The document summarizes the economic conditions during the late 1920s stock market boom and the subsequent stock market crash of 1929 that led to the Great Depression. It describes how the stock market rose rapidly through the late 1920s but then crashed on October 29, 1929, referred to as "Black Tuesday", wiping out millions of investors. It led to widespread unemployment, poverty and bank failures over the next several years. The economic crisis had global impacts and severe social consequences in the United States including the formation of shanty towns nicknamed "Hoovervilles". President Hoover was criticized for not doing enough to address the Depression.

1. “Crash & Depression”
1929 - 1933

2. Section #1
“The Economy in the Late 1920’s”
• Healthy Economy?
• 1925: Stock market $27 Billion 
• 1928: stock values rose $11.4 billion.
The year was described as “of
unprecedented advance, of wonderful
prosperity.” – New York Times
• Oct. 1929: stock values hit $87 Billion.
• Since 1914 workers wages  40%.
• Unemployment under 4%.
• Best selling book: “The Man Nobody
Knows (1925) – Bruce Barton
• 1929 article by John J. Raskob –
“Everybody Ought to Be Rich”
• welfare capitalism: An approach to
labor relations in which companies met
some of their workers’ needs without
prompting by unions.

3. Uneven Prosperity
• The Rich get richer!
• Huge corporations
• 200 large companies
controlled 49% of
American industry.
• 24,000 families (0.1%)
had incomes of more
than $100,000 & held
more than 34% of the
country’s total savings.
• The Poor get poorer!
• 71% of individuals and
families earned less than
$2,500.
• 80% of families had no
savings.
• Everyone in the family,
including children, had
to work to get by.
Income Distribution,
1920
1%
5%
29%
65%
$10,000 and over
$5,000 - $9,999
$2,000 - $4,999
$1,999 and Under

4. Other Economic Dangers
• Buying on Credit
• Increased personal debt.
• Installment plans made
expensive items
irresistible.
• Stock Market
• speculation: the practice
of marking high-risk
investments in hopes of
getting a high gain.
• buying on margin:
purchase a stock for only a
fraction of its price and
borrow the rest.
• Brokers charged high
interest rates and could
demand payment or loan
at any time.
• Supply & Demand
• Warehouses full of unbought
goods.
• Automobile industry.
• Housing construction fell 25%
from 1928 – 1929.
• Farmers
• Prices for farm products
plummeted after the wartime
demand ended. (wheat &
cotton)
• Farmers bought more land.
• Workers
• Most laborers did not benefit
from prosperity of big
business.
• 56 hour work week for 16 to
18 cents an hour = $10 a
week.

5. Section #2:
“The Stock Market Crash”
• Dow Jones Industrial Average: an average of
stock prices of major industries.
• Early 1928 = 191.
• Hoover’s inauguration day, March 4, 1929 = 313.
• September 3rd, all time high at 381.
• The Market Crashes
• Black Thursday: October 24, 1929, worried investors began to
sell and stock prices fell. (ex. GE $400 down to $283)
• Black Tuesday: October 29, 16.4 million shares were sold.
• By Nov. 13, 1929, the Dow Jones had fallen from 381 to
198.7 = losses totaling $30 billion. Known as the Great
Crash.
• business cycle: the periodic growth and contraction of a
nation’s economy. See page #636.

6. *In billions of dollars. Based on Standard and Poor’s index of common stocks.
Source: Historical Statistics of the United States, Colonial Times to 1970.
The Stock Market Crash
0
5
10
15
20
25
30
1925 1926 1927 1928 1929 1930 1931 1932 1933
Year
AverageMonthlyValue*
Stock
market
crash

7. Effects of the Crash
• Great Depression: a severe economic decline
that lasted from 1929 until the United States’
entry into World War II in 1941.
• Millions of Americans lost their jobs, homes, and farms.
• 1931 Henry Ford closed down his Detroit plants, 75,000
unemployed.
• Gross National Product (GNP): the total value of goods and
services a country produces annually.
• $103 billion in 1929.
• By 1933 it was only $56 billion.
• Bushel of wheat went from $1.04 in 1929 to 38 cents in
1932.
• Banks close
• 5,000 banks closed.
• By 1933, 9 million savings accounts vanished.

