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The Great Depression

US History

Devin Kleffer

on 5 March 2013

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Transcript of The Great Depression

Part I
The Beginnings of Turmoil Essential Question:

What were the primary
causes and consequences of
the Great Depression? The Great Depression 1929 - 1939 Black Tuesday (5:00 min) Factors Leading to the Great Depression: Key industries struggle

Farmers face crop overproduction and falling profits

Consumers have less money to spend; Living on credit becomes the norm

Uneven distribution of wealth

A faltering stock market Failing Industries Key industries begin to experience stunted growth,
or a decline in profits.

These industries include: construction, housing,
textiles, railroad, and steel. As these industries falter,
businesses are forced to fire thousands of workers, causing soaring unemployment rates throughout the nation. Agriculture and the Plight of
the American Farmer During World War I, food prices soared to all-time highs.

In order to keep up with demand, farmers took out loans to plant more crops. After the war, demand fell dramatically and crop prices fell by more than 40%. (Surplus + Debt = Bad Situation) The government called for
price-supports on key products,
such as wheat, corn, cotton,
and tobacco Price-supports meant the federal government would purchase surplus crops at guaranteed prices,
and then sell them
on the world market for profit. Consumer Spending Dwindles Consumer spending dramatically decreased because of rising prices, stagnant wages, an unbalanced distribution of wealth, and overbuying on credit for several years. The income of the wealthiest 1% of
Americans rose by over 75%,
while the average income rose
by only 9%.

As a result, the gap between wealthy
and poor Americans widened. The "Problem" with Credit Purchasing items with credit is like
taking out a small loan
each time a purchase is made.

By purchasing on credit, someone else
(usually a bank or financial institution)
pays the merchant on
the consumer’s behalf. How it Works... $25,000 Car...? :( $600/month, 5 years $36,000 $13,000 By making credit easily available,
businesses encouraged Americans
to pile up large amounts of debt. As a result, many Americans were
forced to scale back their spending,
while even more were forced
to sell their possessions.

In some cases,
Americans lost everything -
including their homes and land. The Rise & Fall of the Stock Market Key Terms Dow Jones Industrial Average...overall health
Points...unit of measurement
Trading...buying and selling
Speculation...quick profit; potential risks
Buying on Margin...down payment; borrowing; illegal
Bull or Bear Market The "stock market" is an everyday term
representing the place where stocks
and bonds are "traded" –
meaning bought and sold.

A stock, or share, is a small percentage
of ownership in a
publicly traded company. The goal is to buy the
stock, hold it for a time,
and then sell the stock
for more than you
paid for it.

“Buy low, sell high!” If the company is impacted by
something, so is the
price and value of the stock.

If the stock is sold on a day
when the price of that stock falls
below the price paid for it,
the investor would lose money. Throughout the Roaring ‘20s,
the stock market
(a/k/a “Wall Street”)
was a visible sign of
American prosperity. The Dow Jones Industrial Average
is used to calculate the
overall health of the market,
by measuring the stock prices
of 30 representative large firms
that traded on the
New York Stock Exchange. The Dow Jones Industrial Average is computed by taking the average price of the 30 stocks and dividing that figure by a number called the divisor. In 1929, the Dow reached
a high of 381 points. Today, the Dow is approximately 14000,
though the number rises and falls frequently. Americans began purchasing
stock on speculation,
with the hope of quick profits.

Adding to this was the practice of
buying stock on margin. Together, along with little government
regulation of the stock market,
these factors helped drive
stock prices higher,
thereby fueling a false sense
of the market’s worth. Making matters worse,
as the market began to decline,
Americans who purchased stock
on margin had no way to
pay off their loans. Panicked investors began
selling their shares.

On Tuesday, October 29, 1929,
more than 16.4 million shares
were dumped by investors,
while millions of other shares
went unsold. The culmination of these events
became known as Black Tuesday. Investors had lost approximately
$30 billion in the stock market
in one week;
roughly the same amount the
United States spent funding
World War I. With this, unemployment skyrockets,
millions of Americans are
without basic needs,
and the Great Depression begins. Hundreds of thousands of Americans
withdrew their money from their
local banks for fear of losing it.

This caused almost half of the
nation’s banks to go out of business. America’s GNP was cut in half.

Unemployment leaped from
1.6 million, to 13 million workers,
in less than four years.

Those who were able to retain a job
were faced with drastic pay cuts
and reduced hours. The Great Depression in America
had a far-reaching impact on
the rest of the world.

The US Congress enacted the
Hawley-Smoot Tariff to try and
help protect American businesses
from foreign competitors, but the act
ultimately made matters worse
for American businesses. The Trading Floor Part II: Hardships & Suffering Essential Questions:

In what ways were Americans
impacted by the Great Depression?

In what ways is America
still impacted by poverty? The Great Depression caused life
in America to change
rapidly and drastically.

