Chapter 19 Section 1 The Great Depression

I. Introduction Business began to slow 1. Stocks started to drift down 2. Investors rushed to sell before value further 3. The more they sold, the further they fell

Investors panicked 1. Prices tumbled 2. Stockbrokers demanded payment from people who bought on margin (margin = buying stock with money borrowed from the broker)

Tuesday, October 29, 1929 1. Worst day in Stock Market history 2. Thousands tried to sell, but there were few buyers 3. Stocks sold for next to nothing

4. Many people put all their in market, they were ruined

II. The Shaky Economy Stock Market crash marked the beginning of the Great Depression Many problems contributed 1. Gap between rich and everyone else

a. 5% of people had 33% of the money 2. After the crash, rich stopped spending which hurt businesses 3. Poor business practices 4. Overproduction of durable goods

a. Factories slowed production and laid off workers 5. People had less money to spend in stores-stores had less money to buy goods from factories-factories had to cut back production

Bank failures 1. Banks invest most of what is deposited – some in stocks 2. When market crashed, banks lost money 3. People saw banks in trouble and rushed to withdraw money

a. Called a run on a bank b. Banks could not pay all their depositors c. Had to close down

Run on bank

Run on bank

III. Unemployment As banks and businesses failed people lost their jobs 1. At the height, 25% unemployed B. People out of work scared and ashamed

Unemployment

Unemployment

Unemployment

Unemployment

IV. Looking for Help Many people were homeless and hungry Communities tried to help, but were not prepared for the numbers 1. People lined up for blocks

Food lines

Food lines

1. Cut teachers’ salaries, closed schools People help themselves 1. “Penny auctions

Milo Reno urged farmers to not grow as much to keep prices higher a. Set up road blocks to stop farmers from bringing goods to market b. Fights broke out

Farm Holiday

E. People on the move 1. Many homeless “rode the rails” looking for work

Some families piled everything on family car or truck and went looking for work 3. Some became migrant farm workers

On the Road

On the Road

“Hoovervilles” 1. Some homeless huddled together in cardboard shacks, wooden boxes, rusty old cars 2. Called their shantytowns

Hoovervilles

Hoovervilles

Newspapers to keep warm were called “Hoover blankets”

Pockets turned inside out were called “Hoover flags”

G. The Bonus Army World War I veterans were looking for help Congress had promised to pay $1,000 bonus in 1945

Congress proposed paying it now – Hoover said government did not have the money 4. 20,000 veterans marched on Washington D.C. – “Bonus Army”

Bonus Army

Bonus Army

Hoover would not meet with them – ordered Gen Hoover would not meet with them – ordered Gen. MacArthur to drive them out of town a. Burned their camp to the ground

Bonus Army

V. Hoover Fights the Depression Hoover saw that people were losing faith in him 1. Promised a recovery Called on business and labor to cooperate

1. Asked business to keep jobs and wages 2. Asked labor leaders to stop demanding higher wages Spend federal money on construction

1. Asked business to keep jobs and wages 2. Asked labor leaders to stop demanding higher wages Spend federal money on construction

Asked Congress to lower taxes Resisted doing more 1. Did not want government to become too powerful 2. Did not want people to stop helping themselves

The 1932 Election A. Republicans nominated Hoover again B. Democrats nominated Franklin Roosevelt 1. Promised that government would work to find solutions - a new deal

Won 57% of votes Voters also gave Democrats control of both houses of Congress

Election of 1932