THE GREAT THE GREAT DEPRESSION BEGINS!DEPRESSION BEGINS!

Chapter 14Chapter 14

Key UnderstandingsA nation’s survival depends on its ability to respond to

crisis. 

Human and physical systems interact and impact oneanother

 Democratic societies must balance the rights and

responsibilities of the government with the good of thecitizens.

 During a crisis, government institutions are called upon to

help stabilize society and safeguard the welfare of itscitizens.

StatisticsStatistics National Income: 1929--$81 billionNational Income: 1929--$81 billion

1932--$41 billion1932--$41 billion Business Failures: 1929-32--85,000Business Failures: 1929-32--85,000 Banks: 1929-32 - 9,000 failures and Banks: 1929-32 - 9,000 failures and

9,000,000 accounts wiped out9,000,000 accounts wiped out Per capita income: 1929 -- $681Per capita income: 1929 -- $681

1932 -- $4951932 -- $495 Weekly income of a stenographer: 1929 Weekly income of a stenographer: 1929

-- $45-- $451932 -- $161932 -- $16

Why was the economy Why was the economy sick in the late 1920’s?sick in the late 1920’s?

Many industries had been successful in Many industries had been successful in the EARLY 20’s, but losing $ by late 20’s.the EARLY 20’s, but losing $ by late 20’s.

Examples were auto manufacturing, Examples were auto manufacturing, construction, & consumer goods.construction, & consumer goods.

The biggest problems The biggest problems were in FARMING!!were in FARMING!!

Farmer’s income went down after Farmer’s income went down after WWI.WWI.

Many lost their land.Many lost their land.

Farm foreclosure sale. (Circa 1933)Farm foreclosure sale. (Circa 1933)

PRICE SUPPORTSPRICE SUPPORTS

Congress tried to help farmers by passing Congress tried to help farmers by passing priceprice supportssupports..W/price supports, the government wouldn’t allow W/price supports, the government wouldn’t allow food prices to fall below a certain level…food prices to fall below a certain level…BUT, President Coolidge vetoed the bill and BUT, President Coolidge vetoed the bill and farmers’ incomes continued to drop.farmers’ incomes continued to drop.

CREDIT & DEBTCREDIT & DEBT

Because of inflation, many Americans Because of inflation, many Americans were accumulating were accumulating debtdebt they couldn’t they couldn’t afford to pay off.afford to pay off.

Supply & Demand in the farm Supply & Demand in the farm sectorsector

Laissez Faire business with Laissez Faire business with unequal distribution of wealthunequal distribution of wealth

International Debts Unpaid & loss International Debts Unpaid & loss of oversees marketsof oversees markets

Overproduction in manufacturingOverproduction in manufacturing Stock MarketStock Market

Contributing Factors to the Great DepressionContributing Factors to the Great Depression

Q:Q: What problems did farmers What problems did farmers face in the 1920’s?face in the 1920’s?

HERBERT HOOVER HERBERT HOOVER BECOMES PRESIDENTBECOMES PRESIDENT

19281928

Hoover defeated Democratic Hoover defeated Democratic nominee, Alfred E. Smith.nominee, Alfred E. Smith.

People believed Hoover when People believed Hoover when he said that the economy was he said that the economy was healthy.healthy.

The Dow Industrial Average was up The Dow Industrial Average was up 30 pts.30 pts.

People rushed to buy stocks.People rushed to buy stocks.

Many people were engaging in Many people were engaging in SPECULATIONSPECULATION….buying risky ….buying risky stocks in hopes of a quick profit.stocks in hopes of a quick profit.

They were They were BUYING ONBUYING ON MARGINMARGIN……paying just a small down payment & paying just a small down payment & borrowing the rest.borrowing the rest.

STOCK MARKET STOCK MARKET CRASHES!!!!!!CRASHES!!!!!!

Tuesday, October 29, 1929Tuesday, October 29, 1929

A.K.A. “Black Tuesday”A.K.A. “Black Tuesday”

Q:Q: What was dangerous What was dangerous about how Americans bought about how Americans bought stock?stock?

