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

  • 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
    • 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…
    • 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…
    • 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…
    • 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…
    • 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…
    • 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…
    • 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…
  • 5,000 banks closed; 9 million savings accounts were wiped out… Unemployment: Less than 1 million (1929) Over 12 million (1933)
    • … 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…
  •  
    • 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
  •  
  • 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:
    • 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…
    • 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…
    • By the time the 1936 elections rolled around, things were beginning to look up;
      • FDR was easily re-elected…
    Unemployment Weekly earnings
    • 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…
  •  
    • 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…
    • 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