UNIT 5 Chapter 22 – Crash and Depression Chapter 23 – The New Deal THE GREAT DEPRESSION

Presidents of the United States George Washington; Federalist (1788) John Adams; Federalist (1796) Thomas Jefferson (1800) James Madison (1808) James Monroe (1816) John Quincy Adams (1824) Andrew Jackson; Democrat (1828) Martin Van Buren; Democrat (1836) William Henry Harrison; Whig (1840) John Tyler; Whig (1841) James K. Polk; Democrat (1844) Zachary Taylor; Whig (1848) Millard Fillmore; Whig (1850) Franklin Pierce; Democrat (1852) James Buchanan; Democrat (1856) Abraham Lincoln; Republican (1860) Andrew Johnson; Democrat (1865) Ulysses S. Grant; Republican (1868) Rutherford B. Hayes; Republican (1876) James Garfield; Republican (1880) #21 - … Chester A. Arthur; Republican (1881) Grover Cleveland; Democrat (1884) Benjamin Harrison; Republican (1888) Grover Cleveland; Democrat (1892) William McKinley; Republican (1896) Theodore Roosevelt; Republican (1901) William Howard Taft; Republican (1908) Woodrow Wilson; Democrat (1912) Warren G. Harding; Republican (1920) Calvin Coolidge; Republican (1923) Herbert Hoover; Republican (1928) Franklin D. Roosevelt; Democrat (1932)

Crash and Depression (1929–1933) Chapter 22 America: Pathways to the Present Chapter 22 Crash and Depression (1929–1933)

OBJECTIVES CORE OBJECTIVE: Analyze the causes and effects of the Great Depression Objective 6.1: What were the main causes of the Great Depression? Objective 6.2: Describe the social problems and struggles created by poverty during the Depression. Objective 6.3: How did Americans pull together to survive the Great Depression? Objective 6.4: Analyze the differences between President Hoover’s response to the Great Depression and Franklin Roosevelt’s promise for change. THEME:

America: Pathways to the Present Chapter 22: Crash and Depression (1929–1933) Section 1: The Stock Market Crash Section 2: Social Effects of the Depression Section 3: Surviving the Great Depression Section 4: The Election of 1932

Chapter 22 SECTION 1 – The Stock Market Crash When the economy…

The Market Crashes The market crash in October of 1929 happened very quickly. In September, the Dow Jones Industrial Average, an average of stock prices of major industries, had reached an all time high of 381. On October 23 and 24, the Dow Jones Average quickly plummeted, which caused a panic. On Black Tuesday, October 29, 1929, the stock market set a record for loss in value most people sold their stocks at a tremendous loss. 16.4 million shares were sold This collapse of the stock market in October 1929 is called the Great Crash. Overall losses totaled $30 billion. The Great Crash was part of the nation’s business cycle, a span in which the economy grows, and then contracts. WRITE THIS DOWN!

Effects of the Great Crash, 1929 Investors Businesses and Workers Investors lose millions. Businesses lose profits. Consumer spending drops. Workers are laid off. Businesses cut investment and production Some fail. Banks Businesses and workers cannot repay bank loans. Savings accounts are wiped out. Bank runs occur. Banks run out of money and fail. World Payments Overall U.S. production plummets. U.S. investors have little or no money to invest. U.S. investments in Germany decline. German war payments to Allies fall off. Europeans cannot afford American goods. Allies cannot pay debts to United States. Great Crash Investors Businesses and Workers Investors lose millions. Businesses lose profits. Consumer spending drops. Workers are laid off. Businesses cut investment and production Some fail. Banks Businesses and workers cannot repay bank loans. Savings accounts are wiped out. Bank runs occur. Banks run out of money and fail. World Payments Overall U.S. production plummets. U.S. investors have little or no money to invest. U.S. investments in Germany decline. German war payments to Allies fall off. Europeans cannot afford American goods. Allies cannot pay debts to United States. Great Crash Investors Businesses and Workers Investors lose millions. Businesses lose profits. Consumer spending drops. Workers are laid off. Businesses cut investment and production Some fail. Great Crash Investors Investors lose millions. Businesses lose profits. Great Crash Investors Businesses and Workers Investors lose millions. Businesses lose profits. Consumer spending drops. Workers are laid off. Businesses cut investment and production. Some fail. Banks Businesses and workers cannot repay bank loans. Savings accounts are wiped out. Bank runs occur. Banks run out of money and fail. World Payments Overall U.S. production plummets. U.S. investors have little or no money to invest. U.S. investments in Germany decline. German war payments to Allies fall off. Europeans cannot afford American goods. Allies cannot pay debts to United States.

