The Great depression

Monday, april 20th SWBAT identify the causes of the Great Depression Do Now: How important is the stock market to the U.S. economy today? How do Americans participate in the stock market?

Budget Scenarios Tell the students to read the directions at the top of the page and complete the columns on the budget sheet for 1928. Tell students that when they finish, the students with the budget card should read the card to the group. Then the students should complete the columns for 1933 and answer the questions that follow the table. Allow time for students to work. When students have finished working, have a spokesperson from each group tell the worker’s income in 1928, read the worker’s 1933 card and discuss the family’s budget changes.

Questions In 1933, when your income decreased, why did the percentage of your income spent on housing and perhaps other items increase? Raise your hand if your group spent the same dollar amount on food in 1928 as you did in 1933. What tradeoffs did you make in order to feed yourself and/or your family? How would these spending decisions affect the economy? Although in your role, you retained your job, one in every four (or 25%) of the workforce was unemployed. What effect did this have on spending? If you were unemployed, what choices might you have had to make? If you had additional family members come to live with you in 1933, what happened to the income per person—per capita income—for your family?

The country experienced deflation, which is a decline in the average price level. During the Great Depression, the prices of goods and services decreased by nearly 30%. At first, this might seem like a good thing. But as our activity showed, with lower prices, businesses such as textile mills, railroads, farmers, car manufacturers and others earned less revenue. With less revenue, businesses could not afford to pay people as much and/or employ as many people. In the Great Depression, the economy suffered unemployment as high as 25%, and wages fell. With wages decreasing and unemployment increasing, borrowers were not able to repay loans. Loan defaults and bankruptcies followed, which produced more bank failures and further declines in output, prices and employment.

A Lesson In banks The United States, along with most of rest of the world, has a fractional reserve banking system. This means that banks take in deposits and lend most of the money that they take in. The banks keep only a fraction of deposits on reserve. Ordinarily, this system works well, but it does depend on the willingness of people to hold bank deposits. Because only a small fraction of the banks’ customers’ deposits are kept on reserve, not everyone can get all of their money out of the bank in cash on the same day. This is generally not considered a problem because, under normal conditions, all of the banks’ customers do not wish to withdraw all of their funds at the same time.

People and businesses borrow less from banks. People buy fewer goods and services. Businesses sell fewer goods and services because people have less to spend. Prices decline. Business Revenues decline. Businesses are able to buy fewer supplies and equipment. Businesses are unable to employ as many workers, they must pay workers less or a combination of both. Workers who are paid less or lose their jobs may buy fewer goods and services and may be unable to repay bank loans. More banks fail, so the economy's supply of money and credit shrinks. This causes a decline in business revenues, which leads to more unemployment and/or decreases in wages.

Causes of the great depression Due to the previous activities findings, by the latter half of the 1920s the stock market was running out of new customers. Professional investors sensed danger and began to sell off their holdings. On October 29, 1929 on Black Tuesday, prices took the steepest dive yet. That day stocks lost $10 to $15 billion in value. The stock market crash was not the major cause of the Great Depression, but it undermined the economy’s ability to hold out against its other weaknesses. Banking crisis Overproduction and low demand leads to employee layoffs Low wages reduce consumer buying power Unemployment reduces buying power further High tariffs restrict foreign demand for American goods (Smoot-Hawley Tariff and other protectionist policies)

Tuesday, april 21st SWBAT describe how the Great Depression affected American families Do Now: Identify and explain two causes of the Great Depression

The Depression worsens The Depression grew worse during President Hoover’s administration. Thousands of banks failed. Thousands of companies went out of business. Millions of Americans were unemployed. Many of the unemployed went hungry. They joined bread lines to receive a free handout of food. They lined up outside soup kitchens. These were private charities set up to give poor people a meal. Many people could not afford to pay their rent or mortgage and lost their homes. Those who could not or would not move were given an eviction notice. Court officials called bailiffs threw them and their belongings in the street. Many of these homeless people put up shacks on unused or public lands, forming communities called shantytowns throughout the country. Many called the shantytowns Hoovervilles, because they blamed President Hoover for their problems.

