bushel in 1919 and 47 cent per bushel by 1929.

8 US and Europe Also, money was unequally divided between the US and Europe Also, money was unequally divided between the US and Europe The US became the worlds banker, food producer, and manufacturer after WW I The US became the worlds banker, food producer, and manufacturer after WW I By 1927, US loans to European nations reached 1.25 billion dollars By 1927, US loans to European nations reached 1.25 billion dollars Europeans used 90% of loans to buy US products Europeans used 90% of loans to buy US products

9 2. High Tariffs To protect US businesses, America passed import high tariffs on imported products like the tariff of 1922 To protect US businesses, America passed import high tariffs on imported products like the tariff of 1922 The Hawley-Smoot Tariff of 1930 increased tariff restrictions even more The Hawley-Smoot Tariff of 1930 increased tariff restrictions even more Other nations then retaliated with their own tariffs which resulted in strangled world trade Other nations then retaliated with their own tariffs which resulted in strangled world trade

10 3. Overspeculation Definition – as stock values continued to rise, investors over borrowed money- called buying on margin- in order to purchase stocks. Definition – as stock values continued to rise, investors over borrowed money- called buying on margin- in order to purchase stocks. These stocks would then be used as collateral to buy even more stocks. These stocks would then be used as collateral to buy even more stocks.

11 The average of major stock prices, called the Dow Jones Index, continued to rise. The average of major stock prices, called the Dow Jones Index, continued to rise. Index rose from 191 to 381 in 1929 Index rose from 191 to 381 in 1929 People were confident prices and profits would continue to spiral upwards People were confident prices and profits would continue to spiral upwards

12 Example of stock investment Mr. Jones wants to buy one share of RCA stock- valued at $85.00 per share Mr. Jones wants to buy one share of RCA stock- valued at $85.00 per share He puts down $10.00 and borrows $75.00 from a stock broker at a low interest He puts down $10.00 and borrows $75.00 from a stock broker at a low interest By 1927, the stock has increased to $ per share By 1927, the stock has increased to $ per share Mr. Jones sells his one share of stock, less the $75.00 plus interest, for a profit of $ ( on a $10.00 original investment) Mr. Jones sells his one share of stock, less the $75.00 plus interest, for a profit of $ ( on a $10.00 original investment) What if Mr. Jones had used the $85.00 as collateral to buy another share of RCA stock? What if Mr. Jones had used the $85.00 as collateral to buy another share of RCA stock?

13 By 1929, national investors were 8.5 billion in debt By 1929, national investors were 8.5 billion in debt When some became concerned with the large amount of speculative debt, interest rates began to rise sharply- reaching 20% in When some became concerned with the large amount of speculative debt, interest rates began to rise sharply- reaching 20% in Some investors began to sell their stocks in the fall of 1929, in order to get out of the market if prices began to fall Some investors began to sell their stocks in the fall of 1929, in order to get out of the market if prices began to fall

14 4. Stock Market Crash On October 29, 1929 ( Black Tuesday) – a record 16.2 million stock shares were sold On October 29, 1929 ( Black Tuesday) – a record 16.2 million stock shares were sold By November, the Dow average continued to fall which resulted in a loss of over 30 billion dollars By November, the Dow average continued to fall which resulted in a loss of over 30 billion dollars

15 At first, the crash effected only those heavily invested in the stock market, about 4 million people out of the total population of about 120 million At first, the crash effected only those heavily invested in the stock market, about 4 million people out of the total population of about 120 million But soon, the crash effected the entire nation But soon, the crash effected the entire nation

16 5. Failure of the Federal Reserve During the 1920’s, The Federal reserve, which regulates the amount of money in circulation, cut interest rates to spur economic growth and did nothing to stop overspeculation During the 1920’s, The Federal reserve, which regulates the amount of money in circulation, cut interest rates to spur economic growth and did nothing to stop overspeculation In 1929, to limit the money supply ( because of overspeculation), the Federal Reserve raised interest rates In 1929, to limit the money supply ( because of overspeculation), the Federal Reserve raised interest rates When the crash and effects finally occurred, there was too little money in circulation to recover When the crash and effects finally occurred, there was too little money in circulation to recover

17 Results of the Crash A combination of all 5 causes resulted in the Great Depression, which had a rippling effect throughout America and the world. A combination of all 5 causes resulted in the Great Depression, which had a rippling effect throughout America and the world.

