NOTES on the Great Depression SSUSH17 SSUSH17 Causes of the - - PowerPoint PPT Presentation

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NOTES on the Great Depression SSUSH17 SSUSH17 Causes of the - - PowerPoint PPT Presentation

Nov 14, 2022 160 likes •396 views

NOTES on the Great Depression SSUSH17 SSUSH17 Causes of the Depression 1. uneven distribution of wealth 2. Stock market mistakes a. Speculation: buying cheap stocks hoping they will improve b. Buying on Margin: borrowing money from broker

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NOTES on the Great Depression

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Causes of the Depression 1. uneven distribution of wealth 2. Stock market mistakes

a. Speculation: buying cheap stocks hoping they will improve

  • b. Buying on Margin: borrowing

money from broker to buy stocks

i. charge interest!

  • ii. Stock must BOOM to make any $

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  • 3. Overproduction…

supply exceeds demand  price drop

  • a. Mass production =

too efficient

  • 4. Buying on Credit

a. Farmers buy equipment on credit b. Prices drop  Cannot pay debt c. Farm foreclosures!

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Farms Foreclosed

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  • 5. Panic! Stock Market Crash
  • a. Black Tuesday

i. 16.4 million shares SOLD (Oct 29th, 1929) ii. Loss of $30 billion

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  • 6. Bank Runs – everyone withdraws $
  • a. WORLD’s biggest lender falls
  • b. Stop lending to Europe  Europe cannot

afford to buy American products

  • c. Europeans cannot sell goods in US …

cannot pay back war debts

European factories fail Europe cannot repay loans OR buy Amer. products US stops loans to Europe

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Great Depression – severe economic decline

  • 1. Widespread poverty
  • a. Factories close – 25% unemployed
  • b. Hoovervilles = shantytowns for homeless
  • 2. gross national product (total value of

goods and services a country produces) = cut in half

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“Prosperity cannot be restored by raids upon the public treasury”

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Herbert Hoover (R) 31st President of the U.S. 1929-1933 Born: Aug 10, 1874 Died: Oct 20, 1964 “Children are our most valuable natural resource. We need to start drilling for more children.”

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Herbert Hoover’s response 1. Relied on “Corporate Volunteerism”

  • a. Opposes expanded government programs or direct

government intervention

2. Bonus Army - 20,000 unemployed veterans marched on Washington

a. Want war pensions b. Army burns camps - Used tanks and tear gas c. Hoover = horrified … but takes responsibility

3. Smoot Hawley Tariff – protectionist tax on foreign goods

a. Intended to help American companies, farmers, etc… b. Hurts American consumers & relationships with international trade community, reduces imports

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  • 4. In 1933, Prohibition is repealed.

Increased:

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21st Amendment to the United States Constitution

*Economy *Industry *Jobs

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Stories of Survival

  • Nothing was wasted

 the “depression generation”

– even those who recovered enough to live a very comfortable life, would continue to pinch pennies as if financial ruin were just around the corner – People pulled together and helped

  • ne another

– Humor to cope “When Wall Street took the tail spin, you had to stand in line to get a window to jump out of”

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Dust bowl – drought and dust storms in plains states

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