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UNEQUAL DISTRIBUTION OF WEALTH

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HIGH TARIFFS AND WAR DEBTS. CAUSES OF THE GREAT DEPRESSION. UNEQUAL DISTRIBUTION OF WEALTH. OVER PRODUCTION. AGRICULTURE. Historians disagree as to the causes of the Great Depression. Most scholars would include:. STOCK MARKET CRASH AND FINANCIAL PANIC. MONETARY POLICY. - PowerPoint PPT Presentation
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1 UNEQUAL DISTRIBUTION OF WEALTH OVER PRODUCTION HIGH TARIFFS AND WAR DEBTS CAUSES OF THE GREAT DEPRESSION AGRICULTURE INDUSTRY MONETARY POLICY STOCK MARKET CRASH AND FINANCIAL PANIC Historians disagree as to the causes of the Great Depression. Most scholars would include:
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1UNEQUAL DISTRIBUTION OF WEALTHOVER PRODUCTIONHIGH TARIFFS AND WAR DEBTSCAUSES OFTHE GREATDEPRESSIONAGRICULTUREINDUSTRYMONETARY POLICYSTOCK MARKET CRASH AND FINANCIAL PANICHistorians disagree as to the causes of the Great Depression. Most scholars would include:12The 1920s was known as a prosperous time, but not for everyoneInstallment buying, using credit and paying back in small amounts, was introduced which allowed people to buy cars, radios and other new products of the 1920s. Farmers, however, were in a depression throughout the whole decade.

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RURAL POVERTY IN THE 1920S34Although the nation's wealth grew by billions throughout the 1920s, it was not distributed evenly.The top 1% received a 75% increase in their disposable income while the other 99% saw an average 9% increase in their disposable income.80% of Americans had no savings at all.UNEQUAL DISTRIBUTION OF WEALTHDisposable income is money remaining after the necessities of life have been paid for.

Happy Feet song

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The chart shows that 99% of the population received a 9% increase in their income, while the top 1% saw their income rise by 75%. 1,230,000 Americans121,770,000 Americans56

Chart showing wages of unskilled workers. Notice how little the wages changed during the supposed prosperity of the 1920s.6WHY DO THINK WAGES STARTED GOING UP BEGINNING IN 1938? (WAR SPENDING AROUND THE WORLD)7HIGH TARIFFS AND WAR DEBTSAt the end of World War I, European nations owed over $10 billion ($115 billion in 2002 dollars) to their former ally, the United States. Their economies had been devastated by war and they had no way of paying the money back.The U.S. insisted their former allies pay the money. This forced the allies to demand Germany pay the reparations imposed on her as a result of the Treaty of Versailles. All of this later led to a financial crisis when Europe could not purchase goods from the U.S. This debt contributed to the Great Depression.In 1922, the U.S. passed the Fordney-McCumber Act, which instituted high tariffs on industrial products. A tariff is a tax on imports. Other nations soon retaliated and world trade declined helping bring on the great depression.78Factories were producing products, however wages for workers were not rising enough for them to buy them. Too few workers could afford to buy the factory output. The surplus products could not be sold overseas due to high tariffs and lack of money in Europe.

OVERPRODUCTION IN INDUSTRY89FARM OVERPRODUCTIONDue to surpluses and overproduction, farm incomes dropped throughout the 1920s. The price of farm land fell from $69 per acre in 1920 t0 $31 in 1930. Agriculture was in a depression which began in 1920, lasting until the outbreak of World War II in 1939.In 1929 the average annual income for an American family was $750, but for farm families it was only $273. The problems in the agricultural sector had a large impact since 30% of Americans still lived on farms.

Surplus ears of corn910

In the 1928 presidential contest, Democratic New York Governor Al Smith ran against Republican Secretary of Commerce Herbert Hoover. Many were suspicious of Smith who was Catholic, while Hoover was popular for feeding starving Europeans after WWI.

