1. NOTES on the Great Depression

2. Causes of the Depression 1.uneven distribution of wealth 2.Stock market mistakes a.Speculation: buying cheap stocks hoping they will improve b.Buying on Margin: borrowing money from broker to buy stocks i.charge interest! ii.Stock must BOOM to make any $

3. 3. Overproduction … supply exceeds demand  price drop a. Mass production = too efficient 4. Buying on Credit a.Farmers buy equipment on credit b.Prices drop  Cannot pay debt c.Farm foreclosures!

4. Farms Foreclosed

5. 5. Panic! Stock Market Crash a.Black Tuesday i.16.4 million shares SOLD (Oct 29 th, 1929) ii.Loss of $30 billion

8. 6. Bank Runs – everyone withdraws $ a. WORLD’s biggest lender falls b. Stop lending to Europe  Europe cannot afford to buy American products c. Europeans cannot sell goods in US … cannot pay back war debts European factories fail Europe cannot repay loans OR buy Amer. products US stops loans to Europe

11. Great Depression – severe economic decline 1.Widespread poverty a.Factories close – 25% unemployed b.Hoovervilles = shantytowns for homeless 2.gross national product (total value of goods and services a country produces) = cut in half

16. Welcome to Hoovervilles

17. “Prosperity cannot be restored by raids upon the public treasury”

18. Herbert Hoover’s response (R President) 1.Helps business … not PEOPLE a. Opposes welfare for poor 2.Bonus Army - 20,000 unemployed veterans marched on Washington a.Want war pensions b.Army burns camps – use tanks and tear gas c.Hoover = horrified … but takes responsibility 3.Smoot Hawley Tariff – protectionist tax on foreign goods a.Intended to help companies b.BUT, hurts consumer

19. 4. Prohibition repealed (industry & jobs)

21. Stories of Survival Nothing was wasted  the “depression generation” –even those who recovered enough to live a very comfortable life, would continue to pinch pennies as if financial ruin were just around the corner –People pulled together and helped one another –Humor to cope “When Wall Street took the tail spin, you had to stand in line to get a window to jump out of”

22. Dust bowl – drought and dust storms in plains states