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Causes of the great depression
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THE GREAT DEPRESSIONTHE GREAT DEPRESSION
04/23/23
The Election of 1928
MARCH 4, 1929 … HOOVER MARCH 4, 1929 … HOOVER INAUGRATEDINAUGRATED
MOST POPULAR PRESIDENT IN HISTORYMOST POPULAR PRESIDENT IN HISTORY
8 MONTHS LATER … HOOVERVILLES & 8 MONTHS LATER … HOOVERVILLES &
HOOVER BLANKETS.HOOVER BLANKETS.
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PROSPERITY NOT SHAREDPROSPERITY NOT SHARED
AGRICULTURE, COAL , AND AGRICULTURE, COAL , AND TEXTILES DEPRESSEDTEXTILES DEPRESSED
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Downtown MedfordDowntown Medford
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WALL STREETWALL STREET1 SHARE of RCA WENT FROM 1 SHARE of RCA WENT FROM
$85.00 TO $420.00 PER SHARE $85.00 TO $420.00 PER SHARE IN 1 YR.IN 1 YR.
PAID NO DIVIDENDSPAID NO DIVIDENDSRADIO UP 530%RADIO UP 530%
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SPECULATORS MARKETBUYING ON MARGINBUYING ON MARGINCALL $$$ … STANDARD OIL ( $69 CALL $$$ … STANDARD OIL ( $69
MILLION A DAY)MILLION A DAY)
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OCT.24 , 1929 … BLACK OCT.24 , 1929 … BLACK THURSDAYTHURSDAY
PANIC SELLINGPANIC SELLINGHOUSE OF MORGAN PROPS HOUSE OF MORGAN PROPS
UP MARKETUP MARKET
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WHY ? WHICH WAY THE WHY ? WHICH WAY THE ECONOMY ???ECONOMY ???
CONSUMER SPENDING FELL RAPIDLYCONSUMER SPENDING FELL RAPIDLY BUSINESS INVENTORIES UP BUSINESS INVENTORIES UP 100%100% IN 1 IN 1
YEAR YEAR BANK FAILURES … BANK FAILURES … 57005700 CLOSE CLOSE RESULTS IN A BLEAK ECONOMIC RESULTS IN A BLEAK ECONOMIC
FORECAST … NO INVESTMENTFORECAST … NO INVESTMENT NAT`L INCOME DROPS FROM NAT`L INCOME DROPS FROM $88$88
BILLION IN 1929 TO BILLION IN 1929 TO $40$40 BILLION IN 1933 BILLION IN 1933 GNP DROPS FROM GNP DROPS FROM $104$104 BILLION TO BILLION TO $56$56
BILLION IN 1933BILLION IN 1933 1933 --- 1933 --- 25%25% OF POP. WITHOUT JOBS OF POP. WITHOUT JOBS
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FARM PROBLEMSFARM PROBLEMSDUST BOWLOAKIESOVERPRODUCTION AND
INFLATION
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Okies and Arkies moved west
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The Dust Bowl
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What happened to farmers?The Dust Bowl
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•CAUSES OF THE DEPRESSION
1) PRODUCTIVITY INCREASED1) PRODUCTIVITY INCREASED
2) WAGES DID NOT2) WAGES DID NOT
3) DECLINE IN INVESTMENT3) DECLINE IN INVESTMENT
4) POOR DISTRIBUTION OF INCOME4) POOR DISTRIBUTION OF INCOME
5) BANK FAILURES5) BANK FAILURES
6) HOLDING CO. --- PYRAMID STYLE6) HOLDING CO. --- PYRAMID STYLE
7) ECONOMIC THOUGHT LACKING7) ECONOMIC THOUGHT LACKING
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STOP
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•DIFFERENCES FROM PAST DIFFERENCES FROM PAST DEPRESSIONSDEPRESSIONS
THE MOST SEVERETHE MOST SEVERE
1) NO MORE FRONTIER WITH 1) NO MORE FRONTIER WITH OPPORTUNITIESOPPORTUNITIES
2) TOTAL INDUSTRIAL ECONOMY2) TOTAL INDUSTRIAL ECONOMY
3) WORLDWIDE3) WORLDWIDE
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Hoovervilles
Labor and the Depression
Curing the Curing the Depression?Depression?
President Herbert HooverPresident Herbert HooverRugged IndividualismRugged Individualism
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What did Hoover do to end the Depression?Little action to help
people - Rugged individualismhelped business - RFC
Failed Hoover policiesFailed Hoover policiesAgricultural
Marketing Act Gov. buys farm
surplus Farmers refuse to
limit production Soaks up gov.
revenue
Hawley-Smoot TariffHawley-Smoot TariffRaise tariffs
on imported goods
Fails as overseas trade decreases
Reconstruction Finance Reconstruction Finance CorporationCorporation
Gov. lends $ to banks to avoid collapse
Again, soaks up gov. revenue
Too little, too late as banks continued to close
BACKLASH BACKLASH
THE BONUS ARMYWorld War I vets
demand bonusesMarched in D.C. to
receive early payment
Congress refuses
Driving Out Driving Out ProtestorsProtestors
Many vets remain, living in open areas
army moves inMilitary burns
their dwellings3 protestors
were killed
Change had to ComeChange had to Come !!!
“PROSPERITY IS JUST PROSPERITY IS JUST AROUND THE CORNERAROUND THE CORNER”
