1929 -1939 Stock market crash Didn t

1929 -1939 • Stock market crash • Didn’t realize the effect it would have • No money to replenish what was borrowed Many found being broke humiliating.

The Roaring 20’s • The new concept of “credit” • People were buying: – Automobiles – Appliances – Clothes • Fun times reigned – Dancing – Flappers – Drinking

Why was this bad? • Credit system – People didn’t really have the money they were spending • WWI – The U. S. was a major credit loaner to other nations in need – Many of these nations could not pay us back

EASY MONEY (CREDIT) • INTEREST RATES ON LOANS WERE TOO LOW = TOO MUCH BORROWING INTEREST RATES ON SAVINGS WERE TOO LOW = TOO MUCH SPENDING (INFLATION) EXCESSIVE REAL ESTATE CONSTRUCTION = OVERSUPPLY GHS Rules

Buying on Credit Borrowing Money Causes of Depression Write t his down!! ! 80% of radios & 60% of cars were on credit

Wealth is Distributed Unevenly • Corporate profits rose 65% during the 20 s. • The rich became much richer and the workers became less poor.

1920 s and 30 s salaries • Bus driver: no power steering or brakes • $1300 or $0. 43/hr • Teacher • $1227 • Waitress • $520 or $0. 20/hr • Farmhand • $216 or $0. 07/hr • First minimum wage under FDR? • Highest paid production workers in the 1920’s – Ford Motor Company • $5. 00/day or $0. 48/hr. • Farm Prices: Potatoes, Cotton, Pork? • $0. 01/pound potatoes • $0. 05/pound cotton • $0. 05/pound pork

Uneven distribution of Wealth • Many Poor and Very Few Rich! • Workers earn so little they can’t buy the products they produce! • Wages were as little as 20 – 25 cents per hour! • Even the best employer Ford Motor Company paid only $5. 00/Day for a 6 AM 6 PM shift!

Uneven Distribution of Wealth Rich got richer Buying on Credit Borrowing Money Causes of Depression Write t his down!! ! 80% of radios & 60% of cars were on credit

The Stock Market • People bought stocks on margins – If a stock is $100 you can pay $10 now and the rest later when the stock rose • Stocks fall – Now the person has less than $100 and no money to pay back

And then…. • With people panicking about their money investors tried to sell their stocks – This leads to a huge decline in stocks – Stocks were worthless now • People who bought on “margins” now could not pay • Investors were average people that were now broke

Uneven Distribution of Wealth Rich got richer Buying on Credit Borrowing Money Causes of Depression Stock Speculation • Buying on Margin • Black Tuesday Write t his down!! !

• Farmers were already feeling the effects – Prices of crops went down – Many farms foreclosed • People could not afford luxuries – Factories shut down – Businesses went out • Banks could not pay out money • People could not pay their taxes – Schools shut down due to lack of funds • Many families became homeless and had to live in shanties

AGRICULTURAL OVERPRODUCTION • INCREASED TECHNOLOGY • GOOD GROWING CONDITIONS • SUPPLY GREATER THAN DEMAND

The Great Dust Bowl • Over use & Over grazing – No crop rotation • • • No soil conservation No wind breaks Loss of natural grasses and animals Climatic change – the drought of the 30’s

Uneven Distribution of Wealth Agriculture Overproduction Rich got richer Great Dust bowl Buying on Credit Borrowing Money Causes of Depression Stock Speculation • Buying on Margin • Black Tuesday Write t his down!! !

OVERSPECULATION • • “GET RICH QUICK SYNDROME” MARGIN BUYING LACK OF GOVT. REGULATION PANIC SELLING • ‘ 29 MARKET CRASH •

The New York Stock Exchange Black Friday, October 24, 1929

Run on Banks • The crisis in confidence frightened depositors who feared for their money. • Millions tried to withdraw their money because they feared the banks losing it. • 1929 - 641 banks failed • 1930 - 1350 banks failed • 1931 - 1700 banks failed

Uneven Distribution of Wealth Agriculture Overproduction Rich got richer Great Dust bowl Buying on Credit Borrowing Money Causes of Depression Banks Collapse Stock Speculation “Runs” on banks • Buying on Margin • Black Tuesday Write t his down!! !

• Herbert Hoover was president at the start • Philosophy: We’ll make it! • What He Did: Nothing • The poor were looking for help and no ideas on how to correct or help were coming

Laissez Faire Economic Policy • Prior to the Great Depression the US. Government ignored the business cycles of the US economy. The Government until FDR believed that the American Economy could fix itself.

Government Today is in charge of the US Economy! • Presidents win or lose elections based on economic performance! Government control over one third of our $10 trillion economy!!

THE BUSINESS CYCLE • BOOM/PROSPERITY/PEAK • HIGH DEMAND DESIRE FOR MORE PROFITS = GREATER INVESTMENT = MORE PRODUCTION = HIGHER EMPLOYMENT = MORE DEMAND = HIGHER PRICES (INFLATION)

THE BUSINESS CYLCLE • CONTRACTION/SLOWDOWN • INFLATION/OVERPRODUCTION LESS PRODUCTION = LAY OFFS = LESS SPENDING = LOWER CONFIDENCE = LESS INVESTMENT = HIGHER UNEMPLOYMENT • UNTIL SURPLUSES ARE USED UP

BUSINESS CYCLE TROUGHS • RECESSION = TWO SUCCESSIVE 1/4’s (3 MONTH PERIODS) OF DECLINING GDP ($ OF GOVT, CONSUMER AND BUSINESS SPENDING) • DEPRESSION = UNEMPLOYMENT GREATER THAN 12%

