1. Why might the cartoonist have chosen a squirrel to represent a “wise economist”?
What does this cartoon imply about who was to blame for the Great Depression? Were the individuals the ones to blame?
What is the message of this cartoon?

2. The Causes of the Great Depression
Photos by photographer Dorothea Lange

3. The Rise of Herbert Hoover
By the late 1920s, Herbert Hoover was very popular
Hoover was became a hero during World War I for his leadership guiding the Food Administration
Hoover was Secretary of Commerce under both Warren G. Harding and Calvin Coolidge during the ‘20s
“Given the chance to go forward with the policies of the last eight years, we shall soon with the help of God, be in sight of the day when poverty will be banished from this nation.” – Herbert Hoover, 1928

4. Hoover Becomes President
Hoover defeats Democratic nominee Alfred E. Smith in the Election of 1928
Prohibition and Religion big factors
Hoover was for Prohibition and was a Protestant; Smith was against Prohibition and was a Catholic

6. Warning signs There was an uneven distribution of wealth.
There were numerous warning signs in the late 1920s that the economy was beginning a downward turn:
There was an uneven distribution of wealth.
Large companies dominated economy.
Too many Americans were buying on credit.
Overproduction of goods.
People gambling on the stock market

7. THE NATION’S SICK ECONOMY
1920s  serious problems threatened the economy while
Important industries struggled
Agriculture
Railroads
Textiles
Steel
Mining
Lumber
Automobiles
Housing
Consumer goods

8. FARMERS STRUGGLE Farmers had to rent the land or move
No industry suffered as much as agriculture
WWI  European demand for American crops soared
After the war, demand plummeted
Farmers were producing more than American consumers were consuming
Some farmers lost so much money they couldn’t pay the mortgage on their farm.
Farmers had to rent the land or move
Photo by Dorothea Lange

10. Mass Advertising
Advertisers, reaching millions of American consumers on a daily or weekly basis
Mass advertising promoted new products
Mass advertising reflected the general acceptance of buying by installment as a way to finance consumption.

11. Overproduction in Industry
Factories were producing products, however wages for workers were not rising enough for them to buy the goods
Too few workers could afford to buy the factory output
The surplus products could not be sold overseas due to high tariffs and lack of money in Europe
Companies produced more goods than could be sold. Businesses had to lay off workers. Prices of goods being sold declined.

12. UNDERCONSUMPTION Late 1920s  American consumers were buying less
Rising prices
stagnant wages
overbuying on credit
Most people lacked the income to purchase goods being produced, which drives up unemployment.

13. Uneven distribution of income
The gap between rich and poor widened
people were either really rich or really poor.
The wealthiest 1% saw their income rise 75%
The rest of the population saw an increase of only 9%
Not everyone who wanted consumer goods could afford them. Most of the Americans were living below the poverty line.
Photo by Dorothea Lange

15. High Tariffs and War Debts
European nations owed $10 billion ($115 billion in current dollars) to the U.S. in reparations
Their economies were devastated and had no way of paying the money back
U.S. insisted on repayment.
This forced the allies to demand Germany pay reparations imposed by Treaty of Versailles
Europe could no longer purchase goods from the U.S.
1922, U.S. passed the Hawley-Smoot Act
Meant to protect U.S. industry
Had the opposite effect
Other nations enacted their own tariffs and soon world trade fell 40%

16. The Stock Market
The stock market is a system for buying and selling shares of stock in a company, thus owning a small piece of the company.
By 1929, many Americans were invested in the Stock Market
4 Million Americans owned stocks.

17. The Stock Market’s bubble was about to break
SEEDS OF TROUBLE
Late 1920s  problems with the economy emerged
Speculation: buying stocks & bonds hoping for a quick profit
“Buying on Margin”: paying a small % of a stock’s price as a down payment and borrowing the rest
The Stock Market’s bubble was about to break

18. Banks
Banks loaned stock brokers money for the margin loans, they used the savings people had deposited in the bank for these loans.
The savings was not insured.

19. THE 1929 CRASH
During the Summer of 1929, stock prices started to fall. By September, there was serious problems. More and more investors began to sell.
The sell-off of stocks began on Oct 21. As more investors saw the value of stock fall, more investors sold their stocks.
On October 24, the market took a plunge . . .the worst was yet to come
As prices drop, brokers call in their loans
Investors do not have the cash to payoff the loans
Brokers enforce sales of stock to payoff the loans
Prices drop more, causing panic sales of stock
On October 29, now known as Black Tuesday, the stock market crashed
16.4 million shares were sold that day – prices plummeted
People who had bought on margin (credit) were stuck with huge debts

20. What caused the Stock Market Crash?
1929
 The Wall Street Crash was caused by a number of factors including:
US Economic Boom was a time of financial prosperity with increases in productivity, sales and wages. There was a rising demand for new consumer products leading to massive profits for American businesses. 
Rise of American Consumerism encouraged the acquirement of goods and services in ever-increasing amounts. 
Overproduction of consumer goods
Easy credit schemes and increased debt
The Stock Market boom As US industry boomed, so did company shares on the Wall Street stock market. Prices of shares went up year after year, and investors made substantial profits. and the 'Long Bull Market‘ A Bull Market is a long period of rising stock prices
Buying stocks "on margin" (buying shares with loaned money)

21. Alabama family, 1938 Photo by Walter Evans
THE GREAT DEPRESSION
The Stock Market crash signaled the beginning of the Great Depression
The Great Depression is generally defined as:
period from 1929 – 1940
economy plummeted
unemployment skyrocketed
The crash alone did not cause the Great Depression
But it accelerated its arrival
Alabama family, 1938 Photo by Walter Evans

22. Bank Failures
After the crash, many Americans panicked & withdrew their money
Banks had invested in the Stock Market & lost money. No insurance against bank closings
Thousands of banks close
By 1933, of the banks nationwide had collapsed
1933

23. GNP DROPS, UNEMPLOYMENT SOARS
Between , the U.S. Gross National Product (GNP) – the total output of a nation’s goods & services – fell nearly 50% from $104 billion to $59 billion
90,000 businesses went bankrupt
Unemployment leaped from 3% in 1929 to 25% in 1933

24. CAUSES OF THE GREAT DEPRESSION
Tariffs & war debt policies
U.S. demand low, despite factories producing more
Farm sector crisis
Easy credit
Unequal distribution of income

25. RURAL LIFE DURING THE DEPRESSION
While the Depression was difficult for everyone, farmers did have one advantage; they could grow food for their families
Thousands of farmers, however, lost their land
Many turned to tenant farming and barely scraped out a living
Between almost ½ million farmers lost their land

30. The Dust Bowl Drought and overfarming dry up land
Drought and overfarming dry up land
Huge dust storms spread across the US

35. Huge dust storms covered the Great Plains and blew dust as far away as the East Coast

36. Darkness came when it hit us
Darkness came when it hit us. Picture taken from water tower one hundred feet high. Yours Truly, Chas. P. Williams." Photo: Massive Dark cloud approaching village  

39. Many came from Oklahoma, so migrant workers were often called Okies
Many farmers packed up their belongings & headed for California to look for work
Many came from Oklahoma, so migrant workers were often called Okies