UNIT 6 Chapter 22 – Crash and Depression Chapter 23 – The New Deal THE GREAT DEPRESSION

Presidents of the United States George Washington; Federalist (1788) George Washington; Federalist (1788) John Adams; Federalist (1796) John Adams; Federalist (1796) Thomas Jefferson (1800) Thomas Jefferson (1800) James Madison (1808) James Madison (1808) James Monroe (1816) James Monroe (1816) John Quincy Adams (1824) John Quincy Adams (1824) Andrew Jackson; Democrat (1828) Andrew Jackson; Democrat (1828) Martin Van Buren; Democrat (1836) Martin Van Buren; Democrat (1836) William Henry Harrison; Whig (1840) William Henry Harrison; Whig (1840) John Tyler; Whig (1841) John Tyler; Whig (1841) James K. Polk; Democrat (1844) James K. Polk; Democrat (1844) Zachary Taylor; Whig (1848) Zachary Taylor; Whig (1848) Millard Fillmore; Whig (1850) Millard Fillmore; Whig (1850) Franklin Pierce; Democrat (1852) Franklin Pierce; Democrat (1852) James Buchanan; Democrat (1856) James Buchanan; Democrat (1856) Abraham Lincoln; Republican (1860) Abraham Lincoln; Republican (1860) Andrew Johnson; Democrat (1865) Andrew Johnson; Democrat (1865) Ulysses S. Grant; Republican (1868) Ulysses S. Grant; Republican (1868) Rutherford B. Hayes; Republican (1876) Rutherford B. Hayes; Republican (1876) James Garfield; Republican (1880) James Garfield; Republican (1880) #21 - …  Chester A. Arthur; Republican (1881)  Grover Cleveland; Democrat (1884)  Benjamin Harrison; Republican (1888)  Grover Cleveland; Democrat (1892)  William McKinley; Republican (1896)  Theodore Roosevelt; Republican (1901)  William Howard Taft; Republican (1908)  Woodrow Wilson; Democrat (1912)  Warren G. Harding; Republican (1920)  Calvin Coolidge; Republican (1923)  Herbert Hoover; Republican (1928)  Franklin D. Roosevelt; Democrat (1932)

America: Pathways to the Present Chapter 22 Crash and Depression (1929–1933)

 CORE OBJECTIVE:  CORE OBJECTIVE: Analyze the causes and effects of the Great Depression Objective 6.1: What were the main causes of the Great Depression? Objective 6.2: Describe the social problems and struggles created by poverty during the Depression.  THEME: When the economy of the high-flying 1920s crashed in 1929, the bleak years of the Great Depression began. Out of the destitution grew a debate over government size and strength that changed forever how Americans look at government.

America: Pathways to the Present Section 1: The Stock Market Crash Section 2: Social Effects of the Depression Section 3: Surviving the Great Depression Section 4: The Election of 1932 Chapter 22: Crash and Depression (1929–1933)

In October 1929, panic selling caused the United States stock market to crash. The crash led to a worldwide economic crisis called the Great Depression

The market crash in October of 1929 happened very quickly. The market crash in October of 1929 happened very quickly. In September, the Dow Jones Industrial Average, an average of stock prices of major industries, had reached an all time high of 381. In September, the Dow Jones Industrial Average, an average of stock prices of major industries, had reached an all time high of 381. On October 23 and 24, the Dow Jones Average quickly plummeted, which caused a panic. On October 23 and 24, the Dow Jones Average quickly plummeted, which caused a panic. On Black Tuesday, October 29, 1929, the stock market set a record for loss in value On Black Tuesday, October 29, 1929, the stock market set a record for loss in value most people sold their stocks at a tremendous loss. most people sold their stocks at a tremendous loss million shares were sold 16.4 million shares were sold This collapse of the stock market in October 1929 is called the Great Crash. Overall losses totaled $30 billion. This collapse of the stock market in October 1929 is called the Great Crash. Overall losses totaled $30 billion. The Great Crash was part of the nation’s business cycle, a span in which the economy grows, and then contracts. The Great Crash was part of the nation’s business cycle, a span in which the economy grows, and then contracts.

