1. The Great Depression Begins
Chapter 18
The Great Depression Begins

2. Causes of the Great Depression
Section 1
Causes of the Great Depression
Herbert Hoover won election in 1928
Like by Americans because of all he had participated in w/the gov’t
He was optimistic of Americas future

3. Stocks Soar
Stock market had a long period of a bull market – rising stock prices
Occurred from many people investing in stocks – usually new consumers
Stock brokers could make big profit but worried if prices fell
Because they may not be able to pay loans back they used to buy stock

4. Beginning of the Crash
Bull market can only last as long as investors continue putting new money in.
They were running out of new consumers by the end of the 1920s
Prices began to slip, brokers sold stocks and prices further fell

5. Monday Oct 21, 1929 October 24, 1929 October 29, 1929
Prices plummet – dropping cause stocks are being sold off
October 24, 1929
Stocks plummet again
October 29, 1929
Stocks dropped to the lowest it had been – BLACK TUESDAY
Stock market crash wasn’t the major cause of the depression but it undermined the economy’s ability to overcome other weaknesses

6. Market crash severely weakened the nations banks in 2 ways:
By 1929 banks had loaned nearly $6 billion to stock speculators
Many banks had invested depositors money in the stock market hoping for higher returns

7. Banks were on the verge of collapse if they could not absorb the losses
Banks closed when bank runs took place
Even if customers didn’t invest in stocks their saving were lost if a bank collapsed
Nearly 3,500 banks closed by 1932

8. Causes for the Economy to Collapse
Low Interest Rates
Overproduction
Uneven Distribution of Wealth
High Tariffs
Falling Demand
Stock market Speculation

9. Roots of the Depression
Uneven distribution of income
Loss on export sales
Mistakes in the Federal Reserve

10. Life During the Depression
Section 2
Life During the Depression
Great Depression caused large numbers of people to lose their jobs or property
Depression grew throughout the 1930s
1933 was worse year of the depression

11. People Starvation: waited in breadlines or outside soup kitchens
Homeless: set up shacks forming communities called Shantytowns—Hoovervilles
Hobos: many men/boys traveled on around the country looking for work on boxcars

13. Farmers on the Great Plains suffered the “Dust Bowl”
Drought and over plowed soil
Crop prices dropped – no use for ground
Dust buried crops and livestock
22 dust storms in 1934, 72 in 1937
Some farmers stayed other left

15. Art & Entertainment
Many people prefer entertainment to escape their worries of the 1930s
Comics
Superman & Batman
Hollywood flourished
Shirley Temple
Walt Disney
The Wizard of Oz and Gone With the Wind

16. Radio offered information and entertainment to Peoples living rooms
Comedians: Jack Benny and George Burns
Radio adventures of super heros—Green Hornet
Soap Operas – daytime radio
Literature and Art
Grapes of Wrath

17. Hoover Responds to the Depression
Section 3
Hoover Responds to the Depression
Hoover kept an optimistic outlook on the problems the nation was facing
He believed that individualism would work better at getting the economy out of problems, gov’t should not help out
He organized conferences w/big business leaders in hopes to find strategies to help the economy

18. Gov’t increased funding for public works
Kept taxes low but increased the budget deficit
Hoover wanted to help banks out with creating the National Credit Corporation and Reconstruction Finance Corporation
Gov’t passes Emergency Relief and Construction Act that for the 1st time federal gov’t was supplying direct relief funds to citizens

19. Americans Reaction to the Crisis
Americas Reaction