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Ch. 25 The Great Depression

Ch. 25 The Great Depression. Causes of the Great Depression. Between government policies and corporate structures, actions taken during the 1920s created immediate wealth. Unfortunately those same practices created deeper problems.

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Ch. 25 The Great Depression

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  1. Ch. 25 The Great Depression

  2. Causes of the Great Depression • Between government policies and corporate structures, actions taken during the 1920s created immediate wealth. • Unfortunately those same practices created deeper problems. • The various conditions that led to the Great Depression are much like a perfect storm coming together at the same time.

  3. Causes Cont. • Decline in Demand • The most profitable industries during the 1920s were construction and automobiles. • By the late 20s fewer people were purchasing new cars and the demand came to a halt. • Many industries and factories built new structures and additions, but eventually demand slowed down. • Newer markets emerged, but not stable enough to support the massive needs of the economy.

  4. Causes Cont. • Maldistribution of wealth • Most Americans had purchased goods on credit during the 20s, but actual wages did not reflect wealth. • Policies created a pyramid of wealth, a very small percentage of Americans controlled an overwhelming percentage of the money. • Overproduction • Many industries responded by making more goods, but as unemployment rose demand fell. • Many companies were left with warehouses full of goods they couldn’t sell.

  5. Causes Cont. • Declining Exports • Following WWI European allies struggled to recover from their shattered economies. • They relied heavily on reparations paid by Germany and Austria from the Treaty of Versailles. • When Germany couldn’t repay, American banks gave them loans. • High American tariffs caused them to send less goods to U.S. markets. • As debts piled and American banks failed the depression spread to Europe as well.

  6. Causes Cont. • Plight of Farmers • Farmers rarely experienced the wealth of the 20s. • Many had to take loans to continue to grow their crops and keep up with growing agricultural technology. • As the market proceeded to collapse and series of droughts and poor growing seasons caused more farmers to default on loans.

  7. The Stock Market Crash • The value of stocks on Wall St. continuously rose over an 8 year period. • Those values more than tripled between 1925 & 1929. • Due to the wild success of the markets, speculation became a popular activity. • This is when you buy stocks low and then sell them when a profit can be turned. • Since the market was so safe many bought on margin: • Investors could borrow money from brokers with only a small down payment on the whole value. • Most stocks were purchased with money investors didn’t actually have.

  8. Crash Cont. • By late 1929 the value of stocks had risen much higher than the actual production of companies. • Brokers knew this, and when prices started to fall they all sold and made the problem worse. • Investors lost over $30 Billion nationwide on Black Tuesday and they couldn’t repay the debt. • Since banks had lent most of the money, they couldn’t cover their losses and began to default. • The biggest tragedy of Black Tuesday is that many people who never bought stocks lost all their savings too.

  9. Banking Collapse • Following the stock market crash over 9,000 banks either went bankrupt or closed their doors to avoid bankruptcy. • Depositors lost over $2 Billion on top of investment losses. • The nation’s money supply decreased by 1/3 which caused a decrease in purchasing power and deflation. • Federal Reserve raised interest rates to protect their own interests which worsened flow of money further. • Unemployment rose above 25% during the depression and never went below 15% for ten years.

  10. Unemployment and Relief • Many laborers had been accustomed to layoffs, but never so quickly and drastic. • In 1932 unemployment hit 50% in Cleveland, 60% in Akron, and 80% in Toledo. • Shame and helplessness became epidemic as most Americans believed employment and poverty were personal responsibilities. • Local relief associations were ill-equipped to handle new demands. • State governments felt compelled to extend funds for relief, but did not have tax bases to give the money anymore. • Many felt public welfare programs would not only harm the government budgets, but also harm public morale.

