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The Great Depression

The Great Depression. Chapter 22. Dorothea Lange’s “Migrant Mother”. Economic Troubles. Basic Industry declining from competition: Railroads Textiles Steel Coal mining. Housing Construction Declining. 25% drop from 1925-1929 Drop in all related industry. Farmers.

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The Great Depression

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  1. The Great Depression Chapter 22 Dorothea Lange’s “Migrant Mother”

  2. Economic Troubles • Basic Industry declining from competition: • Railroads • Textiles • Steel • Coal mining

  3. Housing Construction Declining • 25% drop from 1925-1929 • Drop in all related industry

  4. Farmers • Caught in vicious cycle of more crops and lower prices

  5. Buying on Credit • Large consumer debt

  6. Uneven Distribution of Wealth • 70% of nation’s families earned less than $2500

  7. Mechanization • Increase in production and lower prices • Many lack the funds to buy goods

  8. Buying on Margin • Pay only a percentage of stock price and borrow the rest • This caused stocks to be overvalued

  9. 1928 Election • Republicans: Herbert Hoover (wins easily) • Democrats: Alfred E. Smith (1st Catholic nominated by a major party)

  10. Stock Market Crash • October 29, 1929 • Prices Plunge • 16.4 million shares traded • By mid-November over $30 billion lost

  11. Great Depression • By 1933: • 44% of country’s banks failed • 90,000 businesses bankrupt • Gross National Product (GNP) drops from $104 billion to $59 billion • 25% unemployment (13 million workers)

  12. World Wide Depression • Hawley-Smoot Tariff (1930): • Caused world trade to drop 40% • Highest in US history

  13. Hardship & Suffering during the Depression • People lost money, jobs, houses • Shantytowns: make shift shacks spring up called “Hoovervilles” • Soup kitchens, bread lines begin • Minority groups suffer greatly economically • 400,000 farms lost • Families break under stress • 300,000 hoboes wandering the country • Increased malnutrition in children • Declining health of all Americans • Suicide rate increased 30% • More admitted to mental hospitals

  14. Dust Bowl • Caused by overproduction and drought • Lasts the decade of the 1930’s • Thousands fled the region • Terrible conditions for those who stay

  15. Hoover’s Response • Rugged individualism (people should help themselves) over direct relief (cash payments/food from the government) • Problem with Direct Relief: people losing the will to work • Depression part of natural business cycle. Economy would fix itself. Government helps out businesses. • Public Works Projects: Boulder/Hoover Dam ($700 million) • Reconstruction Finance Corporation (RFC): $2 billion for banks, insurance, railroads, and other big business • Federal Home Loan Bank Act: lowered interest rates so people could avoid foreclosure

  16. Hoover/Boulder Dam

  17. Bonus Army • 1924: WWI veterans promised a $500 bonus to be paid in 1945 • Depression starts and veterans want bonus paid now • Congress debates Patman Bill: pay bonus immediately • 20,000 veterans march on Washington D.C. • Patman Bill voted down by Congress • Bonus Army Driven from Washington D.C. • Douglas MacArthur, Dwight Eisenhower, & George Patton responsible for driving out Bonus Army • President Hoover takes the blame

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