The Nation’s Sick The Nation’s Sick EconomyEconomy

Chapter 22Chapter 22

Section 1Section 1

Causes of the Great Causes of the Great DepressionDepression Industry: Some industries were less Industry: Some industries were less

competitivecompetitive Farming: Farmers produced more than they Farming: Farmers produced more than they

could sellcould sell Easy credit: Many went into debt buying Easy credit: Many went into debt buying

goods on the installment plan goods on the installment plan Income: Rich got richer while the poor got Income: Rich got richer while the poor got

poorerpoorer

A New PresidentA New PresidentThe Election of 1928The Election of 1928

DemocratsDemocrats RepublicansRepublicans

Alfred E. SmithAlfred E. Smith Herbert HooverHerbert Hoover

Governor of New York Governor of New York Sec. of CommerceSec. of Commerce

Witty / OutgoingWitty / Outgoing Formal / ReservedFormal / Reserved

Hoover WinsHoover Wins

Risky BusinessRisky Business

Many Americans practiced Many Americans practiced speculation & buying on speculation & buying on marginmargin

Speculation – very riskySpeculation – very riskyBuying on margin – only Buying on margin – only

paying for part of the stockpaying for part of the stock

Stock Market CrashesStock Market CrashesOctober 29, October 29,

19291929 Stock prices Stock prices

droppeddropped Investors Investors

started selling started selling all their stocksall their stocks

Wall Street lost Wall Street lost $30 billion in $30 billion in one monthone month

Financial CollapseFinancial Collapse Many Americans lost Many Americans lost

EVERYTHING in the EVERYTHING in the crashcrash

After the CrashAfter the Crash Americans panicked & Americans panicked &

tried to withdraw their tried to withdraw their money from the bankmoney from the bank

The banks ran out of The banks ran out of money and closedmoney and closed

People lost their savings People lost their savings

After the Crash, After the Crash, ContinuedContinued

85,000 businesses 85,000 businesses went bankruptwent bankrupt

1 out of every 4 1 out of every 4 people were people were unemployedunemployed

People who kept People who kept their jobs had cut their jobs had cut hours and less hours and less wageswages

Hawley – Smoot Tariff Act Hawley – Smoot Tariff Act

Highest tariff in US HistoryHighest tariff in US HistoryDesigned to protect farmers Designed to protect farmers

and manufacturers from and manufacturers from foreign competitionforeign competition

Backfired – foreign countries Backfired – foreign countries couldn’t afford to buy couldn’t afford to buy American goodsAmerican goods

Questions over Section 1Questions over Section 1Fill in the following graphic organizer:Fill in the following graphic organizer:

Hardship and Hardship and Suffering During the Suffering During the

DepressionDepression

Chapter 22Chapter 22

Section 2Section 2

Depression in the CitiesDepression in the Cities

Many people were Many people were evicted from their evicted from their homes and lived on homes and lived on the street or in the street or in shantytownsshantytowns

Charities provided Charities provided food in soup food in soup kitchens and bread kitchens and bread lineslines

Minorities & the DepressionMinorities & the Depression African Americans and African Americans and

Latinos had the highest Latinos had the highest unemployment ratesunemployment rates

Racial violence increased Racial violence increased – there were 24 – there were 24 lynchings in 1933lynchings in 1933

Many demanded that Many demanded that Latinos be deported to Latinos be deported to MexicoMexico

Some left voluntarily Some left voluntarily while others were while others were deporteddeported

Depression in Rural Areas Depression in Rural Areas Some farmers were able Some farmers were able

to grow enough food to to grow enough food to feed their familiesfeed their families

Over 400,000 farms Over 400,000 farms were foreclosed due to were foreclosed due to unpaid debtsunpaid debts

Many turned to tenant Many turned to tenant farming but were VERY farming but were VERY poorpoor

Thousands left their Thousands left their land and went to land and went to CaliforniaCalifornia

The Dust BowlThe Dust BowlFarmers overused land Farmers overused land Grasslands became Grasslands became unsuitable for farmingunsuitable for farmingDrought and winds Drought and winds blew the soil awayblew the soil away

Men & the DepressionMen & the Depression Men could not provide for their Men could not provide for their

familiesfamilies 2 million men abandoned their 2 million men abandoned their

families and wandered the countryfamilies and wandered the country

Relief?Relief?The government The government did not offer direct did not offer direct relief relief Some charities Some charities gave a weekly gave a weekly payment of $2.39 payment of $2.39 for a familyfor a family

Women and Women and ChildrenChildren Women sewed Women sewed

clothes and canned clothes and canned foodfood

Managed household Managed household budgetsbudgets

Worked outside the Worked outside the homehome

Many women were Many women were too ashamed to too ashamed to admit their hardshipadmit their hardship

