The Great Depression and New Deal1929-1940

Section1: Hoover and the CrashSection 2: Roosevelt and the New DealSection 3: Life During the DepressionSection 4: The Effects of the New Deal

Who do you think should help the poor?

What do you think? Is the Government

responsible for every-one’s well being?

What responsibility do individuals have to help others?

What is the best way to help people out of poverty?

Chapter 12 Section 1:Hoover and the Crash

Main Idea:

After the stock market crash of 1929 , the U.S. economy sank into the worst depression in its history.

Why It Matters Now:

Today the government regulates banking and the stock exchange to prevent such severe depressions.

Section 1 Objectives

1. To identify the problems of the U.S. economy in the 1920’s 2. To summarize the causes of the stock market crash and the

Great Depression 3. To analyze how President Hoover responded to the Great

Depression. 4. To explain why Hoover lost the 1932 election to Roosevelt

Problems in the Economy

Herbert Hoover won the election of 1928 and predicted that the nations good economic times would continue.

There were signs of trouble since several big industries had hard times during the 1920’s

EX: Agriculture, railroads, textile mills and mines. Most Americans barely earned enough to survive

Speculation- buying and selling stocks in the hope of making a quick profit.

Buying on margin- Paying for part of a stock’s price up front and borrowing the rest.

Why was buying on margin considered to be a great risk?

Because if stock prices fell, investors would have to sell their stock for less money and could not pay back their

loans

The Crash and the Great Depression

Why is the depression called the Great Depression? On September 3, 1929, the value of stocks on the NYSE

reached a high point. Then prices began to drop. People tried to sell their stock before prices dropped too low.

On October 29, Black Tuesday, investors sold millions of shares of stock. To attract buyers, sellers lowered stock prices.

But too many people wanted to sell stock than to buy it. So stock prices dropped sharply.

The stock market could not handle such a large drop in stock prices. As a result…the market collapsed. This was known as the Crash of 1929.

BLACK TUESDAY

After the Crash

Banks began to demand that people pay back the money they had borrowed to buy stocks.

Few people could repay the loans, and as a result banks ran short on $$$. This scared many people, who in turned rushed to the bank to withdraw their savings.

But the banks were running short on $$$ and could not pay their depositors, so thousands of banks had to close.

After the Crash Continued… Businesses felt the impact

next.

With the economy in trouble, people stopped buying new goods.

Businesses sold less and less and tens of thousands went bankrupt.

This led to companies firing their employees.

Unemployment rate 25% in 1933

The crash hurt people from all walks of life

This was a "great" depression because of the breadth of people that it touched.  Even the well-to-do, illustrated by this man's suit, shoes and cane, were hit hard.  On the streets of San Francisco, this railroad tycoon had to settle for selling apples at a nickel a piece to people on the street. 

Great Depression

The economic depression that began in 1929 was the deepest and longest depression in the nation’s history. Therefore it is called the Great Depression. This is the period of bad economic times lasting from 1929 to the start of WWII.

The Great Depression also affected millions of people around the globe. Many European nations depended on economic assistance from the United States. When the American economy failed….so did Europe’s.

Why did America’s Great Depression affect other nations?

Uncle Sam

Answer

Because many nations depended on economic assistance from the United States

Hoover Acts Conservatively

Why did Hoover oppose government aid?

As the depression grew worse, Americans wanted the government to help them.

Hoover feared that if the government tried to fix the economy, it might make things worse.

Hoover Acts Conservativelycont’d

Hoover believed that federal aid to the poor would make people depend too much on the government. As a result, he did not want to give relief to the needy.

Many Americans became bitter toward the president. They blamed him for the suffering.

In time, Hoover change his ideas about giving relief. In 1932, he set up an agency to lend money to states, cities, and towns.. This money would pay for Public Works Projects. These were government funded projects to build roads and dams. These projects would create jobs.

In spite of this Hoover was still very unpopular.

Homeless

For people who were lucky enough to still have a home, they often did without heat or light because they couldn't pay the bills. Landlords couldn't afford to maintain their buildings (or refused to) and destitute people were often found to be living in buildings that should have been torn down.

When you were unable to pay even the rent, you were evicted. Whole families were thrown out, their belongings stacked outside on the sidewalk.

Children at play in the early 30's moved their dolls around in a new game they called "eviction."

Homeless people slept in doorways, on park benches, under shrubbery, in large unused pipes in pipe yards, in huge ovens at closed steel plants, under viaducts and bridges, and in abandoned autos and trolleys. The homeless foraged for food in garbage dumps, panhandled on the street, begged at homes, and made "mulligan" stews out of whatever they could find that was edible. If they managed to get a little money, they spent the night on urine-stained mattresses in lice-ridden, rat-infested flophouses for 10 to 15 cents a night. They constructed makeshift shacks and shanties out of whatever was handy: scrap wood, scrap metal, cardboard, orange crates and metal signs. On the outskirts of town, these groupings of shacks were known as shantytowns and hoovervilles.

Hoovervilles

Ohio Hooverville

Oregon Hooverville

Why did President Hoover oppose giving federal relief to Americans?

Answer

He thought it would make them too dependent on the government

Hoover loses to Roosevelt

A violent confrontation made Hoover’s problems worse. Congress had promised WWI veterans a bonus. It was to be

an extra payment for fighting in the war. The bonuses were going to be paid in the 1940’s but many ex-soldiers were out of work. They wanted the $$$ earlier. Some of them marched on Washington to ask for their $$$. They were called the Bonus Army.

The Senate voted against paying the bonus early. Hoover agreed with that decision. The veterans then protested. In response, U.S. troops drove the veterans out of town . The troops even used bayonets in the attack.

Hoover loses to Roosevelt

This attack on veterans made Americans even angrier at Hoover In the 1932 election, the people did not reelect him. Instead, they elected the Democratic candidate. His name was Franklin Delano Roosevelt. He won by a big margin.

Why did many World War I veterans march on Washington

Answer:

To demand early payment of their wartime bonuses.