crash & depression
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Crash & Depression. Chapter 32 (Cont.). 4/2011. The Stock Market Crash. 1929. Section 1. The “Roaring 20’s” was coming to an end. Review: Stock Market Boom. Summary: Stock Market Bust. Black Thursday October 24, 1929. The Dow Jones Industrial Average peaked at $381 in September - PowerPoint PPT PresentationTRANSCRIPT
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Crash & Depression
Chapter 32(Cont.)
4/2011
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The Stock Market Crash
Section 1
1929
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The “Roaring 20’s” was coming to an end.
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Review: Stock Market Boom
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Summary:Stock Market Bust
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Black ThursdayOctober 24, 1929
o The Dow Jones Industrial Average peaked at $381 in September
o By October 24th, stock prices began to fall
o Example - GE went from $400 to $283
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Black ThursdayOctober 24, 1929
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The Market Crashes
Investors crowd the sidewalk
outside of the NYSE
Panic on Wall Street
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Black Thursday - October 24, 1929
Pres. Hoover - business “is on a sound and prosperous basis”
Group of bankers bought shares to stabilize prices
Not enough to stop the panic
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Monday October 28, 1929
Investors continued to sell Prices continued to drop
Investors continued to
panic
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Black Tuesday – October 29, 1929
Tried to sell stocks at any priceBankers called in their margins Losses totaled $30 billion dollars
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Low of $34
High of $381
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The Ripple Effect of the Crash Less people able to buy goods (decline
of GNP) Leads to contraction Severe contraction = depression This contraction was so severe, it is
known as the Great Depression
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The Great Depression -Stock Market Crash to WWII
Approximately 1/3 of US banks
failed
Unemployment reached 25%
GNP went from $103 billion to $56
billion
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The Great Depression
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The Great Depression
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Photography by Dorothea Lange
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The Worldwide Impact Countries depended on the USA for
capital, markets, and goods Contractions began in Europe Result - they could not buy
American products (Germany was particularly hard
hit)
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Underlying Causes of the Depression
All of the warning signs that were ignored from the 1920’s.
Lack of government oversight
Lack of government response
Note: Natural disasters did not cause the Great Depression but effected severity of it
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Natural Disasters
From floods in the Northeast to droughts in the Midwest
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Social Effects of the Depression
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Social Effects of the Depression
Hoovervilles Hobos - approx. 1 million Farm distress
• low prices due to low demand• evictions and foreclosures
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Hoovervilles
Shantytown in Central Park
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Hoovervilles
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The Dust Bowl (1931-1940)
Drought and poor environmental practices
Effected Great Plains and the Midwest Hardest hit were Oklahoma, Kansas,
and Nebraska Top soil blew into the Atlantic Ocean Created a desert in the center of the
USA Displaced millions of farmers
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The Dust Bowl
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The Dust Bowl
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Flooding in Tennessee
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Poverty Increased Social Problems
Alcoholism, spousal abuse, child abuse, suicide, and violence increased
Health and nutrition decreased Hoover claimed that no one
starved but historians estimate as many as 1 million people died from the effects of the Depression
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Poverty Increases Social Problems
Divorce, marriage, and birth rates declined
Homeless people moved in with relatives
“Last hired, first fired” Lynchings increased Japanese & Mexicans were deported
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Scottsboro Boys March, 1931 - 9 African Americans
were accused of raping two white women
They were convicted and sentenced to die without even seeing a defense attorney
They were later exonerated but not until four of them had spent many years in jailScottsboro Boys with National Guard
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Surviving the Great Depression
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Survival
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Survival People helped one another States provided relief Local charities assisted millions Those that survived never
completely forgot what it was like to live through the Great Depression
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Surviving the Great Depression
People helped each other Farmers assisted each other
• Penny auctions • Violence prevented some foreclosures
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Surviving the Great Depression
Estimated 1,000,000 hobos rode the rails
Approx. 250,000 of them teenagers
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Hobos
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Surviving the Great Depression
Hobo
Symbols
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Surviving the Great Depression
Political movements like the Socialist and Communist Parties gained membership
Entertainment like this new board game provided a pleasant diversion
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Dark Humo
r Helps
to Reliev
e Stress
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Signs of Change
Prohibition was
repealed
in 1933
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The Chrysler building was overshadowed by the Empire State Building in 1931
Signs of
Change
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Signs of Change By 1935
• Calvin Coolidge died• Al Capone was convicted of tax fraud• Babe Ruth retired• Lindbergh baby was kidnapped and found
dead
America’s heroes were changing
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The Election of 1932
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President Hoover: Assured the American people the
economy was improving Insisted it was a normal business
cycle Thought direct relief should come
from charity Asked business leaders to maintain
wages voluntarily
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President Hoover’s Response Agricultural Marketing Act of 1929
- was supposed to buy excess crops from farmers to increase demand
Hawley - Smoot Tariff - largest tariff in history (1930)
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President Hoover’s Response Reconstruction Finance Corp. - lent
money to large corporations, banks, and insurance companies (1932)
Trickle down economics
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President Hoover’s Response
Public works projects like new buildings, bridges, and roads
Boulder Dam is built, later renamed Hoover Dam (take as many dam pictures as you like)
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“Rugged individualism” No (federal) government handouts Gave little direct relief until 1932
President Hoover’s Response
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1932 signed the Home Loan Bank Act to lower interest rates on mortgages
1932 allowed the federal government to give money to the states for relief programs
President Hoover’s Response
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Peoples’ Responses to Hoover
“Too little, too late”
People blamed him for the Depression
Called him heartless and cold
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The Bonus Army World War I veterans promised a bonus
but not until 1945 1932 - 20,000 went to Washington to
demand immediate payment Stayed in Washington in Hoovervilles to
embarrass the President
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March to the White House led to a confrontation with the army
General Douglas MacArthur was called in to quell the uprising
He used tanks, gas, and 4 Calvary units against unarmed marchers
The Bonus Army
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The Bonus Army
US Army burned the shantytown and caused a riot
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Foreign Policy 1928 – before taking office, toured Latin
America on a Goodwill Tour (on-board a battleship!)
During Depression, ended intervention in several Latin American countries due to the economy• Withdrew from Haiti & Nicaragua
• Less money for foreign aid to friendly governments
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Election of 1932
“This campaign is more than a contest between two men….It is a contest between two philosophies of government.”
Herbert Hoover, October 1932
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Election of 1932 Herbert Hoover
• “trickle down economics”
• rugged individualism
• normal business cycle
Franklin D. Roosevelt
• “prime the pump” (Keynes)
• organized relief efforts for the state of NY
• promised immediate aid and hope for the future
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Election of 1932 Franklin D. Roosevelt won by
7,000,000 votes Herbert Hoover only won 6 states FDR would start the New Deal
upon his inauguration in March, 1933
» The End