The Great Depression

1929 – 1933Chapter 15

Section 1 – Pg. 442

What you need to know…

1. Explain the warnings that financial experts issued about business practices in the 1920’s

2. Causes of the stock market crash in 1929.

3. How did the banking crisis and business failures point to the beginning of the Great Depression?

4. Main Causes of the Great Depression

#1 – Warnings from experts…

Danger !!• Farm crisis• “Sick” Industries• Reliance on credit – buying

goods without actually paying money

• Buying/Selling stocks quickly inflated stock prices

• Margin Buying

#2 – Stock Market Crash

Once the stock market starts to fall, can anything reverse the decline?

1. Rising Interest rates and other factors worry investors.

2. Investors sell stocks.

3. Stock prices go down.

4. Heavy sales continue.

CRASH

#3 – Banking Crisis Depression

• Borrowers could not pay loans – default• Banks left with little $$

• Depositors panicked and tried to take life savings out.• 1930-1932 5,000 banks failed.

How do Banks Make $$ ??

#3 – Business Failures Depression

• GNP: Gross National Product – total value of goods and services produced in a given year.• 1929 = $103 Billion• 1933 = $56 Billion

• Industry lost money in the stock market• Consumers did not buy

• NO MORE USING CREDIT!• Forced companies to have less inventory, scale back

making products, lay off employees or go bankrupt.

#4-Causes of Great DepressionPg. 5 in Packet

• Global finances after WWI• Others = paying war debts buying American goods• Smoot-Hawley Tariff

• Few people had wealth, many had debts.• No buying power

• The Business Cycle• The normal ups and downs in a free-enterprise

economy

Hard Times

Section 2 – Page 448-455

What you need to know…

1. Describe how unemployment affected the lives of workers during G.D.

2. Compare/Contrast hardships between urban and rural citizens.

3. How G.D. affected family life and American attitudes.

4. Explain how popular culture provided an escape from G.D.

#1-Unemployment affected lives

“Everyone in America was looking for work.”1929 – 1.5 Million

unemployed1933 – 15 Million

unemployed• Wages • Hours • Immigration • Discrimination • Women working

#2 –Life in the city

• Unemployment & Poverty• Fighting over scraps• Groups tried to provide to the needy

• Salvation Army, Red Cross, mutualistas, rent parties• Breadlines

• Eviction Shantytowns / “Hoovervilles”

#2 –Life in the country

• Prices - Who could buy?• Too many products• Income - Foreclosing farms• Pressured migrant workers to leave• Dust Bowl – drought in some states

#3 –Family life & attitudes

• Fractured some families / forced some families together• Divorce • Birthrates • Depression was the mood – 28% increase in suicide in

1932 over 1929• Shame for middle-class / wealthy• Made every penny count – made as much as they could

#4 –Culture = Escape

• Took up inexpensive hobbies• Reading, games, movies, radio

• Literature presented heroes and easy lives / others portrayed grim life

VIDEO

What did the Government Do??What did the Government Do??

Hoover’s PoliciesHoover’s Policies

Section 3 – Page 456-463Section 3 – Page 456-463

What you need to know…What you need to know…

1.1. Explain why Pres. Hoover opposed Explain why Pres. Hoover opposed government sponsored relief for the government sponsored relief for the needy.needy.

2.2. Outline Hoover’s attempts to solve Outline Hoover’s attempts to solve economic problems and analyze the economic problems and analyze the successes.successes.

3.3. Explain how veterans and radicals Explain how veterans and radicals responded to Hoover’s policies.responded to Hoover’s policies.

4.4. Why was FDR a popular candidate in the Why was FDR a popular candidate in the 1932 election?1932 election?

#1 – #1 – Opposition to Government ReliefOpposition to Government Relief

REASONS NOT TO HELPREASONS NOT TO HELP• Relief would create large governmentRelief would create large government• Inflate the federal budgetInflate the federal budget• Reduce self-respect of people getting aidReduce self-respect of people getting aidINSTEAD…INSTEAD…• Rugged IndividualismRugged Individualism – success through – success through

individual effort and private enterpriseindividual effort and private enterprise• Encouraged voluntarism – PCUR Encouraged voluntarism – PCUR

Presidential committee collected info and Presidential committee collected info and donations for local relief agenciesdonations for local relief agencies

#2 – #2 – Government & EconomyGovernment & Economy

• Laissez-faire approach to economyLaissez-faire approach to economy• Funded several public-works programsFunded several public-works programs

• Stimulated business & reduced Stimulated business & reduced unemploymentunemployment

#2 – #2 – Government & EconomyGovernment & Economy

• Established Federal Farm BoardEstablished Federal Farm Board• GOAL: Find ways for farmers to help themselvesGOAL: Find ways for farmers to help themselves• OFFERED: loans, financed cooperatives to reduce OFFERED: loans, financed cooperatives to reduce

expenses by allowing them to purchase in bulkexpenses by allowing them to purchase in bulk

• Established Reconstruction Finance CorporationEstablished Reconstruction Finance Corporation• Loaned tax payer money to stabilize banks, insurance Loaned tax payer money to stabilize banks, insurance

companies, railroadscompanies, railroads• Government realized that they could do something to Government realized that they could do something to

help the economyhelp the economy

#3 – #3 – Radicals / Veterans ProtestedRadicals / Veterans Protested

• Condemned capitalism – felt it led to G.D.Condemned capitalism – felt it led to G.D.• Bonus Army – group that wanted early payment Bonus Army – group that wanted early payment

of pension bonuses owed to themof pension bonuses owed to them• Bill was rejected and caused deadly conflict!Bill was rejected and caused deadly conflict!

#4 – #4 – 1932 Election1932 Election

Rep. Herbert Hoover vs. Dem. F. D. RooseveltRep. Herbert Hoover vs. Dem. F. D. Roosevelt

• Hoover’s gloom vs. Roosevelt’s optimismHoover’s gloom vs. Roosevelt’s optimism• Roosevelt pushed for a fairer distribution of wealthRoosevelt pushed for a fairer distribution of wealth• Roosevelt had designed creative relief programs as Roosevelt had designed creative relief programs as

governor of NY.governor of NY.