In addition to soaring unemployment,
Americans faced a growing number
of unexpected hardships by the millions. Hardships, Homelessness & Hunger No part of the United States was left
unharmed by the Great Depression.

Across the country, people lost jobs,
were evicted from their homes,
and were forced to live on the street. In urban settings, many makeshift
shacks made out of rusted metal,
scrap wood, and cardboard
became commonplace. These were known
as Shantytowns. Millions of people dug
through garbage cans, or
begged for food,
warm clothing, or a job. Soup kitchens and
bread lines wrapped around
city blocks, attempting to
feed homeless families. In rural areas, some had an initial advantage over urban dwellers because they were able to grow they own food.

This quickly changed due to massive foreclosures, and excessive drought conditions. The impact of the drought, which began in the early 1930s, was compounded by poor farming techniques in the Plains States. The combination of extreme and continuous plowing, crop overproduction,
and windstorms led to devastating sandstorms that were known as
Black Blizzards. Rabbit Drives (4:00 min) As a result, many people were forced to flee for their lives, while thousands of others died - suffocating from the amount of sand in their lungs. In some cases, winds in Kansas
were so powerful, they swept sand clouds
as far east as New York City. Impact on the American Family While some families drew closer together, and showed kindness toward others experiencing similar circumstances, many families crumbled under the enormous strain of poverty. Traditionally, a man’s value was tied directly to his ability to provide
for the needs of his family. When the Great Depression hit, many men had difficulty coping with unemployment, and seeing their families suffer from a lack of necessities, such as food, shelter and clothing. Women contributed to meeting their families needs by canning whatever extra food they could, and by making clothes for the family. In some cases, women were able to find work outside the home - mainly because companies could pay them less than men.

This fostered increased resentment toward women because many believed married women should not be allowed to work if their husband was without employment. Malnutrition and a lack of money
for health care were the
primary causes of
hardships for children.
In many cases, teenagers, trying to ease the financial burden of the family, left home and traveled the country in search of work, while others labored in sweatshops under deplorable conditions. The national suicide rate rose
by over 30%, and the lack of
income turned doctor and dentist visits
into luxuries for the wealthy. Faces of Poverty (7:30)
AmericanPoverty.org DonorsChoose.org The area most diversely affected became known as the Dust Bowl. Part III: A President Grapples with Disaster In what ways did President Hoover
attempt to remedy the crisis of
the Great Depression? Essential Question: President Hoover’s response to the
circumstances of the Great Depression
were largely viewed as
too conservative,
and left Americans feeling angry. President Hoover attempted to
convince the American people that
the economy was not in jeopardy
and to continue life as usual. He hoped to convince citizens that the
economic downturn was normal,
and would be short-lived. Hoover believed in... The concept of “rugged individualism.”
the ideal that people should succeed
through their own efforts,
and not through government handouts Government assistance would
weaken people’s self-respect
and moral fiber It was the duty of charities and churches
to feed, clothe and shelter the hungry,
not the federal government’s. When Hoover finally altered his approach to curing the ailments of the Great Depression,
he had moderate levels of success. The Boulder (Hoover) Dam
The Federal Home Loan Bank Act
The Reconstruction Finance Corp. Hoover's Successes: Hoover’s public image was irrevocably
damaged when he authorized tear
gas grenades to be launched at a
crowd of 2,000 World War I veterans - known as the Bonus Army - who had assembled in Washington, D.C., in the hopes of receiving early the monetary bonus they were promised. Bonus Army (3:00 min) Later that year,
Democrat Franklin D. Roosevelt
was elected
President of the United States. FDR Campaign for President, 1932 (4:00 min) Critical Analysis Do you agree, or disagree with
President Hoover's philosophy of
"rugged individualism?"
Why, or why not? Part IV: The New Deal Essential Question:

What were the primary differences
in how Presidents Hoover
and Roosevelt addressed the
problems created by
the Great Depression? President Roosevelt used a series of
government programs to help
the American economy,
and peoples trust in the
American government,
recover from the Great Depression. FDR assured the American people,
“We have nothing to fear,
but fear itself.” http://millercenter.org/president/speeches/detail/3280 He then used a series of
“Fireside Chats”
to regularly communicate
with the American people.

http://millercenter.org/president/speeches/detail/3298 During the months leading up to
Roosevelt’s inauguration,
Roosevelt and his advisers devised
a series of government programs
known collectively as,
“The New Deal.” It was meant to convey a
new and positive relationship
between the American people
and the government. The New Deal focused primarily on:

Relief for the needy
Recovery of the economy
Reform for financial institutions Critics of The New Deal Those opposed to the New Deal programs believed the programs were simply “make work” programs designed merely for the appearance of job creation. Others believed the federal government was growing too large, and was creating too many
social welfare programs. Senator Huey Long The Impact of the New Deal (4:00 min)
Full transcript