Al Smith1011*1928 Hoover elected President: winning platform was based on continued prosperity

We in America today are nearer to the final triumph over poverty than ever before in the history of any land. The poorhouse is vanishing from among us. 1928

Hoover accepting the Republican nomination for president

1112"I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering. . . . The lesson should be constantly enforced that though the people support the Government the Government should not support the people." (1930)

President Hoovers belief in self-reliance would later affect his ideas about how to best solve the upcoming depression President and Mrs. Hoover1213Federal Reserve Monetary PolicyThe Federal Reserve System was created in 1913 to help stabilize the economy by establishing a central banking system for the U.S.A major goal is to deal with bank panics.Monetary policy manipulates the money supply to help strengthen the economy.At the beginning of the Great Depression, the Fed did not address failing banks, and many scholars argue their idleness worsened the situation.

1314STOCK MARKET CRASH AND FINANCIAL PANIC

WALL STREET ON THE DAY OF THE CRASH, OCTOBER 1929

14The trading floor of the New York Stock Exchange just after the crash of 1929. On Black Tuesday, October twenty-ninth, the market collapsed. In a single day, sixteen million shares were traded--a record--and thirty billion dollars vanished into thin air. Westinghouse lost two thirds of its September value. DuPont dropped seventy points. The "Era of Get Rich Quick" was over. Jack Dempsey, America's first millionaire athlete, lost $3 million. Cynical New York hotel clerks asked incoming guests, "You want a room for sleeping or jumping?"

15Stocks were overpriced due to speculation, meaning they were not worth their sale priceMassive fraud and illegal activity occurred due to a lack of regulation and rules Margin buying, or buying using credit Federal reserve policy Major reasons for the stock market crash in October 1929

1516Our government is founded on a conception that in times of great emergency, when forces are running beyond the control of individuals or cooperative action, beyond the control of local communities or the states, then the great reserve powers of the federal government should be brought into action to protect the people. But when these forces have ceased there must be a return to state, local and individual responsibility.

Herbert Hoover, speech in October 1932 expressing his philosophyHoover response to the Great Depression

1617The Reconstruction Finance Corporation, popularly known as RFC, was established in 1932, under the sponsorship of President Hoover and expanded during the administration of Franklin Roosevelt. The corporation made loans to banks, insurance companies, and industrial corporations as a way of restoring credit during the Great Depression. RECONSTRUCTION FINANCE CORPORATION (RFC)

1718HOOVER RELIEF AND GOVERNMENT MAKE WORK CONSTRUCTION PROJECTS

Construction of the Hoover Dam in Nevada employed thousands who needed jobs.1819

Hoovervilles, homeless camps named after the president1920

Modern day homeless camps in India (above) and Brazil (below)21The Bonus Expeditionary Force was a group of WWI veterans who had been denied early bonus payments for service in the war. They organized a protest march on Washington in 1932. Twenty thousand men set up a tent city, vowing to stay until they got their money. President Hoover sent in the army (led by future generals of the Army Douglas MacArthur and Dwight D. Eisenhower) to break up the peaceful demonstration.

Bonus marchers set up camp in Washington D.C.The Bonus March, MayJuly 1932

Bonus marchers rally at the Capitol steps2122

22wages409469388357393406404409418420431424407355356424439445506520527542604

Sheet1David, Paul A. and Peter Solar, (1977). "A Bicentenary Contribution toResearch the History of the Cost of Living in America," Pages 1-80 in Volume 2 ofin Economic History , Greenwich: JAI Press, Inc. (Table B.1 p. 59)177433177535177632177735177836177931178041178143178239178336178434178544178640178748178848178942179037179143179243179348179445179563179662179761179869179952180060180171180275180357180472180562180686180769180868180910418108818119118129218138718149718159218161111817931818721819751820671821741822681823801825681826701827841828671829701830681831681832681833641834671835621836911837104183810718398918407718417118427318436818448018458018467618477318487618498118508218518418528518538718549018559118569318579418589318599618601001861102186210618631211864138186514518661451867145186814618691461870142187114218721431873136187413118751251876118187711418781111879109188011618811201882123188312818841301885128188612918871321888138188913818901381891138189213818931381894132189513518961331897133189813518991371900140190114419021481903154190415519051571906165190717219081641909166191017219111681912171191317919141801915182191622419172791918351191940919204691921388192235719233931924406192540419264091927418192842019294311930424193140719323551933356193442419354391936445193750619385201939527194054219416041942686194375719447911945813194690019471017194810871949113119501184195112831952135819531450195415211955158419561662195717451958183019591903196019761961204719622114196321811964224519652314196623991967251519682660196928221970302119713265197234991973375319744059


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