Lesson 6:The Start of the Great Depression

and President Hoover

1929-1933

Business CycleImportant Words:

• Recessiontemporary economic decline

• Depressiona long and severe recession

• Peak• Trough• Expansion• Recession

A Roller Coaster

Where would the Great Depression be on the graph

below?

“Brother, can you spare me a dime?”

They used to tell meI was building a dream.Once I built a railroad

I made it runNow it’s done.

Brother, can you spare a dime?

Once in khaki suitsGee we looked swell

Full of that yankee doodly dum.

Why don’t you remember?I’m your pal.

Say buddy, can you spare a dime?

What did the singer do before the Great Depression?What is he doing now?

Causes---Why!? O! Why?

Stock market Crash

Consumer Debt

Unequal distribution

of wealthCreation of credit

Speculation (guessing at

stocks)

0

5

10

15

20

25

Stock Prices, 1923-1929

Stan

dard

and

Poo

r's In

dex

of C

omm

on S

tock

s

1923 1925 1927 1929

…Causes continued

0

1

2

3

4

5

6

7

8

Consumer Debt, 1921-1929

Dol

lars

(in

billi

ons)

1921 1923 1925 1927 1929

What Happened to the Banks?

• Over 9,000 banks closed because they didn’t have any more money.

• People who lost their money in these failed banks could not pay for shelter, food, or clothing.

Unemployment

Year%

unemployed1929 3%

1930 9%

1931 16%

1932 24%

1933 25%

1934 22%

1935 21%

1936 17%

1937 15%

1938 19%

1939 17% Important!For people who did get to keep their jobs, their wages were cut drastically.

Your Chart

Before During After

0

25

What Did People Do?

Breadlines

• For people who were unemployed, the government served meals in lines for families.

Bonus Army

• An assembly of 43,000 WWI veterans, who gathered to demand cash-payment redemption of their service certificates.

Hoovervilles

• Groups of shacks made from tin or cardboard that people built after they lost their homes.

• Names after President Hoover.

Other

• Farmers revolted

• Hunger marches

A GLOBAL Great Depression

Why would Germany be particularly hard hit with this

Great Depression?

Hoover’s Response

• Did not believe in providing relief• Attempted to rescue banks• Increased public-works projects

“Economic depression can not be cured by legislative action or executive pronouncement.

The basic of successful relief in national distress is to mobilize and organize the infinite number of agencies of self help in the community.

That has been the American way.”-Herbert Hoover