CHAPTER 22 The Great Depression Begins Overview Time

CHAPTER 22 The Great Depression Begins Overview Time Lines SECTION 1 The Nation’s Sick Economy SECTION 2 Hardship and Suffering During the Depression SECTION 3 Hoover Struggles with the Depression Chapter Assessment Transparencies

CHAPTER 22 The Great Depression Begins “The illusory prosperity and feverish optimism which marked preceding years have given way to fearful economic insecurity and to widespread despair. ” Senator Robert M. La Follette, Jr. , 1931 THEMES IN CHAPTER 22 Economic Opportunity Immigration and Migration The American Dream HOME

CHAPTER 22 The Great Depression Begins “The illusory prosperity and feverish optimism which marked preceding years have given way to fearful economic insecurity and to widespread despair. ” Senator Robert M. La Follette, Jr. , 1931 What do you know? • What do you already know about the Great Depression? • Have you ever discussed the Depression with a relative who lived through it? If so, what did he or she say? Read the quote above and answer the following: • What does La Follette suggest about the prosperity and optimism of the years preceding the Depression? HOME

CHAPTER 22 Time Line The United States October 1929 The stock market crashes. June 1930 The Hawley-Smoot Tariff Act becomes law. July 1930 Congress creates the Veterans Administration. 1931 Hoover proposes a one-year delay in repayment of war debts and reparations. Between 4 million and 5 million Americans are unemployed. 1932 The Reconstruction Finance Corporation is established. 1933 More than 13 million Americans are unemployed. Average annual income drops to $1, 500 per family. HOME

CHAPTER 22 Time Line The World 1930 Army officers led by José Uriburu seize control of the government in Argentina. 1931 Austria suffers economic collapse. September 1931 Japan occupies Manchuria. 1932 Ibn Saud becomes king of Saudi Arabia. September 1932 From prison, Mohandas K. Gandhi leads a protest against British policies in India. 1933 Adolf Hitler comes to power. Japan withdraws from the League of Nations. HOME

SECTION 1 The Nation’s Sick Economy Learn About economic problems affecting industries, farmers, and consumers at home and abroad. To Understand the causes of the Great Depression. HOME

SECTION 1 The Nation’s Sick Economy Key Idea Economic problems affecting industries, farmers, and consumers lead to the Great Depression. HOME

Section 1: The Nation’s Sick Economy l Economic troubles on the Horizon l Industries in trouble l l Railroad, Steel, and Textile Farmers l l WWI prices and demand was high world wide Prices dropped after the war (1919 -1921) so farmers boosted production in hopes of selling more crops…just made prices decline more Farmers defaulted on loans…banks began to fail Congress tried to help with the Mc. Nary-Haugen bill l l Price-Supports: government would buy surplus crops at guaranteed prices and sell them on the world market President Coolidge vetoed the bill twice

Economic Troubles on the Horizon cont… l Consumers have less money to spend l l l Living on Credit l l Farmers bought fewer goods Rising Prices, stagnant wages, unbalanced distribution of income, and overbuying on credit in previous years Credit: an arrangement in which consumers agreed to buy now and pay later for purchases…usually in installment plans Uneven Distribution of Income: rich get richer l Between 1920 and 1929 the income of the wealthiest 1% rose by 75% compared with a 9% increase for Americans as a whole

Hoover Takes the Nation l 1928 Election: Herbert Hoover Republican vs Alfred E. Smith Democrat l l Hoover had little political experience while Smith had been the Governor of New York for four terms Hoover’s main advantage was he was Republican and people believed in the Republican party b/c of the successful past 8 years…Hoover won big

The Stock Market l Dow Jones Industrial Average l l Speculation: buying stocks and bonds on the chance of a quick profit, while ignoring the risks Buying on Margin: paying a small percentage of a stock’s price as a down payment and borrowing the rest l l The most widely used barometer of the stock market’s health The Dow is measured based on the stock prices of 30 representative large firms trading on the New York Stock Exchange Stock goes down and the buyer has no way to repay his debt The Unrestricting buying and selling fueled the market’s crash

The Stock Market Crash l Black Tuesday l l October 29, 1929 Shareholders frantically tried to sell their stock l l Number of shares sold that day reached 16. 4 million Additional millions of shares could not find buyers…people who had bought stock on credit were stuck with huge debts

Financial Collapse l Great Depression: the period from 1929 -1940 in which the economy plummeted and unemployment skyrocketed l l Banks Fail l The Stock Market crash alone did not cause the Great Depression but it did signify the collapse of the economy and made the depression even more severe Many people withdrew their money from banks after the crash but some couldn’t get their money b/c banks had invested their money in the stock market l The government did not protect or insure bank accounts In 1929, 600 banks closed…By 1933, 11, 000 of the nations 25, 000 banks had failed Business Failures l l Between 1929 -1932 the Gross National Product (the nation’s total output of goods and services) was cut nearly in half from 104 billion to 59 billion Unemployment went from 3% in 1929 to 25% in 1933

