11-2 and 11-3 Notes

Causes of the 1929 Crash Economic Factors Financial Factors Poor distribution of wealth Consumers relied on credit Consumer spending dropped Industry struggled Stock markets rise in 1920s Speculation in stock increases Margin buying Stock prices rise to unrealistic levels

Key Terms: Hobos – jobless, homeless wanderers Great Depression – most severe economic downturn in the history of the U.S. Foreclosure – when a bank or other lender takes over ownership of a property from an owner who has failed to make loan payments.

Hoovervilles and Hobos In the early 1930s, no federal government provided food or money to the poor Hoovervilles are established as a result Hobos often jumped trains traveling from town to town looking for work or a place to live. Hobos had dangerous lifestyle – develop sign language to determine if a town was a safe place for them

Key Terms Continued Hoovervilles – sprawling neighborhoods of shacks sprang up on the outskirts of towns and public parks. – blamed this on president Hoover

Bank Failures Many had entrusted their savings to banks. How has that changed today? Insurance from the federal government protects most people’s deposits Laws require that a bank keep a greater percentage of assets in cash to be paid out by depositors 1930 – almost 350 banks closed due to runs.

Key Terms Continued: Drought – a period of below-average rainfall, this lasted several years during the 1930s Dust Bowl – Oklahoma, Kansas, Colorado, New Mexico, and Texas became known as this due to large wind storms and dry dusty conditions

Dust Bowl Caused many deaths due to inhalation of dust. Destroyed crops and buried farm equipment The storms stripped off the topsoil and blew it away

Farm Failures Faced hard times in 1920s – got worse in the 1930s Farmers produced more than they could sell and price dropped drastically  INFLATION How does this effect farmers income? Many suffered foreclosure

Unemployment 1933 – GNP dropped 40% Unemployment reached a high of 25% (50% in some areas such as Harlem)

Writers and Musicians Woody Guthrie – songs about the dust bowl describe the disaster’s effect on the people John Steinbeck – wrote several books describing life during the depression and dust bowl – often very tragic endings