1. Chapter 9 The Great Depression
Agenda
Please see one of us if you have not taken the 1920’s Test
Turn in 20’s Faces if you have not already
9-1 Notes Today
Homework tonight – Main Points – due Tuesday
WARM UP
People who own stock in companies may receive cash payments based on how much profit the companies make. Name 2 companies you would invest in.
The Great Depression
Chapter 9 The Great Depression

2. Prior Information From Last Chapter
Prosperity in the Roaring 20’s Economy
Bull Market
More people buy stocks than ever before
Industry Booms
producing large quantities of goods & jobs
Incomes Rise
People buy more products and buy on credit
What goes up must . . .
Farming
During WWI farms produced goods selling them to Europe

3. Signs of Economic Trouble
Some industries had problems throughout the 1920’s
Farming – over production
Factories – over production
Textiles (Clothing and Materials)
Coal Mining
Lack of government statistical data – no one knew it was getting bad
Weak Banking –
banks granted unwise loans - EASY CREDIT / DEBT
could not pay back when the price of goods went up but wages did not
d. Hoover reassures the public

4. What Caused the Economy to Collapse
What Caused the Economy to Collapse? Low Interest Rates Federal Reserve kept interest rates low; companies borrowed money and expanded more than necessary. Overproduction Companies made more goods than could be sold. Uneven Distribution of Wealth Not everyone who wanted consumer goods could afford them. High Tariffs Tariffs restricted foreign demand for American goods. Falling Demand With too many goods unsold, production was cut back and employees were laid off. Stock Market Speculation Low interest rates encouraged borrowing money to speculate, endangering bank solvency.

5. The Crash
By 1929 investors worried that boom could not continue and began selling their stocks which caused prices to fall.
Speculators -bought stocks on margin to make more money faster now have to payback the stockbrokers
On margin = pay part of the cost of the stock when they make the purchase they borrow the rest from the stockbrokers.
Investors who can not repay loans must sell their stocks. Panic sets in as people try to unload shares – prices drop further
October 29, 1929 = Black Tuesday stock market opens to everyone selling / no one buying. STOCK MARKET CRASHES!

6. The Great Depression – economic hardship that lasted from 1929-1941

7. Americans rush to the bank to claim their money

8. The Great Depression Begins
The Downward Spiral
One disaster after another
No business growth
Factories cut production, wages, employees
Businesses go bankrupt – unable to pay debts
Banks
Over 5,000 banks close
Lifetimes savings gone overnight

9. What happened to Europe?
American banks lent money to Europe after WWI.
US banks stop loaning, and European banks collapse

10. HARD TIMES
Prior to the 1930’s many people lived on farms and grew their own food. In the 1930’s people lived in cities and had to buy food. When factories closed – jobless had no money for food and no land to grow it.
By 1930 – 1 in 4 workers were jobless. Millions worked shorter days or took pay cuts. The chance of finding work was small. People lost their homes.

11. HARD TIMES Continued
Families suffered – marriage & birth rates dropped. Parents & children searched through garbage for food. Fathers and young teens left home to search for work. Leaving meant fewer people to feed.
Jobless men and women drifted from town to town looking for work. Some road the rails living in railcars.
Neighbors shared what they had. Families doubled up and began growing vegetables.
Riding the rails

12. HOOVER RESPONDS
Hoover was concerned but did not believe the government should get involved with relief programs to help the needy.
He thought business should work together to end the downslide by keeping workers employed and wages high.
He called on charities to help. Churches set up soup kitchens where the hungry could get a free meal, ethnic communities organized relief efforts but were soon overwhelmed.

13. HOOVE RESPONDS Continued
When conditions grew worse he set up Public Works projects that provided jobs in mainly construction.
He asked Congress to pass the Reconstruction Finance Corporation (RFC) to loan money to banks, railroads, and insurance companies to help them stay in business. He hoped saving these businesses would save thousands of jobs.
Although he did more than any other president to reverse hard times – it was too little too late.

14. Hooverville shacks where the homeless lived sprang up.
Hoover blankets – newspapers used to cover you while you slept and
Hoover leather- cardboard covering a hole in your shoe.

15. THE BONUS ARMY
After WWI Congress had voted to give Veterans a bonus (additional money)
20,000+ jobless veterans marched to Washington to demand the bonus right away = Bonus Army
When the Senate rejected the bill the men camped out along the Potomac River.
Police tried to get them to leave and when fighting broke out, Hoover had military tanks clear out the remaining veterans.
He lost what little support he had and Americans looked for a new leader.

16. Government Aid / relief programs Public Works Hoovervilles Bonus Army
DO NOW In your notebook. Draw an outline of Herbert Hoover. Create a visual and a brief sentence describing how he responded to the Great Depression.
Government Aid / relief programs
Public Works
Hoovervilles
Bonus Army
Put his early efforts on the left and his later efforts on the right.
CHARACTER COLLAGE

17. EXIT OUT - 10 minute write
Imagine you are an unemployed worker in What should President Hoover do to help you?
Write Hoover a letter, 7 lines, that describes 3 things he could do to help. Underline the 3 things.
**He can’t just give jobs**