Before Great Depression Govt. did very little domestically.

Main duties of the federal govt.:

Deliver the mail.

Maintain a national military.

Collect taxes & tariffs.

Conduct foreign policy.

Exception administer the annual Civil War veterans’ pension.

Remember: Federal Government Role

National income was 50% of what it had been in 1929

1 out of 4 was unemployed…

mass consumption declined

unemployment rose

no government assistance at first

productivity was cut back = further unemployment

Additional unemployment = further purchasing power decline = productivity yet again reduced

Unemployment

Purchasing Power Productivity

For the Poor...

The Depression's impact on the economy

  1929 1933

Banks in operation 25,568 14,771 

Prime interest rate 5.03% 0.63%

Volume of stocks sold (NYSE) 1.1 B 0.65 B

Privately earned income $45.5B $23.9B

Personal and corporate savings $15.3B $2.3B