The Great Depression

Essential Question Analyze the causes and effects of the Great Depression.

Section 1 Price Supports Buying on Margin Black Tuesday Hawley-Smoot Tariff Act Explain the causes of the Great Depression.

Causes Of the Great Depression 1. Uneven Distribution of Wealth – about ½ of the population lived at or below a minimum level - 2. Easy Credit – installment plans, loans for stocks, banks borrowing from other banks 3. Unbalanced Foreign Trade – high tariffs = inability to sell goods overseas 4. Mechanization – new technology (machines) = less jobs

Farmers Need Help WW I = farmers overplanting to feed Europe = loans for new equipment Post WW I = demand down and prices fall 50% From 1919 to 1921 – farm income falls from $10 billion to $4 billion – even with government price supports

Election of 1928 Rep. - Herbert Hoover (the food administration dude) – look at how well you’ve done since 1920 Dem. – Alfred E. Smith – Catholic, Brooklyn Accent, and against prohibition Hoover gets 58% of the vote = most Americans were happy with the republican party

The Stock Market Crumbles 1920’s = most stocks rise (above worth) – people taking loans to buy more (buying on margin) in hopes of turning a quick profit (speculation) October 29, 1929 – Black Tuesday – 16 million stocks sold – prices continue to fall – by mid- November investors had lost $30 billion

Between 1929 & 1932 Payments to producers went from $81 Billion to $41 Billion 85,000 businesses closed 400,000 farms were lost 6,000 banks closed 9 million savings accounts were lost 100,000 lost jobs every week until 16 million were unemployed (about 1/3 unemployment) NO FEDERAL RELIEF SYSTEM – NO WELFARE OR UNEMPLOYMENT

World Wide Depression Much of Europe had struggled through the 20’s The Depression made things worse because the U.S. was not importing goods Hawley-Smoot Tariff – 1930 – highest tariff in U.S. history = world trade down 40% Much of Europe goes off the gold standard = value of $ declines = debt paid with cheaper currency

Section 1 Price Supports Buying on Margin Black Tuesday Hawley-Smoot Tariff Act Explain the causes of the Great Depression.

Essential Question Analyze the causes and effects of the Great Depression.

Section 2 Dust Bowl Shantytowns/Hoovervilles Direct Relief Assess how Americans coped with the hard times.

Many people forced to give up homes Shantytowns sprang up on the outskirts of cities Soup kitchens and bread lines were provided by charities

African Americans & Latinos Unemployment rate for both groups was much higher than national average The jobs they did have were usually low paying Increase in white on black violence over jobs 24 African Americans were lynched in 1933

Rural Areas Farmers could at least feed their families – 400,000 farms foreclosed on The drought of the early 1930’s + the break-up of grasslands during WW I = The Dust Bowl Crop & Milk prices went so low that is was more expensive to drive your crops to market = farmers dumping milk and burning crops

The Family Families stayed home = board games & radio Stress = divorce Some men were so discouraged they quit trying 2 million men wandered the country looking for work = hobos No system of direct relief from government

Riding the Rails By Larry Stessin "One evening as the sun went down And the jungle fire was burning Down the track came a hobo hiking And he said, "Boys I'm not turning - I'm heading for a land that's far away, Beside the crystal fountain. So, come with me; we'll go and see The Big Rock Candy Mountain." The Big Rock Candy Mountain, a famous old hobo poem

Women & Children 1 st – women did o.k. – they make less then men – later on women were fired before men Canning foods, sewing clothes, anything to save money Malnutrition rose from 18% in 1928 to 60% in 1931 – 2,600 schools closed

Social & Psychological Effects 1928 – 1932 – suicide rates rose 30% & 3X as many people were admitted to mental hospitals Families helped other families Many developed habits of saving & thriftiness

Section 2 Dust Bowl Shantytowns/Hoovervilles Direct Relief Assess how Americans coped with the hard times.

Essential Question Analyze the causes and effects of the Great Depression.

Section 3 Herbert Hoover Boulder Dam Bonus Army Understand how Hoover reacted and why he lost public support.

Hoover struggles with the Depression Many experts believed that the best course of action during a slump was to do nothing and let the economy fix itself – it had worked before Hoover opposed any form of federal welfare or direct relief to the needy He believed handouts weakened self-respect Charities and local organizations had to do this work

He asked employers not to cut wages or lay off workers and told labor not to demand raises He created a special organization to help charities generate contributions These actions had little success and the economy was only getting worse Remember: Hoover was following the advice of the time and what other presidents had historically done – laizze faire or hands off

mid-term election = Democrats win big Shantytowns now called Hoovervilles Hoover blanket – newspapers stuffed in clothes at night Hoover flag – pockets turned out Hoover held firm and refused direct federal handouts

Hoover Takes Action Late 1930 – Hoover starts directing federal funds into projects like the Boulder Dam Public works program to build roads, dams, and other large projects – congress approved $800 million Federal Farm Board – raised prices by buying crops and keeping them off the market National Credit Corporation – Large banks loaned $ to small banks

Glass-Steagall Banking Act – made bank loans easier to get Federal Home Loan Banking Act – lowered mortgage rates & allowed farmers to refinance Reconstruction Finance Corporation (RFC) – emergency financing to banks and large corporations Hoover believed in the trickle down theory 1 st 5 months – agency gave out $805 million – does not help

The Bonus Army 1932 – 15,000 WW I vets arrived in D.C. – they called themselves the Bonus Army The Patman Bill said WW I vets should get their bonus ($500) now instead of in 1945 Hoover was against the bill June 17, 1932 – Hoover asks the Bonus Army to leave after Patman bill was defeated About 2,000 refuse to leave

July 28, 1932 – 1,000 troops led by Gen. Douglas MacArthur attack and tear gas the remaining Bonus Army Most Americans stunned by this treatment of WW I vets

Section 3 Herbert Hoover Boulder Dam Bonus Army Understand how Hoover reacted and why he lost public support.

Essential Question Analyze the causes and effects of the Great Depression.

What have we learned? Develop a logical argument which shows what recent presidents have learned from Hoover’s reaction to the depression.

Chapter 15 – The New Deal