THE GREAT DEPRESSION BEGINSBy Nick White

Guiding Question Objective

What three areas of the economy began to struggle at the end of the 1920s?(What caused the Great Depression?)

Students will be able to explain how a failure in industry, agriculture, and the consumer market led to the Great Depression

Warm Up• Think and scribble!

• What would you do if you lost your entire life’s savings and your job at the same time?

• How would you feel if you couldn’t provide clothing, food, or shelter for your family?

• What would happen if you spent more money than you actually have?

• What typically happens when people and businesses are both in debt?

Economic Struggles• What happens to companies during times of War?

• Which companies might feel these effects?• Lumber, oil, automobile, steel

• Which resources do we use for energy?• Which resources were used in the late 1920s?

• Coal

Economic Struggles• In the early 1900s, how were goods transported?

• Railroads• What transportation industries flourished in the 1920s?

• Automobile, airplanes• With the growth of air and highway transportation, the rail

industry shrunk. What other industries might this affect?

Economic Struggles• What industries or professions benefit from building

houses?• Lumber• Construction workers• Architects• Landscaping• Plumbing• Steel• Glass

Economic Struggles• What happened to

housing starts (construction) between 1920 and 1940?

• What would happen to the industries that benefit from building houses during this time?

Economic Struggles• What is the name for the branch of the economy that

encompasses rail, steel, coal, energy, lumber etc.?• Industry

• Many of the major industrial companies either went out of business or dramatically cut back on expenses/ This led to high levels of unemployment and a weak economy.

Economic Struggles• What happens to farming during War?

• Demand increases

Economic Struggles• What happened to farming income after World War I?

Economic Struggles• Between 1919 and 1921 farming income decreased from

$10 billion to just over $4 billion• If you were a farmer during World War I and you did not

have the most modern equipment, what would you do?• Remember, demand for crops always goes up during war. This

means profits go up too!• Most farmers chose to take out loans to purchase new equipment.

When the farming bubble burst after World War I, most were unable to pay back their debt

Economic Struggles• What happens when you

can’t pay back your debt?• Foreclosure

• The bank seizes your assets and sells them off to get the money you owe

• Many farmers began to lose their farms• This resulted in a drop in the

agricultural sector. As a result, banks failed because debt became unpayable and food production dropped.

Economic Struggles• To help farmers make more money, Congress proposed

the McNary-Haguen bill. This bill would have allowed the US Government to buy surplus crops at a guaranteed price.• President Coolidge vetoed the bill twice

• “Farmers have never made money. I don’t believe we can do much about it.”

Economic Struggles• What is the name for the branch of the economy that

encompasses farming?

Economic Struggles• What was one of the negative consequences of the

installment plan (buying on credit)?

Economic Struggles• Wages stagnated (stopped rising) at the end of the 1920s.

If wages are not rising as fast as they were when credit rates were created, what might this do to debt payment?

• If you begin to accumulate too much debt, what might you do?• By the end of the 1920s, many consumers cut back on spending

because wages had slowed down making it more difficult to pay off debt.

• Who suffered from less consumer spending?• Business

Economic Struggles• What is wealth distribution?• Between 1920 and 1929, the income of the wealthiest 1%

of the population rose 75% compared with a wage increase of 9% for the other 99%

• How balanced was wealth distribution between 1929 and 1930?

Economic Struggles• Why is unequal wealth distribution a bad thing?

• It prevents most people from successfully navigating economic disaster. When a majority of the population is unable to contribute to the economy after a crash, the economy has a hard time recovering

• Some historians argue that unequal wealth distribution was a contributing factor to the fall of the Roman Empire• Rome wealth control: Top 1% owned 16% of wealth• 1929 US wealth control: Top 1% owned 44.2% of wealth• 2013 US wealth control: Top 1% owns 38% of wealth• 2013 International wealth control: Top 1% owns 40% of wealth

• http://www.youtube.com/watch?v=oOwjN9qV2ls

Economic Struggles• What is the name of the branch of the economy that we

occupy?• Consumer market

Economic Struggles• Exit Ticket

• What three sections of the economy began to struggle at the end of the 1920s and how did they lead to the economic downturn in 1929?

