The causes of the Great Depression

1. The causes of the Great Depression How the booming 20s became a huge bust!

2. Harding in Office • Republican elected in 1920 • “return to normalcy” • time in office far from normal • promoted laissez-faire • surrounded himself with the Ohio Gang • poker buddies greedy and drunk (spoils system) • looking to get rich off the government

3. Teapot Dome Scandal • Secretary of the Interior, Albert B. Fall. • federal oil reserves at Elk Hills, CA and Teapot Dome, WY • leased private companies in return for bribes • oil was for naval use • Fall went to jail…1st Cabinet member to go to jail • Harding died in office before scandal could touch him

4. Silent Cal (Calvin Coolidge) in Office “The business of America is business!” “The man who builds a factory, builds a temple” • Republican – takes over following Harding’s death in 1923, elected 1924 • trust in business • laissez-faire approach • had honest people working for him • economy was booming…but not for long

5. A Bull Market (rising stock prices) “A chicken in every pot and a car in every garage.” • Republican rule (Harding & Coolidge) • America was prospering • no one could see what was about to happen • there were signs • Another Republican, Herbert Hoover, gets elected in 1928 • another laissez-faire guy • …..things are looking good but are they???

6. Early Signs of the Great Depression OVERPRODUCTION DISTRIBUTION OF WEALTH • new technologies • increased output • wages remain low to buy goods • too many goods • not enough consumers • farmers amounting large debt • huge gap between rich and poor • middle class basically non-existent • fewer consumers when products overflowing

7. More Causes INSTALLMENT PLAN BUYING ON MARGIN • buying things with small down payments • then pay the rest in monthly payments • used to buy consumer goods like cars, washing machines, and refrigerators • buying stock on credit • small down payment • pay the rest in monthly payments • PROBLEM: value of stocks go up and down

8. And More Causes SPECULATION EASY CREDIT • buying stock using credit • hope stock prices would rise • PROBLEM: if they didn’t people could loose everything • before 20s • no money no buy • debt = fear • buying on credit was a new idea • now everybody was doing it

9. The Boom is a Bust • For a month • stock prices had fallen • too many people selling stocks • only makes the problem worse • Black Tuesday: October 29, 1929 • sparked the Great Depression • people rush to sell their stocks • called the Great Crash • people lost their fortunes in hours

10. The Great Depression • 1929-1941 • Economy was ruined • Businesses close • Extremely high unemployment • fewer goods bought • People run to the banks • withdraw their money • banks don’t have all the money on hand • led to bank failures/closings • People lose EVERYTHING

11. Hawley-Smoot Tariff • Hoover tried to help • Tariff raised taxes on foreign imports • American products cheaper • Foreign companies raise taxes on American goods • Now can’t sell in America or other countries • BACKFIRE (failure)

12. Life During the Great Depression • People lost EVERYTHING: • Jobs • Homes • life savings due to bank closings • confidence in Government • hope of achieving the “American Dream” • their pride

13. Charity • Soup Kitchens • Bread lines • provided free food to families but was limited

14. “Hoovervilles” • places where many homeless people grouped together in shantytowns (makeshift tents or lean-tos) • named after President Hoover • felt he was doing nothing to take care of the problem (homelessness) or them • covered up with newspapers (Hooverblankets) • turned their pockets inside out known as Hoover flags

15. “Hoovervilles”

16. The Dust Bowl (Great Plains Region) • environment a struggle from beginning • not enough rain, over-farming • 1932 drought • caused soil to turn to dust • wind storms created dust storms ~ Dust Bowl • refugees, “Okies,” (regardless of what state they came from) left their farms for California for a new start

17. When he leaves the Dust Bowl, he will be called an “Okie”!

18. Plight of the Farmer • John Steinbeck’s Grapes of Wrath • family facing hard times in CA • Photojournalists, Walker Evans and Dorthea Lange • hardship and determination • leads to demands for better housing & sanitation of migrant workers

19. Hoover’s Band-Aid • promoted rugged individualism not direct relief • people take care of themselves rather than the government • BIG problem, little Band-Aid…tried to fix it • tried to get businesses to keep employees, wages and prices at stable levels • reduced taxes on people to encourage spending • asked the wealthy to be more charitable • none of this worked (too laissez-faire)

20. Hoover Disappoints • started to give money to companies to restart production…didn’t work • built the Hoover Dam to create construction jobs

21. Bonus Army (The Nail in Hoovers Coffin) • WWI veterans promised a bonus check to be paid in 1945 • depression hit (1932), need money NOW • Hoover vetoed a bill to give them their money early • they march to Washington and set up a “Hooverville” • Hoover had General MacArthur remove veterans • given one hour to pack up and get out • tear gas was used on stragglers • not Hoovers intentions but ruined his reputation

22. “No Pay, All Stay”