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The Great Depression Begins. Chapter 14 US History Honors Mr. Basich. Timeline: What’s Going On?. World 1932 – Gandhi leads a protest against British policies in India. 1933 – Adolf Hitler takes power in Germany. 1933 – Japan withdraws from the League of Nations. United States

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The Great Depression Begins

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The great depression begins

The Great Depression Begins

Chapter 14

US History Honors

Mr. Basich


Timeline what s going on

Timeline: What’s Going On?

  • World

  • 1932 – Gandhi leads a protest against British policies in India.

  • 1933 – Adolf Hitler takes power in Germany.

  • 1933 – Japan withdraws from the League of Nations.

  • United States

  • 1929 – The Stock Market crashes.

  • 1930-33 – More than 40% of the nation’s banks fail.

  • 1931 – 8.02 million Americans are unemployed.

  • 1933 – The 21st Amendment ends Prohibition.


Section 1 objectives

Section 1: Objectives

  • By the end of this lesson, I will be able to:

  • 1. Summarize the critical problems threatening the American economy in the late 1920’s.

  • 2. Describe the causes of the stock market crash and the Great Depression.

  • 3. Explain how the Great Depression affected the economy in the United States and throughout the world.


Section 1 the nation s sick economy

Section 1: The Nation’s Sick Economy

Main Idea: As the prosperity of the 1920’s ended, severe economic problems gripped the nation.

Why it Matters Now: The Great Depression has had lasting effects on how Americans view themselves and their government.

Key Terms:

Price Support

Credit

Dow Jones Industrial Average

Speculation

Key Terms / Names:

Buying on Margin

Alfred E. Smith

Black Tuesday

Great Depression

Hawley-Smoot Tariff Act


The nation s sick economy

The Nation’s Sick Economy:

  • As the 1920s advanced, serious problems threatened the economy while

  • Important industries struggled, including:

  • Agriculture

  • Railroads

  • Textiles

  • Steel

  • Mining

  • Lumber

  • Automobiles

  • Housing

  • Consumer goods


Farmer s struggle

Farmer’s Struggle:

  • No industry suffered as much as agriculture

  • During World War I European demand for American crops soared

  • After the war demand plummeted

  • Farmers increased production sending prices further downward


Consumer spending down

Consumer Spending Down:

  • By the late 1920s, American consumers were buying less

  • Rising prices, stagnant wages and overbuying on credit were to blame

  • Most people did not have the money to buy the flood of goods factories produced


Living on credit

Living On Credit:

  • Although many Americans appeared to be prosperous during the 1920’s, many were living beyond their means.

  • Many goods were bought on Credit – an arrangement in which consumers agreed to buy now and pay later for purchases.

  • Many businesses encouraged credit purchases. (sound familiar?)

  • Consumer debt started to pile on.


Gap between rich and poor

Gap Between Rich And Poor:

  • The gap between rich and poor widened

  • The wealthiest 1% saw their income rise 75%

  • The rest of the population saw an increase of only 9%

  • More than 70% of American families earned less than $2500 per year


Hoover wins 1928 election

Hoover Wins 1928 Election:

  • Republican Herbert Hoover ran against Democrat Alfred E. Smith in the 1928 election

  • Hoover emphasized years of prosperity under Republican administrations

  • Hoover won an overwhelming victory


The stock market

The Stock Market:

  • By 1929, many Americans were invested in the Stock Market

  • The Stock Market had become the most visible symbol of a prosperous American economy

  • The Dow Jones Industrial Average was the barometer of the Stock Market’s worth

  • The Dow is a measure based on the price of 30 large firms


Stock prices rise through the 1920 s

Stock Prices Rise Through the 1920’s:

  • Through most of the 1920s, stock prices rose steadily

  • The Dow reached a high in 1929 of 381 points (300 points higher than 1924)

  • By 1929, 4 million Americans owned stocks


Seeds of trouble

Seeds Of Trouble:

  • By the late 1920s, problems with the economy emerged

  • Speculation:Too many Americans were engaged in speculation – buying stocks & bonds hoping for a quick profit

  • Margin:Americans were buying “on margin” – paying a small percentage of a stock’s price as a downpayment and borrowing the rest


