The Great Depression and the

New DealMr. Leasure

BHVSD: Harrison Career CenterWinter 2013

President Hoover and the CrashAfter the stock market crash of 1929, the U.S. economy sank into the worst depression in history. As a result, today the government regulates banking and the stock exchange to prevent severe depressions.

President Hoover and the Crash: Vocabulary

• Herbert Hoover: The POTUS (R) at the start of the Great Depression.

• Speculation: Buying and selling of a stock in the hope of making a quick profit.

• Buying on the Margin: To pay a small part of a stock’s price and then borrow money to pay for the rest.

President Hoover and the Crash: Vocabulary

• Black Tuesday: A name given to October 29, 1929, when stock prices fell sharply.

• Crash of 1929: The plunge in stock market prices which started the Great Depression.

• Great Depression: A period, lasting from 1929 to 1941, in which the U.S.

President Hoover and the Crash: Vocabulary

• Public Works Projects: Government funded projects to build resources such as roads and dams.

• Bonus Army: In 1932, thousands of veterans steamed into Washington D.C. demanding promised bonuses they never received.

President Hoover and the Crash: Sequence of Events

1. Stock Market Crashed2. Banks Failed3. Businesses sold less and laid off workers.4. Massive Unemployment.

President Hoover and the Crash: Sequence of Events

Cause EffectStock market prices fell on October 23.

Investors sold their stock.

People could not repay their loans to the bank.

Banks ran short of money.

Businesses sold fewer products.

Businesses fired workers

President Hoover and the Crash: Main Ideas

•What weaknesses existed in the economy during the 1920s?

• Industries were struggling•Wages were low• Income and foreign trade decreased• Debt rose

President Hoover and the Crash: Main Ideas

•What is buying on the margin, and how was it a problem?

• Buying on the margin is paying part of a stock’s price as a down payment and borrowing the rest. When the prices dropped, people had to repay their loans and typically had no money to do so.

President Hoover and the Crash: Main Ideas

•Why did President Hoover become unpopular with many Americans?

• President Hoover opposed federal relief and attacked the Bonus Army.

President Hoover and the Crash: Main Ideas

• How did Hoover’s view of the federal government and that of most American’s differ?

• Hoover thought the government should not interfere in the economy or hand out charity. Many American’s disagreed with President Hoover.

President Hoover and the Crash: Comparing Graphs• Task: Mak a line graph of consumer debt in the 1990s to compare trends in

consumer debt in the 1920s and 1990s.

Consumer Debt from 1990 – 1998 (All figures are in billions of dollars)

1990 $796.4

1992 $779.9

1993 $839.1

1994 $960.7

1995 $1095.7

1996 $1181.9

1997 $1,233.1

1998 $1,308.4

President Hoover and the Crash: Comparing Graphs

• After completing your graph, compare the Consumer Debt graph on page 328 in your text book with the graph you created.

• In which period did consumer debt rise more rapidly?

President Hoover and the Crash: Critical Thinking

•Why do you think Americans were angry about the treatment of the Bonus Army protestors? What are some other ways Hoover might have resolved the conflict?

• Complete the following graphic organizer to consider the issue. ANSWER IN COMPLETE SENTENCES.

President Hoover and the Crash: Critical Thinking

PROBLEMWho: Bonus Army

What: The Bonus Army did not receive their bonus as promised after their service during WWI.

Why: The U.S. Senate, backed by President Hoover, voted down a bill that called for a bonus payment.

Solution 1

1)

Solution 2

2)

Final Result

3)