A recession is when your neighbour has to tighten his belt. A depression is when you have to tighten your belt. And a

panic is when you have no belt to tighten and your pants fall down.

- Tommy Douglas

The Depression Begins: Black The Depression Begins: Black TuesdayTuesday

October 29, 1929 the stock October 29, 1929 the stock market crashed. This day market crashed. This day becomes known as Black becomes known as Black Tuesday. Tuesday.

This wasn’t the single cause This wasn’t the single cause of the Great Depression. of the Great Depression.

The economy had been The economy had been instable prior to the 1929 instable prior to the 1929 crash. The crash was crash. The crash was simply the trigger.simply the trigger.

The Great Depression was a The Great Depression was a world wide depression.world wide depression.

Black Tuesday: Why did it Black Tuesday: Why did it happen?happen? So why did the Market So why did the Market

crash?crash? The richest one percent of The richest one percent of

Americans owned over a Americans owned over a third of all American assetsthird of all American assets

Banks operated without Banks operated without guarantees to their guarantees to their customers, creating a customers, creating a climate of panic when times climate of panic when times got tough.got tough.

Borrowers were often Borrowers were often willing to pay 20% interest willing to pay 20% interest rates on loans, being dead rates on loans, being dead certain that the risk would certain that the risk would be worth the rewards. The be worth the rewards. The lender was also certain that lender was also certain that the market would risethe market would rise

Headlines from 1929 New York TimesSunday, October 13, 1929

STOCK PRICES WILL STAY AT HIGH LEVEL FOR YEARS TO COME, SAYS OHIO ECONOMIST

Wednesday, October 16, 1929, Page 8, Col. 4

FISHER SEES STOCKS PERMANENTLY HIGH: SAYS STOCK SLUMP IS ONLY TEMPORARY

Saturday, October 26, 1929, Page 2, Col. 5

CAUTION ADVISED BY STOCK BROKERS: Letters to Clients Warn Against Hysterical Selling and Favor Some Buying

---------- TONE IS OPTIMISTIC: Narrow Trading is Predicted for a Time Till the Market Recuperates

Tuesday, October 29, 1929

STOCK PRICES SLUMP $14,000,000,000 IN NATION-WIDE STAMPEDE TO UNLOAD; BANKERS TO SUPPORT MARKET TODAY

Sixteen Leading Issues Down $2,893,520,108; Tel. & Tel. and Steel Among Heaviest Losses

Economic Effects in USAEconomic Effects in USA

In 1925, the total value of the New York Stock In 1925, the total value of the New York Stock Exchange was $27 billion. By September Exchange was $27 billion. By September 1929, that figure skyrocketed to $87 billion.1929, that figure skyrocketed to $87 billion.

The $87 billion 1929 New York Stock The $87 billion 1929 New York Stock Exchange was worth a mere $15 billion in Exchange was worth a mere $15 billion in 1932.1932.

If a working-class family was unfortunate If a working-class family was unfortunate enough to have their savings held in trust by a enough to have their savings held in trust by a failed bank — too bad for them, all their failed bank — too bad for them, all their money was lost. money was lost.

UnemploymentUnemployment

Unemployment rose from 1.5 million Unemployment rose from 1.5 million Americans in 1929 to a debilitating 12 million Americans in 1929 to a debilitating 12 million in 1932- some 25% of the population.in 1932- some 25% of the population.

College professors in New York City drove College professors in New York City drove taxicabs to make ends meet. taxicabs to make ends meet.

Citizens of Washington State lit forest fires in Citizens of Washington State lit forest fires in the hopes of earning a few bucks extinguishing the hopes of earning a few bucks extinguishing them.them.

UnemploymentUnemployment

Life in the Dust BowlLife in the Dust Bowl It is recognized that those Americans living in It is recognized that those Americans living in

the the Great Plains suffered the greatest.the the Great Plains suffered the greatest. Beginning in 1931, a severe drought began Beginning in 1931, a severe drought began

which turned the states in the Midwest into a which turned the states in the Midwest into a giant dust bowl.giant dust bowl. There was There was hardly any rainhardly any rain. . TopsoilTopsoil blew away, blew away,

and and grasshoppersgrasshoppers flooded the prairie landscape. flooded the prairie landscape. Dust stormsDust storms were very common. were very common.

The Great MigrationThe Great Migration The severe conditions in the The severe conditions in the

Midwest sparked the largest Midwest sparked the largest migration in American history. migration in American history.

