The Great Depression

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The Great Depression

• 1929 1933
• Chapter 15

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Section 1 Pg. 442What you need to know

• Explain the warnings that financial experts
  issued about business practices in the 1920s
• Causes of the stock market crash in 1929.
• How did the banking crisis and business failures
  point to the beginning of the Great Depression?
• Main Causes of the Great Depression

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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

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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.

1. Investors sell stocks.

3. Stock prices go down.
4. Heavy sales continue.
CRASH
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3 Banking Crisis ? Depression
How do Banks Make ??

• 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.

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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.

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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

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Hard Times

• Section 2 Page 448-455

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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.

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1-Unemployment affected lives

• Everyone in America was looking for work.
• 1929 1.5 Million unemployed
• 1933 15 Million unemployed
• Wages ?
• Hours ?
• Immigration ?
• Discrimination ?
• Women working ?

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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

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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

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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

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4 Culture Escape

• Took up inexpensive hobbies
• Reading, games, movies, radio
• Literature presented heroes and easy lives /
  others portrayed grim life
• VIDEO

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What did the Government Do??

• Hoovers Policies
• Section 3 Page 456-463

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What you need to know

1. Explain why Pres. Hoover opposed government
   sponsored relief for the needy.
2. Outline Hoovers attempts to solve economic
   problems and analyze the successes.
3. Explain how veterans and radicals responded to
   Hoovers policies.
4. Why was FDR a popular candidate in the 1932
   election?

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1 Opposition to Government Relief

• REASONS NOT TO HELP
• Relief would create large government
• Inflate the federal budget
• Reduce self-respect of people getting aid
• INSTEAD
• Rugged Individualism success through individual
  effort and private enterprise
• Encouraged voluntarism PCUR ? Presidential
  committee collected info and donations for local
  relief agencies

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2 Government Economy

• Laissez-faire approach to economy
• Funded several public-works programs
• Stimulated business reduced unemployment

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2 Government Economy

• Established Federal Farm Board
• GOAL Find ways for farmers to help themselves
• OFFERED loans, financed cooperatives to reduce
  expenses by allowing them to purchase in bulk
• Established Reconstruction Finance Corporation
• Loaned tax payer money to stabilize banks,
  insurance companies, railroads
• Government realized that they could do something
  to help the economy

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3 Radicals / Veterans Protested

• Condemned capitalism felt it led to G.D.
• Bonus Army group that wanted early payment of
  pension bonuses owed to them
• Bill was rejected and caused deadly conflict!

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4 1932 Election

• Rep. Herbert Hoover vs. Dem. F. D. Roosevelt
• Hoovers gloom vs. Roosevelts optimism
• Roosevelt pushed for a fairer distribution of
  wealth
• Roosevelt had designed creative relief programs
  as governor of NY.