Do Now Write down the Date and Daily Objective in your Notebooks Answer the following question in your notebooks: What is the first line of the Classroom Expectations and Policies? (Hint: It’s your memorization homework for today)

The Great Depression Begins CHAPTER 11 The Great Depression Begins

Section 1 The Causes of the Great Depression

The Long Bull Market The ECONOMIC COLLAPSE of 1929 was something that NO ONE could have predicted CALVIN COOLIDGE did not run for presidency again in 1928 Republicans nominate HERBERT HOOVER (WWI  Food Administration), Democrats nominate ALFRED SMITH Smith loses election to Hoover by 6 million votes, a LANDSLIDE Pres. Hoover says he has “NO FEAR” for the future of the U.S.

The Long Bull Market OPTIMISM from the Federal Government led to RISING stock market and stock market PRICES LONG BULL MARKET  GOOD for investors [Stocks example] People in the 1920s began to SPECULATE which led to investments based on GUESSING/GAMBLING  a BAD strategy

The Great Crash 1920s bull market rose as long as people INVESTED 1929  not many NEW INVESTORS, stock prices start to SLIP AND FALL October 24, 1929  “BLACK THURSDAY”, stock market PLUMMETED, chain reaction starts October 29, 1929  “BLACK TUESDAY”, stock market takes STEEPEST DIVE, $30 billion lost

The Great Crash Banks were HIT HARD by the stock market crash Banks had LOANED $6 billion to stock market SPECULATORS Banks had INVESTED depositors money in the stock market No profits from the stock market led to REDUCED CREDIT and loans which led to ECONOMIC RECESSION PANIC led to BANK RUNS which led many banks to COLLAPSE DEPOSITORS who did not invest in the stock market still LOST money if the banks closed

The Roots of the Great Depression The Great Depression was not just caused by the STOCK MARKET CRASH UNEVEN distribution of INCOME led to OVERPRODUCTION and little DISPOSABLE INCOME No DISPOSABLE INCOME and INSTALLMENT PLANS led to less PURCHASING which led to less DEMAND and more LAY-OFFS in manufacturing Cyclical CHAIN REACTION

The Roots of the Great Depression Many LAY-OFFS could have been avoided if American EXPORTS stayed high Foreign countries also experiencing ECONOMIC RECESSIONS Pres. Hoover wanted to LOWER TARIFFS for foreign trade, Republicans RAISE TARIFFS instead American exports drop 4/5THS from 1929 to 1932

The Roots of the Great Depression The Federal Reserve Board made MAJOR MISTAKES that led to the Great Depression The Federal Reserve did not raise INTEREST RATES to stop risky LOANING The Federal Reserve did not report that SALES were DROPPING leading to OVERPRODUCTION The Federal Reserve raised INTEREST RATES after the crash which led to LESS CREDIT and HURT the economy more

Section 2 Life During the Depression

The Depression Worsens Over 9,000 banks failed Over 30,000 businesses closed Over 12 million unemployed Bread lines by charities fed 12,000 daily People lost their homes  leads to the creation of shantytowns (“Hoovervilles”) Hobos “ride the rails” to find a better life

The Depression Worsens Major homesteading led to major loss of wild grasses  No grasses = no moisture in the ground, farmers inattentive in 1920s Drought + Neglect – Moisture = soil turns to dust From the Dakotas to Texas was called “the Dust Bowl” Dust buried crops, livestock, and people  deadly outdoors “Okies” (Oklahoma) and others head to California, live homeless

Art and Entertainment 1930s  Americans seek entertainment to help them escape the hard times and worries Movies, radio plays, and comic books become popular (Superman and Batman created in ‘38 & ‘39) 60 million in theaters each week to see: Shirley Temple, Groucho Marx, King Kong, Walt Disney (Snow White – ’37), Jimmy Stewart, Gone With the Wind, and The Wizard of Oz

Art and Entertainment Movies captured imagination, radio provided information and entertainment at home Jack Benny, George Burns, and Grace Allen (among others) make popular radio shows like The Lone Ranger and the Green Hornet Radio shows often sponsored by laundry soap companies  “Soap Operas” Community of people created around radio show characters  “fandoms”

Art and Entertainment Literature and Art also flourish during the ‘30s John Steinbeck writes novels about social injustices, sympathy for characters William Faulkner develops “stream of consciousness” writing technique, wins the Nobel Prize for Literature Thomas Benton and Grant Wood develop painting style called “regionalist” that depicts American values in rural Midwest and South (now referred to as “American Gothic”)

Section 3 Hoover Responds to the Depression

Promoting Recovery Hoover tried to be optimistic to avoid increasing fear, believed in American Individualism Public works projects only created some jobs, not enough Hoover and government could not raise or lower taxes to fix economy 1930 elections  public blames the party in power (the Republicans) for the ailing economy and lose many seats in House and Senate

Promoting Recovery Hoover tried to save the banks to help the economy  set up the National Credit Corporation  wasn’t that effective, economy still declining Hoover and Congress set up the Reconstruction Finance Corporation to make loans to businesses  didn’t help enough, economy still declining Hoover did not believe that financial relief should come from the federal government 1932  Congress passes the Emergency Relief and Construction Act, it helped but too late to save the economy

In an Angry Mood 1931  Americans angry and discontent about the economy, “hunger marches” start across the country Farmers had taken mortgages that they couldn’t pay now, many farms foreclosed, crops gone to waste 1931  Veterans march on Washington D.C. to get their bonuses from WWI, “Bonus Army”, “Bonus marchers” Bonus Army was sent away and then driven away by the army and General Douglas MacArthur Hoover gained bad reputation, but he had done more than any other president to increase the role of the federal government in the economy