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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

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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