The Great Depression: Root Causes and Economic Impact

1. Causes of the Depression

2. BLACK TUESDAY– start of GREAT Depression • Happened because of little Govt. regulation –Laissez Faire Economics • HIGH TARIFFS – Foreign made products entering the USA cost more, so that AMERICANS would buy USA products only. • Backfired – Foreigners in retaliation did not buy our products & put TARIFFS on USA GOODS. Hawley-Smoot TARIFF

3. Causes Many cause contributed to making the Great Depression as severe as it was • Farm Depression of the 1920s • Prices of farm products felled about 40% in 1920-1921 and they remained low through the 1920s • As results some farmers lost so much money they couldn’t pay the mortgage on their farm • The Stock Market Crash • Stock values dropped rapidly on Oct. 24,1929; now known as Black Thursday • On Tuesday stock holders panicked and sold a record 16.410,030 shares of stocks • Thousands people lost huge sums of money as stock values fell far blow the prices paid for • Uneven Distribution of Income • Industrial productions increased about 50% but the wages of the industrial workers rose far more slowly • As results these workers couldn’t buy goods so fast as industry produced them

4. Banks lost money on their investments, and investors defaulted on loans. Because the government did not insure bank deposits customers lost their money if/when a bank closed. Bank RUNSresulted as many bank customers withdrew their money at the same time, causing the bank to collapse and close for business.

5. Decline in agricultural prices Causes of the in the USA

6. 2-27-13 • List and explain your 7 principles of gov’t.

7. Causes of the Depression

8. The Depression Starts

9. Hoover's Policies President Hoover believed that business if left alone to operate without government supervision would correct the economic conditions! Congress approved Hoover’s most successful anti-depression measure ReconstructionFinanceCorporation This government agency provided some relief by lending money to banks, railroads, and other large organization whose failure would have made depression even worse

10. Question: How many people were unemployed in 1925? In 1929? In 1932?

11. Hoover did increasePUBLIC WORKS – government-financed building projects to replace construction jobsthat had been stopped. • At the same time, Hoover refused to increase government spending or taxes. • He feared deficit spending would actually delay an economic recovery.

12. Unemployed workers often stood in BREAD LINES to receive free foodor at SOUP KITCHENS where private charities gave a free meal to the poor. Many of the homeless built shacksin SHANTYTOWNS, which they called “HOOVERVILLES”, because they blamed the President for their troubles. HOBOS, or homeless Americans who wandered around hitching rides on railroad cars, searched for a better life and WORK.

13. Homeless Americans blamed President Hoover for their predicament. • Manyhomeless people wrapped themselves in used newspapersthey called“HOOVER BLANKETS” tokeep themselves warm. Some wore theirempty pockets inside out and called them “HOOVER FLAGS”.

14. BREAD LINE

15. HoBoS

16. Soup Kitchen Line

17. GREAT DEPRESSION 2008

18. 1930s 2000s

20. FARMERS

21. As crop prices dropped in the 1920’s, many American farmers left their fields uncultivated. • A terrible drought in the GREAT PLAINS, beginning in 1932, caused the region to become known as a “DUST BOWL”. • That resulted in many Midwestern farmers and Great Plains farmers lost their farms. Many families moved west to CALIFORNIAhoping to find a better life

22. The DUSTBOWL

23. The Dust Bowl