chapter 15 the great depression section 1: prosperity shattered section 2: hard times section 3:...

Chapter 15 Chapter 15

THE GREAT DEPRESSIONTHE GREAT DEPRESSION

Section 1:Section 1: Prosperity Shattered Prosperity Shattered

Section 2:Section 2: Hard Times Hard Times

Section 3:Section 3: Hoover’s Policies Hoover’s Policies

BlameBlame

Who is to blame for the Who is to blame for the Great Depression?Great Depression?

A} President HooverA} President HooverB} Warren HardingB} Warren HardingC} All of AmericaC} All of AmericaD} the Empty Cow D} the Empty Cow

theorytheory

……..survey says…....survey says…..

Cash crops: the growth of a single crop indigo, tobacco, rice, cotton..thanks Ian

River valley provided arable land for plantations, and transportation route for

crops



crops

1.1. Old industrial base is outdated, time for Old industrial base is outdated, time for new equipmentnew equipment

2. Crisis in the farm sector – 2. Crisis in the farm sector – OVERPRODUCTIONOVERPRODUCTION

3. Availability of easy credit (installment 3. Availability of easy credit (installment plans)plans)

4. Unequal distribution of income, too little 4. Unequal distribution of income, too little money in the hands of working people.money in the hands of working people.

Causes of the Great DepressionCauses of the Great Depression

Employment Employment LineLine

Idle FactoryIdle Factory



crops

A haunting sense of failure and uncertainty A haunting sense of failure and uncertainty about the future – powerlessness and about the future – powerlessness and

helplessness….helplessness….

FarmingFarming-- prices fall constantly during the 1920’s post war

depression decreases demand. R

IndustryIndustry is becoming more concentrated/consolidated; Government is pro – business. Two hundred companies control 51%of the economy and it becomes stiff and rigid.

Growing concentration of wealth:Growing concentration of wealth: Per Capita income grows by 9%, but 75% of that growth goes to the top 1%

Integrated global economy has structural instability and chaotic volatility

Crash of 1929 reveals Crash of 1929 reveals weaknesses in the economyweaknesses in the economy

http://www.ecommcode.com/hoover/hooveronline/hoover_bio/archive/pres/crisis.htm

The GreatThe Great DepressionDepression

After the Stock Market Crash of 1929After the Stock Market Crash of 1929

1. 1933 6,000 banks have closed

2. Between 1929-1933 Nation’s total GNP drops from 104-59 billion

3. Unemployment leaped from 3% (1.6 million) in 1929 to 25% (13 million) in 1933

4. 1 Out of every 4 workers was out of a job

0

2

4

6

8

10

12

14

1928 1929 1930 1931 1932 1933

Unemployment (in millions)

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

1928 1929 1930 1931 1932 1933

Bank FailuresIn thousands

0

5

10

15

20

25

30

35

1928 1929 1930 1931 1932 1933

Business failures (In thousands)

Idle Idle FactoryFactory

Bread lineBread line

Employment Employment LineLine

Common Sights DuringCommon Sights During the Great Depression the Great Depression

Picking Over a Picking Over a garbage dump garbage dump for scraps of for scraps of food “ One food “ One man’s junk is man’s junk is another man’s another man’s treasure”treasure”

In Oakland In Oakland California, California, some were some were living in sewer living in sewer pipes a pipes a manufacturer manufacturer could not sellcould not sell

Bonus Bonus Marchers slept Marchers slept in piano boxes, in piano boxes, coffins, barrels coffins, barrels filled with filled with grassgrass

http://www.animationlibrary.com/animation/18404/Draculla_2/

One woman One woman borrowed 5o borrowed 5o cents bought cents bought stale bread at 3 stale bread at 3 ½ cents a loaf ½ cents a loaf and fed her and fed her family for 11 family for 11 daysdays

Children would Children would hang around the hang around the grocery stores grocery stores begging for food begging for food or running or running errands for fooderrands for food

At Pittsburgh At Pittsburgh steel mills, men steel mills, men were called back were called back to work, but to work, but were too weak were too weak from not eatingfrom not eating

In Harlan, In Harlan, Kentucky Kentucky dandelions dandelions and and blackberries blackberries were a popular were a popular mealmeal

A little boy A little boy from Kentucky from Kentucky tried to hide his tried to hide his pet rabbit and pet rabbit and his sister told a his sister told a reporter ‘ He reporter ‘ He thinks we are thinks we are not going to eat not going to eat it but we are”it but we are”