Floor of Stock Market just after the crash.Floor of Stock Market just after the crash.

Stock prices fell so Stock prices fell so sharply, called a sharply, called a “crash”“crash”

People tried to sell their shares which People tried to sell their shares which drove prices down further.drove prices down further.By mid-November, $30 billion had been By mid-November, $30 billion had been lost.lost.

THE GREAT THE GREAT DEPRESSION…DEPRESSION…

Stock market crash signaled this period Stock market crash signaled this period of bad economic times when many were of bad economic times when many were out of work from 1929-1940.out of work from 1929-1940.

President Hoover’s President Hoover’s ReactionReactionPresident Hoover’s President Hoover’s ReactionReaction

No increase in money No increase in money supplysupply

““the ship would right the ship would right itselfitself””

““Rugged IndividualismRugged Individualism””

Policies Hated by the Policies Hated by the PeoplePeople

UnemploymentUnemployment Office Office

1920 – 5.2%1920 – 5.2%

1921 - 11%1921 - 11%

1929 – 3.2%1929 – 3.2%

1930 – 8.9%1930 – 8.9%

1931 – 16.3%1931 – 16.3%

1932 - 24.1%1932 - 24.1%

1933 – 25.2%1933 – 25.2%

Today: 9%

The Depression spread around the world.The Depression spread around the world.GermanyGermany still paying war reparations. still paying war reparations.Americans unable to buy their goods now, Americans unable to buy their goods now, EuropeanEuropean economies suffered . economies suffered .

HAWLEY-SMOOT TARIFF HAWLEY-SMOOT TARIFF ACTACT

Congress passed this hoping that higher Congress passed this hoping that higher tariffs would push Americans to buy tariffs would push Americans to buy goods made in the U.S. & help U.S. goods made in the U.S. & help U.S. industry.industry.

THIS FAILED!!!! WHY?THIS FAILED!!!! WHY? b/c Europeans had even less $ now to b/c Europeans had even less $ now to

spend on U.S. goods, & American spend on U.S. goods, & American industry suffered.industry suffered.

4 Basic Causes of G.D.4 Basic Causes of G.D.

1)1) Tariffs & war debt policies that cut down Tariffs & war debt policies that cut down the foreign market for American goods.the foreign market for American goods.

2)2) A crisis in the farm sectorA crisis in the farm sector

3)3) The availability of easy creditThe availability of easy credit

4)4) An unequal distribution of income.An unequal distribution of income.

HARDSHIP & HARDSHIP & SUFFERING DURING SUFFERING DURING THE DEPRESSIONTHE DEPRESSION

Section 2Section 2

The Great Depression brought suffering & The Great Depression brought suffering & hardship to many. Hard economic times hardship to many. Hard economic times ruined many lives.ruined many lives.Millions lost jobs, went hungry or became Millions lost jobs, went hungry or became homeless.homeless.

SHANTYTOWNSSHANTYTOWNS

Cities full of homeless people. Some slept in Cities full of homeless people. Some slept in parks , others built parks , others built shantytownsshantytowns, where they , where they lived in little shacks made from scrap materiallived in little shacks made from scrap material..

Rothstein, Arthur, 1915- photographer photographer

Squatter's Camp, Route 70, Arkansas, October, 1935.Squatter's Camp, Route 70, Arkansas, October, 1935.

Photographer: Ben ShahnPhotographer: Ben Shahn

SOUP KITCHENSSOUP KITCHENS

Where charities served meals to the Where charities served meals to the needyneedy

BREAD LINESBREAD LINESThose who couldn’t afford to buy food stood Those who couldn’t afford to buy food stood

in bread lines to receive free food.in bread lines to receive free food.

New York. Bread line beside the Brooklyn Bridge approachNew York. Bread line beside the Brooklyn Bridge approach

Many farm families couldn’t Many farm families couldn’t meet their mortgage payments.meet their mortgage payments.

From 1929 to 1932, about 400,000 From 1929 to 1932, about 400,000 farmers lost their land.farmers lost their land.

