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Essential Question: What caused the Great Depression & how did the federal government respond?

Delve into the causes of the Great Depression, from the stock market crash to the impacts on society, and explore how the federal government intervened. Learn about the economic downturn, unemployment rates, and key events that shaped this turbulent period in American history.

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Essential Question: What caused the Great Depression & how did the federal government respond?

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  1. Essential Question: • What caused the Great Depression & how did the federal government respond? • Warm-Up Question: • Examine “The Depression: Are We All At Fault?” & write a brief explanation as to what each quote reveals about what caused the Great Depression

  2. The Great Depression

  3. The Great Crash • Prelude to the stock market crash • In 1927, the economy had a recession but gov’t & business leaders ignored warning signs • The Federal Reserve lowered interest rates for loans to stimulate the economy, but this easy credit led speculators to buy stock “on-the-margin”

  4. The Great Crash • An initial stock market crash on Oct 24, 1929 (Black Thursday) led to a catastrophic drop in stocks on Oct 29 (Black Tuesday) • Panicked investors sold stocks, causing stock prices to plummet • Banks lent less money, factories produced less, workers were fired or paid less → consumers had less money to spend → factories & businesses closed

  5. The U.S. stock market had only about 3 million active buyers & sellers but the spillover into the greater economy led to the Great Depression

  6. Unemployment, 1929-1942 This downward spiral continued for 4 years; By 1932 unemployment was at 25%

  7. Black Tuesday

  8. The Great Crash • Reasons for the depression: • Overproduction of consumer durable goods & agriculture • The post-war conditions in Europe decreased foreign trade • Unequal distribution of wealth, high consumer debt, stock market over speculation led to an overall decrease in consumer purchase power Consumers already owned durable goods & were not buying more

  9. In 1929, the total market debt of the USA was 210% of the value of GDP By 1934, U.S. debt rose to 265% of GDP In 2005, the value of U.S. debt was 303% of GDP

  10. Effects of the Great Depression • The Depression hit all classes: • Many families lost their homes or farms & were forced to live in “Hoovervilles” • The U.S. saw unprecedented poverty & suicide rates; fathers abandoned their families; lawlessness ensued • The U.S. gov’t offered relief checks to the unemployed

  11. Effects of the Great Depression • African-Americans who had migrated to North were laid off • Mexican immigrants faced competition & deportation from angry Americans • The middle class was hit hard: • Refused relief checks & charity • Many lost their homes • Health care declined; doctor & dentist visits were “luxuries”

  12. Employment Agencies & Relief-Check Lines

  13. Soup Kitchens & Breadlines

  14. Mortgage Foreclosures

  15. These 4 potatoes are Christmas Dinner

  16. Where’s daddy?

  17. “Hoovervilles” & “Hoover Flags”

  18. Essential Question: • What caused the Great Depression & how did the federal government respond? • Reading Quiz Ch 24 A (846-862)

  19. Hoover Struggles to Fight the DepressionHoover video (8 min)

  20. Hoover and Voluntarism “Rugged individualism” • PresidentHoover’sinitialresponse was to reassure Americans that prosperity would return • Hoover rejected bold gov’t action & called for volunteerism among charities, local gov’t, & business • As the depression worsened, Hoover called for gov’t projects like the Reconstruction Finance Corps (RFC) which loaned money to failing businesses

  21. The Hoover administration initiated job-creation programs, like building the Hoover Dam

  22. Hoover and Voluntarism • In 1932, Hoover’s presidency suffered two final blows: • When 22,000 war veterans marchedtothecapitaltodemand their WW1 bonus checks early, Hoover ordered this Bonus Army to be forcibly removed • The steady rise of bank failures led to a complete collapse of the U.S. banking system

  23. Bonus Army Douglas MacArthur Dwight Eisenhower

  24. Bank Failures, 1929-1933

  25. “Okies” & “Arkies” The Dust Bowl (1931-1939) worsened the effects of the Depression Areas Affected by the Dust Bowl drought

  26. Fighting the Depression • The inability of Republicans to resolve the economic depression opened the door for a Democratic takeover in politics • Once in power, Democrats succeeded in relieving some suffering, restored hope, & created an unprecedented level of gov’t intervention in the process

  27. Conclusions • The Depression of the 1930s came as a shock to Americans: • The consumer revolution led to confidence that 1920s economic prosperity would continue • When the stock market crashed in 1929, businesses closed & millions were unemployed • Americans began to look to the gov’t for unprecedented support

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