CHAPTER 24 The Great Depression

SECTION 1 Prosperity Shattered

OBJECTIVES  Recount why financial experts issued warnings about business practices during the 1920’s  Describe why the stock market crashed in 1929  Understand how the banking crisis and business failures signaled the beginning of the Great Depression  Analyze the main causes of the Great Depression

Summary of what caused the Stock Market to crash  1. Credit boom in the 1920’s  2. Margin buying  3. Rising interest rates  4. Weakness in banking system  5. Uneven distribution of wealth  6. Smooth-Hawley Tariff in 1930

FINANCIAL EXPERTS ISSUE WARNINGS ABOUT BUSINESS PRACTICES  Farm crisis  “sick” industries  Consumer reliance on credit  Stock speculation

FINANCIAL EXPERTS ISSUE WARNINGS ABOUT BUSINESS PRACTICES  Margin buying – purchasing stocks with borrowed money  Gross National Product – total value of all goods and services produced in a given year  $123 billion 1933 – $56 billion

FINANCIAL EXPERTS ISSUE WARNINGS ABOUT BUSINESS PRACTICES  Bull Market: Upward trend in stock prices  Bear Market: Downward trend in stock prices  Business cycle: ups and downs of business in a free-enterprise economy

DESCRIBE WHY THE STOCK MARKET CRASHED  Economic factors  Investors sell stocks  Stock prices plunge  Heavy sales continue CRASH !!!!!!!!!!!!

BANKING CRISIS  Banks failed due to heavy default  Depositors withdrawals

BUSINESS FAILURES Bank failures deprived businesses of necessary resources and customers and forced layoffs and closings Bank failures deprived businesses of necessary resources and customers and forced layoffs and closings

MAIN CAUSES OF THE DEPRESSION  U.S. lost foreign consumers through trade  Consumer debt in the U.S. led to individual and economic chaos

SECTION 2 Hard Times

OBJECTIVES  Describe how unemployment affected the lives of American workers  Compare and contrast the hardships that urban and rural residents faced  Analyze the family life and attitudes of Americans  Explain how popular culture provided and escape from the Great Depression

UNEMPLOYMENT DURING THE DEPRESSION  Unemployment rose sharply (25%)  Created severe financial and emotional problems for workers

URBAN - HARDSHIPS  Received some aid from charities  Experienced hunger  Experienced homelessness

RURAL - HARDSHIPS  Lower prices for food products  Forced to let crops rot and killed their livestock  Faced farm foreclosures  Mexican immigrants faced deportation

EFFECT ON FAMILY LIFE AND ATTITUDES  Depression hurt some families, although it forced other to band together for survival  Divorce rates went up, birthrates down  Americans suffered psychological problems

POPULAR CULTURE OFFERS AND ESCAPE  No TV, computers, or video games  Went to the movies, listen to the radio, and read comics and novels

SECTION 3 Hoover’s Policies

OBJECTIVES  Explain why Hoover opposed government sponsored direct relief for the needy  Outline Hoover’s attempt to solve the economic problems  Relate how radicals and veterans responded to Hoover’s policies  Analyze why FDR was such a popular candidate in the 1932 election

HOOVER OPPOSES GOV’T SPONSORED RELIEF  Individuals and businesses were responsible for themselves  Felt government relief would create a bureaucracy

HOOVER’S ATTEMPT TO SOLVE THE ECONOMIC PROBLEM  Attempted to create public-works program (example is Boulder Dam)  Poured money into the Boulder Dam

Boulder Dam – 25 miles southeast from Las Vegas

HOOVER’S AGRICULTURE PROGRAM  made loans to farmers  established cooperatives for farmers (example: Cenex Cooperative)  only was a temporary fix for the farmers

VETERAN RESPOND TO HOOVER’S POLICIES (BONUS ARMY IN 1932)  veterans gathered in Washington, DC  demanding their WWI pension  President Hoover had them removed from Washington D.C.

FDR – POPULAR IN 1932 ELECTION  FDR’s optimism contrasted Hoover’s gloom