Many causes contributed to making the Great Depression as severe as it was: Farm Depression of the 1920s Prices of farm products fell about 40%

Many causes contributed to making the Great Depression as severe as it was:

Farm Depression of the 1920s

Prices of farm products fell about 40% in 1920-1921 and they remained low through the 1920s

As a result, some farmers lost so much money they couldn’t pay the mortgage on their farm

They either had to rent the land or move

Uneven Distribution of Income

Industrial production increased about 50% but the wages of the industrial workers rose far more slowly

As a result these workers couldn’t buy goods as fast as industry produced them

The Stock Market Crash

Stock values dropped rapidly on Oct. 24,1929; now known as Black Thursday

The next Monday stock prices fell again

On Tuesday stock holders panicked and sold a record 16.410,030 shares of stocks

Thousands people lost huge sums of money as stock values fell far below the prices paid

The relatively impoverished conditions of Americans farmers, who averaged 40% of urban laborers’ income, meant they couldn’t afford to buy consumer products

For the mining industry yearly earnings fell from 1, 700 to 1,481 dollars

The top 5% of income earners in America held 33.5% of the nation’s total wealth

[How Bad Was It?][How Bad Was It?]

100,000 businesses failed.

Stock values fell from $89 billion to $15 billion.From 381 to 41. $74 billion was lost.

25% unemployment rate [15 million](125 million

in the U.S.) [Unemployment was 3% in 1929.]

Unemployment stayed above 14.3% from 1931-1940. Average unemployment was 18%

This migrant worker had 7 children.This migrant worker had 7 children.

10,797 banks failed out of over 25,000, taking the life savings of 9 million people.

In some cities, girls danced only for 10 cents.

333,000 could not go to school. Many schools were open only 3 days a week for 8 months.

One million lost their homes. Housing starts dropped 90%.

GDP dropped from $104 billion in 1929 to $56 billion in 1933.

Dust storm approaching Stratford, Texas - 1934Dust storm approaching Stratford, Texas - 1934

THE DUST BOWL

Storm approaching Elkhart, Kansas Storm approaching Elkhart, Kansas in 1937in 1937

Dust buried cars and wagons in South Dakota in 1936Dust buried cars and wagons in South Dakota in 1936

Apple sellers could make $1.15 profit on 72 sold apples.

Many factory wages went from .55 an hour to .05 an hour.

Agriculture collapsed.

Prices and wages dropped around 25%.

Factory production dropped 50%.

Auto production fell from 4.5 million cars in 1929 to 1.1 million in 1933.

Those who checked into hotels were asked,“For sleeping or jumping”? [Suicides jumped 30%]

GREAT DEPRESSION STATSGREAT DEPRESSION STATS [IN 1958 DOLLARS] [IN 1958 DOLLARS]“BROTHER, CAN YOU SPARE A DIME?”“BROTHER, CAN YOU SPARE A DIME?”YearYear UUnemplnempl Real GDPReal GDP “C”“C” “Ig”“Ig” “G”“G” In.In. RRateate InflationInflation19291929 3.23.2 203.6203.6 139.6 40.4 139.6 40.4 22.022.0 5.95.9 ___ ___19301930 8.98.9 183.5183.5 130.4 27.4 130.4 27.4 24.324.3 3.63.6 -2.6-2.619311931 16.316.3 169.5169.5 126.1 16.8 126.1 16.8 25.425.4 2.62.6 -10.1-10.119321932 24.124.1 144.2144.2 114.8 114.8 4.74.7 24.224.2 2.72.7 -9.3-9.31933 25.21933 25.2 141.5141.5 112.8 112.8 5.35.3 23.323.3 1.71.7 - 2.2- 2.219341934 22.022.0 154.3154.3 118.1 118.1 9.49.4 26.626.6 1.01.0 7.47.419351935 20.320.3 169.5169.5 125.5 18.0 125.5 18.0 27.027.0 0.80.8 0.90.919361936 17.0 17.0 193.2193.2 138.4 24.0 138.4 24.0 31.831.8 0.80.8 0.20.219371937 14.314.3 203.2203.2 143.1 29.9 143.1 29.9 30.830.8 0.9 4.20.9 4.219381938 19.1 19.1 192.9192.9 140.2 17.0 140.2 17.0 33.933.9 0.80.8 -1.3-1.319391939 17.217.2 209.4209.4 148.2 24.7 148.2 24.7 35.235.2 0.60.6 -1.6-1.61940 14.61940 14.6 227.2227.2 155.7 33.0 155.7 33.0 36.436.4 0.60.6 1.6 1.6

-30-30%% -20-20%% -87-87%% -23-23%%

4.74.7

20072007

Relief: Providing immediate aid to people who had lost income

Recovery: Restoring GNP to the full-employment level

Reform: Providing greater security or benefits for groups of people

Federal Housing Administration (1934) Guaranteed mortgage loans of up to 30 years National Labor Relations Act (Wagner Act, 1935) Guaranteed collective bargaining Established the National Labor Relations Board The Social Security Act (1935) Established old-age pensions Established unemployment compensation Established aid to dependent children, the blind, and elderly not

eligible for Social Security Rural Electrification Administration (1935) Organized electrical cooperatives to supply power to rural areas Fair Labor Standards Act (1938) Minimum wage (25 cents an hour) Maximum hours (44), additional hours to be compensated at overtime

rates Restricted “oppressive” child labor

What were some of the reasons the New Deal was challenged?

1. Created a very powerful president that led Congress, this was a violation of checks and balances.

2. It was a radical departure from Laissez Faire ideals. Created "big government" .

3. Some acts appeared interfering and at worst unconstitutional.

4. Heavy debt burden - the United States was engaged in deficit spending and this was unhealthy for the economy in the long run.