A teacher at a A teacher at a Middle School Middle School told a little girl to told a little girl to go home and eat go home and eat something something because she because she looked sick and looked sick and she replied “ I she replied “ I can’t its my can’t its my sisters turn to eat sisters turn to eat today”today”

Police saw the Police saw the worst. In NY worst. In NY City 29 died City 29 died from from malnutritionmalnutrition

People who took People who took public relief were public relief were denied civil rights in denied civil rights in some states. An some states. An example they were example they were denied from voting if denied from voting if they were on relief or they were on relief or their kids were kept their kids were kept out of schoolout of school

Some people Some people would spend 10 would spend 10 cents a day to go cents a day to go to a movie house to a movie house and stay all day and stay all day to get warmto get warm

Some people Some people stole electric stole electric from from neighborsneighbors

Studies found Studies found that the poor that the poor survived best survived best because they because they knew how to be knew how to be poor. It was the poor. It was the “ new” poor that “ new” poor that struggledstruggled

Shoe repair Shoe repair kits were made kits were made from old tires from old tires that were cut that were cut and attached and attached them to shoesthem to shoes

Objectives:Objectives:Why did financial experts issue warnings about Why did financial experts issue warnings about

business practices during the 1920s?business practices during the 1920s?Why did the stock market crash in 1929?Why did the stock market crash in 1929?How did the banking crisis and subsequent business How did the banking crisis and subsequent business

failures signal the beginning of the Great failures signal the beginning of the Great Depression?Depression?

What were the main causes of the Great Depression?What were the main causes of the Great Depression?

Section 1: Prosperity ShatteredSection 1: Prosperity Shattered

Warnings about business practicesWarnings about business practicesfarm crisisfarm crisis““sick” industriessick” industriesconsumers’ reliance on creditconsumers’ reliance on creditstock speculationstock speculation

Can these signs be compared to the tough times of Can these signs be compared to the tough times of the early 2000’s?the early 2000’s?


Reasons for the stock market crash Reasons for the stock market crash of 1929of 1929Economic factors such as rising interest rates Economic factors such as rising interest rates

began to worry investors.began to worry investors.Investors sold stocks.Investors sold stocks.Stock prices dropped sharply, fueling panic.Stock prices dropped sharply, fueling panic.Heavy selling continued.Heavy selling continued.


Events signaling the Great DepressionEvents signaling the Great DepressionBanks failed due to heavy defaults, margin calls, and Banks failed due to heavy defaults, margin calls, and

heavy withdrawals.heavy withdrawals.Bank failures deprived businesses of necessary Bank failures deprived businesses of necessary

resources and customers.resources and customers.Businesses closed and workers lost their jobs.Businesses closed and workers lost their jobs.

Makes many American's afraid of banks…. Creates the Makes many American's afraid of banks…. Creates the idea of “cold hard cash”idea of “cold hard cash”


Causes of the Great DepressionCauses of the Great DepressionThe global economic crisis decreased exports.The global economic crisis decreased exports.Unequal distribution of income reduced the total Unequal distribution of income reduced the total

purchasing power available in the economy.purchasing power available in the economy.Consumer debt undermined individuals and Consumer debt undermined individuals and

increased economic chaos.increased economic chaos.


SECTION 1

Prosperity ShatteredProsperity Shattered

The Crash

1. economic factors such as rising interest rates worry investors

2. investors sell stocks

3. stock prices plunge

4. heavy sales continue

Factors That Caused the Stock Market Crash

BlameBlame

Who is to for the Great Who is to for the Great Depression?Depression?

A} President HooverA} President HooverB} Warren HardingB} Warren HardingC} All of AmericaC} All of AmericaD} Empty Cow ( no D} Empty Cow ( no

milk)milk)

B ANKSB ANKSL EGISLATUREL EGISLATUREA MERICAN SHOPPERSA MERICAN SHOPPERSM ANUFACTURERSM ANUFACTURERSE UROPEE UROPE M ARGIN ACCOUNTS M ARGIN ACCOUNTS T ARIFFS T ARIFFS C REDIT C REDIT O OVERPRODUCTION O OVERPRODUCTION W ORLD WAR 1 W ORLD WAR 1

That cow

has got no

milk

AN (EMPTY) COW CAUSED THE GREAT AN (EMPTY) COW CAUSED THE GREAT

DEPRESSIONDEPRESSION

Banks and Margin AccountsBanks and Margin Accounts Federal BanksFederal Banks were forbidden to loan money were forbidden to loan money

for stock market speculationfor stock market speculation Private BanksPrivate Banks did not - they used did not - they used Margin Margin

