The great depression


Published on

Published in: Economy & Finance, Business
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

The great depression

  1. 1. The Great Depression
  2. 2. The_Great_Depression_Begins
  3. 3. Election of 1928 <ul><li>Prohibition and poverty major campaign issues </li></ul><ul><li>Republicans take credit for prosperity of ’20s </li></ul><ul><li>Herbert Hoover, Republican, elected by landslide </li></ul><ul><ul><li>Promise to keep Prohibition </li></ul></ul><ul><ul><li>Prosperity of ’20s </li></ul></ul>
  4. 4. Black_Tuesday
  5. 5. The Stock Market <ul><li>Stock </li></ul><ul><ul><li>Ownership in company </li></ul></ul><ul><ul><li>Sold to raise capital </li></ul></ul><ul><ul><ul><li>Improvements, expansion </li></ul></ul></ul><ul><li>Stock market </li></ul><ul><ul><li>Where stock is bought and sold </li></ul></ul><ul><li>Bull market </li></ul><ul><ul><li>Period of rising stock value </li></ul></ul><ul><ul><li>Caused millions to invest heavily </li></ul></ul>
  6. 6. <ul><li>Buying on margin </li></ul><ul><ul><li>Small down payment </li></ul></ul><ul><ul><li>Pay off balance ‘loan’ when stock sold </li></ul></ul><ul><ul><li>Safe as long as stock price rises </li></ul></ul><ul><li>Margin call </li></ul><ul><ul><li>Calling in ‘loan’ for repayment </li></ul></ul><ul><li>Speculation </li></ul><ul><ul><li>Buying stock at low price </li></ul></ul><ul><ul><li>Hold for short time </li></ul></ul><ul><ul><li>Sell for quick profit </li></ul></ul>
  7. 7. Problems with Stock Market <ul><li>No government regulation </li></ul><ul><li>Stock bought not reflect true value </li></ul><ul><ul><li>Prices bid up without looking at company’s earnings and profits </li></ul></ul>
  8. 8. The Crash <ul><li>Margin calls </li></ul><ul><ul><li>Led to stock sales </li></ul></ul><ul><ul><ul><li>Flooded market </li></ul></ul></ul><ul><ul><ul><ul><li>Caused prices to drop </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Panic on Oct 24, 1929 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>More & more stock put up for sale </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Stock priced bottomed out </li></ul></ul></ul></ul><ul><li>Tuesday, Oct. 29, 1929 </li></ul><ul><ul><li>“ Black Tuesday” </li></ul></ul><ul><ul><li>Stock market crashed </li></ul></ul><ul><ul><li>Beginning of Great Depression </li></ul></ul>
  9. 9. Collapse of Banking Industry <ul><li>Banks had invested in stock market </li></ul><ul><li>Risky loans </li></ul><ul><ul><li>Could not collect money </li></ul></ul><ul><li>People pulled money out </li></ul><ul><ul><li>‘ bank runs’ </li></ul></ul><ul><li>Unstable banks closed </li></ul>
  10. 10. Causes of Great Depression
  11. 11. Efficient machinery Overproduction Decline in Sales
  12. 12. Unemployment
  13. 13. Gov’t economic policies High Import Tariffs High Export Tariffs- no foreign markets
  14. 14. Overproduction- Surplus goods- Unemployment
  15. 15. Unchecked Stock Speculation Increase in stock price Decrease in stock demand
  16. 16. Stock Market Crash Oct. 29, 1929 “ Black Tuesday”
  17. 17. Unregulated Banking Industry Risky loans- Overextended credit Inability to recover money
  18. 18. Collapse of Banks
  19. 19. Other Factors to Consider <ul><li>Decline of farming industry </li></ul><ul><li>Uneven distribution of wealth </li></ul><ul><li>International economic policies </li></ul><ul><li>Easy credit purchasing </li></ul><ul><li>Weak and unregulated banks </li></ul>
  20. 20. Welcome_to_Hooverville
  21. 21. Farmers and Dust <ul><li>Decline of the farmer </li></ul><ul><ul><li>Overproduction </li></ul></ul><ul><ul><ul><li>Drop in farm prices </li></ul></ul></ul><ul><ul><ul><li>Economic devastation </li></ul></ul></ul><ul><ul><ul><ul><li>Loss of farms </li></ul></ul></ul></ul><ul><ul><li>Overuse of land </li></ul></ul><ul><ul><ul><li>Fields left bare, exposed to elements </li></ul></ul></ul><ul><ul><ul><li>1932 drought </li></ul></ul></ul><ul><ul><ul><li>Winds caused blowing sand </li></ul></ul></ul><ul><li>Farming poverty contributed to nation’s overall economic decline </li></ul>
  22. 22. Hoover’s Relief Efforts <ul><li>Public works </li></ul><ul><ul><li>Gov’t financed building projects </li></ul></ul><ul><ul><ul><li>Provided jobs lost in private sector </li></ul></ul></ul><ul><ul><ul><li>To pay for projects—raise taxes or borrow from banks </li></ul></ul></ul><ul><li>Reconstruction Finance Committee </li></ul><ul><ul><li>Provide funding for banks, railroads, and agricultural institutions </li></ul></ul><ul><ul><ul><li>Too cautious with loans to be effective </li></ul></ul></ul>
  23. 23. <ul><li>Veteran’s march for bonus </li></ul><ul><ul><li>Promised $1,000 to be paid in 1945 </li></ul></ul><ul><ul><li>1931 legislation, borrow ½ of bonus </li></ul></ul><ul><ul><li>1932 marched on Washington D.C. for full amount </li></ul></ul><ul><ul><ul><li>Congress voted down pmt of bonus </li></ul></ul></ul><ul><li>Hoover did more to expand role of federal gov’t than any previous president </li></ul>Hoover Cont’d……
