The Great Depression 1929 – 1933 Chapter 15
Section 1 – Pg. 442What you need to know… Explain the warnings that financial experts issued about business practices in the 1920’s Causes of the stock market crash in 1929. How did the banking crisis and business failures point to the beginning of the Great Depression? Main Causes of the Great Depression
#1 – Warnings from experts… Danger !! Farm crisis “Sick” Industries Reliance on credit – buying goods without actually paying money Buying/Selling stocks quickly inflated stock prices Margin Buying
#2 – Stock Market Crash Once the stock market starts to fall, can anything reverse the decline? 1. Rising Interest rates and other factors worry investors. • Investors sell stocks. 3. Stock prices go down. 4. Heavy sales continue. CRASH
#3 – Banking Crisis Depression Borrowers could not pay loans – default Banks left with little $$ Depositors panicked and tried to take life savings out. 1930-1932 5,000 banks failed. How do Banks Make $$ ??
#3 – Business Failures Depression GNP: Gross National Product – total value of goods and services produced in a given year. 1929 = $103 Billion 1933 = $56 Billion Industry lost money in the stock market Consumers did not buy NO MORE USING CREDIT! Forced companies to have less inventory, scale back making products, lay off employees or go bankrupt.
#4-Causes of Great DepressionPg. 5 in Packet Global finances after WWI Others = paying war debts buying American goods Smoot-Hawley Tariff Few people had wealth, many had debts. No buying power The Business Cycle The normal ups and downs in a free-enterprise economy
Hard Times Section 2 – Page 448-455
What you need to know… Describe how unemployment affected the lives of workers during G.D. Compare/Contrast hardships between urban and rural citizens. How G.D. affected family life and American attitudes. Explain how popular culture provided an escape from G.D.
#1-Unemployment affected lives “Everyone in America was looking for work.” 1929 – 1.5 Million unemployed 1933 – 15 Million unemployed Wages Hours Immigration Discrimination Women working
#2 –Life in the city Unemployment & Poverty Fighting over scraps Groups tried to provide to the needy Salvation Army, Red Cross, mutualistas, rent parties Breadlines Eviction Shantytowns / “Hoovervilles”
#2 –Life in the country Prices - Who could buy? Too many products Income - Foreclosing farms Pressured migrant workers to leave Dust Bowl – drought in some states
#3 –Family life & attitudes Fractured some families / forced some families together Divorce Birthrates Depression was the mood – 28% increase in suicide in 1932 over 1929 Shame for middle-class / wealthy Made every penny count – made as much as they could
#4 –Culture = Escape Took up inexpensive hobbies Reading, games, movies, radio Literature presented heroes and easy lives / others portrayed grim life VIDEO
What did the Government Do?? Hoover’s Policies Section 3 – Page 456-463
What you need to know… Explain why Pres. Hoover opposed government sponsored relief for the needy. Outline Hoover’s attempts to solve economic problems and analyze the successes. Explain how veterans and radicals responded to Hoover’s policies. Why was FDR a popular candidate in the 1932 election?
#1 – Opposition to Government Relief REASONS NOT TO HELP Relief would create large government Inflate the federal budget Reduce self-respect of people getting aid INSTEAD… Rugged Individualism – success through individual effort and private enterprise Encouraged voluntarism – PCUR Presidential committee collected info and donations for local relief agencies
#2 – Government & Economy Laissez-faire approach to economy Funded several public-works programs Stimulated business & reduced unemployment
#2 – Government & Economy Established Federal Farm Board GOAL: Find ways for farmers to help themselves OFFERED: loans, financed cooperatives to reduce expenses by allowing them to purchase in bulk Established Reconstruction Finance Corporation Loaned tax payer money to stabilize banks, insurance companies, railroads Government realized that they could do something to help the economy
#3 – Radicals / Veterans Protested Condemned capitalism – felt it led to G.D. Bonus Army – group that wanted early payment of pension bonuses owed to them Bill was rejected and caused deadly conflict!
#4 – 1932 Election Rep. Herbert Hoover vs. Dem. F. D. Roosevelt Hoover’s gloom vs. Roosevelt’s optimism Roosevelt pushed for a fairer distribution of wealth Roosevelt had designed creative relief programs as governor of NY.