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1929-1934

The economic boom of the 1920s collapses in 1929 as the United States enters a deep economic depression.

Millions of Americans lose their jobs.

President Hoover is unable to end the downslide.

Economic problems affecting industries, farmers and consumers lead to the Great Depression.

The Great Depression brings suffering of many kinds and degrees to people from all walks of life

President Hoover tries to restore confidence and halt the Depression, but his actions are ineffective.

The year is 1929. The U.S. Economy has collapsed. Farms, businesses and banks nationwide are failing, causing massive unemployment and poverty. You are out of work with little prospect of finding a job.

What would you do to feed your family?◦ What groups of people will be most hurt by the

economic crash?◦ What can you do to find a paying job?◦ What can unemployed and impoverished people

do to help each other?

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How do you feel the people in the picture were feeling when this photograph was taken?

Look at the timeline on p.264 of your book. The timeline covers key U.S. and world events from 1929-1934:◦ What year did the Japanese invade Manchuria?

◦ How long after the stock market crash did large numbers of banks fail?

◦ How many more people were unemployed in 1933 than in 1931?

Immigration and Migration:◦ The effects of the Great Depression and dust

storms forced farm families to leave their land.

◦ Mass migration to urban areas and California helped further the U.S. transformation into a largely urban society and caused disruption and hardship throughout the country.

Economic Opportunity:◦ The dominant theme of the Great Depression was

the lack of economic opportunity.

◦ In the years immediately prior to and during the Great Depression, many Americans called on the government to create more economic opportunity for citizens.

◦ The Republican presidents Coolidge and Hoover stuck to their economic beliefs and did not budge.

Diversity and National Identity:◦ The Great Depression undermined the notion of the

American dream as millions of people endured hardship and despair.

◦ The hard times caused some Americans to doubt the ideas of capitalism.

Chapter 14: The Great Depression Begins

Section 1: The Nation’s Sick Economy

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Objectives:

1. To summarize the critical problems threatening the American economy in the late 1920s

2. To describe the causes of the stock market crash and the Great Depression

3. To explain how the Great Depression affected the economy in the United States and around the world.

Main Idea:◦ As the prosperity of the 1920s ended, severe

economic problems gripped the nation.

Why It Matters Now:◦ The Great Depression has had lasting effects on

how Americans view themselves and the government.

Terms and Names:◦ Price support

◦ Credit

◦ Alfred E. Smith

◦ Dow Jones Industrial Average

◦ Speculation

◦ Buying on margin

◦ Black Tuesday

◦ Great Depression

◦ Hawley-Smoot Tariff Act

Industries in Trouble:◦ Key industries like railroads, textiles and steel are

barely making a profit

◦ Mining and lumbering expanded during WW1, but are no longer in high demand

◦ Coal is especially hard-hit due to the availability of new energy sources

◦ Boom industries—automobiles, construction, consumer goods—now weak

◦ Housing starts decline

Farmers need a lift:◦ International decline for U.S. grain declines after the

war

Prices drop by 40% or more

◦ Farmers boost production to sell more—MISTAKE—prices drop further

◦ Farm income declines; farmers default on loans; rural banks fail

◦ Price Supports—government buys surplus crops and guarantees prices

President Coolidge vetoes the price support bill known as the McNary-Haugen Bill

Interpret the Photograph

What do you think was the mood at a farm auction in the 1920s and 1930s?

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Consumers Have Less Money to Spend:◦ People buy less due to rising prices, stagnant

wages, credit debts

Living on Credit:◦ Many people buy goods on credit

Buy now, pay later

◦ Businesses are willing to give easy credit, consumers pile up large debts

◦ Consumers have trouble paying off their debts and cut back on spending

Uneven Distribution of Income:◦ In the 1920s, the rich got richer, and the poor got

poorer

◦ 70% of families earn less than minimum for a decent standard of living

◦ Most people cannot afford the flood of products factories produce

Republican Herbert Hoover gets overwhelming victory

Democrat Alfred E. Smith—four times governor of New York

Dreams of Riches in the Stock Market:◦ Dow Jones Industrial Average—tracks state of the

stock market

◦ 1920s, stock prices rise steadily; people buy to rush stocks and bonds

◦ Many engage in speculation, buy on a chance of a quick profit

◦ Buying on Margin—pay small percent of the price, borrow the rest

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Black Tuesday:◦ September 1929 stock prices peak, then fall—

investors start selling

◦ October 29, 1929=Black Tuesday

The stock market and the nation’s confidence plummet

◦ Shareholders sell frantically; millions of shares have no buyers

◦ People who bought on credit left with huge debts

◦ Others lose most of their savings

Bank and Business Failures:◦ Great Depression—economy plummets,

unemployment skyrockets—lasts from 1929-1940◦ After crash, people panic and withdraw money from

banks◦ Banks that invested in stocks fail; people lose their

money◦ 1929-1932, gross national product cut nearly in

half 90,000 businesses go bankrupt

◦ 1933—25% of workers jobless; those with jobs get cuts in hours and pay

Worldwide Shock Waves:◦ Great Depression limits U.S. ability to import

European goods

◦ Hawley-Smoot Tariff Act sets the highest protective tariff ever in the U.S.

◦ Other countries cannot earn American currency to buy U.S. goods

◦ International trade drops, unemployment soars around the world

Causes of the Great Depression:◦ Factors leading to the Great Depression:

War debts, farm problems, easy credit, unequal distribution of wealth, tariffs

◦ Federal government keeps interest rates low, encourages borrowing

Students pair up and work on Section 1 of Chapter 14 study guide.