18 Results 1. Bank runs- people rushed to banks to withdraw savings accounts 2. Stock prices fell and by 1932 the Dow reached a low of ,000 banks went out of business 4. Unemployment reached 40% in urban areas, 60% for African Americans and 26% overall- 15 million people were jobless

19 5. 86,000 businesses closed 5. 86,000 businesses closed 6. Wages decreased 60% 6. Wages decreased 60% 7. There was widespread hunger, poverty, 7. There was widespread hunger, poverty, homelessness and suffering homelessness and suffering 8. The GNP fell from 103 billion to 56 billion 8. The GNP fell from 103 billion to 56 billion 9. A world wide economic crisis developed 9. A world wide economic crisis developed

20 Dust Bowl 10. In the Midwest, drought conditions forced many farmers to abandon their farms. This area became known as the Dust Bowl during the 1930’s. 10. In the Midwest, drought conditions forced many farmers to abandon their farms. This area became known as the Dust Bowl during the 1930’s. Oklahoma farmers that left their farms for California were called ‘Okies’. Oklahoma farmers that left their farms for California were called ‘Okies’.

21 11. In 1932, Veterans of WW I that had been promised a monetary bonus by 1945, marched on Washington, DC demanding their bonus now. They were called the Bonus Army. 11. In 1932, Veterans of WW I that had been promised a monetary bonus by 1945, marched on Washington, DC demanding their bonus now. They were called the Bonus Army. General Douglas MacArthur dispersed the veterans by using force ( tanks and teargas) against the orders of President Hoover. General Douglas MacArthur dispersed the veterans by using force ( tanks and teargas) against the orders of President Hoover.

22 12. Across the nation, displaced people built tent cities and Shantytowns and these locations were known as Hoovervilles. 12. Across the nation, displaced people built tent cities and Shantytowns and these locations were known as Hoovervilles.

23 Depression Era

24 The New Deal A question for the national government throughout the early 30’s was ‘what is the role of the government in trying to solve the national economy and suffering of the people’ A question for the national government throughout the early 30’s was ‘what is the role of the government in trying to solve the national economy and suffering of the people’ In 1932, Franklin Delano Roosevelt was elected at one of the darkest hours of the depression. In 1932, Franklin Delano Roosevelt was elected at one of the darkest hours of the depression.

25 FDR- President from Franklin Delano Roosevelt was elected in 1932, stating in his inauguration “The only thing we have to fear is fear itself.” Franklin Delano Roosevelt was elected in 1932, stating in his inauguration “The only thing we have to fear is fear itself.” He promised the American people a New Deal: He promised the American people a New Deal: A program of the 3 R’s= Relief, Recovery and Reform. A program of the 3 R’s= Relief, Recovery and Reform. FDR

26 The New Deal

27 Roosevelt immediately began a package of legislative reforms in Congress that transformed US politics and the US economy. Roosevelt immediately began a package of legislative reforms in Congress that transformed US politics and the US economy. “ the first 100 days” – during the Roosevelt administration produced numerous new programs and agencies. “ the first 100 days” – during the Roosevelt administration produced numerous new programs and agencies.

28 New Deal Programs TVA- Tennessee Valley Authority = provided hydroelectric power and jobs to the Tennessee valley area. TVA- Tennessee Valley Authority = provided hydroelectric power and jobs to the Tennessee valley area. CCC- Civilian Conservation Corps = provided jobs to young men to work on conservation projects. CCC- Civilian Conservation Corps = provided jobs to young men to work on conservation projects.

29 PWA- Public Works Administration= provided massive public work jobs. PWA- Public Works Administration= provided massive public work jobs. NRA -National Recovery Administration= NRA -National Recovery Administration= Worked with business to establish fair business and fair labor practices. Worked with business to establish fair business and fair labor practices. FDIC - Federal Deposit Insurance Corporation= insured bank deposits up to $5,000.00

30 AAA- Agricultural Adjustment Administration= helped farmers regulate production and increased income for farmers. AAA- Agricultural Adjustment Administration= helped farmers regulate production and increased income for farmers. FHA- Federal Housing Administration= improved housing standards and provided home financing. FHA- Federal Housing Administration= improved housing standards and provided home financing.

31 SEC- Securities and Exchange Commission= regulated the stock market. SEC- Securities and Exchange Commission= regulated the stock market. WPA- Works Progress Administration= WPA- Works Progress Administration= provided jobs to the unemployed in construction and in art projects. provided jobs to the unemployed in construction and in art projects. SSA- Social Security Administration= provided old-age pensions, disability payments and unemployment benefits.

