Americans Face Hard Times

11-2 and 11-3 Notes

Causes of the 1929 CrashEconomic Factors Financial FactorsPoor distribution

of wealthConsumers relied

on creditConsumer

spending droppedIndustry struggled

Stock markets rise in 1920s

Speculation in stock increases

Margin buyingStock prices rise

to unrealistic levels

Key Terms:Hobos – jobless, homeless wanderersGreat Depression – most severe

economic downturn in the history of the U.S.

Foreclosure – when a bank or other lender takes over ownership of a property from an owner who has failed to make loan payments.

Hoovervilles and HobosIn the early 1930s, no federal government

provided food or money to the poorHoovervilles are established as a resultHobos often jumped trains traveling from

town to town looking for work or a place to live.

Hobos had dangerous lifestyle – develop sign language to determine if a town was a safe place for them

Key Terms ContinuedHoovervilles – sprawling

neighborhoods of shacks sprang up on the outskirts of towns and public parks. – blamed this on president Hoover

Bank FailuresMany had entrusted their savings to banks.How has that changed today?

Insurance from the federal government protects most people’s deposits

Laws require that a bank keep a greater percentage of assets in cash to be paid out by depositors

1930 – almost 350 banks closed due to runs.

Key Terms Continued:Drought – a period of below-average rainfall,

this lasted several years during the 1930s

Dust Bowl – Oklahoma, Kansas, Colorado, New Mexico, and Texas became known as this due to large wind storms and dry dusty conditions

Dust BowlCaused many deaths due to inhalation of

dust.

Destroyed crops and buried farm equipment

The storms stripped off the topsoil and blew it away

Farm FailuresFaced hard times in 1920s – got worse in the

1930s

Farmers produced more than they could sell and price dropped drastically------------- INFLATION

How does this effect farmers income?

Many suffered foreclosure

Unemployment1933 – GNP dropped 40%

Unemployment reached a high of 25% (50% in some areas such as Harlem)

Writers and MusiciansWoody Guthrie – songs about the dust bowl

describe the disaster’s effect on the people

John Steinbeck – wrote several books describing life during the depression and dust bowl – often very tragic endings