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CHAPTER 11 The Great Depression Begins
Transcript of CHAPTER 11 The Great Depression Begins
Section 1 The Causes of the Great Depression
Section 2 Life During the Depression
Section 3 Hoover responds to the Depression
The Great Depression Begins
Hoover continually claimed that "the fundamental business of the country ...is on a sounds and prosperous basis."
6 months later, claimed that the worse of the crash is behind them in 1930
He (and republicans) felt that the government should not step in to help the individuals out.
Many european countries after WWI utilized a form of socialism and Hoover felt this was the reasoning behind their lack of recovery.
What is Socialism?
Section 3 Hoover Responds to the Depression
The Depression Worsens
1352 banks suspended operations across the nation during Hoover's administration
Struggling to Get by
People without jobs went hungry, standing in long lines for free food.
YMCA in NYC who fed 12,000 people a day
Bailiffs - court officers who would eject nonpaying tenants dramatically increasing the homeless population
Hobos- wanderers who hopped boxcars and travel city to city
Section 2 Life During the Great Depression
The Election of 1928
Herbert Hoover was a republican who claimed his party was responsible for the 1920's prosperity.
Easily won the election of 1928
The Stock Market Soars
Bull market is a long period of rapid rise in the stock
People began to invest in stock on credit, only paying 10% for a stock.
Many investors bid the prices of the stocks much higher than the actual amount of money that businesses were making.
The Long Bull Market
The Bull Market was running out of new investors.
The Stock Market Crash
Monday October 21, 1929 the market began to fall
Black Tuesday Oct 29, Stock market lost between 15 and 30 million dollars. This occurs when people cash out their stocks at a rapid rate, or businesses reports far less value than the actual stock
By mid November nearly 30 billion was lost, a sum roughly equal to the total amount of all money made in 1929
The Great Crash
Plows uprooted the wild grasses that held the soil's moisture
Crop prices dropped in the 1920's, farmers left the land uncultivated
Terrible drought struck the plains, and with neither grass nor wheat to hold the soil down, it dried to dust.
Winds blew the dust and it created static electricity and picked up more dust creating gargantuan dust walls.
72 dust storms in 1937
Many turned over their farms to banks and left
The Dust Bowl
Hoover focused on expanding the money supply
Asked the Federal Reserve to print more money, which they refused to do so
Created the National Credit Corportaion to help troubled banks keep running, but this was too small scale
Requested Congress to create the Reconstruction Finance Corporation
RFC was extremely cautious, handed out 238 million in loans but that was not enough.
Economy continued to decline
Trying to Rescue the Banks
The Uneven Distribution of Income
Overproduction of goods drove prices down; 32% growth
Wages only increased 8%; People didn't have enough money to buy the large surplus of goods.
Because people bought things on credit, they eventually couldn't buy anymore which less to a decrease in demand. This led to a layoff of jobs.
Less demand, less supply, less jobs.
26000 businesses collapsed.
The Roots of the Great Depression
americans used entertainment that let them escape their worries.
Comic books became popular, Superman (1938) Batman(1939
60 million Americans went to the movies each week
King Kong showed off special effects
Walt Disney - Snow White and the Seven Dwarfs
1939 MGM produced the Wizard of Oz (actually about politics)
Gone with The Wind
Art and Entertainment
In an Angry Mood
Banks Begin to Close
Banks loaned nearly 6 billion dollars to speculators
Speculators - are people who estimate the value of a stock
When stock values collapsed banks lost the money which is actually the money of the people who bank there.
News of bank failures scared people and a Bank Run occurred
Bank Run- when many people try to withdraw money at once and deplete the money resources of the bank.
10% of nation's banks failed by 1932
The Loss of Export Sales
Conservative Republicans pased the Hawley-Smoot Tariff which raised the Tariff's on American Farmers to their highest levels.
Foreign countries raised their Tariffs on U.S. goods and exports decreased.
Mistakes by The Federal Reserve
Federal Reserve kept interest rates low which dared banks to make risky loans.
Also Businesses thought the economy was expanding because of low interest rates yet it was actually shrinking.
All of the following characterize the stock market of 1920's EXCEPT
A) inflated stock prices
B) a bull market
C) stock purchases on margin
D) selling curbs
On The Air
Primary source of entertainment was radio
Lone Ranger and Green Hornet were popular
Long shows with sponsors from soap company's began to be called Soap Operas
Literature and Art
John Stienbeck - The Grapes of Wrath
Book and movie about life during the Dust Bowl
William Faulkner - The Sound and The Fury
New 35mm cameras allowed better pictures than before
Henry Luce created the magazine Life dedicated to show what life was like during that time
Grant Wood - American Gothic
Which of the following summarizes President Hoover's approach to the nation's economic problems?
It is the responsibility of government to ensure the financial health of the nation
Relief should come through voluntarily actions and state and local programs, not through federal intervention
If the Federal government takes aggressive action to put people to work, recovery will eventually follow
A program deficit spending will provide immediate relief and economic recovery.
Socialism is ...
a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.
Industry leaders promised to stop laying people off and cutting wages but by 1931 they broke their deals off.
Hoover then created a small amount of Public Works but not enough to put a dent in the Depression
Direct Help for Citizens
Hoover strongly opposed relief directly to the people
State and Local jobs to do that
Congress passed the Emergency Relief and Construction Act
Hoover reluctantly signed it, sending out
1.5 billion in public works for jobs
300 million in emergency loans to the states for direct relief for the people.
First time in history Government is helping the people.
Hunger Marches and Protests by Farmers
1200 hungry marchers chanted "feed the poor tax the rich on their march to the Capital in D.C.
Farmers burned their crops to increase demand and decrease supply
Dumped milk in ditches
Burned corn for heat in winters.
The Bonus Marchers
After WWI, Congress wanted to give a $1000 to all fighters
The Veterans wanted early payments of this money
As they traveled east to D.C., thousands more joined, singing war songs and spreading their cause
Once in D.C. created Hoovervilles - shacks to live in
Force was used to remove the people, police officer panicked and two veterans.
General MacArthur used the army to remove the Veterans from D.C. with teargass and force
Tarnished Hoover's Image, but he did more than any president before on expanding the role of the Federal Government