32 These programs did not end the depression, but it did help the poor and jobless. These programs did not end the depression, but it did help the poor and jobless. Roosevelt kept in touch with the American people through radio talks known as Roosevelt kept in touch with the American people through radio talks known as “fireside chats” “fireside chats”

33 New Deal Problems When the Supreme Court declared several new government programs unconstitutional, Roosevelt tried to increase the number of Supreme Court Justices. When the Supreme Court declared several new government programs unconstitutional, Roosevelt tried to increase the number of Supreme Court Justices. This plan failed and Roosevelt was criticized for trying to “pack the court” This plan failed and Roosevelt was criticized for trying to “pack the court”

34 Several New Deal programs are still with us today: Several New Deal programs are still with us today: FDIC- Federal Deposit Insurance Corporation insures depositors funds in a bank. FDIC- Federal Deposit Insurance Corporation insures depositors funds in a bank. Social Security Social Security FHA FHA

35 1930’s 1930’s Major World Events Major World Events

36 Rise of Totalitarianism Totalitarianism- a type of government that controls almost every aspect of a citizens life appeared in Italy, Germany, Soviet Union, Spain and Japan during the 1930’s. Totalitarianism- a type of government that controls almost every aspect of a citizens life appeared in Italy, Germany, Soviet Union, Spain and Japan during the 1930’s.

37 Fascism- the term used to describe the practices of a government that adopts extreme nationalism, militarism, and gives supreme power and authority to a leader. Fascism- the term used to describe the practices of a government that adopts extreme nationalism, militarism, and gives supreme power and authority to a leader. In Italy the Black Shirts under Mussolini, in Spain-Fascist under Franco, and in Germany- the Nazis under Hitler represented the development of fascism. In Italy the Black Shirts under Mussolini, in Spain-Fascist under Franco, and in Germany- the Nazis under Hitler represented the development of fascism.

38 Benito Mussolini- Italy Benito Mussolini- Italy Mussolini led the March on Rome with fascists Black Shirts troops and was in control of Italy by Mussolini led the March on Rome with fascists Black Shirts troops and was in control of Italy by 1928.

39 Mussolini stressed loss of individual freedoms, the duties of citizens, geographic expansion through military conquest, and the need for gang raids to eliminate enemies. Mussolini stressed loss of individual freedoms, the duties of citizens, geographic expansion through military conquest, and the need for gang raids to eliminate enemies.

40 Adolf Hitler - Germany Hitler was a World War I veteran that eventually led the Nazi party in Germany. He was arrested and imprisoned for an attempted coup of the Munich government Hitler was a World War I veteran that eventually led the Nazi party in Germany. He was arrested and imprisoned for an attempted coup of the Munich government

41 In prison, he dictated Mein Kampf, or my struggle. In prison, he dictated Mein Kampf, or my struggle. After prison, Hitler was legally elected Chancellor of Germany and then became the undisputed leader of Nazi Germany. After prison, Hitler was legally elected Chancellor of Germany and then became the undisputed leader of Nazi Germany.

42 Hitler stressed extreme nationalism, a belief in racial superiority, and expansion through military conquests. Hitler stressed extreme nationalism, a belief in racial superiority, and expansion through military conquests. In addition, Hitler stressed control of Europe and the systematic extermination of the Jews. In addition, Hitler stressed control of Europe and the systematic extermination of the Jews.

43 Joseph Stalin - USSR After the death of Lenin in 1924, Stalin emerged as the leader of the USSR ( Union of Soviet Socialist Republics) After the death of Lenin in 1924, Stalin emerged as the leader of the USSR ( Union of Soviet Socialist Republics) During the 1930’s, Stalin eliminated political enemies through political purges. During the 1930’s, Stalin eliminated political enemies through political purges. Approximately 10 to 15 million people were killed or disappeared in death camps throughout the Soviet Union Approximately 10 to 15 million people were killed or disappeared in death camps throughout the Soviet Union

44 In addition, Stalin stressed rapid industrlization, and state control of business and agriculture In addition, Stalin stressed rapid industrlization, and state control of business and agriculture

45 Emperor Hiro Hito - Japan In Japan, Emperor Hiro Hito and military leader Tojo had plans to remove all foreign influence from Asia and have Japan emerge as the leader of a Japanese Empire in Asia. This was called “ Asia for Asians” in the land of the Rising Sun. In Japan, Emperor Hiro Hito and military leader Tojo had plans to remove all foreign influence from Asia and have Japan emerge as the leader of a Japanese Empire in Asia. This was called “ Asia for Asians” in the land of the Rising Sun. Emperor Hirohito Emperor Hirohito

46 Civil War in Spain In Spain, the fascist Francisco Franco led Spanish rebels against the Loyalist government of Spain. Franco was supported by Hitler and Mussolini and the Loyalist were supported by Communist from Moscow. In Spain, the fascist Francisco Franco led Spanish rebels against the Loyalist government of Spain. Franco was supported by Hitler and Mussolini and the Loyalist were supported by Communist from Moscow. Franco became the fascist leader Franco became the fascist leader of Spain. of Spain. The Spanish Civil war proved The Spanish Civil war proved to be a dress rehearsal for WW II. to be a dress rehearsal for WW II.

47 By the 1930’s, the world had again emerged into a dangerous situation that threatened world peace and stability. By the 1930’s, the world had again emerged into a dangerous situation that threatened world peace and stability.

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