The Great Depression The Great Depression- 1929

The Great Depression

The Great Depression- 1929 to 1941 l In 1928, Herbert Hoover is elected President

Main Causes of the Great Depression: l 1. Over production and under consumption of farm crops. – Many farmers went into debt to buy tractors and new machines but after WWI the demand for crops went DOWN.

l 2. Uneven distribution of income – *The rich get MUCH richer and the workers just become less poor* – In 1929, the wealthiest 1% of the population earned about the same amount of money as the bottom 42%!

l 3. Consumer debt grows- Credit is easy to get – 60% of cars are purchased using installment buying – People are going in debt to get the latest appliances… –

l 4. Stock market speculation- – SPECULATION= making high-risk investments hoping to make a lot of money – i. e. You invest your life savings into a new product because you think it will be the next “hot item”

Assignment: l Open your textbook to pg. 366. l Begin reading the section. l Answer the following questions (in complete sentences) on a separate piece of paper – Pg. 372 #1, 4, 5, 6

STOCKS! Welcome to Miss. Wilson’s stock exchange! Today you will have the opportunity to purchase and sell stocks. Will you end up on top? $$$ A reward will be given to the person who finishes with the most amount of money! $$$

1920 l l l l Kroger Foods Radio Corp. (RCA) Mammoth Oil City Corp. Bank Durant Motors Midland Utilities Kansas Pacific RR Tel-Tone $100 $100

1923 l l l l Kroger Foods Radio Corp. (RCA) Mammoth Oil City Corp. Bank Durant Motors Midland Utilities Kansas Pacific RR Tel-Tone $150 $100 $50 $200 $50 $100 $150

1925 l l l l Kroger Foods Radio Corp. (RCA) Mammoth Oil City Corp. Bank Durant Motors Midland Utilities Kansas Pacific RR Tel-Tone $100 $200 $150 $200 $75 $50 $200

1929 l l l l Kroger Foods Radio Corp. (RCA) Mammoth Oil City Corp. Bank Durant Motors Midland Utilities Kansas Pacific RR Tel-Tone $75 $50 $0 $0 $75 $50 $25

What are you worth? !? !? l Add up both your money and what your stocks are worth at this point. l Who has the most? The least? l THE CRASH!! October 29, 1929 Also known as “Black Tuesday”

Effects of the Great Depression

Effects l 1. Banks and businesses fail: – l Banks cannot pay back the customers and people were running to take out their MONEY 2. Unemployment soars:

Effects l 3. Personal income shrinks: l 4. American loans to Europe dry up: Hawley-Smoot Tariff- this raised prices on foreign imports so they could not compete in American market

l The tariff DESTROYS INTERNATIONAL TRADE l Depression goes GLOBAL

The Great Depression creates… Hard times for ALL Americans Urban: l Factory jobs are cut and for those who keep their jobs, hours and wages go DOWN l *Just when many people thought they could move up in society*

l Breadlines– l Places to wait for free scraps of food Hoovervilles– – – Homeless people grouped together and set up tents and shacks One of the largest= Central Park “Hoover blankets” and “Hoover flags”

Rural: Low prices for farm goods and many farmers lost their jobs l I. E. In 1919 a bushel of wheat= $2. 16 In 1932 a bushel of wheat= $0. 38 Minorities: During the Great Depression, African Americans were the “last to be hired, first to be fired” *nearly 50%!

The Dust Bowl!! l mid 1930 s

Hoover Responds… l Hoover’s actions failed to get the United States out of the depression l He wanted trickle-down economics – *see picture on whiteboard l Hoover was NOT re-elected l In 1933, in steps Franklin D. Roosevelt…