Objective: To examine the causes of the Great
Depression
Became 30th President after Harding died 1923
 Supported big business and laissez-faire
economics (government should not regulate
business or the market, it will automatically fix
itself)
 Most of 1920s – stock market did well
 People bought stock on speculation (made highrisk investments hoping to make a large profit)
 Also engaged in buying on the margin
(purchasing stocks for portion of what they cost
(10%), borrowing the difference, and paying
interest)
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Helped a booming
economy in the 1920s
Ford and the assembly line
Mechanization (use of
machines)
Increased production
Manufacturers could
charge less
More people purchased
cars, clothes, appliances
Consumerism – buying
and consuming products
meant people were
spending more than they
saved
“Cycle of Consumerism”
$$, spending,
good economic
times
(prosperity)
Improved
Economy
Increased
employment
Companies do
well, make profit
 Overproduction
– market has more of a
product than consumers want
 Underconsumption – consumers
reluctance to buy all that has been
produced (also due to rising interest
rates)
 Combination leads to falling prices
“Cycle of Disaster” – many businesses went bankrupt
Falling prices,
hurting
economy
Demand for
goods fall
Producers are hurt
Little profit
Loss of jobs,
people have less
$ to spend
 Technology
(new tractors) led to
overproduction (esp. during WWI)
 Agricultural prices dropped drastically
 Many attempts by Congress to pass bills
increasing farm prices were vetoed by
Coolidge (laissez-faire: “the chief
business of the American people is
business”)
 Farms went into foreclosure
A foreclosure sale in Iowa in the early 1930s when "the
bottom fell out of everything." Military police were on hand
to keep farmers from disrupting the auction.
Farmers prevent the foreclosure of a
dairy farm in Des Moines Iowa 1933
Foreclosure:
the sale or
repossession
of a person’s
home or
property by
creditors!
 Overproduction
and poor farming
techniques led to drought
 Dust Bowl – (1931-1939) storms hit
Midwest destroying farms leaving
hundreds of thousands homeless
migrants
Causes of the Dust Bowl:
• Overgrazing by cattle and plowing by farmers destroyed the
grasses that once held down the soil.
• The loose soil, a drought, and high winds helped to cause the
Dust Bowl.
Dust Storms: "Kodak view of a dust storm Baca Co.,
Colorado, Easter Sunday 1935
Farmer and
sons, dust
storm,
Cimarron
County,
Oklahoma,
1936.
Photographer:
Arthur
Rothstein.
Effects of the
Dust Bowl:
• Farmers could barely
make a living, causing
many to leave their
homes for the west.
Farm foreclosure sale.
(Circa 1933)
• Many
farmers
became
migrant
farmers as
they moved
from region
to region
looking for
work.
Farm Security Administration: Families on the road with all
their possessions packed into their trucks, migrating and
looking for work. (Circa 1935)
Farm Security
Administration:
farmers whose
topsoil blew
away joined the
sod caravans of
"Okies" on
Route 66 to
California.
(Circa 1935)
 Became
President in 1929
 Opposed too much government interference in
business
 Oct. 29, 1929 “Black Tuesday” stock market
crashed:
 Stock prices dropped (caused by panic and
selling of stocks)
 Many people lost everything
 Bankers began calling in loans that people had
no $$ to pay
 Marked beginning of Great Depression
 Rush
to withdraw money from banks caused
them to close
 Fewer investments in stocks caused prices to
fall even further
 Roughly 25% of all Americans were
unemployed
 People had to rely on soup kitchens and
breadlines (provided food for poor and
homeless)
 Hoovervilles – homeless lived in homemade
shacks and makeshift villages
A Bank Run in 1933 “It’s A Wonderful Life”
http://www.youtube.com/watch?v=lbwjS9iJ
2Sw&feature=player_detailpage
Hoover did take action to intervene in
the economy, but it was
too little too late . . .
“The sole function of the government is to
bring about a condition of affairs favorable
to the beneficial development of private
enterprise.”
Herbert Hoover (1930)
Officials believed that raising trade
barriers (tariffs) would force
Americans
to buy more goods at home, which
would keep Americans employed.
But they ignored
the principle of
international tradeit is a two-way street;
If foreigners can’t sell
their goods here,
they will shut off our
exports there!
 Greatest
economic crisis in U.S. history
lasting more than a decade
 Severe worldwide economic downturn
prior to WWII (affected industrialized
nations and countries that exported raw
materials to them)
 Log
in!
 Overproduction
and underconsumption
that led to falling prices
 Consumerism
 Installment plan (buying on credit)
 Speculation and buying stock on the
margin
 Political and economic decisions
 Black Tuesday
Dorothea Lange's
"Migrant Mother,"
destitute in a pea picker's
camp, because of the
failure of the early pea
crop. Most of the 2,500
people in this camp were
destitute. By the end of
the decade there were still
4 million migrants on the
road.
• Migrant
farmers from
Oklahoma
became
known as
Okies.
Young
Oklahoma
mother; age
18, penniless,
stranded in
Imperial
Valley,
California.
The Great
Depression forced
many Americans to
go hungry or depend
on charities for food,
clothing, and other
necessities. Here,
people wait in a
breadline to receive
free food.
A soup kitchen – Free Food for the Homeless
Shantytowns
formed in
cities across
the United
States in the
1930s, built by
people made
homeless by
the Great
Depression.
These areas were nicknamed Hoovervilles because their
inhabitants blamed President Herbert Hoover for their plight.
 Franklin
Delano Roosevelt wins the next
election in a landslide!
 In
order to bring
about direct relief,
FDR created quick,
short-term jobs, and
federal help to those
hurting financially –
(FERA Federal
Emergency Relief
Agency)
 In
his First 100 Days in office, he passed
program after program for recovery
 Immediately began creating the New
Deal Program
 Three Phases- First 100 days, The First
New Deal, and The Second New Deal
 Relief, Recovery, and Reform