AccountsAccounts

Margin AccountsMargin Accounts - a buyer wants to purchase stock and - a buyer wants to purchase stock and puts down part of the money (25%)puts down part of the money (25%)

- His broker or agent puts down the rest for him, but - His broker or agent puts down the rest for him, but charges interest on a charges interest on a Margin AccountMargin Account

The broker gets the rest of the money by borrowing it The broker gets the rest of the money by borrowing it from a bank and he uses the stock as collateralfrom a bank and he uses the stock as collateral

Inexperienced investors ( a large number Inexperienced investors ( a large number from the middle class who had never from the middle class who had never invested before) panic when the stock falls invested before) panic when the stock falls which leads to a which leads to a "a gambler's type "a gambler's type panic"panic"

The Banks were ruined from the The Banks were ruined from the loansloans

Legislature and the TariffLegislature and the Tariff Hawley Smoot Tariff -1930Hawley Smoot Tariff -1930 - was the - was the

highest protective tariff in U.S History - it highest protective tariff in U.S History - it created an unbalanced foreign tradecreated an unbalanced foreign trade

Foreign Nations were unable to sell their Foreign Nations were unable to sell their goods in the American market and thus could goods in the American market and thus could not afford American productsnot afford American products

This led to This led to Economic WarfareEconomic Warfare - which - which is not a good business practiceis not a good business practice

BAD BUSINESS PRACTICEBAD BUSINESS PRACTICE Raffle Ticket theoryRaffle Ticket theory - if many people - if many people

sell raffles to you and you refuse all the sell raffles to you and you refuse all the time-when it comes time for you totime-when it comes time for you to

sell some - look outsell some - look out

Credit and the Credit and the American ShopperAmerican Shopper

The Installment The Installment PlanPlan - Americans - Americans built up huge debts built up huge debts on credit on credit

They couldn't afford to They couldn't afford to pay back their loanspay back their loans

http://www.free-graphics.com/clipart/Holidays/Christmas/Gifts_And_Stockings/thumbnails1.shtml

Manufacturers and OverproductionManufacturers and Overproduction Mechanization Mechanization - New plants built the latest - New plants built the latest

technology -increased output of goods but technology -increased output of goods but needed less workers to do itneeded less workers to do it

Uneven distribution of incomeUneven distribution of income - lack of - lack of

balance between consumption and productionbalance between consumption and production

Profits from production went to the stockholders Profits from production went to the stockholders or were put back into the business - at first; in or were put back into the business - at first; in the early 20's stocks were greatthe early 20's stocks were great

PROBLEM:PROBLEM: Workers under low wages Workers under low wages

couldn't afford to buy the products. The farmers couldn't afford to buy the products. The farmers had the same problem. They werehad the same problem. They were

not receiving enough money for their cropsnot receiving enough money for their crops

Europe and World War 1Europe and World War 1 European nations were in debt, had property destroyed European nations were in debt, had property destroyed

which reduced their purchase of American goodswhich reduced their purchase of American goods The insistence that Germany pay war debts of 33 billion The insistence that Germany pay war debts of 33 billion

caused Europe to go off of the caused Europe to go off of the Gold StandardGold Standard (paper money (paper money could nocould no

longer be exchanged for gold) - the gold value dropped which longer be exchanged for gold) - the gold value dropped which meant that Europe bought American products with a cheapermeant that Europe bought American products with a cheaper

currencycurrency

Objectives:Objectives:How did unemployment during the Great How did unemployment during the Great

Depression affect the lives of American workers?Depression affect the lives of American workers?What hardships did urban and rural residents face What hardships did urban and rural residents face

during the depression?during the depression?How did the Great Depression affect family life How did the Great Depression affect family life

and the attitudes of Americans?and the attitudes of Americans?How did popular culture offer an escape from the How did popular culture offer an escape from the

Great Depression?Great Depression?

