THE CAUSES OF THE GREAT DEPRESSIONHow the booming 20s became a huge bust!

Harding in Office

Republican elected in 1920

“return to normalcy” time in office far from

normal promoted laissez-faire surrounded himself with

the Ohio Gang poker buddies greedy and

drunk (spoils system) looking to get rich off the

government

Teapot Dome Scandal

Secretary of the Interior, Albert B. Fall. federal oil reserves at Elk

Hills, CA and Teapot Dome, WY

leased private companies in return for bribes

oil was for naval use Fall went to jail…1st Cabinet

member to go to jail Harding died in office

before scandal could touch him

Silent Cal (Calvin Coolidge) in Office

Republican – takes over following Harding’s death in 1923, elected 1924

trust in business laissez-faire approach had honest people

working for him economy was

booming…but not for long

“The man who

builds a factory, builds a temple”

“The business of America is business!”

A Bull Market (rising stock prices)

Republican rule (Harding & Coolidge) America was

prospering no one could see what

was about to happen there were signs

Another Republican, Herbert Hoover, gets elected in 1928 another laissez-faire

guy …..things are looking

good but are they???

“A chicken in every

pot and a car in every

garage.”

Early Signs of the Great Depression

new technologies increased output wages remain low

to buy goods too many goods not enough

consumers farmers amounting

large debt

huge gap between rich and poor

middle class basically non-existent

fewer consumers when products overflowing

OVERPRODUCTION DISTRIBUTION OF WEALTH

More Causes

buying things with small down payments

then pay the rest in monthly payments

used to buy consumer goods like cars, washing machines, and refrigerators

buying stock on credit

small down payment pay the rest in

monthly payments PROBLEM: value of

stocks go up and down

INSTALLMENT PLAN BUYING ON MARGIN

And More Causes

buying stock using credit

hope stock prices would rise

PROBLEM: if they didn’t people could loose everything

before 20s no money no buy debt = fear

buying on credit was a new idea now everybody

was doing it

SPECULATION EASY CREDIT

The Boom is a Bust

For a month stock prices had fallen too many people selling

stocks only makes the problem worse

Black Tuesday: October 29, 1929 sparked the Great Depression people rush to sell their stocks called the Great Crash people lost their fortunes in

hours

The Great Depression

1929-1941 Economy was ruined Businesses close Extremely high

unemployment fewer goods bought

People run to the banks withdraw their money banks don’t have all the

money on hand led to bank

failures/closings People lose

EVERYTHING

Hawley-Smoot Tariff

Hoover tried to help Tariff raised taxes on

foreign imports American products

cheaper Foreign companies raise

taxes on American goods Now can’t sell in America

or other countries BACKFIRE (failure)

Life During the Great Depression

People lost EVERYTHING: Jobs Homes life savings due to

bank closings confidence in

Government hope of achieving the

“American Dream” their pride

Charity

Soup Kitchens Bread lines provided free food

to families but was limited

“Hoovervilles”

places where many homeless people grouped together in shantytowns (makeshift tents or lean-tos)

named after President Hoover felt he was doing nothing to take care of the

problem (homelessness) or them covered up with newspapers

(Hooverblankets) turned their pockets inside out known as

Hoover flags

“Hoovervilles”

The Dust Bowl (Great Plains Region)

environment a struggle from beginning not enough rain, over-farming

1932 drought caused soil to turn to dust wind storms created dust storms ~ Dust Bowl

refugees, “Okies,” (regardless of what state they came from) left their farms for California for a new start

When he leaves the Dust Bowl, he will be called an “Okie”!

Plight of the Farmer

John Steinbeck’s Grapes of Wrath family facing hard

times in CA Photojournalists,

Walker Evans and Dorthea Lange hardship and

determination leads to demands for

better housing & sanitation of migrant workers

Hoover’s Band-Aid

promoted rugged individualism not direct relief people take care of themselves rather than

the governmentBIG problem, little Band-Aid…tried to

fix it tried to get businesses to keep employees,

wages and prices at stable levels reduced taxes on people to encourage

spending asked the wealthy to be more charitable

none of this worked (too laissez-faire)

Hoover Disappoints started to give money to companies to restart

production…didn’t work built the Hoover Dam to create construction jobs

Bonus Army (The Nail in Hoovers Coffin)

WWI veterans promised a bonus check to be paid in 1945 depression hit (1932), need money NOW

Hoover vetoed a bill to give them their money early they march to Washington and set up a

“Hooverville” Hoover had General MacArthur remove

veterans given one hour to pack up and get out tear gas was used on stragglers not Hoovers intentions but ruined his reputation

“No Pay, All Stay”