THE BUSINESS CYCLE • EXPANSION/RECOVERY • HIGHER DEMAND SURPLUS REDUCTION = MORE PRODUCTION = RECALL OF WORKERS = MORE PURCHASING= INCREASED INVESTMENTS = ECONOMIC GROWTH

POOR MONETARY POLICY • FED RESERVE INCREASED INTEREST RATES WHICH MADE MONEY/BORROWING MORE EXPENSIVE & SAVING MORE ATTRACTIVE INSTEAD OF LOWERING INTEREST RATES TO GIVE THE ECONOMY A “JUMP START”

POOR FISCAL POLICY • HOOVER ADMIN. & CONGRESS CUT SPENDING & RAISED TAXES TO BALANCE THE BUDGET INSTEAD OF INCREASING SPENDING & CUTTIN G TAXES TO “JUMP START” THE ECONOMY • EX. TEMPORARILY DEFICIT SPENDING

THE CIRCULAR FLOW $ COSTS $ INCOMES RESOURCE MARKET RESOURCES INPUTS BUSINESSES HOUSEHOLDS GOODS & SERVICES PRODUCT MARKET $ REVENUE $ CONSUMPTION

THE CIRCULAR FLOW $ COSTS $ INCOMES RESOURCE MARKET RESOURCES BUSINESSES INPUTS GOVERNMENT GOODS & SERVICES HOUSEHOLDS GOODS & SERVICES PRODUCT MARKET $ REVENUE $ CONSUMPTION

HIGH TARIFFS • WE TAXED FOREIGN IMPORTS TO PROTECT OUR PRODUCTS UNDER HOOVER THE HAWLEY SMOOT TARIFF IS PASSED – THE HIGHEST PROTECTIVE TARIFF IN US. HISTORY!!! FOREIGN NATIONS TAXED IMPORTS FROM THE U. S. IN RETALIATION • HIGHER PRICES FED UNDERCONSUMPTION • NATIONS STOPPED PAYING WWI DEBTS TO THE U. S.

Uneven Distribution of Wealth Agriculture Overproduction Rich got richer Great Dust bowl Buying on Credit Borrowing Money Causes of Depression Banks Collapse Stock Speculation “Runs” on banks Tariffs Write t his down!! ! Hawley-Smoot Tariff • Buying on Margin • Black Tuesday

Christmas Day Breadlines in New York City, 1931

Police stand guard outside the entrance to New York's closed World Exchange Bank, March 20, 1931

Unemployed men vying for jobs at the American Legion Employment Bureau in Los Angeles during the Great Depression.

Unemployed workers in front of a shack with Christmas tree, East 12 th Street, New York City. December 1937

Hard Times Unemployment · By the early 1930’s, approximately 25% of the nation was unemployed. Man in hobo jungle killing turtle to make soup, Minneapolis, Minnesota. Sept. 1939.

Families in Crisis · Marriage and birth rates dropped. · Fathers and some children left home to find work.

Evicted family with belongings on street, December 14, 1929.

Homelessness · Homeless families build shacks out of wooden crates and scrap metal. · These shacks were known as Hoovervilles. Seattle, Washington

Central Park, New York City

“Hooverville, " New York City, December 8 1930 [Sign on shack reads: "House of Unemployed"]

Hoover Takes Action • At first, President Hoover was against offering direct government relief. • Instead, he asked private charities, such as the YMCA, to help.

Many waited in unemployment lines hoping for a job.

People in cities would wait in line for bread to bring to their family.

Some families were forced to relocate because they had no money.

“Hooverville” • Some families were forced to live in shanty towns – A grouping of shacks and tents in vacant lots • They were referred to as “Hooverville” because of President Hoover’s lack of help during the depression.

A drought in the South lead to dust storms that destroyed crops. “The Dust Bowl”

The South Was Buried • Crops turned to dust=No food to be sent out • Homes buried • Fields blown away • South in state of emergency • Dust Bowl the #1 weather crisis of the 20 th century

Two Families During the Depression

A Farm Foreclosure

Some families tried to make money by selling useful crafts like baskets.

*FDR* • When he was inaugurated unemployment had increased by 7 million. • Poor sections (like Harlem) had 50% of the pop. unemployed • Instated the “New Deal” • Yea! Frankie!

• People everywhere were effected by the depression • It wasn’t till President Roosevelt took over and tried to put the economy back together that people even saw a glimmer of hope

Major Historical Happenings. . . • Jim Crow Laws • Scottsboro Trials • Recovering from the Great Depression • Racial Injustice • Poor South

Jim Crow Laws • After the American Civil War most states in the South passed anti-African American legislation. These became known as Jim Crow laws. • These laws included segregation in… – Schools -- Hospitals – Theaters -- Water fountains – Restaurants – Hotels – Public transportation – Some states forbid inter-racial marriages

• These laws were instituted in 1896 and were not abolished till the late 1950’s (even then still not completely).

• 9 young African. American men (1320) accused of raping 2 white girls in 1931 • Immediately sentenced to death • Trials went on for nearly 15 years before all the men were dismissed

• Started on a train bound for Memphis • Several white men boarded and picked a fight with the black men • Whites were forced off train by the 12 black men. The white men reported the black men had raped two white girls on the train to authorities • They were immediately arrested and tried in front of an all-white jury.

The trials caused a huge uproar amongst the black community.

• Wrote To Kill a Mockingbird in 1960 • Based the story on her life growing up in Monroeville, Alabama • TKAM was the only novel she ever wrote

• The character of “Dill, ” Scout and Jem’s playmate in the novel was based upon Lee’s actual neighbor, Truman Capote • Capote is famous for amongst other things, In Cold Blood and Breakfast at Tiffany’s. • It has been said that he gave Lee Mockingbird as a gift.

• In 1962 the novel was turned into a film starring Gregory Peck. • It received a humanitarian award and several Academy Award nominations