This is the first part of the lecture on the Great Depression. It traces the causes of the Great Crash and the road to the Great Depression. Frenzy consumerism, speculation, indebtedness, and agricultural collapse with the Dust Bowl ended in the greatest economic crisis in American History

1. The Great
Depression

2. Economic weaknesses and
unequal distribution of wealth
• No middle class
• 60% of families could not afford consumer goods
• Many who did buy consumer goods did it on
credit/hire purchase
• The richest owned all consumer goods they
wanted
• Supply not equal to demand
• Credit cards created false demand

3. Overproduction
• By 1929, Industry was running out of customers
• Everyone who wanted a fridge and a freezer
now had one
• The market was saturated
• Due to overproduction, there was a growing
surplus of manufactured goods

4. Laissez - Faire
• Republican Party policy was to
« leave it to the market »
• Federal government policy was
not to get involved with the
economy and let the market
sort everything
• Non intervention

5. Speculation
• Many people became speculators
• Shares were bought 'on the margin'
(paying only 10% of the share value, the
rest to be paid from profit on sale).
• People were BUYING, BUYING, BUYING
stocks in businesses that were not worth
the amounts they were paying

6. Americans perceived the stock market as a
possible rags to riches

7. Panic!!!
• Banks were loaning out more money than what
peoples’ investments were worth.
• Losses of confidence in March and September
but banks reacted by mass-buying shares.
• Thursday 24th October 1929, nearly 13 million
shares were sold in a panic, and prices crashed.
• Banks stopped buying shares.
• Speculators panicked at being stuck with huge
loans and worthless shares.
•
Thursday, October 24, 1929

8. • 29th October 16 million shares were
sold.
•many investors who bought stocks, lost
everything!

9. The Stock Market Crash of 1929
The crash caused others to
panic and sell the stock they had.
Banks were recalling loans. This
meant they made people pay
back loans early.
But, many could NOT pay!

10. The Stock Market Crash of 1929
•People could NOT pay, so
banks ended up closing.
• People who put their
money in the bank lost
their life savings.
The!

11. From Crash to Depresion
• With only 1.5 million shareholders
• And 600,000 speculators
• Why should their banktrupty cause a
Depression in a country of 123 million?

12. Why did it become the Great Depression
“The Domino Effect…”
• People lost their jobs after the stock market
crashed.
They needed to spend their savings.
Large numbers of people tried to take money
out of the banks
Many banks went out of business because they
had no money!
With less money, people bought less goods.

13. Why did it become the Great Depression ?
“The Domino Effect” Continued…
•Producers could not sell what they made so they
did NOT make profit!
Without profit, factories could not pay their
employees so factory workers lost their jobs.
When workers lost their jobs, they could not pay
what they owed to banks or businesses.
So more banks and more businesses began to fail.

14. The Great Depression
It was the worst economic crisis in US history.
• People had to rely on soup kitchens, which gave out
free food to the poor, because they could not survive
without this.

15. Farmers
Farmers struggled even before the Depression.
• During WWI, farmers did well, because as war created
demand for farm produce and raised farm prices.
• Overproduction after the Great War
• Collapse in prices with depression

16. Farmers
• Some farmers could manage
to grow their own food.
• Unable to keep up loan
repayments
• Were evicted and forced to
leave
• 1929-1932 over 400,000
farms were lost to
foreclosure

17. • Many people packed up and moved to California
looking for agricultural work.

18. • Between 1925 and 1930 more than 5 million
acres of previously unfarmed land was
plowed
• they covered the prairie with wheat in place
of the natural drought-resistant grasses and
left any unused fields bare
• Introduced new mechanized farming
techniques
• These methods left the land dry, useless, and
uncovered by crops.
Disaster Meets Disaster!

19. The Dust Bowl 1933-1936
During the early ‘30s, the Midwest experienced a
drought, which made the soil drier.
• The Dust Bowl was a series of windstorms that
carried the soil high in the air and created massive
dark clouds of dust.
• Some of these storms buried entire homes and cities.
The Dust Bowl forced many
Midwest farmers to leave and
move to other parts of the
country.

20. • Dustbowl
• Stories
A traveler noticed a nice new hat by the side of the road,
and he stopped to pick it up.
Under the hat was a man, buried up to his neck in the
dust! As he dug the poor fellow out,
the traveler asked if he wanted a ride into town. "No, I'll
get there myself,"
the man replied, "I'm on a horse."
(Excerpt from THE DUST BOWL by Tricia Andryszewski, p. 33.)

21. Disaster Meets Disaster!

22. Dust Bowl
• The “ground zero” of the Dust Bowl included
parts of Colorado, New Mexico, Texas,
Oklahoma, and Kansas.
• The effects of the Dustbowl would physically
impact about 26 states.
• The overall effect would be felt throughout the
whole nation.

30. Great Depression in the Cities
•People in the cities not only lost
their jobs, they lost their
homes! This led to:
• Shantytowns or
Hoovervilles/Hoovertowns
• Soup Kitchens
• Breadlines

32. In Detroit…
• The Great Depression crippled the
industries.
• Henry Ford was one of the many tycoons
who resisted the idea that the economy
was bad.
• He Actually gave raises.
• Then a year later decreased pay.

33. Impact on Workers
 August 1931 – Ford
closed its Detroit
factories.
 75,000
unemployed in
one day.
 Millions others
unemployed.

34. Impact on Workers
 Because large
factories closed –
small businesses and
restaurants began to
fail too.
 No customers
 No merchandise
 Rich people laid
off staff

36. Unemployment
•Before the Great Depression unemployment
rate 3.2%.
•1933 25% of population unemployed,
13 million people out of jobs.
-Many could but mortgage or rent payments
and ended up homeless.
-Many had to scrounge in garbage cans for
food or beg on street corners from the
wealthy people that passed by.

40. Homeless families
Most citizens blamed Hoover for the crisis.
During the depression many lost their homes and had
nowhere to live
They built shacks out of scrap pieces of wood and metal.
These soon became communities where poor homeless
people lived.
They were called “Hoovervilles” after Herbert Hoover.