Unit 7 lesson 3 The great depression

under-production

By the end of the 1920s, factories produced too many durable goods

Causes of the great depression

• stock-based economy; superficial economy

• Unequal distribution of income

• problems in industry and farm sector

• increasing consumer debt

• stock market speculation and crash

Effects of the causes of the great depression

• people out of work

• development of shantytowns

• banks fail and schools close

• world economy suffers

• hoover employs more active government involvment

The end of WWI led to  a decline in demand for agricultural products and a 40% decline in ____ prices

crop

Farmers could not pay back loans and many had their farms

Foreclosed

Railroads, textiles, coal were losing money and faced ________ from cars, synthetic fabrics, natural gas

competition

Many Americans used ________to live beyond their means, generate large debts, and had to cut back on spending by the end of the decade

credit

1 of the main reasons for the crash

Uneven distribution of wealth 

The decade was not as ______
as it appeared; Despite rising wages, the ____ between the rich and poor grew wider in the 1920s

wealthy;gap

70% of Americans were considered “_______” so most of the spending was done by 30% of the population

poor

The stock market soared throughout the 1920s and people speculated by _______ money to pay for stocks (called buying on _______)

borrowing;margin

The stock market was not regulated which allowed some companies to alter their stock _____
to increase profits…
This created a “bubble” in the stock market

values

The spark the triggered the
Great Depression was the 

stock market crash in October 1929 

On October 29, 1929 (Black Tuesday) the

Stock market crashed

People rushed to sell, stock prices dropped, and investors lost a total of

$30 billion

Speculators who bought on the _______, could not pay off their debts

Margin

When banks could
not produce money
for all their customers, the banks failed.This led to a____ on banks across the U.S… hundreds of banks failed and thousands of  people lost their savings 

run

From 1929 to 1932, unemployment grew to __ million people

12

The decline in consumer confidence made the depression drag on until the

1940s

The Great Depression
led to a global depression in

Europe, Asia, and Latin America

World trade fell by ___%

40

To encourage citizens to buy from U.S. companies (not foreign competitors) the government passed new

High Tariffs

…European nations responded with their
own _____ which made it difficult for U.S. companies to sell their goods overseas

tariffs

The Great Depression led to a collapse
of

The American finance system by 1933

Americans lost confidence in banks as ______ banks failed; The lack of banking meant there was no money for investment

25,000

The lack of spending and stock market crash led to failure of _______businesses

90,000

Unemployment peaked at ____ of all Americans; People lost their homes, farms, and businesses

25%

he USA had record _______________ and healthcare declined; Charities offered soup kitchens and breadlines to help

Povery and suicide rates

The effects of the depression were made worse by the _____

Dust Bowl

Dust Bowl

Decades of over-farming and droughts in the Plains led to windstorms that swept away soil and made farming impossible

Farmers in the Plains (called “Okies” and “Arkies” left their farms and searched for work or
for better land in

West Coast Areas

The grapes of wrath were by

John Steinbecks

What did president Herbert Hoover say America could overcome the depression through?

“rugged individualism” (using hard work and perseverance)   

Volunteerism

Hoover private charities to help

Things Herbert Hoover promoted

encouraged business growth, wanted to keep taxes low, and avoided direct gov’t intervention

Under Hoover, the gov’t issued

relief checks to help  the unemployed

Reconstruction Finance Corp. (RFC) (Made under hoover)

to loan money to save failing businesses

Hoovervilles

Americans who lost their homes, lived in shantytowns

Bonus Army debacle

• 1932, Group of WWI veterans marched on Washington demanding that the government issue promised bonuses and benefits for their service immediately

• Hoover refused to meet with them, then ordered the army to remove them form public areas of DC.  Gen. Douglas MacArthur used force, burning their tents.  4 killed, over 1000 injured.  Destroyed Hoover’s chances of re-election.