Great Crash Investors Businesses and Workers Investors lose millions. Businesses lose profits. Consumer spending drops. Workers are laid off. Businesses cut investment and production. Some fail. Banks Businesses and workers cannot repay bank loans. Savings accounts are wiped out. Bank runs occur. Banks run out of money and fail. World Payments Overall U.S. production plummets. U.S. investors have little or no money to invest. U.S. investments in Germany decline. German war payments to Allies fall off. Europeans cannot afford American goods. Allies cannot pay debts to United States. Great Crash Investors Investors lose millions. Businesses lose profits. Great Crash Investors Businesses and Workers Investors lose millions. Businesses lose profits. Consumer spending drops. Workers are laid off. Businesses cut investment and production Some fail. Great Crash Investors Businesses and Workers Investors lose millions. Businesses lose profits. Consumer spending drops. Workers are laid off. Businesses cut investment and production Some fail. Banks Businesses and workers cannot repay bank loans. Savings accounts are wiped out. Bank runs occur. Banks run out of money and fail. World Payments Overall U.S. production plummets. U.S. investors have little or no money to invest. U.S. investments in Germany decline. German war payments to Allies fall off. Europeans cannot afford American goods. Allies cannot pay debts to United States. Effects of the Great Crash, 1929 Great Crash Investors Businesses and Workers Investors lose millions. Businesses lose profits. Consumer spending drops. Workers are laid off. Businesses cut investment and production Some fail. Banks Businesses and workers cannot repay bank loans. Savings accounts are wiped out. Bank runs occur. Banks run out of money and fail. World Payments Overall U.S. production plummets. U.S. investors have little or no money to invest. U.S. investments in Germany decline. German war payments to Allies fall off. Europeans cannot afford American goods. Allies cannot pay debts to United States.

 The economic contraction that began with the Great Crash triggered the most severe economic downturn in the nation’s history—the Great Depression. The Great Depression lasted from 1929 until the United States entered World War II in The Great Depression lasted from 1929 until the United States entered World War II in  The stock market crash of 1929 did not cause the Great Depression – it was the result of underlying economic problems.

Causes of the Depression An Unstable Economy An Unstable Economy The prosperous economy of the 1920s lacked a firm base. The prosperous economy of the 1920s lacked a firm base. The nation’s wealth was unevenly distributed. The nation’s wealth was unevenly distributed. Industry produced more goods than most consumers wanted or could afford. Industry produced more goods than most consumers wanted or could afford. Overspeculation Overspeculation Speculators bought stocks with borrowed money and then pledged those stocks as collateral to buy more stocks. Speculators bought stocks with borrowed money and then pledged those stocks as collateral to buy more stocks. The stock market boom was based on borrowed money. The stock market boom was based on borrowed money. Government Policies Government Policies During the 1920s, the Federal Reserve cut interest rates to assist economic growth. During the 1920s, the Federal Reserve cut interest rates to assist economic growth. In 1929, the Federal Reserve limited the money supply to discourage lending. In 1929, the Federal Reserve limited the money supply to discourage lending. There was too little money in circulation to help the economy after the Great Crash. There was too little money in circulation to help the economy after the Great Crash.

By the early 1920s, wage cuts and growing unemployment had brought widespread suffering across the United States

Poverty Spreads  People of all levels of society faced hardships during the Great Depression. Unemployed laborers, unable to pay their rent, became homeless. Unemployed laborers, unable to pay their rent, became homeless. Humor was used to cope – many things named after President Hoover Humor was used to cope – many things named after President Hoover  Sometimes the homeless built shacks of tar paper or scrap material. These shanty town settlements came to be called Hoovervilles.

 Farm families suffered from low crop prices. As a result of a severe drought and farming practices that removed protective prairie grasses, dust storms ravaged the central Great Plains region. As a result of a severe drought and farming practices that removed protective prairie grasses, dust storms ravaged the central Great Plains region.  The Great Plains, stripped of its natural soil, was reduced to dust, became known as the Dust Bowl. This caused about 60 percent of Dust Bowl families to lose their farms. This caused about 60 percent of Dust Bowl families to lose their farms.

 Impact on Health Some people starved and thousands went hungry. Some people starved and thousands went hungry. Children suffered from poor diet and medical care. Children suffered from poor diet and medical care.  Stresses on Families Living conditions declined as families crowded into apartments. Living conditions declined as families crowded into apartments. Men felt like failures because they couldn’t provide for families. Men felt like failures because they couldn’t provide for families. Working women were accused of taking jobs away from men. Working women were accused of taking jobs away from men.  Discrimination Increases Competition for jobs produced a rise in hostilities against minorities Competition for jobs produced a rise in hostilities against minorities Affected groups: African Americans, Hispanics, and Asian Americans. Lynchings increased. Aid programs discriminated against African Americans.

Social Effects of the Depression—Assessment What factors contributed to disaster for farming families living in the Dust Bowl? (A) Drought (B) Farmers plowing under prairie grasses (C) Decreased prices for agricultural goods (D) All of the above The shanty towns made up of temporary shacks were called: (A) Roosevilles (B) Hoovervilles (C) Greenspans (D) Simpson towns

Social Effects of the Depression—Assessment What factors contributed to disaster for farming families living in the Dust Bowl? (A) Drought (B) Farmers plowing under prairie grasses (C) Decreased prices for agricultural goods (D) All of the above The shanty towns made up of temporary shacks were called: (A) Roosevilles (B) Hoovervilles (C) Greenspans (D) Simpson towns