• Guiding Question• What caused the Great Depression? • Objective• Students will be able to explain why the Stock Market

Crash was not a primary cause of the Great Depression.

Warm Up• Do you recognize this statue?• Where is it located?• What does it represent?

• http://www.youtube.com/watch?v=DXFAf-V9Qpk

The Stock Market Crashes• What is the New York Stock Exchange?

The Stock Market Crashes• NYSE

• New York Stock Exchange. The place to buy and sell stock since 1792• Stock

• A share of a company that entitles you to profits made by the company• Stockbrokers

• People who take orders from customers to buy and sell shares of stock in companies

• Why would you buy stock?• Retirement plan• Salary compensation• Recreation• Get rich quick

The Stock Market Crashes• Dow Jones Industrial Market

• Barometer of the stock market’s health based on the prices of the 30 largest NYSE firms

• Bull Market• A general rise in the stock market over time

• Speculation• Buying stock in hopes of making a quick profit

• Buying on margin• Paying for a small percentage of the stock and borrowing the rest

The Stock Market Crashes

• What does the artist will think will happen as a result of the stock market crash?

• How is fear communicated in the picture?

The Stock Market Crashes

The Stock Market Crashes• Black Tuesday

• In September 1929, stock prices peaked and then fell• This caused confidence in the market to waver and some investors

quickly sold their stock• On Tuesday 1929 the bottom fell out of the market

• Shareholders tried to sell before prices plunged even lower• 16.4 million shares sold in one day

• Despite this, many people were left with shares worth less than what they had originally paid. Many were left with huge debts while other lost their entire life savings

The Stock Market Crashes• Cause or effect?

• Did the stock market crash cause the Great Depression?• What arguments would you use to say that Black Tuesday was a

result of a bad economy and not a cause of the Great Depression?• Where should we go to get data to support our argument?• What kind of argument is this?

• Can Americans all take their money out of the banks at the same time?• No, the money is not sitting in a vault. It is being spent, invested

and given to people when they make withdrawals

So What Did Cause the Great Depression?

• Bank Failure• After the crash, many people withdrew their money from the banks.

However, many people could not get all of their money back. Why do you think this was?• Money was gone because of unpaid debt• The banks had invested the money in the Stock Market

• 11,000 banks failed out of 25,000 nationwide• Businesses went bankrupt

• GNP (Gross National Product– the monetary value of all goods and services produced in the United States) dropped from $104 billion to $59 billion

• 90,000 business go bankrupt• Unemployment jumps to 25%

So What Did Cause the Great Depression?

• Bad international trading trends• Many European countries were also locked in depression making it

difficult to export American good• Hawley-Smoot Tariff Act

• Highest protective tariff in U.S. History. Ended up harming U.S. exports because other countries could not pay for American goods

So What Did Cause the Great Depression?

• There are four main causes of the Great Depression• 1. Tariffs and war debt cut down the foreign market for American

goods• 2. The agricultural sector collapses• 3. Large amounts of consumer debt and an unequal distribution of

wealth• 4. A weak industrial sector

International Issues• What might be some of the international effects of the

Great Depression?• Downturn in international trade• Greater dependence on reparation payments• Rise of Hitler• http://www.youtube.com/watch?v=5tGKfIJwrh4

1928 Election• Herbert Hoover vs. Alfred E. Smith

1928 Election• Herbert Hoover

• Republican• Mining engineer from Iowa• Served as U.S. Secretary of Commerce under Harding and

Coolidge• Strengths: Economic success under Republican Presidents in the

1920s• Alfred E. Smith

• Democrat• Four-time Governor of New York• Strengths: opposed prohibition, comfortable in the spotlight, career

politician

1928 Election• “We in America are nearer to the final triumph over

poverty than ever before.” –Herbert Hoover• Hoover won in a landslide, indicating that the American

people were pleased with the American economy and the Republican, hands-off economic approach• Some economists had warned of a weakened economy

1928 Election• What do you notice about the electoral results?

Hoover’s Philosophy of Government• “Rugged Individualism”

• People should succeed through their own efforts• Handouts weaken people’s self-respect

• Opposed any form of welfare or federal government handouts

• Local charities alone should be responsible for helping the poor

• What are the potential problems with this philosophy?

