1. 21.1 - Causes of the Great Depression

2. Objectives Discuss the weaknesses in the economy of the 1920s.
Explain how the stock market crash contributed to the coming of the Great Depression.
Describe how the Great Depression spread overseas.

3. speculation – when investors gamble that stock prices will rise
Terms and People
Herbert Hoover – former Secretary of Commerce and Republican candidate for President in 1928
speculation – when investors gamble that stock prices will rise
Black Tuesday – October 24, 1929, the day the stock market crashed
business cycle – periodic expansion and contraction of the economy

4. Terms and People (continued)
Great Depression – The collapse of the United States and world economies beginning in 1929
Hawley-Smoot Tariff – high protective tariff passed in June 1930 that contributed to a worldwide depression 4

5. Brother Can You Spare a Dime?

6. THE GREAT DEPRESSION Was brought on by a chain of events:
LET’S TAKE A LOOK!
REMEMBER THE 1920S?
THE ECONOMY WAS BOOMING

7. EVERYONE WAS

8. WHY ARE THEY HAPPY? Because life is GOOD!
Business is growing…..
Stocks are up…companies grow and make more products. They build more factories and hire more people.

9. Life is good!!!!!!
People have jobs. They have more money to spend. They buy more products, homes, cars, etc..

10. But the good times didn’t last………
WHY?
Something went wrong!!!!
spiraling down from a BOOM economy to a BUST economy

11. OVERCONFIDENCE
People believed that the stock market will keep going up and they will make lots of money. They invest in the stock market.
But stocks went down instead of up. People
started to lose confidence in the stock
market and they began to sell off their
stocks making the prices go even lower.

12. Buying On Margin
Buying on margin is when people borrow money from the banks to invest in the stock market.
They plan to pay the banks back when the price of stock goes up and they make a BIG profit…….But the stocks went down and people could not pay back their loans.

13. BANK CRISIS
* Banks start to go out of business. They have no money because people did not pay back their loans. People’s bank accounts disappear over night. People flock to get their money out of the banks but the banks are out of business.

14. OVERPRODUCTION
Companies made more goods than people could buy. Farmer’s grow more food than people can eat.
So…………..
* Companies closed up
* Workers got laid off

15. BLACK TUESDAY THE PARTY’S OVER! AKA WHEN? OCTOBER 29, 1929
THE DAY THE STOCK MARKET CRASHED AND THE GREAT DEPRESSSION BEGAN!

16. THE STOCK MARKET CRASHES
Stock prices fall. People sell off their stock to cut their loses. The economy continues to get worse……

17. The stock market crash didn’t start the Great Depression by itself
The stock market crash didn’t start the Great Depression by itself. Instead, it quickened the collapse of the U.S. economy. 17

18. As international trade falls, a global drop in business leads to a worldwide depression.18

19. At a Glance The great depression People get Companies close Laid off
People have no money, no jobs
and the economy continues
To spiral down and get worse
Banks call in loans
and begin to fail
Stock Market Crashes

20. 21.2 - Effects of the Depression

21. Objectives Examine the spread of unemployment in America’s cities.
Discuss the impact of the Great Depression on rural America.
Explain the human and geographical factors that created the Dust Bowl.

22. bread line – where charities or local agencies gave food to the poor
Terms and People
bread line – where charities or local agencies gave food to the poor
Hooverville – term used to describe makeshift shantytowns set up by homeless people during the Great Depression
tenant farmer – rural farmers who lost their land but stayed on to work for larger landowners
Dust Bowl – millions of acres in the Great Plains that were destroyed when dust storms blew away the soil

23. Okies – Great Plains farmers forced off their land by the Dust Bowl
Terms and People
Okies – Great Plains farmers forced off their land by the Dust Bowl
repatriation – policy whereby local, state, and federal governments encouraged or coerced Mexican immigrants—some of them U.S. citizens—to return to Mexico

24. Those who managed to keep their jobs had their wages and hours cut.
Between 1921–1929, the unemployment rate never rose above 4 percent. By 1933, however, it was near 25 percent.
Those who managed to keep their jobs had their wages and hours cut.
Few Americans understood the causes of the Great Depression, but everyone felt the impact.