Section 2: Hard TimesSection 2: Hard Times

Unemployment during the Great Unemployment during the Great DepressionDepressionrose sharplyrose sharplycreated severe financial problemscreated severe financial problemscreated severe emotional problemscreated severe emotional problems


Hardships during the depressionHardships during the depressionpovertypovertydiminished expectationsdiminished expectationslow prices or lack of market for farm productslow prices or lack of market for farm productsfarm foreclosuresfarm foreclosureshunger hunger homelessnesshomelessnessdeportation for aliensdeportation for aliens


Great Depression’s effects on family life Great Depression’s effects on family life and attitudes of Americansand attitudes of Americansfractured some families, forced others to band fractured some families, forced others to band

together for survivaltogether for survivaldivorce rates updivorce rates upbirth rates downbirth rates downmany psychological problemsmany psychological problems


Popular culture during the depressionPopular culture during the depressionmoviesmoviesradioradiocomic books and popular novelscomic books and popular novels


SECTION 2

Hard TimesHard Times

The Great Depression in the City and the Country

• received some aid from charities

• formed mutual-aid organizations

• experienced hunger

• experienced homelessness

• faced lower prices for food products

• forced to let crops rot and kill animals

• faced farm foreclosures

• Mexican aliens and immigrants faced deportation

• experienced poverty

• experienced diminished expectations

URBAN RURAL

Objectives:Objectives: Why did President Hoover oppose government-sponsored Why did President Hoover oppose government-sponsored

direct relief for individuals during the Great Depression?direct relief for individuals during the Great Depression? How did the Hoover administration attempt to solve the How did the Hoover administration attempt to solve the

depression’s economic problems, and how successful were depression’s economic problems, and how successful were these efforts?these efforts?

How did radicals and veterans respond to Hoover’s policies?How did radicals and veterans respond to Hoover’s policies? Why was Franklin D. Roosevelt such a popular candidate in Why was Franklin D. Roosevelt such a popular candidate in

the 1932 election?the 1932 election?

Section 3: Hoover’s PoliciesSection 3: Hoover’s Policies

Hoover’s opposition to government relief Hoover’s opposition to government relief during the Great Depressionduring the Great DepressionPresident Hoover believed that individuals and President Hoover believed that individuals and businesses should be self-reliant and that businesses should be self-reliant and that government help would create a bureaucracy.government help would create a bureaucracy.


Hoover’s attempts to solve economic Hoover’s attempts to solve economic problemsproblems Public-works programs such as building Boulder Dam failed Public-works programs such as building Boulder Dam failed

to relieve entrenched depression.to relieve entrenched depression. The Federal Farm Board, which made loans, established The Federal Farm Board, which made loans, established

cooperatives, and bought surplus goods, avoided some cooperatives, and bought surplus goods, avoided some foreclosures, but failed to end the farm crisis.foreclosures, but failed to end the farm crisis.

The Reconstruction Finance Corporation, which loaned The Reconstruction Finance Corporation, which loaned taxpayer money to stabilize industries, helped some taxpayer money to stabilize industries, helped some companies avoid bankruptcy, but used money for businesses, companies avoid bankruptcy, but used money for businesses, not people.not people.


Radical response to Hoover’s policiesRadical response to Hoover’s policiesstaged protestsstaged protestsbecame involved legallybecame involved legally

Veterans’ responseVeterans’ responsegathered in Washington D.C. to demand payment gathered in Washington D.C. to demand payment

of their pension bonusesof their pension bonuses


Reasons for Roosevelt’s popularityReasons for Roosevelt’s popularityRoosevelt’s optimism and enthusiasm contrasted Roosevelt’s optimism and enthusiasm contrasted

with Hoover’s gloom.with Hoover’s gloom.As governor of New York, Roosevelt had As governor of New York, Roosevelt had

designed new relief programs.designed new relief programs.


SECTION 3

Hoover’s PoliciesHoover’s Policies

PORTRAYAL OF AMERICAN LIFE BY LOST GENERATION WRITERS

Effort Description Effectiveness

public-worksprograms

agriculturalefforts

ReconstructionFinanceCorporation(RFC)

poured money into public construction projects such as the Boulder Dam

created the Federal Farm Board; made loans, established cooperatives, and bought surplus goods

loaned taxpayer money to stabilize industries

failed to affect the entrenched depression

helped some farmers take advantage of cooperatives and avoid closure, but failed to end the farm crisis

helped some companies avoid bankruptcy, used money for businesses; not people

The Federal Govt should direct The Federal Govt should direct agencies and states to give agencies and states to give reliefrelief

Hoover's blamed for the DepressionHoover's blamed for the Depression

The Democratic National Committee hired a public The Democratic National Committee hired a public relations expert to damage Hoover. They linked Hoover to relations expert to damage Hoover. They linked Hoover to the Depression. the Depression.

