The Great Depression A period lasting from in which the economy faltered and unemployment soared.

CAUSES OF THE DEPRESSION Chapter 21, Section 1

1920s 1920  Warren G. Harding  President 1924  Calvin Coolidge  President Under the Republican presidents  US grows more prosperous – Consumption increases – Gross National Product (total value of goods produced and services provided in one year) increases – Stock market increases

1920s Herbert Hoover  1928 presidential candidate – Orphaned as a child, went on to Stanford to study geology, became a mining engineer – Coordinator of the Belgium Relief Program during WWI, head of the Food Administration, Secretary of Commerce Beat the Democratic nominee, Alfred E. Smith, easily in 1928 presidential election

Causes of the Great Depression 1.Problems with the Agricultural Sector During WWI  High crop demands led to increased harvest yields, buying of more land, buying of expensive farm equipment – Led to huge debts for the farmers After WWI  Demand for American crops fell sharply, farmers continue to produce high yield, but cannot sell the crops – Cannot pay off huge debts Result  Rural depression – Farmers did not share in the boom times of the 1920s

Causes of the Great Depression 2. Uneven Distribution of Wealth Corporate profit from worker output goes up 65%, but workers’ wages only rise 8% – Rich become much richer, while the workers just become less poor 60% of American families earned less than $2,000 per year – In order to have a healthy economy, more people need to buy more products, but the poor were not able to afford it

Causes of the Great Depression 3. Easy Credit Consumers were buying products on credit – Buy the product  pay for it in monthly installments until it is paid off This masks the fact that they cannot afford the products People built up large amounts of debt and lived beyond their means

What economic problems lurked beneath the general prosperity of the 1920s?

Causes of the Great Depression 4. Stock Market Crash September 1929  Stock market started to fall and people started to lose confidence in the market October 24, 1929  People believed the stock market was failing so they started to sell their stocks October 29, 1929  Black Tuesday  The stock market collapsed and billions of dollars were lost in a matter of hours

Causes of the Great Depression 5. The Banks Collapse People feared for their money and started to take all of it out of the banks Few banks could survive the requests of depositors for their money – 1929  641 commercial banks failed – 1930  1,350 banks went under – 1931  1,700 banks failed Banks ran out of money and closed their doors. People’s life savings were lost

What happened on October 29, 1929?

The Great Depression Begins Businesses started to fail – They believed that the only way to survive would be to cut production and lay off workers to save money, which made unemployment grow – Consumers then spent less money which caused the businesses to produce even less and lay off even more workers 1933  Nearly 25% of Americans were unemployed

Hawley-Smoot Tariff Government wanted to protect American products from foreign competition June 1930  Congress passed the Hawley-Smoot Tariff  raised prices on foreign imports to such a level that they could not compete in the American market European countries retaliated and enacted tariffs of their own The tariff helped to destroy international trade

Depression Goes Global Hawley-Smoot Tariff was one cause of the depression spreading across the globe Reparation payments, war debt payments already created a shaky economic structure European countries started to experience the same cycle of business failures, bank collapses, and high unemployment

1. How did the prosperity of the 1920s give way to the Great Depression? 2. Why was recovery so difficult after the Stock Market crash? 3. Do you think the nation would have experienced an economic depression even if the Stock Market had not crashed? Why or why not?

AMERICANS FACE HARD TIMES Chapter 21, Section 2

Searching for a Job and a Meal  Average unemployment was 3.7% 1933  Unemployment was 24.9% Those that kept their jobs had their wages or hours cut  Paycheck were % less People ate smaller meals, water replaced milk, meat was non existent People would have to stand in breadlines in order to get a free meal

Looking for a Place to Live Most people sold everything they owned during the Great Depression to keep from going hungry Many people were eventually evicted and ended up on the streets because they could not pay their rent Many homeless grouped together in Hoovervilles  makeshift shantytowns of tents and shacks built on public land or vacant lots One of the largest Hoovervilles was in Central Park, NYC

How did the Great Depression affect American cities in the 1930s?

