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The Great Depression Begins Chapter 14 2. 3. 4. 5. Economic problems affecting industries, farmers & consumers lead to the Great Depression The Nation’s Sick Economy 14.1 Economic Troubles - _________________________________________________________________ _________________ in trouble Profit hardly made from textiles, steel, & railroads Mining & lumbering decreased after war Coal mining due to hydroelectric power, fuel oil & natural gas Automobiles, construction & consumer products Housing starts = important economic indicator = spinoff effects Businesses depend on construction Agriculture _________________ hit ____________________________________________________________________ Prices _________________ Difficulty paying loans Farmers default on loans = banks close doors McNary-Haugen bill – controversial plan in the 1920s to _____________________ American agriculture by raising the domestic prices of farm products. Coolidge vetoed Price supports – support certain prices at or above mkt value Government buy surplus crops & guarantee prices higher than mkt rate Gov sell these on world market Tax on goods for buy high/sell low Income falls can’t buy products Americans buy less Due to _________________ prices Incomes couldn’t raise fast enough Balance of income disproportionate Buying on credit – “__________________________________” ________________ – pay amount monthly with interest = large consumer debt Debt = cut back on purchases Production _________________ faster than wages = gap between rich & poor ____________________________________________________________________ 6. Hoover elected President - 1928 Stock Market Most _________________ symbol of American economy Americans gambled on the stock market - ____________________________________________________________________ “_________________” – period of rising stock prices Investors bought on _________________ – bought stocks & bonds on the chance they might make a quick or large profit, ignored risks Bought on _________________ – paid a small % of stock’s price as down payment & borrowed the rest Worked fine as long as prices _________________ _________________ = October 29th, Stock Market Crash Shares _________________ “before it was too late” Stock Market Investors _____________________________________________ 7. Causes of Great Depression – 1929 - 1941 Economy in decline & people _________________ Old industrial base – _________________ can’t be competitive Farmers produced _________________ than they could sell Easy _________________ Working people didn’t have money to buy goods Result - demand for goods _________________ Feds kept __________________________________= borrow easily = ________________ ________________________________________________________= barometer of stock market health A measure based on the ________________________________________________________ ____________________________________________________________________________________ 8. Financial Collapse Banks couldn’t cover _________________ _________________ (Federal Deposit Insurance Corporation) Used people’s savings accounts to pay people for withdrawals _________________– national output of goods & services cut 50% Some automobile companies Railroad companies Workers lost job = Unemployment = _________________ Forced to take _________________ & ___________________________ 9. Hawley-Smoot Tariff act - raised US tariffs on 20,000 imported goods Highest protective tariff = Bad effect Designed to protect farmers & manufacturers from foreign competition Reduce flow of goods into U.S. Other countries couldn’t earn American $ to buy American products 1 Unemployment worsened – can’t export goods ____________________________________________________________________ 10. Economic Troubles on the Horizon - Key Ideas – 14.1 Businesses & farmers face diminished demands for goods in the 1920s As incomes fall, many Americans pile up debts & cut back on spending The country elects Herbert Hoover in 1928 because most Americans believe the nation is prospering 11. Stock Market tumbles down On October 29, 1929, the market crashes as stock prices plunge Stock market crash hastens Great Depression, caused by # of economic & social factors. 12. Financial Collapse As the economy collapses, banks & businesses fall & millions of Americans lose their jobs Countries all over the world suffer effects of Great Depression The drastic decrease in world trade during the Depression further reduces overall economic activity Question 1 What industrial weakness signaled a declining economy in the 1920s? Older industries, such as textiles, steel, & railroads, which were basic to fundamental well-being of the economy were barely profitable. Question 2 What were some of the basic difficulties faced by farmers in the 1920s. During WW I, the demand for crops caused prices to rise. Farmers had planted more crops & taken out loans to buy land & equipment. After the war, demand for farm products declined & prices fell. Question 3 What did the experience of industry, farmers, & consumers at this time suggest about the health of the economy” Beneath the surface prosperity of the 1920s, the economy was in trouble. Question 4 What were some of the causes of the great Depression Decaying industrial base Farm crisis Unequal distribution of income Falling demand for consumer goods Low interest rates = encouraged borrowing Summary The stock market crash of 1929 and the Great Depression that followed created grave economic problems for the U.S. and the world. 