The Stock Market Crashes October 29, 1929 Black Tuesday Result The Great Depression Begins in America The Great Depression lasts from 1929 until the U.S. enters WWII in 1941.
President Herbert Hoover 31 st President, 1929 1933 Shanty Towns shacks of tar paper or scrap material became known as Hoovervilles Many blamed him for the lack of response by the government during the Depression Hoover insisted state and local governments handle relief, not federal gov t
The Long Bull Market The Market soared so investors bought stock on margin-small cash down payment (10%) and borrowed the rest September 1929- investors sensed danger and began to sell October 24, 1929-(Black Thursday) the market plummeted October 29, 1929-(Black Tuesday) 30 billion dollars was lost
Crowds clog Wall Street during the stock market crash of 1929
Crowd After Stock Market Crash Original caption: 10/24/1929-New York, NY: Photograph shows the street scene on Black Thursday, the day the New York stock market crashed, and the day that led to the Great Depression
Investors Crowd Wall Street The planked surface of Wall Street was a scene of near panic here, as hundreds of bewildered investors milled about after the stock market crash on Black Friday. A record 16,000,000 shares changed hands that day, and the decline in stock value by the end of the year was estimated at $15,000,000,000. Two years later, stock losses were estimated at $50,000,000,000.
New York Stock Exchange New York Stock Exchange on Wall Street during the 1929 stock market crash.
CAUSES OF THE GREAT CRASH, 1929 Overproduction of goods Buying on margin Uneven distribution of wealth in the 1920 s Too much borrowing From the banks Stock prices grossly inflated; did not have real value
Overproduction of Goods More factories than needed and people quit buying products Farmers flourished during WWI after war no demand for crops Dust Bowl over farming and drought in the Mid West head to California on Route 66
Family Packed In Car, On Way To The West Original caption: The automobile was often the only hope for the future to many families fleeing from the Dust Bowl in the Southwest during the depression years of the 1930's. Many of these families left their homes in Oklahoma, Kansas, Arkansas, etc., for a better life in California. Here migrant cotton field worker and family on the way to the West (OK, AZ, and CA were often their itinerary). Photograph, early 1930's.
Two men heading to California, 1937
Buying on Margin Buying on credit with as little as 10% down High interest when the loan was called they couldn't pay it back
Uneven Distribution of Wealth in the 1920s Money remained in the hands of a few In 1929, 1% of America possessed 58% of the nations wealth Rich getting richer
Too much borrowing from the banks Banks would lend with expectation that they might not repay loan they could seize the stock and sell it for instant cash Result stocks were worthless
Business Cycle Business cycle span in which the economy grows like the 1920s and then contracts like the 1930s A Contraction Dwindling business activity, unemployment B Trough C Peak D Recession E Expansion Increasing employment, income, and general prosperity.
Businesses and Workers Consumer Spending Drops Workers laid off Businesses cut investments and production some businesses fail
Banks Businesses and workers cannot repay bank loan Savings accounts and Checking accounts Are all cleared out Banks run out of money and fail Bank runs occur. People want their money
Run on Bowery Savings Bank Original caption: 1930-New York, NY- Run on Bowery Savings Bank. Photo shows depositors lining up to withdraw their money.
Crowd Of People Outside Bank 1929 Original caption: 1929-Passaic, NJ: Depositors besiege Merchants Bank in Passaic NJ.
World Payments Overall USA production plummets Allies cannot pay debts to U.S. U.S. investors have little money to invest Europeans cannot afford American goods U.S. investments in other country s markets decline Ex. - Germany German war payments to Allies fall off
The Great Depression(Causes) More goods and services were produced than people were able or willing to buy Result recession (a period of slow economic activity) Falling demand in some industries caused unemployment Result starts the multiplier effect (one person s income is another persons income) Decreases in spending by unemployed workers caused further unemployment
Decreases in the money supply Federal Reserve raised interest rates in the early 30s( they had lowered them in the 20s) Result less money in circulation The Hoover Administration tax hikes Hoover s tax hikes were given to balance the federal budget instead of helping the American people Hawley-Smoot Tariff
Key Players of the Great Depression Consumers/People drop in spending, too many goods to be bought which led to unemployment, taxes were raised Government raised taxes on consumers and businesses, wanted to balance federal budget Businesses started to cut back and multiplier effect began, eventually businesses failed Foreign Investors high tariffs kept foreign products out Federal Reserve raised interest rates which decreased money supply, resulted in banks to fail
Social Effects of the Depression Poverty Hoovervilles homeless people built shantytowns out of what ever they found Dust Bowl extreme drought and poor farming practices create a huge dust bowl in the Mid West causing farmers to move westward Hobos drifters riding the rails around the country
Hobos Riding Freight Car to California Several hobos ride a freight car hanging over the side while others lay in the shade behind them. These hobos ride empty freight carts to Southern California.
Hobo Signs 1. Good road to follow 2. Religious talk will get you a free meal 3. These people are rich (Silk hat and pile of gold) 4. Camp here 5. You may sleep in the hayloft here 6. Warning: Barking Dog 7. House is well-guarded
A Hooverville in New York City, 1931
In 1936, John Steinbeck conducted research on people who had moved to California from Arkansas and Oklahoma. He toured the Dust Bowl in 1937. He wrote The Grapes of Wrath in 1939 from those experiences. It is still one of the most highly praised pieces of American literature.
Dust Bowl Farm Loose soil, blown by dust bowl winds, piling up in large drifts on a farm. Near Liberal, Kansas, March 1936.
Great Depression Pastimes Miniature golf Card playing Jigsaw puzzles Board games Monopoly and Scrabble Radio popularized in the 1920s FDR s Fire Side Chats Lone Ranger & Amos & Andy Movies sound added to films in the 1920s 5-25 cents a movie Classics King Kong, Wizard of Oz, Snow White and the Seven Dwarfs, Gone with the Wind
Monopoly Scrabble Empire State Building President Roosevelt giving a fireside chat
First full length animated film
Signs of Change Prohibition is repealed 21 st Amendment repealed Prohibition in 1933 Mixed reaction, but most Americans welcomed the repeal The Empire State Building Promising symbol of hope The end of an Era Symbols of the 1920s had faded Al Capone, Calvin Coolidge, Babe Ruth, and Henry Ford The Lindbergh kidnapping echoed the nation s distressed condition
President Franklin D. Roosevelt 32 nd President, 1933 1945 Election of 1932 offered the New Deal, Song Happy Days are here Again Inaugural Speech So first let me assert my firm belief that the only thing we have to fear is fear itself. Closes the banks gold standard out New Deal Agencies implemented Alphabet Soup
Migrant Mother by Dorothea Lange A poverty-stricken migrant mother with three young children gazes off into the distance. This photograph, commissioned by the FSA, came to symbolize the Great Depression for many Americans.
Chuck Wagon A man and a child near an old chuck wagon on a grazing project. The wagon once housed a family of fourteen. Oneida County, Idaho, May 1936.
Migrant Family on Road Migrant family walking on the highway from Idabel, Oklahoma to Krebs, Oklahoma. June 1938.
Unemployment Line In New York City Original caption: New York, NY: The Great Depression: Unemployment line up at the City Welfare Bureau to register for city jobs.
Family on Relief A family on relief living in a shanty in a municipal landfill. Herrin, Illinois, January 1939.
Unemployed Men in Bread Line Unemployed men wait in long lines for bread and handouts during the Great Depression.
Row of Slums A row of slums. Washington, DC, November 1935.
Destitute Family of Nine A destitute family with seven children during the Great Depression in the United States.