Causes & Effects of Depression

Causes of Great Depression Beginning of depression is Stock Market Crash in October of 1929 Failure of stock prices to rise after crash b/c no one bought stocks

Contraction (restricting) of country’s money supply because Federal Reserve did not loan money to banks in the late 1920s and early 1930s. Results: banks can’t loan money to businesses, who then can’t hire workers, who then can’t buy goods

High, protective tariffs, called the Tariff Act of 1932 or the Hawley-Smoot Act, on imported goods caused other countries to create retaliatory tariffs—hurts global trade

1. What was happening to the stock market between 1929 and 1932? 2. Between what two major historical events did the Stock Market Crash occur?

Effects of Depression Severe economic decline brought about dramatic changes in the role of the government

With a partner, read one primary source describing life in America during the Great Depression. Record, in the box on your paper, how people were affected by the Depression.

Impact of Depression banks closed and people lost their savings; about half of banks closed by 1933 Decline in purchasing of goods…people had no money to buy anything!

People running to the bank

A.What is the context of the cartoon? In other words, what happened to the man and why? A.Squirrels store away food during the summer and fall so they will have something to eat during the winter. Why do you think the squirrel is referred to as a “wise economist”? B.Is this a cause or effect of the Depression?

Impact of Depression Farmers could not pay mortgage so many had to foreclose which means farmers had to give up their property.

During this time a terrible drought hit the Midwest along with high winds. Dust storms took the topsoil of farms and ruined crops. In the “Dust Bowl”, farmers abandoned their farms, headed west, and became farm hands migrating from farm to farm.

Labor unions and veterans unhappy with economy; wages decreasing and veterans not get their bonus money from WWI

New Deal President Hoover did little to improve financial problems of the country between 1929 and 1932 Presidential election in 1932: Hoover v. Franklin D. Roosevelt (FDR). An FDR campaign speech stated America needed a New Deal

FDR wins election and in his inauguration speech he says, “We have nothing to fear expect fear itself.”

New Deal Programs relief- for the needy such as jobs, money, food, clothes ie: Works Progress Administration (WPA)

New Deal Programs recovery- of the economy to get it out of the depression over time ie: Agricultural Adjustment Act (AAA)

New Deal Programs reform –fix unwise banking and investing practices ie: Federal Deposit Insurance Corporation (FDIC)

New Deal Programs Another New Deal program: Social Security Act a “safety net” for workers, senior citizens, and children with a deceased parent

President Roosevelt uses radio to address (talk to) the nation. Speeches were called fireside chats. “Chats” were an opportunity to calm the frightened nation.

Impact of New Deal changes public’s belief in the responsibility of government American society expects government to keep economy strong and take action that promotes general welfare (benefits nation and its people)

Foldable Directions For each New Deal Program: Chapter 23 1.Give the full name of program 2.Identify if: Relief, Reform, or Recovery 3.Give 2 facts about program. One should be: How does it help people/economy? 4.Draw or find a picture that relates to it. Color the picture 5.Make it neat, accurate, and interesting!