Worldwide Shock Waves l The Great Depression affected the world economy l l l World trade dropped Hawley-Smoot Tariff: Passed by Congress in 1933 which established the highest protective tariff in US history l Designed to help protect American farmers and manufacturers from foreign competition l Opposite effect…reduced the flow of goods into the US, prevented other countries from earning American currency to buy American goods, made unemployment worse in industries that could no longer export goods to Europe, many countries retaliated by raising their own tariffs World Trade had fallen more than 40%

Causes of the Great Depression l l l 1. Tariffs and war debt policies that cut down the foreign market for American goods 2. A crisis in the farm sector 3. The availability of easy credit 4. An unequal distribution of income http: //www. firstladies. org/curriculum. asp x? Curriculum=1829

SECTION 1 The Nation’s Sick Economy HOME Section 1 Assessment SUMMARIZING What were some of the causes and effects of the 1929 stock market crash? speculation falling stock prices buying on margin loss of confidence Stock Market Crash bankrupt businesses bank failures loss of savings high unemployment worldwide depression

SECTION 1 The Nation’s Sick Economy Section 1 Assessment ANALYZING CAUSES How did the economic trends of the 1920 s help cause the Great Depression? THINK ABOUT • what happened in industry • what happened in agriculture • what happened with consumers HOME

SECTION 1 The Nation’s Sick Economy Section 1 Assessment DRAWING CONCLUSIONS Judging from the events of the late 1920 s and early 1930 s, how important do you think public confidence is to the health of the economy? THINK ABOUT • what happened when overconfidence in the stock market led people to speculate and buy on margin • what happened when lack of confidence caused people to sell stocks and close out bank accounts HOME

SECTION 2 Hardship and Suffering During the Depression Learn About living conditions during the Great Depression. To Understand how people coped with hard times. HOME

SECTION 2 Hardship and Suffering During the Depression Key Idea The Great Depression brings suffering of many kinds and degrees to people from all walks of life. HOME

Section 2: Hardship and Suffering During the Depression l The Depression Devastates People’s Lives l Depression in the cities l l Shantytowns: little towns consisting of shacks Soup kitchens: offering free or low-cost food Bread lines: lines of people waiting to receive food provided by charitable organizations or public agencies Depression affects minorities l African Americans and Latinos suffered from unemployment, low pay, and racial violence

The Depression in Rural Areas l l Between 1929 and 1932, 400, 000 farms were lost through foreclosure: the process by which a mortgage holder takes back property if an occupant has not made payments The Dust Bowl: the region (including Texas, Oklahoma, Kansas, Colorado, New Mexico, and the Dakotas) that was made worthless for farming by drought and dust storms during the 1930’s l Previous farming had exhausted the land through overproduction of crops l Plowing had removed the thick protective layer of prairie grasses l l When the drought and winds began little grass and few trees were left to hold the soil down Okies: a negative term used for people who migrated l Most migrated West along Route 66 to California

Effects on the American Family l Some families broke apart l l Others were able to make ends meet Many men left their homes and wandered the countryside l l l Hoboes: men who wandered the country hitching rides on railroad boxcars and sleeping under bridges Left b/c they were disheartened by their inability to support their families and so abandoned them…others hoped to find work and send money home to their families Direct Relieve: cash payments or food provided by the government to the poor

Effects on the American Family cont… l Women struggle to survive l l Hard to keep jobs…men resented them Very good at saving Often times more reluctant than men to take a handout Children suffer hardships l l l Many suffered from poor diets and inadequate health care l Rickets: caused by a vitamin D deficiency and results in defective bone growth Many child welfare programs and even schools were shut down “Hoover tourists”: teenage boys and some girls jumped aboard America’s freight trains to zigzag the country in search of work, adventure and an escape from poverty l Very dangerous…From 1929 -1939 24, 000 trespassers were killed

Social and Psychological Effects l l l Between 1928 and 1932 the suicide rate rose more than 30% 3 x as many people were admitted to state mental hospitals Adults stopped going to the doctor or dentist Young people gave up dreams of college, put off getting married, had smaller families Fears of broken life and ill health were handed down from parents to children l Many peoples primary concern for the rest of their lives was to never be broke again Great Depression also showed a generation who banded together with millions of acts of kindness l Families helped other families and strangers as they shared their resources and strengthened the bonds within their communities

SECTION 2 Hardship and Suffering During the Depression HOME Section 2 Assessment SUMMARIZING What groups of people were affected by the Great Depression? How were they affected? GROUP EFFECTS OF DEPRESSION urban poor lived in shantytowns, ate in soup kitchens or bread lines African Americans experienced increased discrimination Latino Americans experienced increased discrimination farmers lost land headed west unemployed men wandered country looking for work

SECTION 2 Hardship and Suffering During the Depression Section 2 Assessment COMPARING AND CONTRASTING Compare what happened to city dwellers and to farmers during the Great Depression. How was it similar and different? THINK ABOUT • what happened to their livelihoods • what happened to their homes • what help was available to them HOME

SECTION 2 Hardship and Suffering During the Depression Section 2 Assessment RECOGNZING EFFECTS How did the Dust Bowl affect the entire country? THINK ABOUT • the effect on farmers on the plains • the effect on California and other states where the Okies resettled • the effect on the East HOME

SECTION 3 Hoover Struggles with the Depression HOME Learn About President Hoover’s response to the Great Depression. To Understand why the Hoover administration lost public support.