By the end of the 1930's, over 2.5 By the end of the 1930's, over 2.5 million people had fled the million people had fled the Midwest for California. Midwest for California.

They were called “Okies” and They were called “Okies” and “Arkies.”“Arkies.”

Many works have been written Many works have been written about this migration- most notably about this migration- most notably “The Grapes of Wrath.”“The Grapes of Wrath.”

Taken by Dorthea Lange in 1936. The mother pictured is Okie, Florence Owens Thompson. What are her eyes telling you? What are her children thinking?

GOVERNMENT GOVERNMENT HERBERT HOOVERHERBERT HOOVER

President from 1929-1933, and from President from 1929-1933, and from 1935-1948.1935-1948.

““We in America today are nearer to We in America today are nearer to the final triumph over poverty than the final triumph over poverty than ever before in the history of this ever before in the history of this land..” Hoover, 1928 land..” Hoover, 1928

People who could not pay their People who could not pay their mortgages or rent lost their homes.mortgages or rent lost their homes. They dubbed their shantytowns They dubbed their shantytowns

“Hoovervilles.”.“Hoovervilles.”. Newspapers used to keep warm, Newspapers used to keep warm,

“Hoover blankets.”“Hoover blankets.”

WHAT DID HE DO?WHAT DID HE DO?HERBERT HOOVERHERBERT HOOVER

In 1929, ordered the Federal Reserve In 1929, ordered the Federal Reserve Board to release hundreds of millions Board to release hundreds of millions in credit.in credit.

Pressured business leaders to maintain Pressured business leaders to maintain wages.wages.

Committed federal funds to major Committed federal funds to major construction projects, most notably the construction projects, most notably the Hoover Dam.Hoover Dam.

Started the Reconstruction Finance Started the Reconstruction Finance Corporation which provided billions Corporation which provided billions of dollars to banks, farmers and of dollars to banks, farmers and industryindustry

BUT.....BUT.....HERBERT HOOVERHERBERT HOOVER

Nothing he did worked, and people Nothing he did worked, and people grew tired of his promises.grew tired of his promises.

Businesses could not maintain wages, Businesses could not maintain wages, and laid off workers in large numbers.and laid off workers in large numbers.

Consumers did not spend.Consumers did not spend. He did not offer help direcly to the He did not offer help direcly to the

poor and unemployed.poor and unemployed. The Burning of Anacostia Flats was The Burning of Anacostia Flats was

the one of the worst episodes of the the one of the worst episodes of the depression. depression.

AN ELECTION IS HELDAN ELECTION IS HELD Less than 4 months after the Less than 4 months after the

episode at Anacostia, an episode at Anacostia, an election was held.election was held.

The Democratic candidate, The Democratic candidate, Franklin Roosevely soundly Franklin Roosevely soundly defeated Hoover.defeated Hoover.

Roosevelt won 57.4% of the Roosevelt won 57.4% of the popular vote; Hover 39.7%popular vote; Hover 39.7%

Roosevelt promised "a new Roosevelt promised "a new deal for the American deal for the American people" that included a people" that included a repeal of the prohibition repeal of the prohibition amendment.amendment.

GOVERNMENT RESPONSEGOVERNMENT RESPONSE Roosevelt began an aggressive approach to Roosevelt began an aggressive approach to

fixing the depression.fixing the depression. Firstly, he fixed the banks:Firstly, he fixed the banks:

““The Emergency Banking Act”- banks The Emergency Banking Act”- banks could only open once they had passed a could only open once they had passed a Tresaury InspectionTresaury Inspection

Glass-Stegall Act- created the Federal Glass-Stegall Act- created the Federal Deposit Insurance Corporation, Deposit Insurance Corporation, guaranteeing deposits up to $5000 ($78000 guaranteeing deposits up to $5000 ($78000 today)today)

THE FIRST NEW DEALTHE FIRST NEW DEAL Roosevelt's First New Deal program was Roosevelt's First New Deal program was

implemented over a period of several years.implemented over a period of several years. It focused on THREE R'sIt focused on THREE R's

ReliefRelief RecoveryRecovery ReformReform

The programs created:The programs created: Civilian Construction CorpCivilian Construction Corp Agricultural Adjustment AdministrationAgricultural Adjustment Administration Tenessee Valley AuthorityTenessee Valley Authority

THE SECOND NEW DEALTHE SECOND NEW DEAL Works Progress AdministrationWorks Progress Administration Wagner ActWagner Act Social Security ActSocial Security Act