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Objective: To examine the causes of the Great Depression

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Became 30 th President after Harding died 1923 Supported big business and laissez-faire economics (government should not regulate business or the market, it will automatically fix itself) Most of 1920s stock market did well People bought stock on speculation (made high- risk investments hoping to make a large profit) Also engaged in buying on the margin (purchasing stocks for portion of what they cost (10%), borrowing the difference, and paying interest)

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Helped a booming economy in the 1920s Ford and the assembly line Mechanization (use of machines) Increased production Manufacturers could charge less More people purchased cars, clothes, appliances Consumerism buying and consuming products meant people were spending more than they saved

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Cycle of Consumerism $$, spending, good economic times (prosperity) Improved Economy Companies do well, make profit Increased employment

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Overproduction market has more of a product than consumers want Underconsumption consumers reluctance to buy all that has been produced (also due to rising interest rates) Combination leads to falling prices

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Cycle of Disaster many businesses went bankrupt Falling prices, hurting economy Producers are hurt Little profit Loss of jobs, people have less $ to spend Demand for goods fall

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Technology (new tractors) led to overproduction (esp. during WWI) Agricultural prices dropped drastically Many attempts by Congress to pass bills increasing farm prices were vetoed by Coolidge (laissez-faire: the chief business of the American people is business) Farms went into foreclosure

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A foreclosure sale in Iowa in the early 1930s when "the bottom fell out of everything." Military police were on hand to keep farmers from disrupting the auction.

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Farmers prevent the foreclosure of a dairy farm in Des Moines Iowa 1933 Foreclosure: the sale or repossession of a persons home or property by creditors!

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Overproduction and poor farming techniques led to drought Dust Bowl (1931-1939) storms hit Midwest destroying farms leaving hundreds of thousands homeless migrants

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Causes of the Dust Bowl: Overgrazing by cattle and plowing by farmers destroyed the grasses that once held down the soil.

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Dust Storms: "Kodak view of a dust storm Baca Co., Colorado, Easter Sunday 1935 The loose soil, a drought, and high winds helped to cause the Dust Bowl.

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Farmer and sons, dust storm, Cimarron County, Oklahoma, 1936. Photographer: Arthur Rothstein.

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Farm foreclosure sale. (Circa 1933) Effects of the Dust Bowl: Farmers could barely make a living, causing many to leave their homes for the west.

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Farm Security Administration: Families on the road with all their possessions packed into their trucks, migrating and looking for work. (Circa 1935) Many farmers became migrant farmers as they moved from region to region looking for work.

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Farm Security Administration: farmers whose topsoil blew away joined the sod caravans of "Okies" on Route 66 to California. (Circa 1935)

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Became President in 1929 Opposed too much government interference in business Oct. 29, 1929 Black Tuesday stock market crashed: Stock prices dropped (caused by panic and selling of stocks) Many people lost everything Bankers began calling in loans that people had no $$ to pay Marked beginning of Great Depression

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Rush to withdraw money from banks caused them to close Fewer investments in stocks caused prices to fall even further Roughly 25% of all Americans were unemployed People had to rely on soup kitchens and breadlines (provided food for poor and homeless) Hoovervilles homeless lived in homemade shacks and makeshift villages

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A Bank Run in 1933 Its A Wonderful Life http://www.youtube.com/watch?v=lbwjS9iJ 2Sw&feature=player_detailpage

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Hoover did take action to intervene in the economy, but it was too little too late...

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The sole function of the government is to bring about a condition of affairs favorable to the beneficial development of private enterprise. Herbert Hoover (1930)

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Officials believed that raising trade barriers (tariffs) would force Americans to buy more goods at home, which would keep Americans employed.

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But they ignored the principle of international trade- it is a two-way street; If foreigners cant sell their goods here, they will shut off our exports there!

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Greatest economic crisis in U.S. history lasting more than a decade Severe worldwide economic downturn prior to WWII (affected industrialized nations and countries that exported raw materials to them)

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Log in!

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Overproduction and underconsumption that led to falling prices Consumerism Installment plan (buying on credit) Speculation and buying stock on the margin Political and economic decisions Black Tuesday

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Dorothea Lange's "Migrant Mother," destitute in a pea picker's camp, because of the failure of the early pea crop. Most of the 2,500 people in this camp were destitute. By the end of the decade there were still 4 million migrants on the road.

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Young Oklahoma mother; age 18, penniless, stranded in Imperial Valley, California. Migrant farmers from Oklahoma became known as Okies.

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The Great Depression forced many Americans to go hungry or depend on charities for food, clothing, and other necessities. Here, people wait in a breadline to receive free food.

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A soup kitchen Free Food for the Homeless

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These areas were nicknamed Hoovervilles because their inhabitants blamed President Herbert Hoover for their plight. Shantytowns formed in cities across the United States in the 1930s, built by people made homeless by the Great Depression.

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Franklin Delano Roosevelt wins the next election in a landslide!

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In order to bring about direct relief, FDR created quick, short-term jobs, and federal help to those hurting financially (FERA Federal Emergency Relief Agency)

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In his First 100 Days in office, he passed program after program for recovery Immediately began creating the New Deal Program Three Phases- First 100 days, The First New Deal, and The Second New Deal Relief, Recovery, and Reform