The Great Depression (1929-1942) Essential Question: “How did the Great Depression cause a complete halt in the active cultural life of the Roaring Twenties?”

Credit Debt (p. 337) Many people did not want to wait to save up to buy all the new stuff coming out in the 1920s—so they bought it on credit— and paid the money back in payments. The problem was, they were buying more than they could pay for. Businesses and banks were not getting the money back that they loaned. Many businesses had to let people go because they could not pay their wages.

How banks work… When people put money in a bank, all that money goes in together, and they keep records to know how much you have stored. When people borrow money from a bank, all that borrowed money comes from that same “money pot” (so really they are borrowing other people’s money from the bank). So basically, banks usually never have everybody’s money on hand at the same time.

Where’s the Money? (p. 337) Because many of the people that lost money in the stock market used money borrowed from the banks, banks did not have enough cash on hand to give out to all its customers. Right after the crash, there was a rush on the banks by people to get all their money out. Too many people wanted to withdraw much more money than the banks had. The first people in line got most of their money, but many got nothing at all.

American Poverty Rises (p.338) Nearly every American became poor. Food and possessions were scarce, and many worked for only pennies a week. People that used to be wealthy now stood on street corners selling apples to try and make a few cents. Some were so hungry that they would look through garbage just to try and find whatever they could to eat. Many people depended on soup kitchens for food and would stand in long lines for a small piece of bread or a tiny bowl of soup.

Unemployment on the rise… (p. 338) In 1931, lots of people that were able to work could not find a job. Thirteen and a half million people were unemployed (without work). In 1933, 24.9% were unemployed. Right now about 5.5% of Americans are unemployed.

Prices for Goods Drop (p. 337) Farmers had also borrowed money from the banks to buy more property. When the Great Depression began, farmer goods were not worth what they once were. For example—in 1929, a bushel of wheat cost $1.05 a bushel; in 1932, it sold for only $.39. Most farmers were not making enough money to support themselves and pay off their debt. Some sold whatever they could to survive, and some lost their properties and homes. 39 cents

Dust Bowl (p. 338 and 340) …Then it got worse. Really. The few farmers that were able to keep their land then ran into another problem—drought. The native grass that once grew on the prairies kept the topsoil on the plains under control; however, farmers had plowed up this native grass in order to plant wheat. The wheat’s roots were not strong enough to hold down the soil, and huge dust storms began to sweep across the American plains. Nothing would grow and dust clouds would devastate the landscapes of many farms. Sometimes the dust was so thick that the sun would even get completely blocked out. The states that experienced these dust storms became known as the “dust bowl”.

Dust Bowl http://www.univie.ac. at/Anglistik/aaas_ 2007/route66/clas s/oklahoma/dust0 02.mpeg

Will the President help? …Nope. (p. 344) Herbert Hoover was President during this time. He got most of the blame for the Depression, even though it really wasn’t his fault. Places where people made shacks to live in and survive were even called “Hoovervilles.” He refused to let the government help by lending out money. He was afraid the people might get lazy and depend on the government too much. He was convinced that the economy would right itself. (Just leave it alone, and everything will turn around.)

Herbert Hoover (Term: 1929–1933) Seattle’s “Hooverville”

A New President with New Ideas (p. 345) In 1933, Franklin Delano Roosevelt (FDR) became America’s new President. He wanted to help America out of the depression, so he promised them a new plan called the New Deal. The New Deal would create jobs by having the government pay Americans for working on new projects. When FDR was sworn into office he said one of his most famous sayings, “The only thing we have to fear is fear itself.”

FDR Term: 1933-1945 (that’s 12 yrs!) Served 4 terms in office—but died only 83 days after his 4th inauguration.

The New Deal (p. 345) The New Deal sent many Americans back to work building bridges, roads, dams; improving transportation; and preventing floods. Many programs were initiated to modernize America and help employment rise.

Venn Diagram of Economic Policies Hoover FDR Venn Diagram of Economic Policies