Chapter 22 U.S. History 2

The Great Depression Begins 22.1 Causes of the Depression 22.2 Life During the Depression 22.3 Hoover Responds

22.1 Causes of the Depression The Election of 1928 The Long Bull Market The Great Crash The Roots of the Great Depression President Hoover and VP Curtis

The Election of 1928 Herbert Hoover ran against democratic candidate Alfred E. Smith, a former governor of New York in 1928. Smith was the first Roman Catholic to be nominated for president.

The Election of 1928 Prohibition was a major issue in the campaign. Hoover favored a ban on liquor sales. Smith opposed the ban.

The Election of 1928 Many voters disliked Smith because he was a Catholic. The Republicans took full credit for the prosperity of the 1920s. Hoover won by a landslide.

The Long Bull Market The stock market was established as a system for buying and selling shares of companies. A long period of rising stock prices is known as a bull market. Many Americans invested heavily in the stock market during the 1920s.

The Long Bull Market Many investors bought stocks on margin, making a small cash down payment. This was considered safe as long as stock prices continued to rise. If the stock began to fall, a margin call required the investor repay the loan immediately.

The Long Bull Market Speculation occurred when investors bet on the market climbing and sold whatever stock they had in an effort to make a quick profit.

The Great Crash A lack of new investors in the stock market caused stocks to drop and ended the bull market. Investors responded by selling their stocks, causing the stock market to plummet further.

The Great Crash The stock market crashed on October 29, 1929, Black Tuesday, losing $10 to $15 billion in value. While this did not cause the Great Depression, it undermined the economy’s ability defend itself against other weaknesses.

The Great Crash The stock market crash weakened the nation’s banks. Banks lost money on their investments. Speculators defaulted on loans.

The Great Crash Customers lost their money if a bank closed. Many bank customers withdrew their money at the same time, causing the bank to collapse.

The Roots of the Great Depression Efficient machinery led to overproduction. The uneven distribution of wealth in the U.S. added to the country’s economic problems. Low consumption added to the economic problems.

The Roots of the Great Depression As sales decreased, workers were laid off, which caused further decreases in sales. Many bought on the installment plan, making a down payment and paying the rest monthly. The Hawley-Smoot Tariff intensified the Depression by raising the tax on imports. Hawley and Smoot

The Roots of the Great Depression Americans purchased less from abroad because of the high cost. In return, other countries raised tariffs on American products, causing fewer to be sold overseas.

The Roots of the Great Depression Instead of raising interest rates to stop speculation, the Federal Reserve Board made the mistake of lowering the rates. This encouraged banks to make risky loans and misled business owners into thinking the economy was still expanding. Ben Bernanke is the current Chairman of the Federal Reserve Board.

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22.2 Life During the Depression The Depression Worsens Escaping the Depression The Depression in Art

The Depression Worsens By 1933, thousands of banks had closed. Millions of American workers were unemployed. Charities assisted unemployed workers with free meals through bread lines or at soup kitchens.

The Depression Worsens Many Americans lost their homes because they were unable to pay their mortgage or rent. Those unwilling to move had a eviction notice delivered by a court officer or bailiff. Many built shantytowns, or “Hoovervilles” because they blamed the Hoover for their troubles.

The Depression Worsens Hobos, or homeless Americans who wandered around, searched for work and a better life. As crop prices dropped in the 1920s, many farmers left their fields uncultivated. A terrible drought in the Great Plains, beginning in 1932, created the “Dust Bowl.”

The Depression Worsens Many farmers lost their farms. Many families moved west hoping to find a better life but still faced poverty and homelessness.

Escaping the Depression Americans escaped their troubles temporarily by going to the movies and listening to the radio. Stories tended to be about overcoming hardships and achieving success. Walt Disney produced the first feature-length animated film, Snow White and the Seven Dwarfs, in 1937. Walt Disney

Walt Disney

Escaping the Depression Examples of films that told stories of triumph over adversity include: The Wizard of Oz Mr. Smith Goes to Washington Gone with the Wind. Families listened to the radio daily to hear news, comedians like George Burns, or a dramatic series like the Lone Ranger.

Escaping the Depression Melodramas, called soap operas, became very popular with housewives. Soap operas received their name because makers of laundry soaps often sponsored them.

The following slides show examples of Thomas Hart Benton’s art. The Depression in Art Homeless and unemployed Americans were portrayed in art and literature during the 1930s. Artists and writers tried to capture the real life drama of the Depression. Thomas Hart Benton and Grant Wood emphasized traditional American values in their art. The following slides show examples of Thomas Hart Benton’s art.

1934 Lord, Heal the Child

1934 The Ballad of a Jealous Lover of Greenwich Village

1938 Roasting Ears

1938 The Flood

The Depression in Art John Steinbeck’s 1939 novel The Grapes of Wrath told about an Oklahoma family fleeing the Dust Bowl to find a new life in California. Steinbeck wrote of poverty, misfortune, and social injustice.

The Depression in Art Novelist William Faulkner used a literary technique called stream of consciousness. It revealed characters’ thoughts and feelings before they spoke. He exposed attitudes of Southern whites and African Americans in a fictional Mississippi county.

Read about the Hoover Dam on pages 666-667.

22.3 Hoover Responds Promoting Recovery Pumping Money into the Economy In an Angry Mood

Promoting Recovery Hoover held a series of conferences bringing government and business leaders together. Hoover increased public works–government-financed building projects. Hoover asked the nation’s governors and mayors to increase public works spending.

Promoting Recovery However, Hoover refused to increase government spending or taxes. He feared that deficit spending would actually delay an economic recovery.

Promoting Recovery Americans blamed the Republican Party for the Depression. In the midterm congressional elections of 1930, the Republicans their majority in the House. Hoover and FDR

Pumping Money into the Economy Hoover tried to persuade the Federal Reserve Board to put more currency into circulation. The Board refused. Hoover set up the National Credit Corporation (NCC). It created a pool of money to rescue banks but was not enough to help.

Pumping Money into the Economy By 1932, Hoover felt the government had to provide funding for borrowers. Congress set up the Reconstruction Finance Corporation (RFC) to make loans to banks, railroads, and agricultural institutions. The economy continued to decline when the RFC was too cautious in its loan amounts.

Pumping Money into the Economy Hoover opposed the federal government’s participation in relief–money that went directly to very poor families. He felt relief was the responsibility of state and local governments.

Pumping Money into the Economy In July 1932, Congress passed the Emergency Relief and Construction Act to get money for public works and for loans to the states for direct relief.

In an Angry Mood By 1931,looting, rallies, and hunger marches began. During a hunger march at the nation’s capital, police denied protestors food, water, and medical treatment. Congress intervened, stressing the marchers’ right to petition their government.

In an Angry Mood Congress permitted them to march on to Capitol Hill. Between 1930 and 1934, creditors foreclosed, or took possession of, almost a million farms. Some farmers destroyed their crops. They hoped a smaller supply would increase prices.

In an Angry Mood In 1924 Congress enacted a $1,000 bonus to be paid to veterans in 1945. In 1931, a bill was introduced in the House that authorized early payment of the bonus. In 1932, the “Bonus Army” marched to Washington, D.C., to ask Congress to approve the bill.

In an Angry Mood Hoover refused to meet with the Bonus Army. The Senate voted the new bonus bill down Some of the marchers left.

In an Angry Mood Others stayed, moving into deserted buildings in Washington, D.C. Hoover ordered the buildings to be cleared. Disputes between the remaining people and the police (and later the army) resulted in several deaths. Douglas MacArthur in 1945

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