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The Great Depression
Transcript of The Great Depression
Throughout the 1920's, American was Roaring...
But in 1929, the American Economy collapsed.
What caused the Great Depression?
What should the government do?
3. Income Inequality
2. Bank Failures
President Franklin Roosevelt
President Herbert Hoover
Too much for sale
Too little to spend
a severe, long-term slowdown in economic activity
Stock Prices crashed on Black Tuesday, October 29, 1929.
Two months after the crash, stockholders had lost more than $40 billion dollars.
Although only 2% of Americans owned stock, the fact that many stocks had been bought with borrowed money led to even greater problems...
Buying on Margin
People were spooked that their bank would close because loans were not being paid back. At this time, Bank deposits were uninsured and thus as banks failed people simply lost their savings. This created a run on banks.
Surviving banks, unsure of the economic situation and concerned for their own survival, stopped making new loans. This limited the amount of money people could spend and led to other problems...
Banks stopped lending
Fears of further economic woes led people to stop purchasing items. More and more inventory began to accumulate. This then led to a reduction in the number of new items needed and thus a reduction in the workforce.
As people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans and their items were repossessed. The unemployment rate rose above 25% which meant, of course, even less spending to help alleviate the economic situation.
4. The Dust Bowl
A conservative approach:
3. "Trickle Down" Assistance
"Those who cannot remember the past are condemned to repeat it"
"Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body - the producers and consumers themselves."
1. Inspire confidence
2. Promote Individualism
Increased unemployment and hardships
In 1932, America voted for a different approach...
A progressive Approach:
The beginning of the end to the Great Depression
"Throughout the nation men and women, forgotten in the political philosophy of the Government, look to us here for guidance and for more equitable opportunity to share in the distribution of national wealth... I pledge myself to a for the American people."
When drought struck from 1934 to 1937, the soil lacked the stronger root system of grass as an anchor, so the winds easily picked up the loose topsoil and swirled it into dense dust clouds, called “black blizzards.”
Most early settlers used the land for livestock grazing until agricultural mechanization combined with high grain prices during World War I enticed farmers to plow up millions of acres of natural grass cover to plant wheat.
Recurrent dust storms wreaked havoc, choking cattle and pasture lands and driving 60 percent of the population from the region.