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What caused the Great Depression & how did the federal government respond? – PowerPoint PPT presentation

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Title: Essential Question:


1
  • Essential Question
  • What caused the Great Depression how did the
    federal government respond?

2
The Great Depression
3
The Great Crash
  • Prelude to the stock market crash
  • In 1927, the economy had a recession but govt
    business leaders ignored warning signs
  • The Federal Reserve lowered interest rates for
    loans to stimulate the economy, but this easy
    credit led speculators to buy stock
    on-the-margin

4
The Great Crash
  • An initial stock market crash on Oct 24, 1929
    (Black Thursday) led to a catastrophic drop in
    stocks on Oct 29 (Black Tuesday)
  • Panicked investors sold stocks, causing stock
    prices to plummet
  • Banks lent less money, factories produced less,
    workers were fired or paid less ? consumers had
    less money to spend ? factories businesses
    closed

5
The U.S. stock market had only about 3 million
active buyers sellers but the spillover into
the greater economy led to the Great Depression
6
Unemployment, 1929-1942
This downward spiral continued for 4 years By
1932 unemployment was at 25
7
The Great Crash
  • Reasons for the depression
  • Overproduction of consumer durable goods
    agriculture
  • The post-war conditions in Europe decreased
    foreign trade
  • Unequal distribution of wealth, high consumer
    debt, stock market over speculation led to an
    overall decrease in consumer purchase power

Consumers already owned durable goods were not
buying more
8
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9
In 1929, the total market debt of the USA was
210 of the value of GDP
By 1934, U.S. debt rose to 265 of GDP
In 2005, the value of U.S. debt was 303 of GDP
10
Effects of the Great Depression
  • The Depression hit all classes
  • Many families lost their homes or farms were
    forced to live in Hoovervilles
  • The U.S. saw unprecedented poverty suicide
    rates fathers abandoned their families
    lawlessness ensued
  • The U.S. govt offered relief checks to the
    unemployed

11
Effects of the Great Depression
  • African-Americans who had migrated to North were
    laid off
  • Mexican immigrants faced competition
    deportation from angry Americans
  • The middle class was hit hard
  • Refused relief checks charity
  • Many lost their homes
  • Health care declined doctor dentist visits
    were luxuries

12
Employment Agencies Relief-Check Lines
13
Soup Kitchens Breadlines
14
Mortgage Foreclosures
15
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16
Hoovervilles
17
  • Essential Question
  • What caused the Great Depression how did the
    federal government respond?

18
Hoover Struggles to Fight the Depression
19
Hoover and Voluntarism
  • President Hoovers initial response was to
    reassure Americans that prosperity would return
  • Hoover rejected bold govt action called for
    volunteerism among charities, local govt,
    business
  • As the depression worsened, Hoover called for
    govt projects like the Reconstruction Finance
    Corps (RFC) which loaned money to failing
    businesses

Rugged individualism
20
The Hoover administration initiated job-creation
programs, like building the Hoover Dam
21
Hoover and Voluntarism
  • In 1932, Hoovers presidency suffered two final
    blows
  • When 22,000 war veterans marched to the capital
    to demand their WW1 bonus checks early, Hoover
    ordered this Bonus Army to be forcibly removed
  • The steady rise of bank failures led to a
    complete collapse of the U.S. banking system

22
Bonus Army
23
Bank Failures, 1929-1933
24
The Dust Bowl (1931-1939) worsened the effects of
the Depression
Okies Arkies
25
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26
Fighting the Depression
  • The inability of Republicans to resolve the
    economic depression opened the door for a
    Democratic takeover in politics
  • Once in power, Democrats succeeded in relieving
    some suffering, restored hope, created an
    unprecedented level of govt intervention in the
    process

27
Conclusions
  • The Depression of the 1930s came as a shock to
    Americans
  • The consumer revolution led to confidence that
    1920s economic prosperity would continue
  • When the stock market crashed in 1929, businesses
    closed millions were unemployed
  • Americans began to look to the govt for
    unprecedented support
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