1929 crash

1929 Crash:

  • In September the Stock Market had some unusual up & down movements

  • On October 24, the market took a plunge . . .the worst was yet to come

  • On October 29, now known as Black Tuesday, the bottom fell out

  • 16.4 million shares were sold that day – prices plummeted

  • People who had bought on margin (credit) were stuck with huge debts


The great depression

The Great Depression:

  • The Stock Market crash signaled the beginning of the Great Depression

  • The Great Depression is generally defined as the period from 1929 – 1940 in which the economy plummeted and unemployment skyrocketed

  • The crash alone did not cause the Great Depression, but it hastened its arrival


Financial collapse

Financial Collapse:

  • After the crash, many Americans panicked and withdrew their money from banks

  • Banks had invested in the Stock Market and lost money

  • In 1929- 600 banks fail

  • By 1933 – 11,000 of the 25,000 banks nationwide had collapsed


Gnp drops unemployment soars

GNP Drops, Unemployment Soars:

  • Between 1928-1932, the U.S. Gross National Product (GNP) – the total output of a nation’s goods & services – fell nearly 50% from $104 billion to $59 billion

  • 90,000 businesses went bankrupt

  • Unemployment leaped from 3% in 1929 to 25% in 1933


Hawley smoot tariff

Hawley-Smoot Tariff:

  • The U.S. was not the only country gripped by the Great Depression

  • Much of Europe suffered throughout the 1920s

  • In 1930, Congress passed the toughest tariff in U.S. history called the Hawley- Smoot Tariff

  • It was meant to protect U.S. industry yet had the opposite effect

  • Other countries enacted their own tariffs and soon world trade fell 40%

World Trade Center:


Causes of the great depression

Causes Of The Great Depression:

  • Tariffs & war debt policies

  • U.S. demand low, despite factories producing more

  • Farm sector crisis

  • Easy credit

  • Unequal distribution of income


Did we meet our objectives

Did We Meet Our Objectives?

  • Can You:

  • 1. Summarize the critical problems threatening the American economy in the late 1920’s.

  • 2. Describe the causes of the stock market crash and the Great Depression.

  • 3. Explain how the Great Depression affected the economy in the United States and throughout the world.


Section 2 objectives

Section 2: Objectives

  • By the end of this lesson, I will be able to:

  • 1. Describe how people struggled to survive during the Great Depression.

  • 2. Explain how the Depression affected men, women, and children.


Section 2 hardship and suffering during the depression

Section 2: Hardship And Suffering During The Depression:

Main Idea: During the Great Depression Americans did what they had to do to survive.

Why it Matters Now: Since the Great Depression, many Americans have been more cautious about saving, investing, and borrowing.

Key Terms:

Shantytown

Soup Kitchen

Bread Line

Key Terms:

Dust Bowl

Direct Relief


Hardships during depression

Hardships During Depression:

  • The Great Depression brought hardship, homelessness, and hunger to millions

  • Across the country, people lost their jobs, and their homes

  • Some built makeshifts shacks out of scrap material

  • Before long whole shantytowns (sometimes called Hoovervilles in mock reference to the president) sprung up


Soup kitchens

Soup Kitchens:

  • One of the common features of urban areas during the era were soup kitchens and bread lines

  • Soup kitchens and bread lines offered free or low-cost food for people

  • Even successful businessmen could be found trying to get free food.

Unemployed men wait in line for food – this particular soup kitchen was sponsored by Al Capone


Conditions for minorities

Conditions For Minorities:

  • Conditions for African Americans and Latinos were especially difficult

  • Unemployment was the highest among minorities and their pay was the lowest

  • Increased violence (24 lynchings in 1933 alone)marred the 1930s

  • Many Mexicans were “encouraged” to return to their homeland


Rural life during the depression

Rural Life During The Depression:

  • While the Depression was difficult for everyone, farmers did have one advantage; they could grow food for their families

  • Thousands of farmers, however, lost their land

  • Between 1929-1932 almost ½ million farmers lost their land

  • Many turned to tenant farming and barely scraped out a living


The dust bowl

The Dust Bowl:

  • A severe drought gripped the Great Plains in the early 1930s

  • Wind scattered the topsoil, exposing sand and grit

  • The resulting dust traveled hundreds of miles

  • One storm in 1934 picked up millions of tons of dust from the Plains an carried it to the East Coast


Hardest hit regions

Hardest Hit Regions:

  • Kansas, Oklahoma, Texas, New Mexico, and Colorado were the hardest hit regions during the Dust Bowl

