The Great Depression

1. The Great Depression

2. The Great Depression • In the 1930s the United States went into a severe economic state.

3. Causes of the Great Depression • People over speculated on stock and the market crashed – people bought lots of stocks using borrowed money that they could not repay when the market crashed • The Federal Reserve System failed to prevent the collapse of the banking system • World-wide depression which lead to high tariffs (tax on goods coming from other countries).High tariffs discouraged international trade. • Surplus of goods (too many products available and not enough buyers)

4. 1920s American Spending • Between 1925 and 1929, Americans borrowed money and purchased more stock.

5. Stock Market

6. October 29, 1929Black Tuesday

7. What is the immediate effect of Black Tuesday? Banks close!

8. Banks Close • There was a run on banks because people tried to get their money out. • Banks closed because there was no money to give to people because money was uninsured and banks were not regulated well.

9. Value of Stocks • The stock market crash hurt many Americans because their stocks became worthless.

10. What is life like during the Great Depression? • High unemployment: One quarter or 25% of people lose their jobs • A large number of people become homeless and hungry • A large number of banks and businesses failed • Farmers’ incomes fell to low levels

11. Businesses Businesses failed during the Depression because: • Banks asked for repayment of loans • Customers became unemployed and could not purchase consumer goods • Banks foreclosed on many businesses

12. Farmers • Even before the Great Depression farmers faced economic hard times. • Farmers would face the hardest economic times during the Depression.

13. Dust Bowl • The southern Great Plains suffered an environmental disaster and became known as the Dust Bowl • Causes were drought, overgrazing, and overplowing. • As a result, massive dust storms called “black blizzards” continued for years. • Thousands of Dust Bowl farmers went bankrupt and lost their farms. Many migrated to California.

14. President Herbert Hoover

15. Where could a person or family get aid during the Great Depression? soup kitchens bread lines Salvation Army

16. President Hoover’s Response • President Hoover believed that the Great Depression was only temporary and that prosperity was “just around the corner.” • Hoover’s refusal to provide funds for the unemployed during the Depression was based on the belief that private companies and volunteers should provide for the unemployed. • Shacks were called Hoovervilles to show Hoover’s failure.

17. Where did people live during the Great Depression? Hoovervilles

18. President Franklin Delano Roosevelt

19. The New Deal Alphabet Soup

20. Agriculture Adjustment Administration AAA paid farmers not to grow crops

21. Farmers • Roosevelt encouraged farmers to produce less and gave them money. • Dust Bowl Relief • New Deal reforms provided farmers with low-cost loans to help them keep their farms.

22. Social Security Act Money given to people over 65 and the disabled

23. Civilian Conservation Corp CCC provided jobs to young men, planted trees, built bridges and parks, set up food control

24. Tennessee Valley Authority TVA built dams to provide cheap electricity in southern states

25. Federal Deposit Insurance Corporation FDIC insured the savings accounts in banks approved by the government—you will always be able to get your money out of the bank you put it in

26. Federal Emergency Relief Administration FERA gave relief to needy and unemployed

27. Public Works Administration PWA built ports, schools and aircraft carriers

28. Major Features • Farm assistance programs • Social Security • Federal work programs • Environmental improvement programs • Increased rights for labor

29. Depression Ends • True prosperity did not return to America until factories geared up production for World War II.