2Causes of the Great Depression Industry: Some industries were less competitiveFarming: Farmers produced more than they could sellEasy credit: Many went into debt buying goods on the installment planIncome: Rich got richer while the poor got poorer
3A New President Hoover Wins The Election of 1928 Democrats Republicans Alfred E. Smith Herbert HooverGovernor of New York Sec. of CommerceWitty / Outgoing Formal / ReservedHoover Wins
4Risky Business Many Americans practiced speculation & buying on margin Speculation – very riskyBuying on margin – only paying for part of the stock
5Stock Market Crashes October 29, 1929 Stock prices dropped Investors started selling all their stocksWall Street lost $30 billion in one month
6Financial Collapse After the Crash Many Americans lost EVERYTHING in the crashAfter the CrashAmericans panicked & tried to withdraw their money from the bankThe banks ran out of money and closedPeople lost their savings
7After the Crash, Continued 85,000 businesses went bankrupt1 out of every 4 people were unemployedPeople who kept their jobs had cut hours and less wages
8Hawley – Smoot Tariff Act Highest tariff in US HistoryDesigned to protect farmers and manufacturers from foreign competitionBackfired – foreign countries couldn’t afford to buy American goods
9Questions over Section 1 Fill in the following graphic organizer:First Cause of Great Depression:Effect:Second Cause of Great Depression:Third Cause of Great Depression:Fourth Cause of Great Depression:
10Hardship and Suffering During the Depression Chapter 22Section 2
11Depression in the Cities Many people were evicted from their homes and lived on the street or in shantytownsCharities provided food in soup kitchens and bread lines
12Minorities & the Depression African Americans and Latinos had the highest unemployment ratesRacial violence increased – there were 24 lynchings in 1933Many demanded that Latinos be deported to MexicoSome left voluntarily while others were deported
13Depression in Rural Areas Some farmers were able to grow enough food to feed their familiesOver 400,000 farms were foreclosed due to unpaid debtsMany turned to tenant farming but were VERY poorThousands left their land and went to California
14The Dust Bowl Farmers overused land Grasslands became unsuitable for farmingDrought and winds blew the soil away
15Men & the Depression Men could not provide for their families 2 million men abandoned their families and wandered the country
16Relief?The government did not offer direct reliefSome charities gave a weekly payment of $2.39 for a family
17Women and Children Women sewed clothes and canned food Managed household budgetsWorked outside the homeMany women were too ashamed to admit their hardship
18ProblemsPoor diets and lack of money for health care led to health problems for many childrenMalnutritionRicketsPellagra
19Social and Psychological Effects Suicide rates rose by 30%People developed habits of thriftinessPeople gave up on dreams
20Positive Effects of the Depression People showed kindness to strangersGave food, clothing and a place to stay for the needyShared resources and helped each other out
21Answer the following questions What were positive effects of the depression?What were negative effects of the depression?
22Hoover Struggles with the Depression Chapter 22Section 3
23Hoover’s PhilosophyTried to reassure Americans that the economy was on strong footing.Felt the gov. should play a limited role in helping to solve the economy’s problems.Gov. role to encourage & facilitate cooperation.Direct relief efforts not support them finacially.
24Hoover takes Cautious Steps Cautious approach to the depressionAsked employers not to cut wages or layoff workersAsked labor leaders not to demand higher wages or go on strike.Created a special organization to help private charities generate contributions for the poor.None of these steps made much of a difference.
25Boulder Dam Hoover dam was approved to be built in 1928. Boulder Dam World’s tallest dam & second largest dam
26Democrats Win in 1930 Congressional Elections Political tide turnedRepublicans lost control of the House of Representatives & only remained in control by only 1 vote in Senate.Farmers burned crops rather than sell at a loss.Declared a “farm holiday” – refused to work in fields.Calling Shantytowns “Hoovervilles”Hoover blanketsHoover Flags
27Hoover Backs Cooperatives Attempts to relieve the depression involved negotiating agreements among private entities reflecting his belief in small gov.Tried to prop up banking system by establishing the National Credit Corporation.Loaned money to smaller banks
28Direct InterventionAppealed to Congress to pass a series of measures to reform banking.Provide mortgage reliefFunnel more money into business investmentFederal Home Loan Bank Act – lowered mortgage rates & allowed farmers creditGlass – Steagall Act – separated investment from commercial bankingReconstruction Finance Corporation – authorized $2 billion for emergency financing for banks
29Patman Bill Denied10,000-20,000 WWI veterans went to Washington D.C. – Bonus ArmyPatman Bill authorized the gov. to pay a bonus to WWI veterans.Was supposed to be paid out in 1945Wright Patman believed money should be paid immediately.Hoover opposed legislationCalled on Bonus Army to leave - refused
30Hoover Disbands the Bonus Army Hoover called for the infantry to gas 1,000 people who were injured.Most Americans were stunned & outraged at the government’s treatment of veterans.
32Extra-Credit Questions Why was Hoover reluctant to help people during the Depression?What types of action did Hoover take to remedy the effects of the Depression?What measures did Hoover take and what results did he achieve to help the economy?Why did Hoover use to force against World War I veterans?What was the Patman Bill and what happened when it failed in the Senate?What happened to the Bonus Army?How did the treatment of the Bonus Army affect President Hoover?