Great Depression
What is it?
Causes and Contributing Factors
What is a Depression?
– Depression – a sharp & sustained decline in economic
activity
Great Depression – longest/worst in economic history
• Depression did not occur in 1 day - progressive
• Oct. 29, 1929 – stock market crashed
– Had been steadily growing weaker
– Oct. 24 began “panic selling” of stocks
– Stock prices dropped 2/3
• Economy reached bottom in 1932
5 causes of the Great Depression
You need to add notes as we go from what I say – you will have an assignment over these notes!
1. Weak economy
2. American business system was unbalanced
3. Poor distribution of purchasing power
4. Debt threatened economy
5. International debts owed, but not being paid
Now you get to illustrate these 5 causes!
#1
#2
#3
#4
#5
3 Contributing Factors
that prolonged the Depression
1. Banking Crisis
Between 1930-33 over 9,000 banks closed
Bank deposits not insured & depositors lost $
Decline in bank system: reduced amount of $ available
for loans/investments
Federal Reserve System (controls flow of $ to American
banks) responded slowly
1931 raised interest rates (shrinking $ supply further)
Economy bottomed out in 1932
GNP declined 25% over last 3 years
Investments only 3% of what it was before crash
Farm income cut by 2/3’s
2. Unemployment
Reached 25%
(1 of every 4 Americans out of work)
Most immediately visible in Midwest
ex. 50% unemployed in Cleveland, Ohio
ex. 80% unemployed in Toledo, Ohio
3. The Dust Bowl
Natural disaster that struck middle America
mid 1930’s lower than avg. rainfall from Dakotas to TX
 worst areas: panhandle of TX & OK, and parts of Kansas, Colorado
& New Mexico
lakes dried, plants withered, animals died
topsoil so dry that it was blown east in heavy winds
people lost land or ceased to be able to make a living
off of it
 many moved West b/c they heard of jobs and good crops
“Oakies”
 most worked as low-paid migrant farmers
farmers, despite dust, still produced more than people
could buy, prices continued to fall.
Great Depression Images
Dust storms were frequent during the
depression; this one occurred in Texas in 1935.
Dorothea Lange's
Migrant Mother
depicts destitute pea
pickers during the
depression in
California, centering
on Florence Owens
Thompson, a mother
of seven children, age
32, March 1936.
In the early 1930s shantytowns sprang
up in cities across the United States,
built by people made homeless by the
Great Depression.
These areas were nicknamed
Hoovervilles because their inhabitants
blamed United States president
Herbert Hoover. This one is in Seattle.
Dwellers in a local
Hooverville,
Circleville, Ohio
Two small children during the
Great Depression- part of a
squatter community (known
bitterly as "Hoovervilles“)
•What did the man do
wrong if he really did
save money to help him
through the bad times?
•What’s different today
from what happened
during the Great
Depression?
•Do you think it can
happen again?