1. Essential Question:
What caused the Great Depression & how did the federal government respond?
Lesson plan for Friday, February 6, 2009: Warm-Up Question: Causes of the Great Depression & Dust Bowl Group Activity, Begin Causes of the Great Depression Notes

2. The Great Depression Begins

3. The Great Depression
The Great Depression that began in 1929 came as a shock to Americans:
The consumer goods revolution gave a false sense of long-term prosperity
When the stock market crashed, business closings and unemployment caused Americans to look to the government for unprecedented support.
Consumers buying new products on credit- spent more money than actually had
The Great Depression came as a shock to Americans, but there were warning signs:
In 1927, the economy had a recession but gov’t & business leaders failed to respond
The Federal Reserve lowered interest rates for loans to stimulate the economy, but this easy credit led speculators to buy stock “on-the-margin”
Needed direct relief ($) and programs to help them get jobs and find housing

4. Causes of the Great Depression
1. Overproduction of consumer durable goods & agriculture
2. The post-war conditions in Europe decreased foreign trade
3. Unequal distribution of wealth, high consumer debt, stock market over speculation led to an overall decrease in consumer purchase power
By the end of 1920s, consumers already owned durable goods & were not buying more
Farmers had already been producing too much after WW1 in 1920s
Europe couldn’t afford goods; hurt business and farmers more
Economic conditions in Europe, Agricultural decline since 1919, corporate mismanagement, excessive speculation all contributed to the GD as well
Rising stock prices didn’t reflect actual value of businesses
People’s ability to buy things

6. The Stock Market Crash of 1929
A recession in 1927 was an early warning sign for the depression
But gov’t & business leaders ignored warning signs
The Federal Reserve lowered interest rates for loans to stimulate the economy, but this easy credit led speculators to buy stock “on-the-margin”
Govt. organization in charge of banking system
Low interest rates = cheaper money
The Great Depression came as a shock to Americans, but there were warning signs:
In 1927, the economy had a recession but gov’t & business leaders failed to respond
The Federal Reserve lowered interest rates for loans to stimulate the economy, but this easy credit led speculators to buy stock “on-the-margin”
On margin = using credit
(Take out a loan to buy stock)

7. The Stock Market Crash of 1929
An initial stock market crash on Oct 24, 1929 (Black Thursday) and panic on on Oct 29 (Black Tuesday) sparked the Great Depression:
Some people and businesses lost large amounts of money as a result of this crash.
This led to business failures and bank closings which led to people losing their jobs.
Without a job, consumers spent less which then caused more business/bank closings.
Bank & business failures continued for 4 years; unemployment reached 25% by 1933
When prices fell, investors sold stock to try to get as much $ as possible (before they went down further) . But mass amounts of people selling stock just caused prices to plummet even further.
Stock market only had about 3 million active buyers & sellers but the spillover into the greater economy led to the Great Depression

8. The U.S. stock market had only about 3 million active buyers & sellers but the spillover into the greater economy led to the Great Depression

9. Unemployment,
This downward spiral continued for 4 years; By 1932 unemployment was at 25%

10. In 1929, the total market debt of the USA was 210% of the value of GDP
By 1934, U.S. debt rose to 265% of GDP
In 2005, the value of U.S. debt was 303% of GDP

11. Effects of the Great Depression
The Depression hit all classes:
Many families lost their homes or farms & were forced to live in “Hoovervilles”
The U.S. saw unprecedented poverty & suicide rates; fathers abandoned their families; lawlessness ensued
The U.S. gov’t offered direct relief to the unemployed and volunteers and churches started bread lines
Shantytowns or homeless neighborhoods named after Hoover $
Free meals for homeless/unemployed

12. Effects of the Great Depression
African-Americans and Mexican-Americans were laid off first
The middle class was hit hard:
Refused relief checks & charity
Many lost their homes
Couldn’t afford expensive health care declined; doctor & dentist visits were “luxuries”
Result of racism and anger over Great Migration/immigration from Mexico
Seen as shameful
Doctor and dentist visits were seen as “luxuries”

13. Employment Agencies & Relief-Check Lines

14. Soup Kitchens & Breadlines

15. Mortgage Foreclosures

17. These 4 potatoes are Christmas Dinner

18. Where’s daddy?

19. “Hoovervilles” & “Hoover Flags”

20. President Hoover Reacts- “Rugged Individualism” Fails to End the Depression

21. Hoover and Voluntarism
President Hoover’s initial response was to reassure Americans that prosperity would return
Hoover rejected bold gov’t action, believed in rugged individualism & called for volunteerism among charities, local gov’t, & business
As the depression worsened, Hoover called for gov’t projects like the Reconstruction Finance Corps (RFC) which loaned money to failing businesses and created Hoover Dam which gave Americans jobs
Idea of “self reliance” (Americans should take care of themselves)
Problems of poverty best left to volunteers, not federal govt.
Too little, too late

22. The Hoover administration initiated job-creation programs, like building the Hoover Dam
Boulder Dam was renamed Hoover Dam

23. Hoover and Voluntarism
In 1932, Hoover’s presidency suffered two final blows:
When 22,000 war veterans marched to the capital to demand their WW1 bonus checks early, Hoover ordered this Bonus Army to be forcibly removed
The steady rise of bank failures led to a complete collapse of the U.S. banking system
Result: Violence erupted; Hoover’s image destroyed
Americans no longer trusted banks- withdrew $ and didn’t put any back in

24. Bonus Army
Douglas MacArthur
Dwight Eisenhower

25. Bank Failures,

26. Dust Bowl
Dust Bowl ( ) worsened the effects of the Depression and left farmers in extremely hard circumstances
Result: Many “Okies” and “Arkies” left farms and headed out west
Oklahoma, New Mexico, Texas, Colorado, Kansas
Great Plains area affected by severe drought
No other option

27. The Dust Bowl (1931-1939) worsened the effects of the Depression
“Okies” & “Arkies”
Areas Affected by the Dust Bowl drought
Woody Guthrie

29. Fighting the Depression
The inability of Republicans to resolve the economic depression opened the door for a Democratic takeover in politics
Once in power, Democrats succeeded in relieving some suffering, restored hope, & created an unprecedented level of gov’t intervention in the process

30. Conclusions The Depression of the 1930s came as a shock to Americans:
The consumer revolution led to confidence that 1920s economic prosperity would continue
When the stock market crashed in 1929, businesses closed & millions were unemployed
Americans began to look to the gov’t for unprecedented support