CHAPTER 24CHAPTER 24
The Great DepressionThe Great Depression
SECTION 1SECTION 1
Prosperity ShatteredProsperity Shattered
OBJECTIVESOBJECTIVES
Recount why financial experts issued Recount why financial experts issued warnings about business practices during warnings about business practices during the 1920’sthe 1920’s
Describe why the stock market crashed in Describe why the stock market crashed in 19291929
Understand how the banking crisis and Understand how the banking crisis and business failures signaled the beginning of business failures signaled the beginning of the Great Depressionthe Great Depression
Analyze the main causes of the Great Analyze the main causes of the Great DepressionDepression
Summary of what caused the Summary of what caused the Stock Market to crashStock Market to crash
1. Credit boom in the 1920’s1. Credit boom in the 1920’s 2. Margin buying2. Margin buying 3. Rising interest rates3. Rising interest rates 4. Weakness in banking system4. Weakness in banking system 5. Uneven distribution of wealth5. Uneven distribution of wealth 6. Smooth-Hawley Tariff in 19306. Smooth-Hawley Tariff in 1930
FINANCIAL EXPERTS ISSUE WARNINGS FINANCIAL EXPERTS ISSUE WARNINGS ABOUT BUSINESS PRACTICESABOUT BUSINESS PRACTICES
Farm crisisFarm crisis
““sick” industriessick” industries
Consumer reliance on creditConsumer reliance on credit
Stock speculationStock speculation
FINANCIAL EXPERTS ISSUE WARNINGS FINANCIAL EXPERTS ISSUE WARNINGS ABOUT BUSINESS PRACTICESABOUT BUSINESS PRACTICES
Margin buying – purchasing stocks Margin buying – purchasing stocks with borrowed moneywith borrowed money
Gross National Product – total value Gross National Product – total value of all goods and services produced in of all goods and services produced in a given yeara given year
1929 - $123 billion 1933 – $56 1929 - $123 billion 1933 – $56 billionbillion
FINANCIAL EXPERTS ISSUE WARNINGS FINANCIAL EXPERTS ISSUE WARNINGS ABOUT BUSINESS PRACTICESABOUT BUSINESS PRACTICES
Bull Market: Upward trend in stock Bull Market: Upward trend in stock pricesprices
Bear Market: Downward trend in Bear Market: Downward trend in stock pricesstock prices
Business cycle: ups and downs of Business cycle: ups and downs of business in a free-enterprise business in a free-enterprise economyeconomy
DESCRIBE WHY THE DESCRIBE WHY THE STOCK MARKET CRASHEDSTOCK MARKET CRASHED
Economic factorsEconomic factors
Investors sell stocksInvestors sell stocks
Stock prices plungeStock prices plunge
Heavy sales continueHeavy sales continue
CRASH !!!!!!!!!!!!CRASH !!!!!!!!!!!!
