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Topic.11 A Depression In The United States
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Topic.11 A Depression In The United States

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  • Transcript

    • 1. Mr. Michael Meechin Celebration High School Department of Social Science “ Take a method and try it. If it fails, try another. But above all, do something.” - Franklin Delano Roosevelt
    • 2.
      • The stock market was established as a system of buying and selling shares of companies;
        • Prosperous times of the 1920s caused many Americans to invest heavily in the market…
        • When one buys a share, they basically own a “piece” of the company purchased…
    • 3.
      • The stock market soared throughout most of the 1920s, and the more it grew, the more people were eager to pour money into it;
        • Most people bought on margin, paying for only part of the stock when they bought, paying the rest when selling;
        • Margin works great… if the stock prices go up…
        • The market crashed in late October 1929, and people who had bought on margin were forced to pay on stocks worth nothing…
    • 4.
      • Who told them anyone could be rich?
        • People were risking their money by playing the Stock Market;
      • Speculation;
        • The process of buying stocks that were thought to rise quickly in price and then selling them for a profit;
      • Buying on Margin;
        • Buying a stock by only paying a percentage of the price, the stock itself is used as collateral…
    • 5.
      • We’re in the money! With too many people;
        • Huge numbers of people investing causes saturated market;
      • Sell, Sell, Sell
        • Brokers begin to call in their margins or loans, and people did not have the money to pay;
      • Prices Down = Panic
        • Those who noticed the downturn in the market panicked and sold their stocks…
    • 6.
      • Where’s the Bank?
        • Banks lent money to brokers; brokers lost all their money to those who borrowed on margin;
      • FDIC
        • Federal Deposit Insurance Corporation;
      • Who’s Depressed?
        • Anyone who had a savings account had been wiped out…
    • 7.
      • Many banks, especially smaller ones, had overextended credit to farmers;
        • Farmers had not shared in the prosperity of the 1920s and could not repay their loans…
        • Bigger banks had blown all their money lending to foreign countries after WWI;
        • European countries defaulted and banks went bankrupt…
    • 8.
      • While the overall economy soared in the 1920s, most of the wealth was not spread out;
        • In 1929, over half of American families were living under the poverty line…
        • These people had no money to buy products or pay off debt;
        • With less consumers, manufacturers were forced to lay off tens of thousands of workers…
    • 9. 5,000 banks closed; 9 million savings accounts were wiped out… Unemployment: Less than 1 million (1929) Over 12 million (1933)
    • 10.
      • … the consequences were staggering;
      • Thousands were left unemployed and out of a job;
        • It would not be uncommon for 2,000 to 3,000 applicants to show up for one or two openings…
    • 11.  
    • 12.
      • If they weren’t looking for work, they were looking for food;
        • Bread lines were est. to keep people from starving…
      • Over 1 million families lost their homes;
      • They took up residence in shantytowns made up of tents, packing crates and old cars;
      • These places were called “Hoovervilles”, a reference to President Hoover, who was blamed for the mess…
      Bread line in Louisville, Kentucky; 1930s
    • 13.  
    • 14. Automobile sales declined. This loss of demand meant less demand for: Oil Steel Rubber Textiles Industry slowed, which caused: Lower Wages Unemployment Which contributes back to:
    • 15.
      • With jobs scarce, a strong feeling prevailed that women should stay at home and let the men have the jobs;
        • There was even a federal “rule” that two people in the same family could not both be on the gov’t payroll…
        • Two things actually increased the # of women workers;
          • Families could not survive w/o extra income;
          • Men became ashamed they could not find work and abandoned their families…
    • 16.
      • Roosevelt was elected in 1932, with people hoping he could pull them from “Depression”;
        • In 1935, Roosevelt got Congress to pass the Social Security Act;
        • This provided unemployment insurance and retirement pensions paid by both employer and employee through payroll taxes;
        • Later in the 30s, he signed a law which created a national minimum wage of 25 cents/hour…
    • 17.
      • By the time the 1936 elections rolled around, things were beginning to look up;
        • FDR was easily re-elected…
      Unemployment Weekly earnings
    • 18.
      • Roosevelt’s New Deal, his plan to get the country out of the Depression, brought gov’t into peoples lives;
        • It offered a variety of programs that tried to keep people working, fed, and happy;
        • In 1940, most people were indeed happy, at least happier than they were in 1932…
        • In an unprecedented move, Americans gave FDR a third term as President…
    • 19.  
    • 20.
      • While politicians were coming up with ways to create more wealth, others came up with other ways… they stole it!
      • Charles “Pretty Boy” Floyd;
        • 30 banks; killed 10…
      • Arizona “Ma” Barker
        • Gang of four sons; died in a shootout…
      • John Dillinger
        • 14-month crime spree; 3 jail breaks; 2 shootouts; stole $265,000…
    • 21.
      • Fighting the bad guys were the G-Men, a nickname given to FBI agents by George “Machine Gun” Kelly;
        • The “G” stood for government…
        • Head of the G-Men was J. Edgar Hoover, who served as director of the FBI from 1924 until his death in 1972;
        • His dictatorial leadership, unethical and quite possibly illegal use of the bureau against personal enemies have stained his name;
          • But in the 1930s, millions of American boys wanted to be him…
      Hoover on the left