18. The Great Depression brings suffering of many kinds & degrees to people from all walks of life. 19. Hardship & Suffering during the Depression 14.2 Cities _________________ – little towns consisting of shacks _________________ – places where food is given out _________________ – lines of people waiting to receive food from charity or public agencies Farmers Grew food for family _________________ – mortgage holders take over property if monthly payments not made = tenant farmers 20. Dust Bowl – TX to ND _____________________ Grasslands broken up by tractors – unsuitable for farming _________________ depleted land _________________ = nothing to hold soil down during ________________________ Farmers & sharecroppers pack up _________________ to California – road to the West _________________ = negative term for migrant workers Some work in California as a farm hand “Grapes of Wrath” by John Steinbeck 21. Effects on Family Family = source of strength Board games, _________________ (1933) Radio Men who became so discourage about finding work that they quit trying to find a job _________________= poor & homeless, travels to find work Hitched rides on railroad cars _________________ – cash payment or food provided by the government for the poor 22. Women & Children Women Canned food Sewed clothes Became targets of resentment if they worked Taking job away from men No right to work if men unemployed, especially if married Many women _________________ to death Some too ashamed to let others know their hardship Children _________________ = health problems – rickets & pellagra (a disease caused by a dietary deficiency of niacin and marked by dermatitis, diarrhea, and disorder of the central nervous system) 2 Schools closed Went to work in sweatshops 23. Results Suicide _________________ 3 X people admitted to _________________ hospitals Americans accept compromises Make sacrifices Financial security primary focus Kindness shown to people “down on their luck” Habits of saving & penny-pinching developed 24. The Depression Devastates People’s Lives – 14.2 – Key Ideas Great Depression forces people in cities to live in shacks & stand in bread lines Racial tensions rise as whites compete for scarce jobs with African-Americans & Latinos The Dust Bowl in the Great Plains forces many farmers to leave their land. 25. Effects on the American Family During the Depression, some men abandon their families Some women, ashamed of their condition, starve to death, while many children suffer poor health The Depression has long-lasting psychological consequences for those who live through it Question 1 How did the GD affect the lives of ordinary people in cities & towns & farms? Many city people were evicted from their homes Shanty towns sprang up in cities People begged & scrounged for food Some farmers lost their farms Others traveled from place to place looking for work Question 2 How did the drought & dust storms affect migration & population distribution in the U.S. They ruined farmland Thousands of farmers & sharecroppers left their land in the Great Plains & headed west Population of California swelled Question 3 Why did so many men leave their homes during the Depression” Many men were depressed by their inability to support their families, thus abandoning them. Others hoped to find work & send money home to their families. Question 4 How did the GD affect women & children? Many women had to tightly manage household budgets Women encountered opposition in holding jobs outside the home Many children suffered from poor diets & inadequate health care Many child-welfare programs & even schools shut down Question 5 In what ways did the GD prevent or delay the fulfillment of the American dream for many people? The Depression took away homes, jobs & the chance of higher education It caused people to delay marrying & having children It led to mental illness, despair & suicide Summary Millions of people coped with the hardships brought about by the great Depression. In the cities, many people lived in shacks & depended on charity. In the rural areas of the Great Plains, terrible dust storms forced farmers to leave their homes. 32. President Hoover tries to restore confidence and halt the Depression, but his actions are ineffective 33. Hoover Struggles with the Depression – 14.3 Hoover felt: Economy should be allowed to function with _________________intervention Belief in business cycle = periods of economic growth followed by economic depression Government could help solve economic problems Government ‘s role was to encourage & facilitate cooperation _________________ Asked _____________________________________________________________________ Asked ________________________________________________________________________ 34. Frustration grows Farmers – rather than sell at a loss _________________ corn & wheat _________________milk on highways Declare a “farm holiday” & refuse to work fields Blocked roads to keep food from getting to market Some used force to prevent foreclosure Cities Shantytown = _________________ - disgust with ___________________________ _________________ used as blankets = Hoover blankets Hoover continues to__________________________________ or other forms of federal welfare 35. Hoover directs Federal funds into projects 1930 Projects _________________ Public works program to build roads, dams & other large projects Federal Farm Board – __________________________________ by buying & keeping off market National Credit Corporation – l__________________________________ to smaller banks 3 These didn’t help 36. Hoover appeals to Congress Intended to pump new life into economy __________________________________ – increased bank reserves & made bank loans easier – created ___________________________________ __________________________________– lowered mortgage rates for homeowners Farmers could refinance farm loans & avoid foreclosure __________________________________ – emergency financing to banks, life insurance companies, railroads & other large businesses “_________________” effect to average American with job growth & higher wages Too little too late 37. _________________________________ ______________________________________________________________ Leader – Walter Waters, unemployed Came to DC to show support of Patman Bill which authorized gov to pay bonus to vets not compensated for wartime service Pay _________________ Not have to wait until 1945 Bill didn’t pass Hoover tells marchers to leave, most did. Wanted to meet with President Hoover wants group disbanded Gov _________________ called in _________________ – children harmed 2 shot Many injuries Stun & outrage at Hoover 38. Hoover Tries to Reassure the Nation – Key Ideas – 14.3 Hoover believed people should help themselves during the GD rather than depend on government handouts Hoover takes cautions & largely ineffective steps to remedy the GD 39. Hoover Takes Action Hoover initiates several relief projects, but the measures are too little, too late Hoover approves the use of force to disperse WW I veterans protesting for increased benefits 40. Summary Herbert Hoover, who supported the virtue of self-reliance, took little action to combat the GD. The plans that Hoover did implement were viewed as too little, too late. Hoover’s reluctance to act, as well as his role in gassing the Bonus Army, cost him a great deal of public support & his chance for reelection. 4