  24. 24. A Time for Change <ul><li>Election of 1932 </li></ul><ul><ul><li>Hoover, Republican </li></ul></ul><ul><ul><li>Franklin D. Roosevelt, Democrat </li></ul></ul><ul><li>Republicans blamed for economic hardships </li></ul><ul><li>FDR and his “New Deal” wins </li></ul>
  25. 25. Roosevelt_Elected
  26. 26. <ul><li>32nd President </li></ul><ul><li>New Deal </li></ul><ul><li>Fireside Chats </li></ul><ul><li>“ The only thing we </li></ul><ul><li>have to fear is fear </li></ul><ul><li>itself” </li></ul><ul><li>Talent for giving </li></ul><ul><li>hope and confidence </li></ul><ul><li>to Americans </li></ul>Franklin Delano Roosevelt
  27. 27. Roosevelts_Programs
  28. 28. FDR’s Immediate Actions <ul><li>Restore confidence in banks </li></ul><ul><ul><li>Called national bank holiday </li></ul></ul><ul><ul><li>Congress passed Emergency Banking Relief Act </li></ul></ul><ul><ul><ul><li>Federal examiners survey banks </li></ul></ul></ul><ul><ul><ul><ul><li>Issue licenses to the financially sound </li></ul></ul></ul></ul><ul><li>Fireside chat to inform public banks were secure </li></ul><ul><ul><li>Following day—deposits outweighed withdrawals </li></ul></ul>
  29. 29. <ul><li>Federal Deposit Insurance Corporation (FDIC) – provide gov’t insurance for bank deposits up to certain amount </li></ul><ul><li>Securities and Exchange Commission (SEC)– regulate stock market and prevent fraud </li></ul>
  30. 30. <ul><li>The New Deal </li></ul><ul><li>Produced amazing amount of </li></ul><ul><li>legislation first 100 days in office </li></ul><ul><li>Based on: </li></ul><ul><ul><li>Relief – immediate relief for needy </li></ul></ul><ul><ul><li>Recovery – recovery for nation at </li></ul></ul><ul><ul><li>large </li></ul></ul><ul><ul><li>Reform - long-range reform for </li></ul></ul><ul><ul><li>economic institutions </li></ul></ul>
  31. 31. Civilian Conservation Corps <ul><li>Unemployed men 18-25 yrs old </li></ul><ul><li>Work in nat’l parks </li></ul><ul><li>Planted trees, fighting forest fires, built trails </li></ul><ul><li>Rec’d $30/mo plus food, shelter, clothing, education opportunities </li></ul>
  32. 32. Civil Works Administration <ul><li>Established 1933, abolished 1934 </li></ul><ul><li>Men worked on federal, state, local projects </li></ul><ul><li>Built roads, schools, airports, parks </li></ul><ul><li>Funded by Federal Emergency Relief Admin. </li></ul>
  33. 33. <ul><li>Created to expand </li></ul><ul><li>fight against unemployment </li></ul><ul><li>Based on idea of work relief </li></ul><ul><li>Gave unemployed jobs rather </li></ul><ul><li>than money </li></ul><ul><li>- construction & improvement </li></ul><ul><li>- bridges, roads, bldgs </li></ul><ul><li>Established programs to help </li></ul><ul><li>writers, actors, and artists— </li></ul><ul><li>Federal Number One </li></ul>Works Progress Administration
  34. 34. Public Works Administration <ul><li>Boost economy & stimulate industrial recovery </li></ul><ul><li>Worked with private companies & military bldg schools, hospitals, courthouse, navy cruisers </li></ul><ul><li>Permitted contractors to hire 650,000 workers </li></ul><ul><li>Absorbed 1943 by Federal Works Agency </li></ul>
  35. 35. Agricultural Adjustment Administration <ul><li>Relief for farmers </li></ul><ul><li>Paid to limit crop and livestock production </li></ul><ul><li>Created limited supply </li></ul><ul><ul><li>Caused prices to increase </li></ul></ul><ul><li>Helped some; caused hardship for tenant farmers </li></ul>
  36. 36. Tennessee Valley Authority <ul><li>Most celebrated accomplishment of New Deal </li></ul><ul><li>Redeveloped 40,000 square miles covering seven states along Tennessee River </li></ul><ul><li>Provided flood control, cheap electricity, new factories, jobs </li></ul><ul><li>Constructed dams and electrical power projects </li></ul>
  37. 37. <ul><li>Most important legislation </li></ul><ul><li>in American history </li></ul><ul><li>Monthly pensions to </li></ul><ul><li>qualified retirees over 65 </li></ul><ul><li>Benefits began 1942 </li></ul><ul><li>Funded by special tax </li></ul><ul><li>Established system of </li></ul><ul><li>unemployment insurance </li></ul><ul><li>Assistance programs for </li></ul><ul><li>other “dependent” people </li></ul>Social Security Administration
  38. 38. The_Second_New_Deal
  39. 39. The End of An Era <ul><li>Democratic Party members shifted from mainly white Southerners to include African Americans, farmers, laborers, new immigrants, & women </li></ul><ul><li>Roosevelt 2 nd term has limited successes </li></ul><ul><ul><li>Congress begins to block New Deal legislation </li></ul></ul><ul><ul><li>Caused economic downturn by cutting gov’t spending </li></ul></ul><ul><ul><li>Era ended 1939 </li></ul></ul><ul><ul><li>Gave Americans stronger sense of security and stability </li></ul></ul><ul><ul><li>Cut gov’t spending which caused economic downturn </li></ul></ul>
  40. 40. The End