BANKING CRISISBANKING CRISIS
Banks failed due to heavy defaultBanks failed due to heavy default
Depositors withdrawalsDepositors withdrawals
BUSINESS FAILURESBUSINESS FAILURES
Bank failures deprived businesses of Bank failures deprived businesses of necessary resources and customers necessary resources and customers and forced layoffs and closingsand forced layoffs and closings
MAIN CAUSES OF THE MAIN CAUSES OF THE DEPRESSIONDEPRESSION
U.S. lost foreign consumers through U.S. lost foreign consumers through tradetrade
Consumer debt in the U.S. led to Consumer debt in the U.S. led to individual and economic chaosindividual and economic chaos
SECTION 2SECTION 2
Hard TimesHard Times
OBJECTIVESOBJECTIVES
Describe how unemployment affected the Describe how unemployment affected the lives of American workerslives of American workers
Compare and contrast the hardships that Compare and contrast the hardships that urban and rural residents facedurban and rural residents faced
Analyze the family life and attitudes of Analyze the family life and attitudes of AmericansAmericans
Explain how popular culture provided and Explain how popular culture provided and escape from the Great Depressionescape from the Great Depression
UNEMPLOYMENT DURING UNEMPLOYMENT DURING THE DEPRESSIONTHE DEPRESSION
Unemployment rose sharply (25%)Unemployment rose sharply (25%)
Created severe financial and Created severe financial and emotional problems for workersemotional problems for workers
URBAN - HARDSHIPSURBAN - HARDSHIPS
Received some aid from charitiesReceived some aid from charities
Experienced hungerExperienced hunger
Experienced homelessnessExperienced homelessness
RURAL - HARDSHIPSRURAL - HARDSHIPS
Lower prices for food productsLower prices for food products
Forced to let crops rot and killed their Forced to let crops rot and killed their livestocklivestock
Faced farm foreclosuresFaced farm foreclosures
Mexican immigrants faced deportationMexican immigrants faced deportation
EFFECT ON FAMILY LIFE EFFECT ON FAMILY LIFE AND ATTITUDESAND ATTITUDES
Depression hurt some families, Depression hurt some families, although it forced other to band although it forced other to band together for survivaltogether for survival
Divorce rates went up, birthrates Divorce rates went up, birthrates downdown
Americans suffered psychological Americans suffered psychological problemsproblems
POPULAR CULTURE OFFERS POPULAR CULTURE OFFERS AND ESCAPEAND ESCAPE
No TV, computers, or video gamesNo TV, computers, or video games
Went to the movies, listen to the Went to the movies, listen to the radio, and read comics and novelsradio, and read comics and novels
SECTION 3SECTION 3
Hoover’s PoliciesHoover’s Policies
OBJECTIVESOBJECTIVES
Explain why Hoover opposed Explain why Hoover opposed government sponsored direct relief government sponsored direct relief for the needyfor the needy
Outline Hoover’s attempt to solve the Outline Hoover’s attempt to solve the economic problemseconomic problems
Relate how radicals and veterans Relate how radicals and veterans responded to Hoover’s policiesresponded to Hoover’s policies
Analyze why FDR was such a popular Analyze why FDR was such a popular candidate in the 1932 electioncandidate in the 1932 election
HOOVER OPPOSES GOV’T HOOVER OPPOSES GOV’T SPONSORED RELIEFSPONSORED RELIEF
Individuals and businesses were Individuals and businesses were responsible for themselvesresponsible for themselves
Felt government relief would create a Felt government relief would create a bureaucracybureaucracy
HOOVER’S ATTEMPT TO SOLVE HOOVER’S ATTEMPT TO SOLVE THE ECONOMIC PROBLEM THE ECONOMIC PROBLEM
Attempted to create public-works Attempted to create public-works program (example is Boulder Dam)program (example is Boulder Dam)
Poured money into the Boulder DamPoured money into the Boulder Dam
Boulder Dam – 25 miles Boulder Dam – 25 miles southeast from Las Vegassoutheast from Las Vegas
HOOVER’S AGRICULTUREHOOVER’S AGRICULTUREPROGRAMPROGRAM
made loans to farmers made loans to farmers
established cooperatives for farmersestablished cooperatives for farmers
(example: Cenex Cooperative)(example: Cenex Cooperative)
only was a temporary fix for the only was a temporary fix for the
farmersfarmers
VETERAN RESPOND TO VETERAN RESPOND TO HOOVER’S POLICIESHOOVER’S POLICIES
(BONUS ARMY IN 1932)(BONUS ARMY IN 1932)
veterans gathered in Washington, DC veterans gathered in Washington, DC
demanding their WWI pensiondemanding their WWI pension
President Hoover had them removed President Hoover had them removed from Washington D.C.from Washington D.C.
FDR – POPULAR IN FDR – POPULAR IN 1932 ELECTION1932 ELECTION
FDR’s FDR’s optimismoptimism contrasted contrasted
Hoover’s gloomHoover’s gloom