The Great Depression 1929 - 1941

“It came from nowhere, blazed up like a brush fire, pulled us together at the bottom of the depression, held us together through a war, galloped up to the brink of television, and fell over dead”

The Economy President Herbert Hoover elected

Americans in debt Unable to pay credit back to banks

Stock Market Crash of 1929 Black Tuesday Failure of Federal Banks Unemployment rates reached 16-40% in most states

The Dust Bowl A series of dust storms that raged through the Midwest Destroyed crops Left 500,000 Americans homeless

The Dust Bowl

The Dust Bowl

How the Stock Market can crash1. When people buy “stock” in Coca-Cola, they are buying a

percentage of the company.

2. The more people buy Coca-Cola stock, the more value ($$$) Coca-Cola has.

3. The more people sell their Coca-Cola stock back to the company, the less value ($$$) Coca-Cola has.

4. If stockholders (people who own stock) see the value of a company drop, they are more likely to sell their stock.

5. If stockholders panic and everyone sells at the same time, the stock market can crash, causing a depression.

The Stock Market Crash of 1929

Stockholders panickedand soldtheir stock

Timeline September 23, 1929:

Stocks reach an all time high

October 23, 1929: Stock prices drop sharply

October 24, 1929: People panic and sell their stocks to avoid bankruptcy

October 29, 1929: Stock market crashes

Americans panic and withdraw life savings from banks

Banks run out of money and are forced to close

Cash becomes scarce and people stop buying goods

Without people buying their products, businesses close or lay off workers

Unemployment and homelessness sky rockets

1930: The Dust Bowl begins and families are forced to flee their farms

The Domino Effect

How can a bank run out of money? When you put money

in the bank, it isn’t just sitting somewhere in a vault.

Instead, the bank invests your money, uses it to pay its employees, creates additional banks, and gives out loans.

As a result, if everyone went to the bank on the same day to withdraw all of their money, the bank wouldn’t have the necessary funds.

Did it really come from nowhere? Banks loaned out too much money and began

running out of it Aug. 22, 1921: “We are living in hopes that

something will come up to relieve present conditions and can assure you that at any time circumstances will permit we will inform you and will give you all the money we possibly can”

Oct. 5, 1922: “I am very sorry indeed that we can not give you the money you have deposited with us, but this is a physical impossibility at this time.”

Did it really come from nowhere? Sept. 24, 1925: “Had a meeting of the Directors of

the bank Saturday evening and they are very anxious and agree to do all they possibly can to keep the bank running for another year, and we believe you can readily see that if this is accomplished it will take the cooperation of all of our customers…” “We have been wondering Mr. Jacobs if you did not know of someone who would like to invest in a proposition in the bank line that is bound to be a money maker in the future”

Banks were asking for MORE money from their customers

Did it really come from nowhere? Sept. 23, 1929: “Have read your last letter

over carefully and after doing so wish to say that just at this time I am not prepared to answer it as you want it”

Oct. 29, 1929: The stock market crashed—the Great Depression began

Rushing to the Banks

The Great Depression The worst economic disaster the U.S. has ever

seen Effected the majority of the world because of

international trade Homeless formed Hoovervilles

Small communities of homeless people Most people blamed President Hoover Hoover, a Republican, refused to provide aid because

he wanted to restrict government involvement

What is an economic Depression? Depression: a long-lasting economic

downturn.

It took 13 years forthe economy to fully recover

Hooverville

Life During the Depression 9.5% of all Americans were unemployed In order to help support their families, children

as young as 10 went to work in factories Inexpensive entertainment in the form of

movies (25 cents) and radio still thrived Opportunities for women

Eleanor Roosevelt’s influence Frances Perkins became the first female cabinet

officer

Life During the Depression "My family relied on themselves to sew their own

clothes, grow their own vegetables, and raise their own chickens."

"The only entertainment my family had during the Depression was church and visiting relatives.  They also listened to the radio, of course, and played cards and other games.  At Christmas, the only thing they received was fruit."

"Steve committed suicide by taking 'rough on rats,' (I'm not certain what this actually is, but I assume some type of rat poisoning).  Steve's brother John also committed suicide, but my aunt wasn't sure why or how."

Life During the Great Depression “We had a coal stove, and

we had to each take turns, the three of us kids, to warm our legs. It was awfully cold when you opened those garage doors. In the morning, we’d get out and get some snow and put it on the stove and melt it and wash around our faces.”

Food

The Great Depression

People lived in makeshift homes and tents People couldn’t afford transportation

The Great Depression

Soup kitchens gave out free soup

Gangster Al Capone increased his popularity by opening his own soup kitchen.

People couldn’t afford to live in homes

The Great Depression

The Great Depression

Making Matters Worse A group of WWI

Veterans known as the Bonus Army sought early payment of their war bonuses Marched on

Washington Hoover forced them

out; one veteran was shot and killed

A Slow Recovery Public Works projects:

Government funded programs to assist individuals, families, and communities in need

The election of Franklin Delano Roosevelt

The New Deal Roosevelt created numerous programs on relief,

recovery, and reform in America (three R’s) Social Security Act: Money is set aside for retirement for

anyone who works Though the New Deal created jobs and provided relief, it did

away with limited government With no money for funding, Roosevelt ended the New Deal in

1937 Thousands were out of jobs and the economy plummeted again

Fireside chats Radio shows where Roosevelt broadcasted explanations of his

policies in a warm and friendly manner over the radio

RecoveryWith FDR’s failed New Deal, the United States was in for an extended depression until December 7, 1941

The New Deal Ended

Recovery