Wrap Up• Did the Stock Market Crash directly cause the Great

Depression? Why or why not, and if not what did cause the Great Depression?

Warm Up• Who should take care of the poorest people in the United

States?

Life during the Great Depression

• http://www.youtube.com/watch?v=a2e8-ZmtU7c

• What is the mood of this song?

• What job do you think the singer has?

• What happened to the singer?

• What is the name of this region of the United States?

The Great Plains

The Dust Bowl• Between 1929 and 1932 400,000 farms were lost to

foreclosure• Most farmers turned to tenant farming and made barely enough to

survive• Many farmers had “over farmed” the land at the beginning

of the 1920s to keep up with the demand for food.• This resulted in a loss of top-soil and trees which would hold soil in

place• In 1930 a disastrous drought struck the Great Plains

• What happens when soil dries out?• Dust!

The Dust Bowl• Due to a large build up in dust and a lack of top soil to

keep the dust in place, enormous amounts of dust blew up creating a massive dust storm in the Great Plains

The Dust Bowl• The largest dust storms happened in Texas, New Mexico,

Oklahoma, Kansas and Colorado• Dust was found as far away as Boston and New York City• Many farmers up and left for California. These people

were known as Okies.

The Dust Bowl• What do you see in these pictures? What emotions,

people, conditions etc.

The Dustbowl• Dorothea Lange traveled around the country collecting pictures of the Dust

Bowl. This picture, “The Migrant Mother” is her most famous piece• What does this picture make you think when you see it?

Depression Effects on the Family• Effects on women

• Many women had to budget their money wisely to pay for food• Women also took jobs to help feed their family

• Many men resented this. Working women were seen to be preventing unemployed men from getting jobs

• Most people assumed women were having an easier time than men• Men were the ones who were lining up and begging for jobs• In reality, women were suffering in secret and were starving to death in

attics as opposed to starving to death on the streets

Depression Effects on the American Family

• Effects on Men• Men were accustomed to working with their families

• Unemployment was a shameful thing for them• What are the men in the picture doing?

Depression Effects on the Family• http://www.youtube.com/watch?v=lNXTKVxOmfk• What is Russell Crowe doing in this scene?• Why is he doing it?• Where is this happening?• What do you notice about the other men in the room?

Depression Effects on the Family• Effects on children

• A lack of food and money for health care causes sickness among children

• Slashed tax revenue resulted in school closingshttp://www.youtube.com/watch?v=JCKh3Jsge4E

Depression Effects on Minorities• Latinos were seen as job poachers

• Many Americans called for Mexicans and Mexican-Americans to be deported• During the 1930s, hundreds of thousands of Latinos left, either due to

deportation or voluntarily leaving

• African-Americans became even more exposed• Having already lived an underprivileged life, the black community

suffered higher unemployment from the rest of the country as well as more violence

http://www.youtube.com/watch?v=RcrgXmyc6KY&feature=player_detailpage#t=117s

Exit Ticket• Name and describe one social effect of the Great

Depression on American lives

Decision Time• Fill out the reasoning guide explaining your beliefs on

each of the statements

Hoover’s Solution• Hoover’s 1928 Campaign

Slogan: “A chicken in every pot and a car in every garage.”

Hoover’s Solution• Hoover believed in rugged individualism as his political

philosophy• People should take care of themselves and their own families and

not rely on the government for aid• Any sort of government aid leads the people to rely on government

Hoover’s Solution• What is government aid?

