The Great Depression Causes A Under consumption 1

The Great Depression

Causes • A. Under consumption • 1. consumers not purchasing goods during the boom time of the economy • 2. buying on credit: many people cannot pay back the debts they owe due to credit purchasing.

Over production • 1. surplus is created • 2. business cycle is created • • • a. cut prices b. freeze wages c. no new employees hired d. fire employees e. former employees can’t afford to buy goods

Market Speculation • 1. Speculators (stock brokers) are incorrect on the value of stocks • 2. buying “on margin”

Black Tuesday • 1. Stock Market (Dow Jones) starts to drop on Friday • 2. gets worse over the weekend • 3. Monday starts to fall drastically • 4. Tuesday stock brokers race to sell their stock, floods the market and collapses

Consequences • A. Dust Bowl • 1. dry conditions and drought like conditions in the Midwest to west • 2. Okies • a. farmers struck by no income and drought conditions • b. move further west (California) for work and or other opportunities • c. lost everything in the depression

President Herbert Hoover’s attempts to stop it • 1. Relief to business’s not the people • a. Trickle Down Economics: give business’ tax breaks to encourage them to pay employees more. In return, business’ would pay employees more or hire more people – doesn’t work. • 2. Hooverville's • a. shantytowns / shacks or places where homeless people would gather • 3. Hoover Blankets • a. newspapers used as blankets by homeless

• 4. Hoover Flags • a. pockets turned inside out to be a visual protest or demonstration of having no money • 5. Bonus Army – Bonus Army March on Washington • a. WWI veterans pushing for war pensions owed by the government • b. Hoover refuses to give them, and in result loses election to FDR

Who experiences the most impact of the Depression? • 1. Children • a. malnutrition • b. lack of funding for schools • 2. Middle Class • a. wealthy feel it some • b. middle class become poor • c. the one already poor remain poor