8. Impact on the World
• When the world’s leading economy fell, the
global economic system began to crumble.
• U.S. insisted that Britain and France repay war
debts.
• Congress kept wartime tariffs high.
• Allies had to rely on Germany’s reparations
payments for income.
• German banks failed when U.S. companies investments
failed.
• Europeans could no longer afford to buy American
made goods.
• American stock market crash caused a downward
cycle in the global economy.

9. Causes & Effects of the Great
Depression
CAUSES
*The 1920’s economy is out of balance.
*Americans are increasingly in debt.
*Speculation is on the rise.
*Overproduction slows industrial growth.
*The federal government introduces a tight money policy in order to control credit.
*The stock market crashes in October 1929.
THE GREAT DEPRESSION
Effects
*Millions of workers lose their jobs.
*Gross National Product falls dramatically.
*Many banks fail.
*Increased poverty leads to health and social programs.
*Global economy suffers.

10. Section #3 Social Effects – Great
Depression
• Immediate impact did not hit all – 1931-
32 all were effected.
• Professional, white collar, blue collar-
ALL lost jobs, savings accounts, &
homes. Poverty did not discriminate.
• “Hooverville”
• What environmental condition
compounded the Great Depression?

11. Hoovervilles

12. Hoovervilles

13. Children eating their Christmas dinner
during the Great Dep: turnips and
cabbage.

14. Anxiety, Suicide, Family Stress
• Competition for scarce
resources especially
jobs, caused an
increase in
discrimination
• 56% of Blacks were
unemployed in 1932
• Less divorces… why?
• Suicide way up… why?

15. Section 3 - continued
• The Grapes of Wrath – John Steinbeck
• What was the Dust Bowl?

16. The Dust Bowl:
1930’s, “dirty thirties”
• Great Plains (average of
20 in. rain/year)
• TX, OK, KS, NM, CO
• Black blizzards
• Heights of 8,000 feet
• Single storms could carry
more than 300 million lbs
of dust
• Rabbits, birds, field mice
suffocated
• “We live with the dust,
eat it, sleep with it.”
• Destroyed 5 million acres
of wheat
• Okies – dust bowl
refugees
• Dams eventually help as
does the gov’t (subsidies)

17. Section 4 - Surviving the Great
Depression
• Determination and humor
• People helped each other
• Identify problems with social, political and
economic systems
• However, some people (blacks,
immigrants, Jews) were still
discriminated against
• Ex. Scottsboro Boys Case
• The Communist and Socialist Parties
offered solutions to the problems of
capitalism and democracy.

18. Signs of Change
sec.4 cont.
• 1933, during the heart of
the Depression,
Prohibition was ended
with the 21st Amendment.
• Empire State Building
construction started in
1930. Why was it
considered a symbol of
hope?

19. What was Hoover doing?!
• Hoover’s response to the Depression – “world-
wide economic conditions beyond our control”
• Voluntary action by businesses to keep wages up
was Hoover’s “fix-it” plan; businesses did not
continue to voluntarily help
• Gov’t stimulated the Depression economy with
public works projects (i.e. Hoover Dam)

20. Hoover Dam!

21. Hoover Dam – Completed in
1936

22. Hoover’s demise . . .
From ‘Great Humanitarian’ to cold &
hard-hearted!
• Hoover’s RFC – gave gov’t
credit to banks to extend loans
– Trickle down theory of
economics made the gov’t look
like they were helping bankers
and not ordinary people.
(Reconstruction Finance
Corporation – banks still
failed)
• Hawley-Smoot tariff – the
highest in history, backfired-
Europe raised their tariffs –
stifled trade.
• Propaganda efforts against
Hoover aided in his political
downfall, in addition to
economic conditions not
improving.

23. The Bonus Army – sec 5 cont.
• 1932 – 20,000 WWI
veterans march on D.C.
demanding their pensions
payments.
• The H.O.R. agreed to pay, the
Senate did not.
• President Hoover called in
General MacArthur to drive
the marchers out of D.C. – he
turned the military against
those who fought to defend
freedom during WWI.

24. The New Deal & F.D.R (D)
“Happy Days are here again!”
• Landslide for
FDR/Eleanor – 7
million popular
votes.
• More voted against
Hoover.
• Many minorities
favored FDR.