• Food stamps• Unemployment• Direct relief

• Early depression era program allocating money to be given to the needy by the government

Hoover’s Solution• For Hoover, government’s role is encourage voluntary

cooperation between differing parties• Government is a mediator

• Government can help guide relief programs but NEVER get involved

• Small government philosophy

Hoover’s Solution• Tried to be positive• Told the public to go on acting as normal• Believed the Depression was just a natural part of the

business cycle• Told people to let the economy fix itself• Limited the role of government to fix the problems

Hoover’s Solution• Tried to get businesses to voluntarily enact business

practices • Asked businesses not to cut wages or lay off workers• Asked workers not to go on strike

Economic Situation in 1930• Continued to worsen• Unemployment continued to rise• More companies went out of business• Soup kitchens, shantytowns, & hoboes became common• Misery of ordinary people continued to grow• Republicans lost control of the House of Representatives

& Senate

Hoover’s Solution• What is this called?

• Shantytown• Where do you think these are located?

Hoover’s Solution• Hoovervilles

• Homeless people suffering from the Great Depression would gather supplies to build makeshift houses

• These shantytowns became known as Hoovervilles• This Hooverville is located in New York City

Hoover’s Solution• Charities began to open up bread lines and soup kitchens

to feed the hungry• Food was donated by the rich

• However, the demand for resources became far too heavy and without the aid of the federal government the charities could not bear the entire burden of helping the poor

Hoover’s Solution• When the Democrats won Congress in the 1930 election

Hoover took this as a sign that he had to act• Still cautious, Hoover commissioned cooperative projects

to provide employment opportunities• The government would partner with private businesses to pay for

different projects and create employment

Hoover’s Solution• In 1931, Hoover commissioned the construction of the

Boulder Dam on the Colorado River• Created thousands of jobs and cheap power• Later renamed the Hoover Dam

Hoover’s Solution• The co-ops did not do enough however, and Hoover

started instituting direct relief programs to gain reelection• In 1932 Hoover signed the Federal Home Loan Bank Act to allow

people to refinance their mortgage to avoid foreclosure• In January 1932 Hoover established the Reconstruction Finance

Corporation• This provided $2 billion for banks, life insurance companies, railroads

and other large businesses. The idea was that the money would “trickle down” to the poor through job growth and higher wages.

• This did not happen!

Patman Bill• Passed by Congress in 1924

• Authorized government to pay WWI veterans, but not until 1945

• Wright Patman believed that all veterans should immediately get $500

Bonus Army’s March on Washington• 20,000 World War I veterans and their families marched

on Washington to demand their payments• http://www.youtube.com/watch?v=dWvCCxOUsM8

Bonus Army• Hoover believed the Bonus Army was made up of

communists• Hoover sent 1,000 soldiers under the command of Dwight

D. Eisenhower and Douglas MacArthur to disband the veterans.

• They gassed 1,000 people including an 11 month old baby who died & an 8 year old who went blind

Hoover’s Solution• 1929-1931: Everybody relax. This will fix itself and you should

just act as if all is normal. Charities, you guys can carry the poor. The federal government isn’t involving itself at all.

• 1931: Hmm, well this might be a problem that won’t quite fix itself. Tell you what, we here at the Federal Government aren’t going to outrightly help you, but we will try to get all those companies to do their part. The federal government will involve itself a little bit, but not with direct aid.

• 1932: Okay this is a problem. We need to a fix and no charities are big enough to bear the burden. We here at the federal government will involve ourselves directly.

• 1933: Retirement is nice…

A Failed Presidency• The failure of the United States economy to recover from

the Great Depression was blamed largely on Herbert Hoover.

• People thought he lack compassion for the struggles of the poor and did not understand how to deal with the crisis.

1932 Election

1932 Election• The single most important issue in this election was the

economy. Previous important issues such as Catholicism, Nativism, and even Prohibition tool a back seat to what could be done to fix the economy

• New York Governor and former Vice Presidential candidate Franklin Delano Roosevelt ran on the Democratic ticket. Roosevelt attacked Hoover’s weak response to the weak economy and promised a better future for Americans

• http://www.youtube.com/watch?v=gqsT4xnKZPg

1932 Elections• Roosevelt won a huge victory. But more importantly he

won the South. This was the first time since 1912 that a Democrat carried many of these crucial states. Roosevelt was the second Democratic President in 30 years in the 20th Century