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Chapter 14: The Great Depression Begins

Section 2: Hardship and Suffering During the Depression

Objectives:

◦ To describe how people struggled to survive during the Great Depression

◦ To explain how the Depression affected men, women and children

Main Idea:◦ During the Great Depression, Americans did what

they had to do to survive.

Why It Matters Now:◦ Since the Great Depression, many Americans are

more cautious about saving, investing, and borrowing.

Terms and Names:◦ Shantytown

◦ Soup kitchen

◦ Bread line

◦ Dust Bowl

◦ Direct relief

Having no home to live in

No money for food or clothing◦ No Hollister stores in the malls

No government programs to assist you

The Depression in the Cities◦ People lose jobs, are evicted from homes

◦ Shantytowns—settlements consisting of shacks, arise in cities

◦ People dig through garbage and beg

◦ Soup Kitchens offer free or low-cost food

◦ Bread lines—people line up for food from charities and public agencies

◦ African Americans, Latinos have higher unemployment, lower pay.

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The Depression in Rural Areas:◦ Most farmers can grow food for their families◦ About 400,000 farms lost through foreclosure

Many become tenant farmers

The Dust Bowl:◦ Farmers in Great Plains exhaust land through

overproduction

◦ 1920s: drought and windstorms scatter soil for hundreds of miles

◦ Dust Bowl—area from North Dakota to Texas that is hardest hit

◦ Many families migrate to Pacific coast states

Hardship and the Family:◦ Family is source of

strength for most Americans

◦ Some families break apart under stress of making ends met

Men in the Streets:◦ Many men used to

working, supporting families have difficulty coping—cannot find jobs

◦ About 300,000 homeless hobos wander country on railroad box cars

◦ No federal system of direct relief—cash or food from government

Women Struggle to Survive:◦ Homemakers budget

carefully, can food, sew clothes

◦ Women work outside home; resented by unemployed men

◦ Many women suffer in silence, ashamed to stand in bread lines

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Children Suffer Hardships:◦ Poor diet, health care

lead to serious health problems in children

◦ Lack of tax revenue leads to shortened school year; schools close

◦ Teenagers leave home, ride trains in search of jobs and adventure

Social and Psychological Effects:◦ 1928-1932-suicide rate rises over 30%

◦ Admission to state mental hospitals triple

◦ People give up health care, college, put off marriage and children

◦ Stigma of poverty doesn’t disappear; financial security becomes goal

◦ Many show kindness to strangers

◦ Develop habit of saving and thriftiness

Students pair up and work on Section 2 of Chapter 14 study guide.

Chapter 14: The Great Depression Begins

Section 3: Hoover Struggles With The Depression

1. To explain Hoover’s initial response to the Depression

2. To summarize the actions Hoover took to help the economy and the hardship suffered by Americans

3. To describe the Bonus Army and Hoover’s reaction to it

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Main Idea:◦ President Hoover’s conservative response to the

Great Depression drew criticism from many Americans.

Why It Matters Now:◦ Worsening conditions in the country caused the

government to become more involved in the health and wealth of the people.

Terms and Names:◦ Herbert Hoover

◦ Boulder Dam

◦ Federal Home Loan Bank Act

◦ Reconstruction Finance Corporation

◦ Bonus Army

What objections might there be if the government helps out people in need?

Hoover’s Philosophy:◦ President Herbert Hoover tells Americans economy

is sound

◦ Many experts believe economic depressions are a normal part of the business cycle

◦ Hoover: Government should foster cooperation between competing groups

◦ People should take care of their own families, not depend on government

Hoover Takes Cautious Steps:◦ Calls meetings of business,

banking, labor leaders to solve problems

◦ Creates organization to help private charities raise money for the poor

Boulder Dam:◦ Hoover’s Boulder Dam on

the Colorado River is a massive project Later renamed Hoover Dam

◦ Provides electricity, flood control, water to states on the river basin

Democrats Win in 1930 Congressional Elections:◦ As economic problems increase, Hoover and

Republicans are blamed

◦ Democrats win the House, Republican Senate majority down to 1 vote

◦ Farmers try to create food shortages to raise prices

◦ Widespread criticism of Hoover: shantytowns are renamed “Hoovervilles”

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Hoover Backs Cooperatives:◦ Hoover negotiates agreements among private entities◦ Backs Federal Farm Board (organization of farm

cooperatives) Buy crops, keep off the market until prices rise

◦ Gets large banks to establish National Credit Corporation

Direct Intervention:◦ Federal Home Loan Bank Act—lowers mortgage rates◦ Reconstruction Finance Corporation—emergency fund

for businesses◦ Hoover’s measures don’t improve economy before

presidential election

The Patman Bill Denied:◦ Bonus Army—veterans go to D.C. in 1932 to support the

Patman Bill-want payment of war bonuses◦ Hoover opposes bill; Republican led Senate votes down bill◦ Most veterans leave Washington but about 2,000 stick

around to speak with Hoover

Hoover Disbands the Bonus Army:◦ Hoover fears violence, so he calls on the U.S. Army under

McArthur to disband the Bonus Army◦ Infantry tear gases over 1,000 people, including children-

many injured◦ Public is stunned and outraged by the government’s actions◦ In November of the same year, Franklin Delano Roosevelt

wins the presidency in a landslide

Students pair up and work on Section 3 of Chapter 14 study guide.

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Let’s review! Transition 15, 16.pptx