Effects on Rural America 1.Commodity Prices Plunge & Farmers Lose Farms Crop prices fell  new debts are added to old debts – 1919 Bushel of Wheat = $2.16 – 1932 Bushel of Wheat = $0.38 Income generated was not enough to keep farms going Great Plains suffered through a drought, which made many farmers lose their farms  One million farmers lose their farms for failure to pay mortgages

Effects on Rural America 2. Dust Bowl Farmers were devastated during the 1930s. The dust storms are considered one of the worst natural disasters ever to hit the US The drought and dust was partly the result of poor farming methods and lack of dams, but also bad timing. For people of Texas, Oklahoma, Kansas, New Mexico, and Colorado, it forced them to move in search of work It brought the nickname the Dust Bowl and “dirty thirties”

Effects on Rural America 3. Desperation Causes Migration Many farm families trapped in the Dust Bowl migrated out of the region These people were called Okies, even though only some came from Oklahoma 800,000 people migrated out of Missouri, Arkansas, Oklahoma and Texas alone Rural states lost population and cities gained it as a result of the migration

How did the Dust Bowl make life even more difficult for farmers on the Great Plains?

Effects on Family Life Some men felt shame that they could not support their families Some men even deserted their families Birthrates fell to the lowest in American history Mothers worked side jobs to help support the family Some children quit school and others ran away from home

Effects on Minorities During the depression, minorities were the last to be hired and the first to be fired Unemployment for African Americans was around 50% Mexicans suffered job losses as a result of the migration from the Dust Bowl White Americans who migrated tried to force Mexicans to return to Mexico – Hundreds of thousands, whether US citizens or not, were forced out of the US during the 1930s if they were Mexican

1. How did the depression take a toll on women, children, and minorities in America? 2. How were the experiences of the urban unemployed and the rural poor similar? How were they different? 3. Where might the Americans have laid blame for their difficulties during the early 1930s?

HOOVER’S RESPONSE FAILS Chapter 21, Section 3

Hoover’s Policies 1. Hands-off Policy  Felt that government should not interfere with the cycles of business 2. Volunteerism  Asked business and industrial leaders to keep employment, wages, and prices at current levels 3. Government would reduce taxes, lower interest rates and create public works programs – This would put more money into the hands of people and businesses and encourage more spending 4. Wealthier people should give more money to charity

Hoover’s Policies Fail Volunteerism did not work  People did what was in their own best interest not the interest of the country Hoover asked state and local government to provide relief (localism)  Local and state governments did not have the resources Hoover would not use federal resources to provide relief  believed it was unconstitutional

Why was Hoover reluctant to have the federal government interfere with the economy?

America’s Feelings on Hoover American’s negative feelings towards Hoover were seen in how they associated the President’s name with their suffering “Hoover Wagons”  Trucks that were pulled by horse or mule “Hoover Heaters”  Campfires “Hoover Houses”  Cardboard boxes

Hoover’s New Policies Hoover decides to use federal resources to battle the depression Reconstruction Finance Corporation (RFC)  gave more than $1 billion of government loans to railroads, businesses, and banks – Trickle Down Economics  Money poured into the top of the economic pyramid will trickle down to the base Policy did not work because the money never trickled down from the banks and businesses

What actions did Herbert Hoover take to fight the effects of the depression?

Americans Protest Hoover’s Failures 1.Some people wanted socialism or communism instead of capitalism 2.Bonus Army  WWI vets were promised a bonus for They wanted to get it earlier (1931) to help with financial struggles. – A bill was passed, but Hoover vetoed it. – They marched on Washington to protest. Hoover called in the army to put down the protest. – MacArthur used force to put down the protest, which made Hoover look bad and ruined any chance he would have had for reelection.

1. How did Hoover’s views on government influence his response to the depression? 2. What facts show that Hoover’s policies to reverse the depression failed?