Topic.11 A Depression In The United States


Published on

  • Be the first to comment

  • Be the first to like this

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

No notes for slide
  • Topic.11 A Depression In The United States

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