  11. The Dust Bowl • One of the worst droughts in the nation’s history also hit beginning in 1930. • Decrease in rainfall and steady increases in temperatures destroyed crops. • Lack of geographical protection created massive dust storms that swept away large portions of fertile topsoil. • Kansas soil registered no moisture 3 feet below the surface and temperatures averaged over 100 degrees • The dust bowl extended from north Texas all the way to the Dakotas. • Plagues of grasshoppers and locusts also ascended on the plains to destroy whatever crops they could grow.

  12. Sudden Dust Storms

  13. Social Structure of the U.S. during depression • Birth rate and divorces went down during the Depression. • This is because families couldn’t afford either. • More strict child labor laws were created • The government wanted to protect jobs for older Americans who were supporting families. • High School enrollment increased since kids couldn’t get jobs as easily.

  14. The Role of Women • More women entered the work force as the need for money increased for each family. • The women’s division of the WPA hired over 300,000 women for jobs as teachers, nurses, and librarians. • As more men were laid off and women went to work, traditional roles within the home were reversed.

  15. Popular culture during the depression • Serious situations of the depression caused many artists to focus on realistic subjects. • John Steinbeck: Wrote Grapes of Wrath and Of Mice and Men. • Grapes of Wrath: was about Oklahoma farmers in the Dust Bowl during the depression. • Of Mice and Men: was about migrant farmhands trying to find work during the depression. • Margaret Mitchell: wrote Gone with the Wind. • About rebuilding life in the South after the Civil War. • Scarlet Ohara’s inner strength is supposed to represent Americans during the depression.

  16. Entertainment • Newly developed talkies from the 20s became even more popular. • Along with the improving technology came the first movie stars. • Mae West, Clark Gable, Shirley Temple, Ginger Rogers, and Fred Astaire • Movies about life of happy and wealthy celebrities and fairy tales became popular because most people wanted to escape from their reality. • The first soap operas were created over the radio at this time also.

  17. Mae West

  18. Clark Gable

  19. Fred Astaire and Ginger Rogers

  20. Snow White and the Seven Dwarfs • First full length animated feature film by Walt Disney.

  21. Crime of the Depression • Bank robbers became famous during this period since many Americans resented the banks after the stock market crash. • For an 18 month period robbers like John Dillinger, “Baby Face Nelson”, Bonnie and Clyde, and Machine Gun Kelly raided banks and harassed police departments from Michigan to Texas. • Eventually the FBI would be formed as a result of the interstate crime sprees.

  22. John Dillinger Public Enemy Number One

  23. Bonnie and Clyde Barrow

  24. George “Babyface” Nelson

  25. The Hoover Administration • More or less the wrong man at the wrong time. • Tried to put public funding back into various relief programs, but never enough because he didn’t want to upset the federal budget too much. • Tried to raise tariffs on certain industries to protect American interests, but couldn’t stem the tide. • Ultimately felt too much direct government relief to the average American citizen would teach them dependency. • Actually proposed raising taxes when some of the programs cost the government more money.

  26. Hoover’s RFC • Reconstruction Finance Corporation: • Designed to give government funding directly into industries to provide jobs. • Give gov’t loans to banks, railroads and businesses. • had a budget of $1.5 Billion for public works alone. • Problems with the RFC • Never fully used all the money authorized to it so the idea never made much of an impact. • Only gave money to institutions they felt would return on the investment. • Never really dealt with the real problems of the economy.

  27. Hoovervilles • Hoover himself became a target of resentment, citizens blaming him personally for their sudden troubles. • Hoovervilles: shacks, and shantytowns where many struggling Americans were forced to live when they lost their homes. • Used as a term of resentment towards Herbert Hoover.

  28. Hoovervilles

  29. The Bonus Army • WWI veterans were promised bonus checks at a later date for their service during the war. • Due to hardships they wanted to receive those checks early. • When Congress refused to give them those checks they protested outside the White House. • At first, Hoover tried to help them, even providing cots and some shelter. • When they refused to leave he eventually sent army officials to force them out. • Riots and violence broke out when the last 2,000 soldiers refused to go home.

  30. Bonus Army

  31. Violence of the Bonus Army

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