25. Life in the GREAT DEPRESSION
1 IN 4 People are unemployed (25%)
Many people are evicted. Some live in shantytowns called Hoovervilles, named after President Hoover.
People who have no food wait on breadlines
Many companies go out of business
Banks fail (1300 in the first 6 months of the
Great Depression)

26. RESULTS…….. People…. Lose their jobs Can’t pay their bills
Can’t pay their rent
Can’t buy food
Lose all their money in the stock market
Have no money in the banks
THIS IS HAPPENING ON A MASSIVE SCALE

27. On a Massive Scale People are broke, hunger, and homeless………
People look to government for help……….
WHAT WILL GOVERNMENT DO?

28. Dust storms destroyed millions of acres of farmland.
The remaining farmers on the Great Plains suffered a terrible drought, which led to the Dust Bowl.
Dust storms destroyed millions of acres of farmland. 28

29. Millions of tons of topsoil were blown away in giant dust storms.
Farmers had dug up thick prairie grasses to plant wheat, so there was nothing to hold the soil in place.
Winds traveling as fast as 100 mile-per-hour winds blew dust clouds 8,000 feet tall in Oklahoma, Texas, New Mexico, and Colorado.
Wildlife and farm animals suffocated in the choking winds.

30. Family life was hurt by the Great Depression.
Those who still had jobs lived in fear that their next paycheck would be their last.
Those who were still working felt guilty because friends and relatives were unemployed.
America’s birthrate fell to its lowest level on record.
Some teens ran away, and families broke up.

31. Minorities suffered even more during the depression.
Even in good times, African Americans were “last hired and first fired.”
Many were thrown off southern farms where they were sharecroppers.
As Okies moved west to find work, Mexicans and Mexican Americans faced fierce competition for jobs.
Local governments urged repatriation for Mexican Americans.

32. 21.3 - Hoover’s Response to the Great Depression

33. Describe how Americans reacted to Hoover’s relief programs.
Objectives
Discuss how Hoover’s initial conservative response to the depression failed.
Explain the changes in the President’s policies as the crisis continued.
Describe how Americans reacted to Hoover’s relief programs.

34. Terms and People
localism – policy whereby problems are best solved at the state and local level and not by the federal government
Reconstruction Finance Corporation – created in to lend cash to investors to stimulate the economy
trickle-down economics – economic theory that held that money lent to large banks and corporations would in turn be invested in small businesses which would hire more workers

35. Terms and People (continued)
Hoover Dam – huge public works project on the Colorado River that provided jobs, water for irrigation, and power
Bonus Army – group of World War I veterans who marched on Washington, D.C., in 1932, to demand early payment of a bonus promised them by Congress
Douglas MacArthur – supervised the forced removal of the Bonus Army, which angered many Americans 35

36. Why did Herbert Hoover’s policies fail to solve the country’s economic crisis?
As the Great Depression spread misery across America, Herbert Hoover struggled unsuccessfully to respond to the nation’s problems.
As a result of Hoover’s failed response, in Americans would turn to a new leader and increased government intervention to stop the depression.

37. Herbert Hoover did not cause the Great Depression, but Americans looked to him to solve the crisis.
He tried a number of different approaches, but in the end he failed to discover the right formula for stopping the crisis.

38. The RFC gave billions of dollars to banks and large businesses.
The idea was that they would lend to, and invest in, struggling businesses who would hire workers and thus end the depression.
The RFC failed when businesses did not hire more workers.
In 1932, Hoover urged Congress to create the Reconstruction Finance Corporation (RFC). The RFC employed a policy known as trickle-down economics. 38

39. One policy that did succeed was the construction of Boulder Dam, (later renamed Hoover Dam) across the Colorado River.
Started in 1930, the huge dam provided power for more than a million people and irrigation for farm land, and brought needed jobs to the Southwest.

40. With Hoover’s failures, Franklin Delano Roosevelt
Americans looked to a
new leader for hope :
Franklin Delano Roosevelt