Farm foreclosure sale in Iowa. (Circa 1933)Farm foreclosure sale in Iowa. (Circa 1933)

THE DUST BOWLTHE DUST BOWLWhat were the causes?What were the causes?

A LONG DROUGHT HITS A LONG DROUGHT HITS THE GREAT PLAINS….THE GREAT PLAINS….

Little rain from Little rain from Texas to North DakotaTexas to North Dakota.. Much of this area had been grassland Much of this area had been grassland

that farmers broke up with their plows to that farmers broke up with their plows to grow crops.grow crops.

Soil was exhausted from over-farming.Soil was exhausted from over-farming.The grass that had once held the soil in The grass that had once held the soil in

place was gone.place was gone.

When powerful winds swept across the Great When powerful winds swept across the Great

Plains, the soil blew awayPlains, the soil blew away..This dry area of blowing soil called the DUST This dry area of blowing soil called the DUST BOWL.BOWL.

Dust Storm in Rolla, Kansas; "05/06/35; Dear Mr. Roosevelt, Darkness came when it hit us. Dust Storm in Rolla, Kansas; "05/06/35; Dear Mr. Roosevelt, Darkness came when it hit us. Picture taken from water tower one hundred feet high. Yours Truly, Chas. P. Williams." Picture taken from water tower one hundred feet high. Yours Truly, Chas. P. Williams."

Photo: Massive Dark cloud approaching village in forefrontPhoto: Massive Dark cloud approaching village in forefront. . 

HUGE DUST STORMS COVERED THE PLAINS & HUGE DUST STORMS COVERED THE PLAINS & BLEW DUST AS FAR AWAY AS East Coast.BLEW DUST AS FAR AWAY AS East Coast.

MIGRANT WORKERSMIGRANT WORKERS Many farmers packed up their belongings Many farmers packed up their belongings

& started for California to look for work & started for California to look for work Became MIGRANT WORKERS moving Became MIGRANT WORKERS moving

from place to place to pick cropsfrom place to place to pick crops Lots came from Oklahoma, so migrant Lots came from Oklahoma, so migrant

workers often called workers often called okiesokies

Migrant Work CampsMigrant Work Camps

Migrant family looking for work in the pea Migrant family looking for work in the pea

fields of California. (Circa 1935)fields of California. (Circa 1935)

Q:Q: How did people in the How did people in the cities & rural areas suffer cities & rural areas suffer during the Great Depression?during the Great Depression?

Many families pulled together during the hard Many families pulled together during the hard time and shared what they earned. Instead of time and shared what they earned. Instead of going out for entertainment, parents & children going out for entertainment, parents & children often stayed home to play games or listen to often stayed home to play games or listen to radio.radio.

Other families broke apart under the strain of Other families broke apart under the strain of poverty & unemployment. poverty & unemployment.

Many men felt ashamed b/c they lost their jobs.Many men felt ashamed b/c they lost their jobs. Some men left their families & wandered the Some men left their families & wandered the

country looking for workcountry looking for work..

Unemployed men vying for jobs at the American Legion Unemployed men vying for jobs at the American Legion Employment Bureau in Los Angeles during the G.D.Employment Bureau in Los Angeles during the G.D.

Toward Los Angeles, California. 1937.Toward Los Angeles, California. 1937. Photographer: Dorothea Lange. Perhaps 2.5 million Photographer: Dorothea Lange. Perhaps 2.5 million

people abandoned their homes in the South and the Great Plains during the Great people abandoned their homes in the South and the Great Plains during the Great Depression and went on the road.Depression and went on the road.

Children suffered terribly from poverty & break Children suffered terribly from poverty & break up of families.up of families.Many children had poor diets & no health care.Many children had poor diets & no health care.

Many children ran away from home, Many children ran away from home, hopping rides aboard freight trains.hopping rides aboard freight trains.

Direct ReliefDirect Relief: : Cash or food given Cash or food given directly to poor people by the federal directly to poor people by the federal

government.government.

Although Direct Relief was needed Although Direct Relief was needed in the early years of the G.D., it was in the early years of the G.D., it was not made available.not made available.

