Chapter 12: The Great Depression

Chapter 12: The Great Depression1928-1932Section 1Causes of the Depression

Prosperity Hides TroublesOptimism Sweeps Hoover to VictoryIn the 1920s the U.S. economy was boomingHerbert Hoover an accomplished public servant to run for the White HouseHoovers philosophy was cooperation and competition

Problems Plague the Agricultural SectorFarmers made up one fourth of the American workforce / to meet the need created by WWINew technology and methods created bumper crops / debtsLow prices lead to less profits and fewer purchases

Wealth Is Distributed UnevenlyDuring the 1920s wages rose steadily and did disposable incomeWorker productivity increased astronomicallyOne percent of the population earned roughly the same as the bottom 42 percentA healthy economy needs more people to buy more products which creates more wealth

Easy Credit Hides ProblemsCredit hid the unstable economic activitiesInstallment plan80% of radios and 60 % of cars were purchased in this mannerThis was a new mentality of buying unlike the past

The Stock Market CrashesStock prices were based on little more than confidenceSpeculation investors gambled, with money they did not have on stock increases to turn quick profitsOctober 24 Black Thursday SELL SELL SELL SELL

ContBlack Tuesday October 29 the bottom of the market fell out16 million shares were sold, billions were lostWith a high of 381 in September to a low of 198.7 the Dow Jones dropped like a brick (today 12,891.9)Business Cycle explained the periodic growth and contraction of economy

The Great Depression BeginsThe Backs CollapseGreat Depression a period lasting from 1929 to 1941 in which the economy faltered and unemployment soaredPeople lost confidence in the economy and ran to withdraw their saving from banks ( not enough $)

Businesses Close and Unemployment RisesThe fall of stock prices and slowing of consumer spending led to less production and layoffs Ect. Ect. Ect. Ect.

This was like a snowball rolling down a hill

Tariffs Add to the WoesThe government tried to protect American products from foreign competition using tariffsHawley-Smoot Tariff raised prices on foreign imports so they could not compete in the American marketThis would help destroy international trade

The Depression Goes GlobalGermany ceased their reparation payments U.S. suspended France and Britain's war debt paymentsInternational economy had largely been funded by U.S. loans

What Caused the Great Depression?Economists disagree on the exact causes of the Great DepressionMilton Friedman believed that the depression resulted from a contraction in money supplyJohn Maynard Keynes believed the lack of government interference was the cause(Read page 372)

Key ConceptsHow did the prosperity of the 1920s give way to the Great Depression?What economic problems lurked beneath the general prosperity of the 1920s?What happened on October 29, 1929?How did the stock market crash contribute to the onset of the depression?What were the primary causes of the Great Depression?Section 2Americans Face Hard Times

Misery and Despair Grip Americas CitiesThe Great Depression had a deep and lasting impact on the lives of the people who lived through itEvery American was touch by the effects of the Great Depression directly or indirectly

Searching for a Job and a MealBetween 1921 and 1929 unemployment rates never rose above 3.7 percent by the peak of the Great Depression the rate was at 24.9 percent

ContWorkers faced staggering layoffs and signs that read No help wanted here and We dont need nobodyWomen tried to find work and many families went to soup kitchensBread Line people lined up for handouts from charities or public agencies

Descending Into PovertyThey used to tell me I was Building a dreamAnd so I followed the mob.When there was earth to plow or guns to bear,I was always there, right on the job.They used to tell me I was building a dreamWith peace and glory ahead-Why should I be standing in line,Just waiting for bread?Once I built a railroad, I made it run,Made it run against time.Once I built a railroad, now its done-Brother can you spare a dime?

Song lyrics, Brother Can You Spare a Dime?

Looking for a Place to LiveAmericans lost their jobs, ran through their savings, sold furniture, pawned jewelry, and moved; many ended on the streetsHoovervilles makeshift shantytowns of tents, and shacks built on public land or vacant lots

Poverty Devastates Rural AmericaCommodity Prices PlungeCrop prices fell and debts increase again for farmersTenant Farmers working for bigger landowners rather them for themselvesFarmers were also faced with droughtThey were unable to pay their bills and land was foreclosed they were force to leave

The Great Plains Becomes a Dust BowlDust Bowl high plains regions of Texas, Oklahoma, Kansas, New Mexico, and Colorado

Cont

Desperation Causes MigrationOkies Dust Bowl refugees, regardless of their states of originUp to 800,000 people migrated out of Missouri, Arkansas, Oklahoma, and Texas (looking for jobs)

Few Americans Escape Hard TimesThe Depression Attacks Family LifeHoover coined the term depression because he thought it sounded better then panic or crisisMen felt they had betrayed their families, once breadwinners lost their familial status.If employed they felt guilty for their luck while many of their friends and family sufferedWomen and children suffered too. Women made due, children roamed free

Minorities Suffer HardshipsMinorities were the last to be hired and first to be firedBlacks used resources like family and religion to copeThe Negro was born in depression, It didnt mean too much to him, The Great American Depression, as you call it. There was no such thing. The best he could be was a janitor or a porter or shoeshine boy. It only became official when it hit the white man.

ContRepatriation efforts by local, state and federal governments to encourage or coerce Mexican immigrants and their naturalized children to return to Mexico

Key ConceptsHow did the Great Depression affect the lives of urban and rural Americans?How did the Great Depression Affect American cities in the early 1930s?How did the Dust Bowl make life even more difficult for farmers on the Great Plains?How did the depression take a toll on women, children, and minorities in America?Section 3Hoovers Response Fails

Cautious Response to Depression FailsHoover Turns to VolunteerismThough Hoover did not cause the Great Depression he worked tirelessly to solve the nations problemsHoover simultaneously called for the government to reduce taxes, lower interest rates, and create public-works programsHe asked wealthy Americans to give more to charities

Volunteerism Fails to Bring ReliefVolunteerism did not workBusinesses cut wages and laid off workers, and farmers boosted production because it was in the best interests of their familiesLocalism the policy whereby problems could best be solved at local and state levelsHoover also favored rugged individualism

Hoover Adopts More Activist PoliciesHoovervilles and homelessness were on the rise, trucks pulled by horse or mule were called Hoover wagons, campfires Hoover heaters, cardboard boxes Hoover houses.

ContReconstruction Finance Corporation (RFC) passed in 1932, it gave more than a billion dollars of government loans to railroads , business, and banksTrickle-Down economics the idea that money poured into the top of the economic pyramid will trickle down to the base

ContHoover Dam Boulder Dam, construction brought much needed employment to the Southwest

Americans Protest Hoovers FailuresSome Urge Radical ChangeSome thought the answer to the countrys problems was the rejection of capitalism and the acceptance of socialism or communism.

The Bonus Army Marches on WashingtonWorld War I veterans seeking the bonus Congress had promised them (in 1945) converged on the Washington D.C. demanding early payment in 1931Bonus Army name given to these veterans

Hoover Orders the Bonus Army OutDouglas MacArthur (General) along with federal troops were asked by Hoover to surround the affected area and clear it without delay