The Great Depression & the New The Great Depression & the New Deal Deal

Chapter 25Chapter 25

Section 1Section 1

Economic Collapse Economic Collapse

Key ? How did 1920s prosperity affect Key ? How did 1920s prosperity affect different social groups?different social groups?

Economic prosperity in the 1920s.Economic prosperity in the 1920s. More products were being produced – More products were being produced –

incomes of middle class and poor not rising.incomes of middle class and poor not rising. Many products went unsold.Many products went unsold. Farmers –produced more crops than they Farmers –produced more crops than they

could sell.could sell.

The Illusion of WealthThe Illusion of Wealth

Most Americans could not afford cars and Most Americans could not afford cars and appliances. Vast majority had only small incomes appliances. Vast majority had only small incomes and little savings. and little savings.

Many could not find steady work. Continued to Many could not find steady work. Continued to use use credit – an arrangement for delaying payment credit – an arrangement for delaying payment on a purchase. on a purchase. Large debts were accumulated. Large debts were accumulated.

Stock market still climbing. Stock market still climbing. Many investors bought stock on Many investors bought stock on speculation-speculation-

buying and selling risky stocks in the hope of buying and selling risky stocks in the hope of making a quick profit. making a quick profit. Bought borrowed money to Bought borrowed money to buy stocks, but couldn’t repay when prices fell. buy stocks, but couldn’t repay when prices fell.

The Crash and the Great The Crash and the Great DepressionDepression

Key ? – What caused the crash of 1929 and Key ? – What caused the crash of 1929 and the Great Depression?the Great Depression?

President Hoover – President Hoover – economic depression-economic depression-financial slump.financial slump.

Financial panic led to the Stock Market Financial panic led to the Stock Market Crash of 1929. – Crash of 1929. – Black TuesdayBlack Tuesday

Great Depression of the 1930s– worst Great Depression of the 1930s– worst economic crisis in the nation’s history.economic crisis in the nation’s history.

Great DepressionGreat Depression

Global affect – when the American Global affect – when the American economy failed, so did Europe’s.economy failed, so did Europe’s.

Lasted until World War II in 1941.Lasted until World War II in 1941. Millions experienced starvation, Millions experienced starvation,

homelessness, and extreme suffering. homelessness, and extreme suffering.

Hoover Loses the Nation’s TrustHoover Loses the Nation’s Trust

Key ? – Why did the American people lose faith in Key ? – Why did the American people lose faith in Hoover?Hoover?

Hoover did not believe the government aid to the Hoover did not believe the government aid to the needy and depended on charitable organizations. needy and depended on charitable organizations. Solicited voluntary wage rates maintained by Solicited voluntary wage rates maintained by businesses.businesses.

Reconstruction Finance Corporation- gov. funded Reconstruction Finance Corporation- gov. funded organization that gave loans directly to banks and organization that gave loans directly to banks and railroads. railroads.

Public works projects – Hoover Dam Public works projects – Hoover Dam

The Bonus ArmyThe Bonus Army

World War I veterans were promised a bonus for World War I veterans were promised a bonus for wartime service. wartime service.

Summer of 1932, 15,000 veterans went to Summer of 1932, 15,000 veterans went to Washington - Many stayed and camped out in a Washington - Many stayed and camped out in a “Hooverville” – a village of huts, shacks, and “Hooverville” – a village of huts, shacks, and other temporary residences. other temporary residences.

Mac Arthur tried to drive them out with tear gas, Mac Arthur tried to drive them out with tear gas, fired shots, one died. fired shots, one died.

President Hoover not reelected. FDR first goal President Hoover not reelected. FDR first goal would be to rebuild Americans’ hope and trust.would be to rebuild Americans’ hope and trust.