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CRASH AND DEPRESSION

CRASH AND DEPRESSION. 1929-1933. The great crash. September 1929 – the Dow Jones Industrial Average reached an all time high Black Tuesday (October 29, 1929) – most people sold their stocks at a tremendous loss Total losses = $30 billion Beginning of the Great Depression (1929-1941).

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CRASH AND DEPRESSION

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  1. CRASHANDDEPRESSION 1929-1933

  2. The great crash • September 1929 – the Dow Jones Industrial Average reached an all time high • Black Tuesday (October 29, 1929) – most people sold their stocks at a tremendous loss • Total losses = $30 billion • Beginning of the Great Depression (1929-1941)

  3. CAUSES OF THE DEPRESSION • Weakened industrial growth • Farm crisis • Consumers buying less • Unequal distribution of wealth • Tariffs & war debt policies • Buying on margin & credit

  4. Great Crash Great Crash Great Crash Great Crash World Payments World Payments World Payments Investors Investors Investors Investors Businesses and Workers Businesses and Workers Businesses and Workers Overall U.S. production plummets. Overall U.S. production plummets. Overall U.S. production plummets. Investors lose millions. Investors lose millions. Investors lose millions. Investors lose millions. Banks Banks Banks Businesses and workers cannot repay bank loans. Businesses and workers cannot repay bank loans. Businesses and workers cannot repay bank loans. Consumer spending drops. Consumer spending drops. Consumer spending drops. U.S. investors have little or no money to invest. U.S. investors have little or no money to invest. U.S. investors have little or no money to invest. Allies cannot pay debts to United States. Allies cannot pay debts to United States. Allies cannot pay debts to United States. Businesses lose profits. Businesses lose profits. Businesses lose profits. Businesses lose profits. Businesses cut investment and production. Some fail. Businesses cut investment and production Some fail. Businesses cut investment and production Some fail. Savings accounts are wiped out. Savings accounts are wiped out. Savings accounts are wiped out. Banks run out of money and fail. Banks run out of money and fail. Banks run out of money and fail. Workers are laid off. Workers are laid off. Workers are laid off. Europeans cannot afford American goods. Europeans cannot afford American goods. Europeans cannot afford American goods. U.S. investments in Germany decline. U.S. investments in Germany decline. U.S. investments in Germany decline. Bank runs occur. Bank runs occur. Bank runs occur. German war payments to Allies fall off. German war payments to Allies fall off. German war payments to Allies fall off. GLOBAL EFFECTS Great Crash World Payments Investors Businesses and Workers Overall U.S. production plummets. Investors lose millions. Banks Businesses and workers cannot repay bank loans. Consumer spending drops. U.S. investors have little or no money to invest. Allies cannot pay debts to United States. Businesses lose profits. Businesses cut production or fail. Savings accounts are wiped out. Banks run out of money and fail. Workers are laid off. Europeans cannot afford American goods. U.S. investments in Germany decline. Bank runs occur. German war payments to Allies fall off.

  5. EFFECTS OF THE GREAT CRASH • Businesses cut production or fail • Pay cuts & reduced hours • Unemployment rose to 25% by 1933 • Bank runs & closures

  6. FAMILIES DISPLACED • Homelessness & Hoovervilles • Severe drought & farming practices resulted in Dust Bowl in the Great Plains • 60% of Dust Bowl families lost their farms

  7. POVERTY STRAINS SOCIETY • Starvation resulted in long-term health problems • Many men abandoned their families • Working women became targets of resentment • Competition for jobs produced hostility minorities

  8. AMERICANS PULL TOGETHER • People pulled together to help one another • Bidding low at penny auctions, neighbors could return land and machines to the original owners

  9. HOOVER’S RESPONSE • Hawley-Smoot tariff resulted in slowdown of international trade • Reconstruction Finance Corporation gave government credit to banks & industries • Hoover feared federal public assistance would destroy people’s self-respect • Bonus Army incident destroyed Hoover’s remaining popularity

  10. THE BONUS ARMY • Patman Bill proposed to pay military bonuses 12 years early • Veterans camped near the Capitol to support the bill • When the bill failed in Congress, Hoover ordered the army to remove vets • Destroyed Hoover’s remaining popularity

  11. ELECTION OF 1932 • Franklin D. Roosevelt promised a New Deal for the American people • He was ready to experiment with government roles to end the Depression • Wanted more controls on big business • FDR won 57% of the popular vote & almost 89% of the electoral vote

  12. FDR’S FIRST INAUGURAL ADDRESS • Attempted to restore confidence in the American people • “The only thing we have to fear is fear itself.” • Asked for broad executive powers to combat the Depression

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