The Great Depression Depression TermsNamesPart 1 Overproduction Foreclosure

The Great Depression

Depression Terms/Names-Part 1 ■ ■ ■ ■ Overproduction Foreclosure (foreclosed) Buying on Margin Black Tuesday Great Depression Bank Failures Dust Bowl Herbert Hoover

Great Depression Vocabulary-Part 2 ■ ■ ■ Hoovervilles Franklin D. Roosevelt (FDR) Three (3) Parts of the New Deal 100 Days Bank Holiday CCC SEC FDIC TVA AAA Social Security

Five (5) Causes of the Great Depression ■ 1. Weak Business Industry: – Mass-production of consumer goods led to overproduction-making too many products!! – People were not buying appliances & cars by the end of the decade (underconsumption)

Overproduction of Consumer Goods Too much inventory…Not enough buyers

Causes of the Depression ■ 2. Farming develops problems: – The end of WWI led to a decline in agriculture. – Over-production of food: 40% drop in crop prices – Farmers could not pay back loans & many had their farms foreclosed. (Bank takes possession of the property. )

Causes of the Depression ■ 3. Credit Problems – Many Americans used credit to live beyond their means – Americans generated large debts – Result: Americans cut back on spending by the end of the 1920 s p. 369

Causes of the Depression ■ 4. Uneven Division of Wealth – There was a large gap between the rich & poor-grew wider in the 1920 s. – 70% of Americans were considered “poor” – Most of the spending was done by 30% of the population Pg. 368 -369

Causes of the Depression ■ 5. The Stock Market: – In the early 1920 s, the stock market soared & people invested in stocks. (Buying a part of the company) Speculation=“playing” or investing in the stock market. – Many people borrowed money to pay for stocks, called buying on margin. Pg. 370

Causes of the Depression ■ The Stock Market: p. 370 – On October 29, 1929 (Black Tuesday) the stock market crashed. (Lost its money value) (known as the Great Depression) – Everyone rushed to sell their stock as prices rapidly dropped: investors lost $30 billion. – Speculators who bought on the margin, could not pay off their debts – Many banks had also invested in the market: they lost their money……… – People lost their life savings in the banks.

■ Bank Failures: – In 1929, 600 banks failed (Closed) due to lack of funds & the inability to recoup loans.

– The Great Depression led to a global depression in Europe, Asia, & Latin America – World trade fell by 40%.

– Millions of Americans lost their jobs or took pay cuts to keep jobs. – The lack of confidence in the future kept people from spending money. – The lack of spending made the Depression drag on until the 1940 s

■ The Great Depression led to a collapse of the U. S. financial system – 25, 000 banks & 90, 000 businesses failed by 1933 – Unemployment reached 25%. – Many Americans lost their homes – America had record poverty & suicide rates – Fathers abandoned families

Soup Kitchens & Breadlines

Mortgage Foreclosures

Poverty in America

The Dust Bowl ■ The effects of the Depression were made worse by the Dust Bowl: – Heavy droughts & over-farming in the West destroyed the Great Plains, creating a huge region that became known as the “Dust Bowl. ” – In the early 1930 s, windstorms swept away loose soil. (dirt) – Farmers in the Plains left their farms & searched for work or better land in West coast states.

The Dust Bowl (1931 -1939) Areas Affected by the Dust Bowl drought “Okies” & “Arkies” worsened the effects of the Depression

■ President Herbert Hoover – He believed things would improve on their own…… – “Americans need to work together to end the Depression. ”

Americans who lost their homes, lived in towns of wood/cardboard nicknamed “Hoovervilles”

– Americans lost faith in President Hoover. – They believed he was not trying to improve the USA economy. – Hoover did offer relief checks for qualified individuals. – He tried to create a few job programs-ordering the building of Boulder Dam…. . now called Hoover Dam, located outside of Las Vegas, Nevada. – He created the Reconstruction Finance Corporation, loaning $2 billion to banks, corporations, insurance companies, and railroads. – Americans saw this action as “too little/too late. ”