Presented By: Rahul GaikwadSubmitted To : Prof. Sarojini Seth

Content

What is Depression – Business Cycle

Causes of The Great Depression

Impact of the Great DepressionPresident Herbert Hoovers Response to the Great Depression

The New Deal for American People

US Statistical Data

Life Before Depression (1920s)

Immediate cause of Great Depression

President Franklin Delano Roosevelt Response to the Great Depression

Conclusion

What is Depression – Business Cycle

Life Before Depression (1920s)

Causes of The Great Depression

US Statistical Data

Total income rose from $74.3 billion in 1923 to $89 billion in 1929

65

70

75

80

85

90

1923 1929

income

99% of the population received a 9% increase in their income, while the top 1% saw their income

rise by 75%.

Decline in the prices of various products from American farms

Agricultural product

1912-1913 1932-1933

Corn (per bushel) 0.56 0.20

Wheat (per bushel) 0.88 0.41

Oats (per bushel) 0.34 0.17

Butter (per lb) 0.21 0.13

Butterfat (per lb) 0.25 0.16

Wool (per lb) 0.24 0.10

Hogs (per cwt) 7.50 3.80

Milk (per cwt) 1.79 0.90

Farmers, suffering during the 1920s, suffered further declines during the Great

Depression. Wholesale food prices collapsed, led to a lack of money to purchase new equipment and many could not pay for their mortgages and lost their farms.

1910 1918 1932

Average gross receipts

2177 3837 1512

Average expenditures

770 1655 1019

Balance 1407 2182 493

Drop in profits for farmers

Hence farmers unable to afford new equipment, and in many cases their mortgages, which led to the hundreds of thousands of foreclosures on farms.

Immediate cause of the Great Depression

Impact of The Great Depression

Continued…

Farmers Prices of crops went down Many farms foreclosed

Banks Could not pay out money

People Could not afford luxuries Factories shut down Businesses went out Schools shut down due to lack of funds Many families became homeless and

had to live in shanties

Impact of The Great Depression

Continued…

People

President Hoover did nothing Looking for help and no ideas on how to

correct or help were coming People in cities would wait in line for

bread to bring to their family.

Hoorverville

Some families were forced to live in shanty towns

President Hoover’s lack of help during the depression, people referred to as “Hooverville”

Impact of The Great Depression

Continued…

The Dust Bowl

A drought in the South lead to dust storms that destroyed crops.

Crops turned to dust=No food to be sent out

Homes buried South in state of emergency Dust Bowl the #1 weather crisis of the

20th century

Impact of The Great Depression

International trade fell Nations tried to protect their industries

by raising tariffs on imported goods

Beggar-thy-neighbor Major reason why the Depression persisted as

long as it did. By 1932, an estimated 30 million people were unemployed around the world.

Military Dictatorship Western industrialized countries cut back on

purchase of raw materials and other commodities. The price of coffee, cotton, rubber, tin, and other commodities dropped 40 percent. The collapse in raw material and agricultural commodity prices led to social unrest

President Herbert Hoovers Response to the Great Depression

President Herbert Hoover was slow to respond

State governments to undertake public-works projects

Big companies to keep workers’ pay steady

Labour unions to stop demanding raises.

Still, the crisis worsened. Between 1930 and 1933, more than

9,000 banks closed in the US Unemployed people standing in

charity breadlines to feed their families

Selling apples on street corners

President Franklin Delano Roosevelt (FDR) Response to the Great Depression

Continued…

Won presidential election in 1932.

FDR took charge in March 1933, the country was virtually leaderless and the banking system had collapsed.

In his inaugural address, he said “The only thing we have to fear is fear itself….”

Promised… Strong leadership and bold action,

called for discipline and cooperation, expressed his faith in democracy, and asked for divine protection and guidance.

A change: “I pledge myself,” he said, “to a New Deal for the American people.” This New Deal would use the power of the federal government to try and stop the economy’s downward spiral.

President Franklin Delano Roosevelt (FDR) Response to the Great Depression

The New Deal for American People

Purposes of the New Deal Primary aim: Economic recovery Relief: To provide jobs for the

unemployed and to protect farmers from foreclosure

Recovery: To get the economy back into high gear

Reform: To regulate banks, stop child labor, and conserve farm lands

Sources of the New Deal Brains Trust: Specialists and experts, mostly

college professors, idea men

Continued…

National Recovery Act (NRA)& First Agricultural Adjustment Act (AAA)

National Recovery Act (NRA) Purpose: Recovery of industry Partnership of business, labor, and

government to attack the depression with such measures as price controls, high wages, and codes of fair competition

First Agricultural Adjustment Act Purpose: Recovery of agriculture Paid farmers who agreed to reduce

production of basic crops such as cotton, wheat, tobacco, hogs, and corn

Money came from a tax on processors such as flour millers and meat packers who passed the cost on to the consumer

Continued…

Federal Emergency Relief Admin (FERA)& Civilian Conservation Corp (CCC)

Federal Emergency Relief Admin Purpose: relief Gave money to states and

municipalities so they could distribute money, clothing, and food to the unemployed

Civilian Conservation Corp Purpose: Relief Gave work like planting trees,

maintaining forest road, building flood barriers to unemployed men between the ages of 17 and 29

They received $30 per month

This Can be linked to today because we are in a “recovery” and came from “recession” and “The Great Depression” was just the result of a “bad recession”

Take right decision at the right time

Save for your future

Conclusion

Thank You