Great Depression (AKS 38 c and d)

Consumerism in the 1920s

• While farmers struggled, most of the nation prospered during the 1920s.
• People spent money more freely rather than saving, which became normal.
• Buying on credit became popular, allowing people to buy things without saving up.

Overproduction Issues

• Industries and businesses produced more goods than people could buy, creating a supply and demand imbalance.
• Farmers also produced more than people could consume.
• Crop prices dropped after WWI, making it difficult for farmers to profit despite increased production.
• Many farmers borrowed money to buy equipment and grow more crops.

Stock Market Practices

• More people began investing in stocks.
• Buying stock meant purchasing part ownership in companies thought to be profitable.
• Stockholders became wealthy when companies performed well.
• People often paid a portion of a stock's price and borrowed the rest in the 1920s, referred to as buying on margin.
• Millions of Americans speculated in stocks during the 1920s, making high-risk investments hoping for rising share prices.
• This drove stock prices above their actual worth.

Black Tuesday and the Stock Market Crash

• People panicked and sold stocks at lower prices when stocks began dropping to their true value.
• The stock market crashed on October 29, 1929, due to rapidly declining stock prices.
• Black Tuesday marked the start of the Great Depression.

Consequences of the Crash

• The stock market crash led to a depression that harmed many Americans.
• People once wealthy became poor.
• Banks failed, unemployment rose, and many people lost their savings and homes.

Bank Failures

• There was no insurance protecting bank deposits in the early 1900s.
• People rushed to withdraw their money from banks after the stock market crash.
• The banks quickly ran out of money causing many people to lose their life savings.

The Great Depression

• The Great Depression was caused by overproduction, stock speculation/market crash, questionable banking practices, gold standard/hoarding money and laissez faire.
• Georgia was already in a depression because of boll weevil and drought
• Stockholders lost over $40 billion due to the crash.

The Great Depression (Summary)

• Consumerism during the growing economy of the 1920s saw more spending and less saving.
• The Stock Market Crash at the end of 1929 was a shock to the economy.
• Bank Failures led to lost savings and destabilized the economy.
• Reduced Purchasing caused demand to drop, and companies cut production and jobs.
• Overproduction of Agricultural Products caused prices to drop, harming farmers' profits.
• This was the longest period of unemployment and low economic activity.
• Occurred from 1929 and lasted throughout the 1930s.
• Agriculture income dropped 50%.
• Roughly, 25% of Americans were unemployed (or about 33% when all farmers are included).
• Poverty and homelessness were widespread.

Impact on Georgia

• The Depression particularly affected Georgia
• Cotton prices fell to 5 cents per pound leading many farmers to lose land.
• They moved to cities to find job.
• Between 1900 and 1940, Atlanta's population increased by 200,000.
• Many African American sharecroppers and tenant farmers left Georgia for northern cities in what was known at the time as The Great Migration.
• Those remaining on farms were often illiterate and impoverished.
• Many farm families lived in shacks without basic amenities and went hungry.
• Rural schools closed due to children needing to work and support their families.

Dust Bowl

• Over 750,000 farmers lost their farms during the Depression.
• Farmers in the Great Plains experienced severe droughts.
• Crops couldn't grow or hold topsoil without rain causing it to blow away in dust storms.
• The region became known as the Dust Bowl because of the pervasive dust.
• The skies turned black with dry, blowing dust.
• Oklahoma and Kansas were heavily affected.
• Many farm families migrated west to California seeking a fresh start.

Herbert Hoover's Presidency

• Herbert Hoover was president when the Depression started.
• Hoover thought private charities and local communities should help the needy, not the federal government.
• Many believed Hoover didn't do enough to aid Americans during the Depression.

Hoovervilles

• Thousands lost homes due to mortgage foreclosures.
• Many lived in cardboard shacks built in public parks, known as "Hoovervilles".

Unemployment

• Millions of Americans were unemployed and couldn't afford food.
• Food was provided by soup kitchens.

Franklin Delano Roosevelt

• Franklin Delano Roosevelt was elected in 1932.
• Roosevelt introduced his plan to get the country out of the Great Depression.
• He pledged a "New Deal" for the American people.
• He didn't think that the government should not interfere with the economy like Hoover believed,
• Roosevelt's government actively tried to recover the economy.
• Franklin D. Roosevelt had a close relationship with Georgia because he would visit Warm Springs often for his Polio.
• He built the Little White House in Georgia and would later die there in 1945.
• Roosevelt assisted Georgians with programs like Agricultural Adjustment Administration and the Rural Electrification Administration.

The 1920s saw a surge in consumerism driven by increased prosperity and credit availability. Industries and farmers faced overproduction, leading to economic imbalances. The stock market attracted investors, with practices like buying on margin becoming common.