THE GREAT DEPRESSION

CRASH OF 1929

• October 24, 1929 was Black Thursday
• Stock prices dropped, investors lost life-long savings
• Lenders call in loans, forcing investors to keep selling
• Results: overproduction, reduced consumer demand
• Widespread business failure and unemployment

FAMILIES

• Unemployment jumped to 25% in the US
• A shantytown was a deprived area on outskirts of town
• Crude dwellings where people who lost their job/home lived
• Wages decreased significantly
• Often, entire families had to work to survive

THE NEW DEAL

• Keynesian Economics: believed government should play role in economy
• Believed the Depression was a problem of inadequate demand, not supply
• New programs protected banking system, massive public works, farm subsidies
• Minimum wage, social security, and worker union established
• Military spending ultimately ended the depression