HoovervillesHoovervilles - shacks for the homeless outside the cities - shacks for the homeless outside the cities Hoover blanketsHoover blankets - old newspapers worn under the - old newspapers worn under the

clothingclothing Hoover HogHoover Hog - a jackrabbit - a jackrabbit Hoover flagsHoover flags - empty pockets inside out - empty pockets inside out

Hoover's FlawsHoover's Flaws The great engineer The great engineer could not adaptcould not adapt

UNFLEXIBLEUNFLEXIBLE A] Congress wanted 40 billion to spend - He spent only 2 He A] Congress wanted 40 billion to spend - He spent only 2 He

would not listen to them - In tough times a bad movewould not listen to them - In tough times a bad move B] Bonus Army - 1932 VETERANS from WW 1 wanted bonuses B] Bonus Army - 1932 VETERANS from WW 1 wanted bonuses

promised them for 1945 -earlier. promised them for 1945 -earlier. In mid July - there were 15,000 marchers camped out on the In mid July - there were 15,000 marchers camped out on the

white house lawn - they had been there for 2 monthswhite house lawn - they had been there for 2 months

C] Refused to cancel foreign war debtsC] Refused to cancel foreign war debts D] Hoover could be seen at fine restaurants, living well while D] Hoover could be seen at fine restaurants, living well while

most of America sufferedmost of America suffered

The Patman Bill voted down the bill to give them The Patman Bill voted down the bill to give them their bonus early. They did agree to pay for their their bonus early. They did agree to pay for their way home but deducted it from their 500 dollar way home but deducted it from their 500 dollar bonus they were to receive in 1945bonus they were to receive in 1945

Bonus ArmyBonus Army

Congress Congress voted not to voted not to grant them grant them the bonus the bonus earlyearly

Hoover sided Hoover sided with Congress with Congress and sent in and sent in Gen DouglassGen Douglass

Macarthur to Macarthur to remove the remove the marchers with marchers with tanks and tear tanks and tear gas.gas.

Bonus Army

Bonus MarchBonus March A 3 month old baby A 3 month old baby

Benard Myers was killedBenard Myers was killed The BEF News suggested The BEF News suggested

an epitaphan epitaph "Here lies Benard Myers, "Here lies Benard Myers,

aged 3 months, gassed to aged 3 months, gassed to death by order of death by order of President Hoover"President Hoover"

Hoover set aside Hoover set aside 800 million dollars 800 million dollars for public works for public works like the Hoover like the Hoover Dam. Dam.

Built in NevadaBuilt in Nevada

Hoover…..AKAHoover…..AKABoulder DamBoulder Dam

Harold Ickes – sec. Of Harold Ickes – sec. Of Interior believed Hoover had Interior believed Hoover had nothing to do with the dam nothing to do with the dam and along with FDR at the and along with FDR at the dedication he promoted it as dedication he promoted it as the Boulder Dam . The name the Boulder Dam . The name stuck for a dozen yearsstuck for a dozen years

President Truman officially President Truman officially changed the name in 1947changed the name in 1947

Franklin Delano Roosevelt Governor of Franklin Delano Roosevelt Governor of NY NY • New Deal – program OF RELEIF

• Brain Trust -Trusted advisors

• Polio (1921)

• Eleanor Roosevelt (distant cousin to FDR) – she championed the Poor and comforted FDR during his illness

Brain TrustBrain TrustHarry Hopkins Social Worker from NY

Strong on work relief rather than direct relief

Cordell Hull Sec of State

Harold Ickes Sec of Interior – an attorney from Chicago

Francis Perkins

1st woman to sit on the Presidential Cabinet – an expert at Industrial Safety

FDR PolicyFDR PolicyBank Holiday Bank Holiday EBRAEBRAStraight TalkStraight TalkFireside ChatsFireside Chats

Bank HolidayBank Holiday

March 6, 1933 2 days March 6, 1933 2 days into office –FDR into office –FDR closed every bank in closed every bank in the nation until each the nation until each was sound enough to was sound enough to re – openre – open

EBRA –Emergency EBRA –Emergency Banking Relief ActBanking Relief Act

Straight TalkStraight TalkExplains to the people Explains to the people

about Banks – on about Banks – on march 12march 12thth

Banks invest your Banks invest your money and do not have money and do not have it all on handit all on hand

Fireside Chats – FDR Fireside Chats – FDR explained the New explained the New Deal measures on radio Deal measures on radio – he spoke of friendly – he spoke of friendly encouragementencouragement

Side note in History Side note in History Hindenburg Disaster 1937 – New JerseyHindenburg Disaster 1937 – New Jersey

chapter 15 the great depression section 1: prosperity shattered section 2: hard times section 3:...

Documents

transportation route

arable land

thanks ianriver valley

single crop indigo

great depressionpicking

little money

cropscash crops

o cents