The Great Depression

1. The Great Depression

2. Impact of the Roaring 20’s • The new concept of “credit” • People were buying: • Automobiles • Appliances • Clothes • Fun times reigned • Dancing • Flappers • Drinking

3. Why was this bad? • Credit system • People didn’t really have the money they were spending • Interest rates on loans were low = people borrowed more money • Excessive real estate construction = oversupply • WWI • The U.S. was a major credit loaner to other nations in need • Many of these nations could not pay us back

4. The Stock Market Crash • People bought stocks on margins • If a stock is $100 you can pay $10 now and the rest later when the stock rose • Stocks fall • Now the person has less than $100 and no money to pay back

5. And then… • With people panicking about their money investors tried to sell their stocks • This leads to a huge decline in stocks • Stocks were worthless now • People who bought on “margins” now could not pay • Investors were average people who were now broke

6. The New York Stock ExchangeBlack Friday, October 24, 1929

7. Agricultural Overproduction • Increased technology • Good growing conditions • Supply greater • than demand • Overproduction • from World War I

8. The Dust Bowl • Over use & over grazing • No crop rotation • No soil conservation • No wind breaks • Loss of grass and animals • Climatic change – the drought of the 30’s Crops turned to dust= No food to be sent out Homes buried Fields blown away South / Midwest in state of emergency

9. Dust Bowl - the #1 weather crisis of the 20th century Farmers and sharecroppers headed west; called migrants or “Okies”

10. Industrial Overproduction • Wages not keeping up with inflation • Supply greater than demand • European Depression

11. Poor Distribution of Wealth Many Poor and Very Few Rich! Workers earned so little they couldn’t buy the products they produced! Wages were as little as 20 – 25 cents per hour! Even the best employer Ford Motor Company paid only $5.00/Day ($0.48 / hr.) for a 6AM-6PM shift!

12. Cost / hours needed to work… • Hamburger 20-30 cents a pound • Gas 20 cents/gallon • Women’s Coat $6 • Shoes $2 • Men’s Suit $11 • Baseball Glove $1.19 • Chrysler 4 door $1000 • 6 Room House $3000 • Hamburger 1 pound for 1 hours work • Gas - 45 minutes • Women’s Coat - 24 hours • Shoes - 8 hours • Men’s Suit - 44 hours • Baseball Glove – 5 hours • Chrysler 4 door – 4000 hrs. • 6 Room House – 12,000 hrs.

13. Impact on the American People • Farmers were already feeling the effects • Prices of crops went down • Many farms foreclosed • People could not afford luxuries • Factories shut down • 85,000 businesses failed • Banks could not pay out money • 25% of banks closed • Literally closed their doors to people • People could not pay their taxes • Schools shut down due to lack of funds

15. Unemployment lines!

16. Breadlines and soup kitchens!

17. Forced to relocate! Tramps, hobos, riders of freight trains Farmers and sharecroppers headed west; called migrants or “Okies”

19. Hoovervilles No direct relief – cash payments or food provided by the government to the poor

20. “Hooverville” • Some families were forced to live in shantytowns -- A grouping of shacks and tents in vacant lots • Shantytowns were referred to as “Hoovervilles” because of President Hoover’s “lack of help” during the Depression

21. Unemployment Statistics for 1932 – The Cruelest Year 25% of the workforce unemployed by 1932 An additional 15% of the workforce was “underemployed” 21% of the workers who kept their jobs saw hours cut 20% of workers who kept their jobs took pay cuts Some worked only for food or a place to sleep – No pay jobs

22. Franklin Delano Roosevelt Elected in 1932 – his plan… The New Deal