the causes of the great depression
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The causes of the Great Depression. How the booming 20s became a huge bust!. Harding in Office. Republican elected in 1920 “return to normalcy” time in office far from normal promoted laissez-faire surrounded himself with the Ohio Gang poker buddies greedy and drunk (spoils system) - PowerPoint PPT PresentationTRANSCRIPT
THE CAUSES OF THE GREAT DEPRESSIONHow the booming 20s became a huge bust!
Harding in Office
Republican elected in 1920
“return to normalcy” time in office far from
normal promoted laissez-faire surrounded himself with
the Ohio Gang poker buddies greedy and
drunk (spoils system) looking to get rich off the
government
Teapot Dome Scandal
Secretary of the Interior, Albert B. Fall. federal oil reserves at Elk
Hills, CA and Teapot Dome, WY
leased private companies in return for bribes
oil was for naval use Fall went to jail…1st Cabinet
member to go to jail Harding died in office
before scandal could touch him
Silent Cal (Calvin Coolidge) in Office
Republican – takes over following Harding’s death in 1923, elected 1924
trust in business laissez-faire approach had honest people
working for him economy was
booming…but not for long
“The man who
builds a factory, builds a temple”
“The business of America is business!”
A Bull Market (rising stock prices)
Republican rule (Harding & Coolidge) America was
prospering no one could see what
was about to happen there were signs
Another Republican, Herbert Hoover, gets elected in 1928 another laissez-faire
guy …..things are looking
good but are they???
“A chicken in every
pot and a car in every
garage.”
Early Signs of the Great Depression
new technologies increased output wages remain low
to buy goods too many goods not enough
consumers farmers amounting
large debt
huge gap between rich and poor
middle class basically non-existent
fewer consumers when products overflowing
OVERPRODUCTION DISTRIBUTION OF WEALTH
More Causes
buying things with small down payments
then pay the rest in monthly payments
used to buy consumer goods like cars, washing machines, and refrigerators
buying stock on credit
small down payment pay the rest in
monthly payments PROBLEM: value of
stocks go up and down
INSTALLMENT PLAN BUYING ON MARGIN
And More Causes
buying stock using credit
hope stock prices would rise
PROBLEM: if they didn’t people could loose everything
before 20s no money no buy debt = fear
buying on credit was a new idea now everybody
was doing it
SPECULATION EASY CREDIT
The Boom is a Bust
For a month stock prices had fallen too many people selling
stocks only makes the problem worse
Black Tuesday: October 29, 1929 sparked the Great Depression people rush to sell their stocks called the Great Crash people lost their fortunes in
hours
The Great Depression
1929-1941 Economy was ruined Businesses close Extremely high
unemployment fewer goods bought
People run to the banks withdraw their money banks don’t have all the
money on hand led to bank
failures/closings People lose
EVERYTHING
Hawley-Smoot Tariff
Hoover tried to help Tariff raised taxes on
foreign imports American products
cheaper Foreign companies raise
taxes on American goods Now can’t sell in America
or other countries BACKFIRE (failure)
Life During the Great Depression
People lost EVERYTHING: Jobs Homes life savings due to
bank closings confidence in
Government hope of achieving the
“American Dream” their pride
Charity
Soup Kitchens Bread lines provided free food
to families but was limited
“Hoovervilles”
places where many homeless people grouped together in shantytowns (makeshift tents or lean-tos)
named after President Hoover felt he was doing nothing to take care of the
problem (homelessness) or them covered up with newspapers
(Hooverblankets) turned their pockets inside out known as
Hoover flags
“Hoovervilles”
The Dust Bowl (Great Plains Region)
environment a struggle from beginning not enough rain, over-farming
1932 drought caused soil to turn to dust wind storms created dust storms ~ Dust Bowl
refugees, “Okies,” (regardless of what state they came from) left their farms for California for a new start
When he leaves the Dust Bowl, he will be called an “Okie”!
Plight of the Farmer
John Steinbeck’s Grapes of Wrath family facing hard
times in CA Photojournalists,
Walker Evans and Dorthea Lange hardship and
determination leads to demands for
better housing & sanitation of migrant workers
Hoover’s Band-Aid
promoted rugged individualism not direct relief people take care of themselves rather than
the governmentBIG problem, little Band-Aid…tried to
fix it tried to get businesses to keep employees,
wages and prices at stable levels reduced taxes on people to encourage
spending asked the wealthy to be more charitable
none of this worked (too laissez-faire)
Hoover Disappoints started to give money to companies to restart
production…didn’t work built the Hoover Dam to create construction jobs
Bonus Army (The Nail in Hoovers Coffin)
WWI veterans promised a bonus check to be paid in 1945 depression hit (1932), need money NOW
Hoover vetoed a bill to give them their money early they march to Washington and set up a
“Hooverville” Hoover had General MacArthur remove
veterans given one hour to pack up and get out tear gas was used on stragglers not Hoovers intentions but ruined his reputation
“No Pay, All Stay”