THE GREAT DEPRESSION
IN THE UNITED STATES
CAUSES OF THE GREAT
DEPRESSION
 The Stock Market Crash of 1929
 The Dust Bowl
Debt in the United States
The Smoot-Hawley Tariff Act
United States Federal Reserve
and Money Supply
United States
President
Herbert Hoover
United States Business
Tenants were
replaced from the
land during the
Depression
THE STOCK MARKET CRASH
•The Great Depression started in the
United States with the Stock Market
Crash.
•Took place on October 24, 1929, a
date that was called “Black
Thursday.”
•12.9 million shares of stock
were traded
•The stock market had been
surging since September with a
record high mark of 381.17.
•Many economic leaders thought a
stock market panic could potentially
occur.
A large crowd gathers outside of the
New York Stock Exchange
THE STOCK MARKET CRASH
•National newspapers began covering
the activity with the stock market.
•This prompted many people to
begin pulling out of the market on
Monday, October 28.
•The market was down 13 percent
by the end of the day. The next
day, known as “Black Tuesday,”
16.9 million shares of stock were
traded, resulting in a loss of $14
million on that one day.
The trading room of the New York Stock
Exchange after the crash of 1929
•In total, $30 million was lost
during the five-day period.
THE DUST BOWL
•Weather-related occurrence that happened
in the United States from 1930 to 1936.
•Dust storms that would cause much
damage to the American lands.
•There were severe droughts, made
worse by unwise farming practices.
•When a wind would come, the
dried-up soil would turn into dust and
blow to the east and the south.
•Reached as far away as Washington,
D.C., and New York City.
•The states most affected by the Dust
Bowl were Kansas, New Mexico,
Oklahoma, Texas, and Colorado.
This picture depicts a farmer and two of
his sons during one of the Dust Bowl
storms in Oklahoma.

"The economic depression of the
1930s was longer and harder than
any other in American history
because it was followed by one of
the longest and hardest droughts on
record. There are cycles of drought,
but this was one of the worst ever
recorded. The decade started with
dry years in 1930 and 1931
especially in the East. Then, 1934
recorded extremely dry conditions
over almost 80 percent of the United
States. Extreme drought conditions
returned in 1936, 1939 and 1940."
◦

Wessel’s Living History Farm
"Federal aid to the drought-affected
states was first given in 1932, but
the first funds marked specifically
for drought relief were not released
until the fall of 1933. In all,
assistance may have reached $1
billion (in 1930s dollars) by the end
of the drought … "
◦
National Drought Mitigation
DEBT IN AMERICA
•The United States found itself in a
significant amount of debt at this
time.
•Americans had grown dependent
on cheap credit. In the short term, it
seem liked a good idea.
•Those who were already in debt
when the prices for products
decreased risked going into default.
•A significant number of layoffs
occurred, resulting in an
unemployment rate of 25 percent.
Industrial production in the United States,
from 1928 to 1939
DEBT IN AMERICA
•The debt continued to
grow in the United States.
•The price of products and
the average income of a
United States citizen
falling close to 20 to 50 %
•All of the debts,
however, remained at
the same dollar
amount.
The effect of the Stock Market Crash on the
Dow Jones Industrial Average in 1929
•
In the aftermath of the panic of 1929 and for the
majority of 1930, approximately 744 U.S. banks failed.
•
In total, about 9,000 banks failed during the 1930s.
Those who had deposited money lost about $140
billion in deposits.
•
Banks were now forced to build up their reserves and
give out fewer loans to people.




What makes a squirrel a
“wise economist”?
What did the man do wrong
if he really did “squirrel
away” some money to help
him through the bad times.
What’s different today from
what happened during the
Great Depression?
Do you think it can happen
again?
SMOOT-HAWLEY TARIFF
•Blamed by many as one of the
reasons why the Great Depression was
made worse in the United States.
•The tariff reduced international trade
and caused retaliatory tariffs to occur
in other countries.
•This tariff act caused American
exports to fall from $5.2 billion in
1929 to $1.7 billion in 1933.
•Many products were hit hard by this
decline, such as cotton, wheat,
tobacco, and lumber.
Representative W.C. Hawley (left) and
Senator Reed Smoot shake hands on their
Smoot-Hawley Tariff Act.
U.S. FEDERAL RESERVE
& MONEY SUPPLY
•Monetarists have accused the United
States Federal Reserve System of
making poor choices that allowed for
problems in banking in the United
States to continue.
•The Federal Reserve allowed the
money supply in the United States to
shrink by one-third from 1929 to
1933.
The Seal of the United States
Federal Reserve System
•Originally, the downward turn of the
economy, thanks to the Stock Market
Crash, would have caused just another
recession.
U.S. FEDERAL RESERVE
& MONEY SUPPLY
•Businessmen were not able to
get new loans, nor could they
renew their old ones because
there was little money
available.
•By the time the Depression
began, the Federal Reserve had
reached the limit.
The United States Federal Reserve
Building in Washington, D.C.
UNITED STATES BUSINESS
•Roosevelt blamed big business.
•Roosevelt, along with the
majority of Democrats, felt that
business had too much unregulated
power.
United States President
Franklin D. Roosevelt
•Roosevelt would try to fix the
problems of the Great Depression
by implementing many new
programs and policies under the
New Deal.


Practices of the
unscrupulous money
changers stand
indicted in the court of
public opinion,
rejected by the hearts
and minds of men. …
The money changers
have fled from their
high seats in the
temple of our
civilization. FDR
Inauguration speech
1933