The Great Depression The economic contraction that began with the Great Crash triggered the most severe economic downturn in the nation’s history—the Great Depression. The Great Depression lasted from 1929 until the United States entered World War II in 1941. The stock market crash of 1929 did not cause the Great Depression. Rather, both the Great Crash and the Depression were the result of deep underlying problems with the country’s economy. WRITE THIS DOWN!

HOW THE CRASH SPREAD Risky loans – Banks earn profit from loans, to earn profit they made risky loans Consumer borrowing – citizens borrowed to purchase goods; when loans were due they could not pay Bank runs Bank failures Savings wiped out Production cuts Rise in unemployment Further production cuts

Underlying Causes of the Depression An Unstable Economy The prosperous economy of the 1920s lacked a firm base. The nation’s wealth was unevenly distributed. Those who had the most tended to save or invest rather than buy goods. Industry produced more goods than most consumers wanted or could afford. Overspeculation Speculators bought stocks with borrowed money and then pledged those stocks as collateral to buy more stocks. The stock market boom was based on borrowed money. Government Policies During the 1920s, the Federal Reserve System cut interest rates to assist economic growth. In 1929, it limited the money supply to discourage lending. As a result, there was too little money in circulation to help the economy after the Great Crash. WRITE THIS DOWN!

Chapter 22 SECTION 2 – Social Effects of the Depression When the economy…

Poverty Spreads People of all levels of society faced hardships during the Great Depression. Unemployed laborers, unable to pay their rent, became homeless. Sometimes the homeless built shacks of tar paper or scrap material. These shanty town settlements came to be called Hoovervilles. Farm families suffered from low crop prices. As a result of a severe drought and farming practices that removed protective prairie grasses, dust storms ravaged the central Great Plains region. This area, stripped of its natural soil, was reduced to dust and became known as the Dust Bowl. The combination of the terrible weather and low prices caused about 60 percent of Dust Bowl families to lose their farms.

The Extent of Erosion in the 1930s

Poverty Strains Society Impact on Health Some people starved and thousands went hungry. Children suffered from poor diet and inadequate medical care. Stresses on Families Living conditions declined as families crowded into apartments. Men felt like failures because they couldn’t provide for families. Working women were accused of taking jobs away from men. Discrimination Increases Competition for jobs produced a rise in hostilities against African Americans, Hispanics, and Asian Americans. Lynchings increased. Aid programs discriminated against African Americans. WRITE THIS DOWN!

Social Effects of the Depression—Assessment What factors contributed to disaster for farming families living in the Dust Bowl? (A) Drought (B) Farmers plowing under prairie grasses (C) Decreased prices for agricultural goods (D) All of the above The shanty towns made up of temporary shacks were called: (A) Roosevilles (B) Hoovervilles (C) Greenspans (D) Simpson towns

Social Effects of the Depression—Assessment What factors contributed to disaster for farming families living in the Dust Bowl? (A) Drought (B) Farmers plowing under prairie grasses (C) Decreased prices for agricultural goods (D) All of the above The shanty towns made up of temporary shacks were called: (A) Roosevilles (B) Hoovervilles (C) Greenspans (D) Simpson towns