The Great Depression caused great The Great Depression caused great suffering.suffering.Rates of suicide & mental illness Rates of suicide & mental illness increased dramatically.increased dramatically.

Hardship forced young people to Hardship forced young people to give up dreams of college.give up dreams of college.

While the G.D. caused much suffering, While the G.D. caused much suffering, sometimes it brought out the best in sometimes it brought out the best in

individuals, families, and commmunitiesindividuals, families, and commmunities.. Many people shared resources Many people shared resources

w/neighbors or gave food & clothing to w/neighbors or gave food & clothing to the needy.the needy.

HOOVER STRUGGLES HOOVER STRUGGLES WITH THE WITH THE

DEPRESSIONDEPRESSION

Section 3Section 3

HOOVER TRIES TO HOOVER TRIES TO REASSURE THE NATION:REASSURE THE NATION:

At first, President Herbert Hoover believed that At first, President Herbert Hoover believed that the Great Depression was just another slow the Great Depression was just another slow down that would end on its own.down that would end on its own.

Hoover believed the government should take Hoover believed the government should take some action.some action.

But he also believed that government shouldn’t But he also believed that government shouldn’t take too much power or give direct aid to the take too much power or give direct aid to the poor.poor.

Hoover believed that charities-not Hoover believed that charities-not government- should give food & shelter to government- should give food & shelter to people who were poor or out of work.people who were poor or out of work.

Relief line waiting for commodities, San Antonio, Texas.

The economy continued to The economy continued to shrink & unemployment shrink & unemployment continued to go up.continued to go up.

Unemployed workers in front of a shack with Christmas tree, East 12th Street, New York City. December 1937.

One project that helped was One project that helped was the the

HOOVER DAMHOOVER DAM

Still, economic difficulties Still, economic difficulties increased, the country increased, the country turned against Hooverturned against Hoover

In the 1920 elections, the Democrats gained In the 1920 elections, the Democrats gained more seats in Congressmore seats in Congress

Rothstein, Arthur, 1915

Farmers burned crops & dumped milk Farmers burned crops & dumped milk rather than sell it for less than it cost rather than sell it for less than it cost them to produce it.them to produce it.

Fields of uncut wheat northwest of Great Falls, Montana.

Wolcott, Marion Post, 1910- photographer.

HOOVERVILLESHOOVERVILLESMany people gave this name to the “Shantytowns”Many people gave this name to the “Shantytowns”

Lange, Dorothea, photographer

Lange, Dorothea, photographer

Despite the public criticism, Despite the public criticism, Hoover stuck to his principles…Hoover stuck to his principles…

Hoover met w/bankers, businessmen,& labor Hoover met w/bankers, businessmen,& labor leaders.leaders.He asked employers not to fire workers or lower He asked employers not to fire workers or lower their pay.their pay.He asked labor leaders not to ask for higher pay He asked labor leaders not to ask for higher pay or to strike.or to strike.

Q:Q: What did Hoover think What did Hoover think government should do in bad government should do in bad economic times?economic times?

HOOVER TAKES HOOVER TAKES ACTION…ACTION…

What exactly did he do?What exactly did he do?

Hoover didn’t offer Hoover didn’t offer direct aiddirect aid to the poor, to the poor, but he did worry about the suffering of but he did worry about the suffering of the people.the people.

He took some steps to use the He took some steps to use the government to improve the government to improve the economy…..economy…..

Hoover used the Boulder Dam project as a Hoover used the Boulder Dam project as a model of how federal government could model of how federal government could encourage cooperation b/w private groupsencourage cooperation b/w private groups

Rothstein, Arthur, photographer

Las Vegas, Nevada. Transmission towers and transformers redistributing power from Las Vegas, Nevada. Transmission towers and transformers redistributing power from Boulder Dam to Basic Magnesium Incorporated, which produces huge quantities of the Boulder Dam to Basic Magnesium Incorporated, which produces huge quantities of the lightest of all metals for aircraft and other wartime manufacturing. lightest of all metals for aircraft and other wartime manufacturing. Henle, Fritz, photographerHenle, Fritz, photographer

Hoover tried to help farmers Hoover tried to help farmers w/the Federal Farm Board & w/the Federal Farm Board & banks by creating the NATIONAL banks by creating the NATIONAL CREDIT CORPORATIONCREDIT CORPORATION..

