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Chapter 12 The Great Depression. Capitalism  -Private ownership of business  -Anyone can own a business  -No government ownership of business Capital.

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Presentation on theme: "Chapter 12 The Great Depression. Capitalism  -Private ownership of business  -Anyone can own a business  -No government ownership of business Capital."— Presentation transcript:

1 Chapter 12 The Great Depression

2 Capitalism  -Private ownership of business  -Anyone can own a business  -No government ownership of business Capital  -What you sell to make money  -Whatever product your business makes/sells/provides to people Law of Supply and Demand  -If you have a lot of something, prices are low  -If you have little of something, prices are high Free Enterprise  -You may run your business any way you like as long as you don’t break the law  -Also called Free Market Economy

3 Economy from good to bad -During 1920’s U.S. economy was at all time high -Herbert Hoover wins election of Most Americans thought good times would continue -Most felt that stock market was a symbol of how well the U.S. was doing economically -In 1925, stocks were worth $27 Billion -In 1929, $87 Billion -Wages rose 40% in 1920’s -Unemployment was under 4%

4 Welfare Capitalism  -Business owners found a way to meet workers demands without using the unions  -Helped to weaken unions  -They provided paid vacations, health plans, English classes, & other benefits requested by workers  -Tried to show people they didn’t need unions

5 Danger Signs -Although some made money in stock market, mostly the rich got richer. -Huge businesses dominated industry -200 corporations controlled 49% of American economy -Small # of families held most of the wealth [0.1%] -Most Americans didn’t have savings accounts [80%] -Another problem was the huge amount of personal debt -More and more people using credit on goods they could not afford.

6 Stock Market Problems Begin -Problems with the way the stock market used to run also caused economic problems 1.Speculation -Buying high risk stocks hoping to make a quick profit or a high profit -Buying high risk stocks hoping to make a quick profit or a high profit 2.Buying on Margin -Buying a stock with little down and borrowing the rest from the broker -Buying a stock with little down and borrowing the rest from the broker

7 Changes in U.S. Society -A major change came to the U.S. skyline -A major change came to the U.S. skyline -Empire State Building is started in Empire State Building is started in Cost $41 million -Cost $41 million -Opens in 1931 as largest building in the world -Opens in 1931 as largest building in the world -Today largest building is Burj Khalifa Tower in Dubai, UAE -Today largest building is Burj Khalifa Tower in Dubai, UAE -Begins American’s love of skyscrapers -Begins American’s love of skyscrapers

8 Empire State Building

9 Burj Khalifa Tower

10 Hoover’s Problems Continue -Hoover believed problems would fix themselves -Tried to get business to keep wages high [voluntary] -Passed the Hawley-Smoot Tariff -Creates the highest tariff in history -Makes economy worse -Creates the Reconstruction Finance Corporation -Group to help banks -Does little

11 Section 2 Domino Theory -The U.S. economy begins to fail for many reasons. -1st is the Domino Theory -Factories begin to lay off workers -These workers have less money to spend -B/c people were spending less, stores were ordering less -B/c stores were ordering less, factories produced less -B/c factories produced less, they needed less workers -Factories start to lay off more workers -The newly laid off workers now have less money to spend and process begins again

12 Stock Market Crash -In 1929, stocks are at an all time high -Dow Jones Industrial Avg. was at all time high -Avg. of stock prices for major U.S. companies -381 for Many people felt it was time to cash in and gain huge profits. -Dow Jones and stock prices began to fall rapidly -Oct. 24, 1929 was called Black Thursday -$3 billion lost in one day -Americans raced to get out of stock market -No regulations on selling or stoppage of sales -Oct. 29, 1929 was called Black Tuesday million shares of stock were sold in one day -Dow Jones fell from 381 to $30 Billion lost -At first, only the 4 million investors in the stock market were affected by the crash