SECTION 3 Hoover Struggles with the Depression Key Idea President Hoover tries to restore confidence and halt the Depression, but his actions are ineffective. HOME

Section 3: Hoover Struggles with the Depression l l Herbert Hoover: elected President in 1928 Hoover Tried to Reassure the Nation that the economy was on a sound footing l l He believed that Government should play a limited role in helping to solve problems American’s valued rugged individualism l Hoover did not support any form of federal welfare § l Believed it would weaken people’s self-respect Hoover believed that individuals, charities, and local organizations should pitch in to help care for the less fortunate

l Boulder Dam Before President Hoover served as Secretary of Commerce…proposed the construction of the Boulder Dam l l Would be the world’s tallest dam and the second largest Built on the Colorado River $700 million public works program that would pay for itself from the profits of sales of the electric power that the dam would generate The dam provides electricity, helps with flood control, and provides a regular water supply l l Enabled the growth of California’s massive agricultural economy Provides water for cities such as Los Angeles and Las Vegas l Construction started in 1929 while Hoover was in office l http: //www. history. com/photos/new-dealprograms/photo 12

American’s Blame Hoover l l l Farmers burned their corn and wheat and dumped their milk on highways rather than sell it at a loss Famers declared a “farm holiday” and refused to work their fields…others blocked roads to prevent food from getting to the market hoping that food shortages would raise prices Shantytowns became known as “Hoovervilles” homeless wrapped themselves in newspapers known as “Hoover blankets”, empty pockets turned inside out were “Hoover flags”

Hoover Takes Action l Hoover finally softened his position on government intervention in the economy and takes a more active approach l Federal Farm Board: intended to raise crop prices by helping members to buy crops and keep them off the market temporarily until prices rose National Credit Corporation: large banks loaned money to smaller banks, which helped them stave off bankruptcy l

Hoover Finally Takes Direct Action l l l Federal Home Loan Bank Act: lowered mortgage rates for homeowners and allowed farmers to refinance their farm loans and avoid foreclosure Reconstruction Financial Corporation: authorized up to $2 billion for emergency financing for banks, life insurance companies, railroads, and other large businesses Americans did not want to wait…this was too little to late in their eyes

Gassing the Bonus Army l l l Patman Bill: authorized the government to pay a bonus to World War I veterans who had not been compensated adequately for their wartime service Marchers and protesters still camped outside of white house…Hoover decides to disband the Bonus Army: WWI veterans trying to get their bonus money Hoover has General Douglas Mac. Arthur and Major Dwight Eisenhower carry out the operation Gassed more than 1, 000 people…killing an 11 month old babe, blinding an 8 year old boy, two people were shot Hoover’s imaged suffered once again…Franklin Roosevelt benefits from Hoover’s bad decisions

SECTION 3 Hoover Struggles with the Depression HOME Section 3 Assessment SUMMARIZING What did President Hoover say and do in response to the Depression? “Any lack of confidence in the economic future. . . is foolish. ” “rugged individualism” public-works programs HOOVER’S RESPONSES sending of troops against Bonus Army Boulder Dam Federal Farm Board Reconstruction Finance Corporation Federal Home Loan Bank Act

SECTION 3 Hoover Struggles with the Depression Section 3 Assessment 3 ANALYZING ISSUES How did Hoover’s belief in “rugged individualism” shape his policies during the Depression? THINK ABOUT • what that belief implies about government action • Hoover’s policies • whether those policies were consistent with his beliefs HOME

SECTION 3 Hoover Struggles with the Depression Section 3 Assessment CLARIFYING When Franklin Delano Roosevelt heard about the attack on the Bonus Army, why was he so certain that Hoover was going to lose? THINK ABOUT • the American public’s impression of Hoover • Hoover’s actions to fight the Depression • how people judged Hoover after the attack HOME

Chapter 22 Assessment 1. How did what happened to farmers during the 1920 s foreshadow events of the Great Depression? 2. Why was uneven distribution of income bad for the economy? 3. What were some of the effects of the stock market crash in October 1929? 4. What effect did the Hawley-Smoot Tariff Act have on the economy and why? 5. How were shantytowns, soup kitchens, and bread lines a response to the Depression? HOME

Chapter 22 Assessment 6. Why did minorities often experience an increase in discrimination during the Great Depression? 7. What pressures did the American family experience during the Depression? 8. Why did Secretary of the Treasury Andrew Mellon believe that the government should do nothing about the Depression? 9. How did Hoover’s treatment of the Bonus Army affect his standing with the public? 10. In what ways did Hoover try to use the government to relieve the Depression? HOME