1. CICERO © 2008 THE GREAT DEPRESSION IN THE UNITED STATES

2. CICERO © 2008 CAUSES OF THE GREAT DEPRESSION  The Stock Market Crash of 1929  The Dust Bowl  Debt in the United States  The Smoot-Hawley Tariff Act  United States Federal Reserve and Money Supply  United States Business United States President Herbert Hoover Tenants were replaced from the land during the Depression

3. CICERO © 2008 THE STOCK MARKET CRASH The Great Depression started in the United States with the Stock Market Crash. The crash took place on October 24, 1929, a date that was called “Black Thursday.” That day 12.9 million shares of stock were traded after the stock market had been surging since September with a record high mark of 381.17. Many economic leaders thought a stock market panic could potentially occur. Richard Whitney, the vice president of the stock market, hoped to quell the solution by buying stock in many businesses for more than the normal price. This temporarily caused a halt in trading, but this did not last long. A large crowd gathers outside of the New York Stock Exchange

4. CICERO © 2008 THE STOCK MARKET CRASH Before long, national newspapers began covering the activity with the stock market. This prompted many people to begin pulling out of the market on Monday, October 28. The market was down 13 percent by the end of the day. The next day, known as “Black Tuesday,” 16.9 million shares of stock were traded, resulting in a loss of $14 million on that one day. In total, $30 million was lost during the five- day period. The trading room of the New York Stock Exchange after the crash of 1929

5. CICERO © 2008 THE DUST BOWL The Dust Bowl was a weather-related occurrence that happened in the United States from 1930 to 1936. It consisted of dust storms that would cause much damage to the American lands. There were severe droughts, a normal occurrence in these areas, made worse by unwise farming practices. When deep plowing of the land occurred, the grass was destroyed. This caused the soil to dry up. When a wind would come, the dried-up soil would turn into dust and blow to the east and the south. Some dark dust clouds reached as far away as Washington, D.C., and New York City. The states most affected by the Dust Bowl were Kansas, New Mexico, Oklahoma, Texas, and Colorado. This picture depicts a farmer and two of his sons during one of the Dust Bowl storms in Oklahoma.

6. CICERO © 2008 DEBT IN AMERICA The United States found itself in a significant amount of debt at this time. Americans had grown dependent on cheap credit. In the short term, it seem liked a good idea. But over time, both consumer and commercial debt began to mount. Those who were already in debt when the prices for products decreased risked going into default. A significant number of layoffs occurred, resulting in an unemployment rate of 25 percent. Those who worried about their money began to withdraw the majority of their money from the bank. Banks were now in a panic, and there was nothing that the Federal Reserve could do to correct the situation. Industrial production in the United States, from 1928 to 1939

7. CICERO © 2008 DEBT IN AMERICA The debt continued to grow in the United States. This was due to the price of products and the average income of a United States citizen falling close to 20 to 50 percent. All of the debts, however, remained at the same dollar amount. In the aftermath of the panic of 1929 and for the majority of 1930, approximately 744 U.S. banks failed. In total, about 9,000 banks failed during the 1930s. Those who had deposited money lost about $140 billion in deposits. Banks were now forced to build up their reserves and give out fewer loans to people. The effect of the Stock Market Crash on the Dow Jones Industrial Average in 1929

8. CICERO © 2008 SMOOT-HAWLEY TARIFF The Smoot-Hawley Tariff Act has been blamed by many as one of the reasons why the Great Depression was made worse in the United States. The tariff reduced international trade and caused retaliatory tariffs to occur in other countries. This tariff act caused American exports to fall from $5.2 billion in 1929 to $1.7 billion in 1933. Many products were hit hard by this decline, such as cotton, wheat, tobacco, and lumber. Historians have stated that the decline in prices of farm exports had caused many farmers in the United States to default on their loans. Representative W.C. Hawley (left) and Senator Reed Smoot shake hands on their Smoot-Hawley Tariff Act.

9. CICERO © 2008 U.S. FEDERAL RESERVE & MONEY SUPPLY Monetarists have accused the United States Federal Reserve System of making poor choices that allowed for problems in banking in the United States to continue. The Federal Reserve allowed the money supply in the United States to shrink by one-third from 1929 to 1933. Originally, the downward turn of the economy, thanks to the Stock Market Crash, would have caused just another recession. But thanks to large banks such as the Bank of the United States failing, people began to panic. The Seal of the United States Federal Reserve System

10. CICERO © 2008 U.S. FEDERAL RESERVE & MONEY SUPPLY Businessmen were not able to get new loans, nor could they renew their old ones because there was little money available. The amount of credit that the Federal Reserve could give out was limited, however, because there must be a little bit of gold that backed the credit being issued. By the time the Depression began, the Federal Reserve had reached the limit. The United States Federal Reserve Building in Washington, D.C.

11. CICERO © 2008 UNITED STATES BUSINESS When Franklin Delano Roosevelt was elected United States president in 1932, he blamed the big businesses that were prevalent in the United States. Roosevelt, along with the majority of Democrats, felt that business had too much unregulated power. During his many terms in office, Roosevelt would try to fix the problems of the Great Depression by implementing many new programs and policies under the New Deal. United States President Franklin D. Roosevelt