Copy of The Great Depression

Section 2: Americans Face Hard Times

Despair Grips America's Cities (Cont.)

Poverty Devastates Rural America

Misery and Despair Grip America's Cities

Few Americans understood what caused the Great Depression.

The Great Depression effected Every American.

• everyone either experienced it or knew of someone who did.

Unemployment rates in 1933 were 25%!

People that did work saw their wages slashed by as much as 30%

Rural American's fared no better as farmers were suffering even before the Great Depression.

The Great plains suffered through a drought which forced many farmers to move.

Prices of crops fell sharply.

• 1919 A Bushel of Wheat sold for $2.16
• 1932 it sold for 38 cents

Many farmers lost their farms but stayed on to work as tenant farmers for other landowners.

Often the only source of food for families were the bread lines.

• people lined up for handouts from charities

Popular song of the time "Brother Can You Spare a Dime?"

• described the sense of betrayal about the "American Dream"

Growing homeless created makeshift shanty towns called Hoovervilles.

The Dust Bowl (Cont.)

The Dust Bowl

Few Americans Escape Hard Times

Farmers who survived falling crop prices were still not safe.

Intensive Farming practices plowed away natural grasses and top soil to plant crops.

The combination of a drought, loose topsoil and high winds resulted in disaster on the Great Plains.

• winds kicked up dust storms that moved as fast as 100 MPH and blotted out the sun.

The area of Oklahoma, Texas, Kansas and Colorado that were effected became known as the dust bowl.

Many families living in the Dust Bowl were forced to move.

• lost their farms to the dust storms.

Dust bowl refugees were generally referred to as "Okies" regardless of what state they came from.

• headed out west to California

Government reacts to Dust Bowl by building massive dams to help irrigate the Great Plains.

Lack of employment made men feel worthless to their families, often deserted them.

Birthrates plummeted to the lowest point in U.S. history.

Minorities suffer as well.

• usually last to be hired and first to be fired.
• White Americans encouraged repatriation in the South West.
• encouraged Mexican immigrants to return home.

Section 1: Causes of the Depression

Section 3: Hoover's Response Fails

Prosperity Hides Trouble (Cont.)

Prosperity Hides Trouble

Prosperity Hides Trouble (Cont.)

Cautious Response Fails

Hoover's Activist Policies

Cautious Response

Uneven distribution of wealth created economic problems:

• 60% of American families lived on >$2,000 a year.
• less consumers able to buy goods.

Expansion of credit hid this problem for awhile but Americans could not live beyond their means forever...

1920s seemed like an endless era of prosperity.

Republican Herbert Hoover, an accomplished public servant, became president in 1929.

Economic problems plague American farmers.

• demand for crops fell
• most lived month-to-month

Unlike farmers, industry workers had great success.

• bought Model Ts and other consumer goods.

Wages rose gradually but production increased rapidly:

• 32% increase in production, 8% increase in wages.

Due to this, the rich became richer.

• gap between the wealthy and the poor widened.

Hoover decides to reverse course, and use federal resources to help.

Reconstruction Finance Corporation (RFC)-gave billions of dollars to railroads and businesses

• also lent money to banks to extend loans to businesses

Trickle-down economics-belief that money poured into top of economic pyramid would "trickle-down" to the people who needed it.

Hoover soon realized a do nothing policy was no policy at all.

His Plan relied on volunteer cooperation:

• asked businesses to freeze wages and employment
• called on wealthy Americans for charity

localism-policy that problems could best be solved at local and state levels.

Reliance on volunteerism failed

Great Depression effected every American.

Hoover knew this and tried to help:

• worked long hours
• consulted experts

At the start, Hoover followed his "lassiez-faire" economic policy.

• felt the great depression was a brief period of downturn (business cycle)
• thought government should not interfere

President Hoover

The Great Depression Begins

The Stock Market Crashes

What Caused the Depression?

American's Protest Hoover

The Bonus Army

Hoover Orders "Bonus Army" Out

1929-economists realize that rising stock prices based on little more than confidence.

• stock speculation-belief that stocks would turn quick profits.

October 29, 1929-"Black Tuesday" crashes the stock market as shares are sold off rapidly.

Business cycle-periodic growth and contraction of the economy.

Great Depression-period from 1929-1941 in which unemployment soared and the economy faltered.

Banks across the country begin to fail.

Businesses fail due to reduced consumer spending

• unemployment increases, consumers spend less. (cycle)

Hawley-Smoot Tariff raised prices on imported goods to try and protect American businesses.

Some economists say that a contraction of the money supply is to blame:

• stock market crash and the run on the banks left too little money in circulation.

John Maynard Keynes argued that the lack of proactive government intervention caused the collapse.

Problems of consumption, uneven distribution of wealth, and stock speculation all contributed.

While he sympathized with them, Hoover wanted the Bonus Army out.

• orders Gen. Douglas MacArthur and federal troops to clear them out.
• nearly 1,000 protestors were tear-gassed
• many injured

RFC had one contribution:

• Hoover Dam-dam created on the Colorado river, that supplied jobs.

Some Americans believed a rejection of capitalism and a switch to communism was the answer.

Despite rise of Fascism in Europe, no movement here.

Most Americans did not want a revolution, just changes.

1932- 20,000 WWI veterans march on Washington seeking payment Congress had offered them.

• called "The Bonus Army"
• wanted payments now instead of 1945 (when they were scheduled)

Congress passes a bill but Hoover vetoes it.

Run on the Banks

Photographs of federal troops attacking veterans dooms Hoover. The Country needed change....

The Hoover Dam

Ch 21: The Great Depression

U.S. History