Another program tried to raise the Another program tried to raise the prices farmers received for their prices farmers received for their

cropscrops..

Plowing in Maryland. Brooks, photographer

Hoover also urged bankers to join a Hoover also urged bankers to join a credit organization.credit organization.

It gave loans to banks that were in It gave loans to banks that were in danger of failing.danger of failing.

Credit union. Greenhills, Ohio. Vachon, John, 1914-1975, photographer

FEDERAL HOME LOAN FEDERAL HOME LOAN ACTACT

Passed by Congress in 1931.Passed by Congress in 1931. This law lowered mortgage rates.This law lowered mortgage rates. Congress hoped that low mortgage rates Congress hoped that low mortgage rates

would help farmers change the terms of would help farmers change the terms of their mortgages.their mortgages.

This would help protect their farms from This would help protect their farms from foreclosures.foreclosures.

Rothstein, Arthur, photographer

Hoover also created the Hoover also created the RECONSTRUCTION FINANCE RECONSTRUCTION FINANCE

CORPORATIONCORPORATION

The RFC provided $ for projects to create The RFC provided $ for projects to create jobsjobs

Hollem, Howard R., photographer.

THE BONUS THE BONUS ARMYARMY

In 1932, WWI veterans came In 1932, WWI veterans came to the capital.to the capital.

These veterans had been promised bonuses to These veterans had been promised bonuses to make up for their poor wartime pay.make up for their poor wartime pay.Congress was about to vote on a bill to give the Congress was about to vote on a bill to give the vets their bonuses so they wouldn’t have to wait vets their bonuses so they wouldn’t have to wait for their $.for their $.

Thousands of veterans & Thousands of veterans & their families came to D.C.their families came to D.C.

This so-called This so-called BONUS ARMYBONUS ARMY set up set up tents to live in near the Capitol tents to live in near the Capitol building.building.

Hoover 1Hoover 1stst sent the veterans food…. sent the veterans food….But after the bonus was voted down in But after the bonus was voted down in Congress, Hoover told the veterans to Congress, Hoover told the veterans to

leave.leave.

About 2,000 stayed. Hoover ordered the About 2,000 stayed. Hoover ordered the army to remove them.army to remove them.The sight of U.S. Army troops using tear The sight of U.S. Army troops using tear gas on citizens outraged many people.gas on citizens outraged many people.

Shacks, put up by the Bonus Army on the Anacostia flats, Washington, Shacks, put up by the Bonus Army on the Anacostia flats, Washington, D.C., burning after the battle with the military, 1932.D.C., burning after the battle with the military, 1932.

Q:Q: What actions did Hoover take to What actions did Hoover take to

improve the economy?improve the economy?

As the Depression tightened its hold on American life, avid angler President As the Depression tightened its hold on American life, avid angler President Herbert Hoover cast about for ways to improve the economy. He sometimes Herbert Hoover cast about for ways to improve the economy. He sometimes took working vacations at his fishing camp on the Rapidan River (now in took working vacations at his fishing camp on the Rapidan River (now in Shenandoah National Park) with members of Congress and his administration.Shenandoah National Park) with members of Congress and his administration.Well everything helpsWell everything helps, , 1930 or 19311930 or 1931

Published in the Published in the Chicago Daily NewsChicago Daily News (3) (3)

Bell Work

What was a contributing factor to the Great Depression?

We will begin in 5 minutes.

Thanks!C

Bell WorkWhat does “buying on

margin” mean?

Thanks!

We will begin in 5 minutes!We will begin in 5 minutes!

Bell Work

What was life like for many Americans during

the GD?

Thanks!

We will begin in 5 minutes!We will begin in 5 minutes!

COMING UP NEXT!COMING UP NEXT!

A NEW DEAL FIGHTS A NEW DEAL FIGHTS THE DEPRESSION!!!THE DEPRESSION!!!

CHAPTER 15CHAPTER 15

THE ENDTHE END