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1920-30’s
The 1920’s and 30’s
• For the most part the 1920’s were a time of
vast prosperity in most of Europe and North
America
• The 1920’s saw many changes to the way
people lived
• The Prohibition movement led to the ban of
alcohol in the United States
• From 1920-33
Americans turned
to bootleggers like
Al Capone to get
their alcohol
• Capone and other
gangsters ruled
many of the major
American cities
American Economy
• The 1920’s saw a
massive shift in
the economy of
the United States
• Henry Ford
introduced the
assembly line
and the Model T
was the first
mass produced
automobile
• The assembly
line helped Ford
and other
companies like
Firestone,
General Motors
and Oldsmobile
become
massively
successful
• The US economy
was thriving, the
automobile age
was ushered in,
people began to
use credit to
purchase goods
German Economy
• In Germany the economy was not faring so
well
• The harsh conditions imposed by the Treaty
of Versailles left Germany crippled
• Inflation soared as the country struggled to
repay reparations to France
• The cost of bread and other house hold
goods sky rocketed
The Stock Market Crash
•
The prosperity of the American Economy came
to a crashing to a halt on October 29th of 1929
• The New York Stock Exchange lost over half of
its value in one day
• It crashed due to two main reasons:
1. Over Speculation- Too many people were
playing the stocks, too much was being bought
and sold too quickly
2. Buying on
Margin• Investors
were able to
buy stocks
only putting
down 10% of
the cost
• They would
then turn
around and
sell the stock
for a quick
profit
Great Depression
•
The Stock Market Crash did not solely
cause the Great Depression but it did
signal the start of this era.
• The causes were;
1. Overproduction- The industrial capacity
had exceeded the ability of the consumer
to buy goods
2. The Stock Market
• over speculation
limited available
money
3. ProtectionismThe US raised
tariffs to protect
their industries,
other countries
had no choice
but to follow
4. International Debt
from the First World
War
• The allies had
borrowed heavily to
finance the war
effort and needed to
sell their products to
U.S. markets to pay
the money back
5. Uneven Distribution of Wealth
• 8% of the population of the United States
controlled 45% of the countries wealth
• While 60% of the countries population
received only 2.5% of the countries income
• This imbalance meant that many families
were living near the poverty line
• They were affected most by the Depression
Consequences of the Great
Depression
•
The economy of the United States was
devastated which impacted economies all over
the world
• There were several main consequences of the
Depression;
1. Unemployment
•
It ran at about 25% in most industrialized
countries
• There were no safety nets in place such as E.I or
welfare
• People had to
rely on
charity to get
by and often
that was not
enough
• Soup lineups
became
common
place
2. Banking Failures
• As businesses and
farms went bankrupt
so to went the banks
• This hurt those who
lost their life savings
• It also destroyed
consumer
confidence
3. Changing Role of Government
• The Government took a hands off
approach known as Laissez-Faire
Economics
• They did not get involved feeling that it
was the responsibility of the citizen to
help themselves
• In the early 1930’s they were faced with
little choice to get involved in the
economy
Herbert Hoover
• Hoover was American
President from 1928-1932
• Hoover was a wealthy
mining engineer and had
little apathy for those who
were suffering during the
depression
• He didn’t want to endanger the
American way of life which was based
on Free Enterprise
• He used catchy slogans such as a “car in
every garage” to try and get the
economy going
• This failed miserably and by early 1930
the number of unemployed in the United
States was around 20 million and
continuing to grow
• The Homeless and unemployed lived in
communities of shacks called
“Hoovervilles”
Franklin Delano Roosevelt
• Franklin Delano Roosevelt and his
Democrats were swept into power in 1932
• He was to dominate American politics for
the next thirteen years and is seen as one of
the greatest presidents in history
• Roosevelt tried a different path to get the
United States out of the Depression
• During the
election
campaign
Roosevelt
promised
improvement
in his first 100
days
• He wanted to
tackle all
immediate
problems
The New Deal
• Roosevelt introduced his New Deal as a
way to deal with many of the problems in
America
• The New Deal was an attempt to jumpstart
the economy of the United States
• He told the people of these programs
through his Fireside Chats
• He was the first President to use the media
as a tool
•
Part of the program was the Alphabet
Agencies they included:
1. Civilian Conservation Corps CCC
• Created work planting trees, employed 2.5
million people over the course of the
program
2. Works Progress Administration WPA
• Financed public
Works projects
3.
•
4.
•
National Recovery Administration NRA
Reformed labour conditions
Tennessee Valley Authority
Massive public works project to build
seven hydro electrical dams along the
Tennessee River
5. Agricultural Adjustment Administration
AAA
• Created subsidies for farmers
• Roosevelt received some resistance from
the Supreme Court
• He threatened to replace all of them and
they caved in
• He created the Social Security Act in 1935
with the Second New Deal
• Roosevelt's reforms helped but the U.S.
didn’t come out of the depression until the
start of the second world war