Many homeless and unemployed people began to wander around the country Many homeless and unemployed people began to wander around the country. Known as hobos, they often sneaked rides on railroad cars to get from place to place. In addition to the Depression, farmers soon faced a new problem. For a long time, farmers on the Great Plains had plowed the soil. They uprooted the grasses that held the soil’s moisture and planted wheat. When crop prices decreased in the 1920s, however, Midwestern farmers left many of their fields unplanted. In 1932 the Great Plains experienced a severe drought. The unplanted soil turned to dust. Much of the Plains became a Dust Bowl. The winds blew the dry soil, blackening the sky for hundreds of miles. As the drought continued, the number of dust storms increased. Many families packed their belongings into old cars or trucks and headed west to California, to find better opportunities. There most remained homeless and in poverty.

Interstellar – dust storm https://www.youtube.com/watch?v=fUEGdBbtSG4

Escaping the depression Americans turned to entertainment to escape their situation, if only for a little while. Many went to the movies. Most often, Americans would see people on the screen who were happier and richer than they were. Comedies provided people with a way to escape their daily fears. Many European actors, such as Marlene Dietrich and Greta Garbo, became superstars. Americans also enjoyed cartoons. Walt Disney produced the first feature-length animated film in 1937, Snow White and the Seven Dwarfs. Even films that focused on the serious side of life were generally optimistic. Americans also listened to the radio. They listened to the news broadcasts. They also enjoyed different kinds of programs. One of the most popular heroes on the radio shows was the Lone Ranger. Short daytime dramas were also popular and provided people with escapes. Some of these dramas were sponsored by the makers of laundry soaps and were nicknamed soap operas.

The Depression in art Art and literature in the 1930s showed what life was like in the Depression. Painters such as Grant Wood showed traditional American values, particularly those of rural Americans in the Midwest and the South. Novelists such as John Steinbeck wrote about the lives of people in the Depression. In The Grapes of Wrath, Steinbeck told the story of an Oklahoma farm family who fled the Dust Bowl to find a better life in California. Some writers during the Depression influenced literary style. In a technique known as stream of consciousness, William Faulkner showed what his characters were thinking and feeling even before they spoke. Magazines became popular during the Depression. Magazine photographers traveled throughout the nation taking pictures of life around them. Many of these photographs were printed in magazines, which became very successful.

Exit ticket Identify and explain two ways people sought to forget about the Depression

homework Read, annotate and answer the questions from Gary B. Nash’s American Odyssey: The Twentieth Century and Beyond

SWBAT evaluate President Hoover’s Wednesday, april 22nd SWBAT evaluate President Hoover’s attempts to revive the economy Do Now: Take out HW handout for review

Paired readings American Odyssey Fighting Quaker According to the text, what policies did Hoover propose to combat the Great Depression? According to the text, what were the effects of Hoover’s policies? Were they successful or unsuccessful? Do you think the text portrays Hoover in a positive or a negative light? Why? Include citations from the source! How is it possible for historians to create two completely different versions of the past?  What if we relied solely on secondary sources to understand the past?

primary source readings 1931 State of the Union Address, Herbert Hoover Hoover Radio Address, Feb. 12, 1932 1932 State of the Union Address, Herbert Hoover Hoover’s Statement on Public v. Private Relief Efforts According to the text, what specific policies did Hoover propose to end the Great Depression? According to the text, what role should the federal government play in the recovery? What role should individuals and/or local governments play? Which secondary source most accurately reflects your primary text?

Exit ticket Did the secondary sources agree or disagree with the primary sources?  Are the primary sources biased?  If so, how do you know? What if we solely relied on this primary source to understand Hoover’s response to the Great Depression? Why is it important to use a variety of sources when analyzing history?

homework Complete the “Your Turn: How did Hoover Respond?” handout