  • Many farmers migrated to California and other Pacific Coast states


Hoboes travel america

Hoboes Travel America:

  • The 1930s created the term “hoboes” to describe poor drifters

  • 300,000 transients – or hoboes – hitched rides around the country on trains and slept under bridges (thousands were teenagers)

  • Injuries and death was common on railroad property; over 50,000 people were hurt or killed


Effect of depression

Effect Of Depression:

  • Negatives:

  • Suicide rate rose more than 30% between 1928-1932

  • Alcoholism rose sharply in urban areas

  • Three times as many people were admitted to state mental hospitals as in normal times

  • Positives:

  • Many people showed great kindness to strangers

  • Additionally, many people developed habits of savings & thriftiness


Did we meet our objectives1

Did We Meet Our Objectives?

  • Can You:

  • 1. Describe how people struggled to survive during the Great Depression.

  • 2. Explain how the Depression affected men, women, and children.


Section 3 objectives

Section 3: Objectives

  • By the end of this lesson, I will be able to:

  • 1. Explain Hoover’s initial response to the Depression.

  • 2. Summarize the actions Hoover took to help the economy and the hardship suffered by Americans.

  • 3. Describe the Bonus Army and Hoover’s actions towards it.


Section 3 hoover struggles with the depression

Section 3: Hoover Struggles With The Depression:

Main Idea: President Hoover’s conservative response to the Great Depression drew criticism from many Americans.

Why it Matters Now: Worsening conditions in the country caused the government to become more involved in the health and wealth of the people.

Key Terms / Names:

Herbert Hoover

Boulder Dam

Federal Home Loan Bank Act

Key Terms

Reconstruction Finance Corporation

Bonus Army


Hoover struggles with the depression

Hoover Struggles With The Depression:

  • After the stock market crash, President Hoover tried to reassure Americans

  • He said, “Any lack of confidence in the economic future . . . Is foolish”

  • He recommended business as usual


Hoover s philosophy

Hoover’s Philosophy:

  • Hoover was not quick to react to the depression

  • He believed in “rugged individualism” – the idea that people succeed through their own efforts

  • People should take care of themselves, not depend on governmental hand-outs

  • He said people should “pull themselves up by their bootstraps”


Hoover s successful dam project

Hoover’s Successful Dam Project:

  • Hoover successfully organized and authorized the construction of the Boulder Dam (Now called the Hoover Dam)

  • The $700 million project was the world’s tallest dam (726 feet) and the second largest (1,244 feet long)

  • The dam currently provides electricity, flood control and water for 7 western states


Hoover take action too little too late

Hoover Take Action: Too Little, Too Late:

  • Hoover gradually softened his position on government intervention in the economy

  • He created the Federal Farm Board to help farmers

  • He also created the National Credit Organization that helped smaller banks

  • His Federal Home Loan Bank Act and Reconstruction Finance Corp were two measures enacted to protect people’s homes and businesses


Bonus army

Bonus Army:

  • A 1932 incident further damaged Hoover’s image

  • That spring about 15,000 World War I vets arrived in Washington to support a proposed bill

  • The Patman Bill would have authorized Congress to pay a bonus to WWI vets immediately

  • The bonus was scheduled to be paid in 1945 --- The Army vets wanted it NOW


Bonus army turned down

Bonus Army Turned Down:

  • Hoover called the Bonus marchers, “Communists and criminals”

  • On June 17, 1932 the Senate voted down the Patnam Bill

  • Hoover told the Bonus marchers to go home– most did

  • 2,000 refused to leave

  • Hoover sent a force of 1,000 soldiers under the command of General Douglas MacArthur and his aide Dwight Eisenhower


Americans shocked at the treatment of ww i veterans

Americans Shocked At The Treatment Of WW I Veterans

  • MacArthur’s 12th infantry gassed more than 1,000 marchers, including an 11-month old baby, who died

  • Two vets were shot and scores injured

  • Americans were outraged and once again, Hoover’s image suffered


Did we meet our objectives2

Did We Meet Our Objectives?

  • Can You:

  • 1. Explain Hoover’s initial response to the Depression.

  • 2. Summarize the actions Hoover took to help the economy and the hardship suffered by Americans.

  • 3. Describe the Bonus Army and Hoover’s actions towards it.


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