NOTES on the Great Depression
Causes of the Depression 1. Overproduction Factories produced too much Too much supply Europe couldn’t buy our stuff 2. Under-consumption Economic struggles led to people not buying goods they used to Only bought necessities Business fire employees not needing their work
3. Stock Market Speculation Speculation: buying cheap stocks hoping they will improve Stock Market Crash: Speculators try to sell off stuck all at once to hold on to some profit, too many sold at once….CRASH! Black Tuesday 16.4 million shares SOLD (Oct 29th, 1929)…Loss of $30 billion
4. Disparity in Wealth Farmers in debt couldn’t make profit Oil replaces coal as fuel Workers wages do not increase Only 1% of population owned 40% of wealth
5. Banking Panic Everyone withdraws their $ from banks Banks don’t have enough to cover everyone’s cash People lose all their savings and there is nothing insuring that loss 9,000 banks failed during 1930’s
6. Dust bowl Overproduction dried out soil Drought Dust clouds formed that were thousands of feet high and miles wide. The dust storms and drought lasted nearly ten years Farmers head to cities where jobs are already scarce
Farms Foreclosed
Depression Life Okies: Farm migrants became known as "Okies" and were the subject of John Steinbeck's popular book, The Grapes of Wrath
Depression Life Unemployed: 25% Homeless: 2 million Women & Minorities: 1st to be fired
Welcome to Hoovervilles
“Prosperity cannot be restored by raids upon the public treasury”
Herbert Hoover’s response (Republican President) Helps businesses … not PEOPLE Opposes welfare for poor Reluctant to have government help Hoovervilles – Shantytowns (improvised settlement by homeless) named after Hoover Bonus Army - 20,000 unemployed veterans marched on Washington Want war pensions that were promised Set up camp and refuse to leave Army burns their camps Smoot Hawley Tariff –tax on foreign goods Intended to help American companies Europe responds by not buying American goods
Prohibition repealed (industry & jobs)