 The Great Depression was a severe worldwide
economic depression in the decade preceding
World War II.
 The timing of the Great Depression varied across
nations, but in most countries it started in about
1929 and lasted until the late 1930s or early 1940s.
 It was the longest, most widespread, and
deepest depression of the 20th century.
 The depression
originated in the U.S.,
starting with the fall in
stock prices that began
around September 4,
1929 and became
worldwide news with the
stock market crash of
October 29, 1929
 (known as Black
Tuesday).
 From there, it quickly
spread to almost every
country in the world
 Unstable Banking system
 1% of banks controlled over 46% of bank
resources
 Uneven distribution of Income
 5% of the pop. Received 30% of total income
 Low wages for industrial workers and farmers
 Overproduction of goods by manufacturers
 Consumers begin to spend less – under
consumption
 Many warehouses were full of products that
could not be sold
 Weak Industries
 New material affected the Cotton industry
 Automobile affected the Railroad industry
 Low food prices affected the Farmers
 Weak International Economy
 Hawley-Smoot tariff (1930) created highest tariff
in U.S. history
 As stock prices fell with little hope of
recovery, panic struck.
 Masses of people tried to sell their stock,
but no one was buying.
 The stock market, which had appeared to
be the surest way to become rich, quickly
became the path to bankruptcy.
 The Stock Market Crash was
just the beginning.
 Since many banks had
also invested large
portions of their clients'
savings in the stock
market, these banks were
forced to close when the
stock market crashed.
 1932- 5,761 banks had
failed (22% of total)
 Seeing banks close
caused another panic
across the country.
 Afraid they would lose
their own savings,
people rushed to banks
that were still open to
withdraw their money.
 This massive withdrawal
of cash caused
additional banks to
close.
 Since there was no way for
a bank's clients to recover
any of their savings once
the bank had closed, those
who didn't reach the bank
in time also became
bankrupt.
 1929- 20,000
 1932- 30,000
 Businesses and industry
were also affected.
 Having lost much of
their own capital in
either the Stock Market
Crash or the bank
closures, many
businesses started
cutting back their
workers' hours or wages.
 Reached as high as 25% nation wide in 1932
 For farmers-- 33%
 Chicago-- 50%
 Low skilled workers were affected most!!
 Considering what you know so far
about the Great Depression…
 What class of people do you think
were hit the hardest by the economic
downturn? Why?
 Families broke-up, marriage rate and birth rate
dropped
 3 million people became “hobos” and lived in
“Hoovervilles” or Shantytowns
 Malnutrition is rampant in areas
 During the Great Depression, millions of people were
out of work across the United States.
 Unable to find another job locally, many unemployed
people hit the road, traveling from place to place,
hoping to find some work.
 A few of these people had cars, but most hitchhiked or
"rode the rails."
 They would board freight trains and crisscross the
country, hoping to find a job in one of the towns along
the way.
 14,000 unemployed veterans marched on Washington
in summer of 1932
 They wanted the bonuses they were promised…
wouldn’t receive them until 1945
 Years of overprodcution combined with the effects of a
drought caused the grass to disappear.
 With just topsoil exposed, high winds picked up the
loose dirt and whirled it for miles.
 The dust storms destroyed everything in their paths,
leaving farmers without their crops.
 Late 1933 HUGE drought strikes Great Plains area
 Top soil was blown all the way to Boston
 In 5 years time 350,000 “Okies” and “Arkies” moved to
Southern California
 Small farmers were hit especially hard.
 Even before the dust storms hit, the invention of the
tractor drastically cut the need for manpower on farms.
 These small farmers were usually already in debt,
borrowing money for seed and paying it back when their
crops came in.
 When the dust storms damaged the crops, not only
could the small farmer not feed himself and his family,
he could not pay back his debt.
 Banks would then foreclose on the small farms and the
farmer's family would be both homeless and
unemployed.
 Volunteerism
 Hoover believed voluntary cooperation would enable the
country to overcome the depression
 Public Work
 1930 Congress appropriated $750 million for public areas
 1930 Hoover Dam began to be built
 Reconstruction Finance Corporation
 RFC 1932
 International debt
 Freeze European debts for a year
 Just as the shantytowns were named
“Hoovervilles” after him, newspapers became
known as "Hoover blankets," pockets of pants
turned inside out (to show they were empty) were
called "Hoover flags," and broken-down cars
pulled by horses were known as "Hoover wagons."
 During the 1932 presidential election, Hoover did not
stand a chance at re-election and Franklin D.
Roosevelt won in a landslide.
 People of the United States had high hopes that
President Roosevelt would be able to solve all their
problems.
 As soon as Roosevelt took office, he closed all the
banks and only let them reopen once they were
stabilized.
 Next, Roosevelt began to establish programs that
became known as the New Deal.