The Great Depression

1929

1920’s Problems

Factories making Too Much, Farms growing too much

Factories Fire Workers (Don’t need them)

Farm Prices fall (Farmers can’t make $$)

Farmers & Factory Workers can’t pay back loans to

Banks: DEFAULT!!

Banks Close because they have no money: Loans have not been paid back, can’t give people their savings

BANKS Have NO $$

PEOPLE LOST SAVINGS & JOBS

NO ONE TO HELP!

Stock Market Crash

• Buying on margin– Buy stock by just paying a small portion of what the stock is worth

ex.- 100 shares at $10= $1000 only pay $300

but still owe $700

-Problem, stock crashes and you lose your money and can’t pay back stock broker

- stock broker can’t pay back bank

-banks forced to close

-depositors in banks lose everything

Stock Market Crash

• Oct. 29, 1929– Black Tuesday– Overvalued stocks

plummeted as investors panicked and tried to sell

Stock Market Crash

• Thousands of investors lost everything

• Banks demanded repayment of loans and stopped loaning money to anyone

• People couldn’t pay back loans

• Banks are forced to close

=+People Default on Loans

Banks have no money to give people

Banks Close

People Lose savings

• Causes– Overproduction– Bank closing

• Spark– Stock market crash

• Results– Unemployment– Life savings lost

The Great Depression

• Millions lost their savings when banks closed • Millions lost their jobs as businesses failed• Vast unemployment

– As high as 25% – 1930-1932 Jobless rate goes from 4 to 12 million

• People lose their homes• People become desperate• Loss of faith in capitalism and democracy gave rise to

dictatorships in Europe

The Great Depression

• President Herbert Hoover– Does nothing at first– Says it is the job of the

churches and other charities to help the poor, not the government

• Problem: people too poor to help the churches help the poor

» Problem too big for charities to handle

– Named poor places after Hoover

• Hoovervilles, Hoover blankets,

The Dust Bowl

• 1931 Drought hits the Great Plains

• Farms just blew away

• Farmers couldn’t pay the bank; bank took the land

• Many farmers packed up and went to California to try to find work – Jobs weren’t there either– Okies

The Dust Bowl

The Great Depression• Franklin D. Roosevelt becomes President• Starts New Deal programs to put people

back to work• Did not end the depression but helped to ease it• Most wealthy businessmen disliked the New

Deal

– Gave people confidence• Built infrastructure (buildings, roads,

parks, electricity, artwork)» Created ‘ABC’ programs

• Ended bank crisis

The Great Depression

• Connections to today– Government monitoring of and control of the nation’s

economy– Stricter controls on banks and the stock market– Continuation of social programs begun by the New

Deal• Social Security, Welfare, government food

distribution, subsidies