13 Great Depression -Crash ultimately begins the Great Depression -Crash ultimately begins the Great Depression -Severe economic fall from Severe economic fall from Caused huge # of Americans to lose everything from jobs to homes. -Caused huge # of Americans to lose everything from jobs to homes. -Many took their own lives. -Many took their own lives. -Most were left with nothing but clothes on their backs -Most were left with nothing but clothes on their backs -Depression begins to affect every aspect of American life -Depression begins to affect every aspect of American life -Hundreds of factories close -Hundreds of factories close -Thousands lose their jobs -Thousands lose their jobs -No welfare, unemployment, or Social Security -No welfare, unemployment, or Social Security -By 1932, 12 million are unemployed -By 1932, 12 million are unemployed -1/4 of the workforce -1/4 of the workforce -Those still lucky to have jobs had their wages cut -Those still lucky to have jobs had their wages cut

14  -U.S. Gross National Product was cut in half  -Total value of goods and services a country produces  -In 1929, GNP was $103 Billion  -In 1933, GNP was $56 Billion  banks were forced to close  -9 million savings accounts disappeared  -Begins to affect other countries and force them into their own depressions.  -Biggest were Germany, France, and England

15 The Effects ► -People at every economic level were affected ► -Hardest hit were those at the bottom of the economic scale ► -Homelessness was at an all time high ► -Most lived in small homeless areas called Hoovervilles  -Areas where homeless lived ► -Named for President Hoover ► -Most blamed him for the Depression ► --Depression also affected minorities ► -Racism and discrimination rose dramatically ► -Many forced from their jobs and replaced by whites ► -56% of blacks were unemployed ► -Hispanics and Asian Americans were also forced out of their jobs ► -Thousands were deported, even those born in the U.S.

16 Dust Bowl  Farmers took an even bigger hit when a severe drought hit the Midwest  -9 million acres of land became known as the Dust Bowl  -750,000 families were forced to sell their farms  -Others had them repossessed by bank  -Hardest hit were farms in Kansas and Oklahoma  -Many moved to California to begin again

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18 Dust Bowl Range

19 Dust Bowl Farm in Kansas

20 Dust Storm in Oklahoma

21 Americans Helping Others -As bad as the Depression was, Americans worked to help each other -Protested rent increases -Helped farmers re-buy their land -Political groups also worked to help Americans -Most Americans had faith that govt. would help them -Others felt govt. needed changes -Gave support to the Communist and Socialist parties

22 Bonus Army Incident -Final straw was the Bonus Army Incident WWI vets march on D.C. -Wanted bonus for fighting in WWI that was due to be paid in Govt. said no, they had to wait until Led to violence -Hoover sends in Army under Gen. Douglas MacArthur to remove protestors -Many are injured seriously

23 Bonus Army Camps

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26 21 st Amendment -One political change was the 21st Amendment -One political change was the 21st Amendment -Repeals 18th -Repeals 18th -Lasted 14 years -Lasted 14 years -Makes alcohol legal -Makes alcohol legal -Passed in Feb Passed in Feb Only 8 states keep a ban on alcohol -Only 8 states keep a ban on alcohol Mississippi finally removes ban in 1966 Mississippi finally removes ban in Helped stimulate economy by rehiring workers -Helped stimulate economy by rehiring workers

27 The Change of America -Famous Americans’ lives also changed in 1930’s Al Capone convicted of tax evasion [1931] Babe Ruth retires [1935] Henry Ford becomes hated by workers Lindbergh’s baby is kidnapped and killed Calvin Coolidge dies [1933]

28 1932 Election ► -Another major change came with the 1932 election ► -2 candidates were ► Herbert Hoover [Republican] ► Franklin Delano Roosevelt [Democrat] ► -FDR wins by 7 million votes ► -Wanted to bring major changes to U.S. ► -Created a plan called The New Deal ► -Plan would change U.S. forever and bring U.S. out of Depression

29 Hoover vs. FDR


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