ProblemsProblemsPoor diets and lack of money Poor diets and lack of money

for health care led to health for health care led to health problems for many childrenproblems for many children– MalnutritionMalnutrition– RicketsRickets– PellagraPellagra

Social and Social and Psychological Psychological

EffectsEffects Suicide rates rose by 30%Suicide rates rose by 30% People developed habits People developed habits

of thriftinessof thriftiness People gave up on dreamsPeople gave up on dreams

Positive Effects of the Positive Effects of the DepressionDepression

People showed kindness to People showed kindness to strangersstrangers

Gave food, clothing and a Gave food, clothing and a place to stay for the needyplace to stay for the needy

Shared resources and helped Shared resources and helped each other outeach other out

Answer the following Answer the following questionsquestions

What were positive What were positive effects of the effects of the depression?depression?

What were What were negative effects of negative effects of the depression?the depression?

Hoover Struggles Hoover Struggles with the Depressionwith the Depression

Chapter 22Chapter 22

Section 3Section 3

Hoover’s PhilosophyHoover’s Philosophy

Tried to reassure Americans that the Tried to reassure Americans that the economy was on strong footing.economy was on strong footing.

Felt the gov. should play a limited role Felt the gov. should play a limited role in helping to solve the economy’s in helping to solve the economy’s problems.problems.

Gov. role to encourage & facilitate Gov. role to encourage & facilitate cooperation.cooperation.

Direct relief efforts not support them Direct relief efforts not support them finacially.finacially.

Hoover takes Cautious Hoover takes Cautious StepsSteps

Cautious approach to the depressionCautious approach to the depression– Asked employers not to cut wages or layoff Asked employers not to cut wages or layoff

workersworkers– Asked labor leaders not to demand higher Asked labor leaders not to demand higher

wages or go on strike.wages or go on strike.– Created a special organization to help Created a special organization to help

private charities generate contributions for private charities generate contributions for the poor.the poor.

None of these steps made much of a None of these steps made much of a difference.difference.

Boulder DamBoulder Dam

Hoover dam was approved to be built Hoover dam was approved to be built in 1928. in 1928. Boulder DamBoulder Dam

World’s tallest dam & second largest World’s tallest dam & second largest damdam

Democrats Win in 1930 Democrats Win in 1930 Congressional ElectionsCongressional Elections

Political tide turnedPolitical tide turned Republicans lost control of the House of Republicans lost control of the House of

Representatives & only remained in control Representatives & only remained in control by only 1 vote in Senate.by only 1 vote in Senate.

Farmers burned crops rather than sell at a Farmers burned crops rather than sell at a loss.loss.

Declared a “farm holiday” – refused to work Declared a “farm holiday” – refused to work in fields.in fields.

Calling Shantytowns “Hoovervilles”Calling Shantytowns “Hoovervilles”– Hoover blanketsHoover blankets– Hoover FlagsHoover Flags

Hoover Backs CooperativesHoover Backs Cooperatives

Attempts to relieve the depression Attempts to relieve the depression involved negotiating agreements involved negotiating agreements among private entities reflecting his among private entities reflecting his belief in small gov.belief in small gov.

Tried to prop up banking system by Tried to prop up banking system by establishing the National Credit establishing the National Credit Corporation.Corporation.– Loaned money to smaller banksLoaned money to smaller banks

Direct InterventionDirect Intervention

Appealed to Congress to pass a series of Appealed to Congress to pass a series of measures to reform banking.measures to reform banking.– Provide mortgage reliefProvide mortgage relief– Funnel more money into business investmentFunnel more money into business investment– Federal Home Loan Bank Act Federal Home Loan Bank Act – lowered – lowered

mortgage rates & allowed farmers creditmortgage rates & allowed farmers credit– Glass – Steagall ActGlass – Steagall Act – separated investment – separated investment

from commercial bankingfrom commercial banking– Reconstruction Finance CorporationReconstruction Finance Corporation – –

authorized $2 billion for emergency financing authorized $2 billion for emergency financing for banksfor banks

Patman Bill DeniedPatman Bill Denied

10,000-20,000 WWI veterans went to 10,000-20,000 WWI veterans went to Washington D.C. – Washington D.C. – Bonus ArmyBonus Army

Patman Bill authorized the gov. to pay a Patman Bill authorized the gov. to pay a bonus to WWI veterans.bonus to WWI veterans.

Was supposed to be paid out in 1945Was supposed to be paid out in 1945 Wright Patman believed money should Wright Patman believed money should

be paid immediately.be paid immediately. Hoover opposed legislationHoover opposed legislation Called on Bonus Army to leave - refusedCalled on Bonus Army to leave - refused

Hoover Disbands the Bonus Hoover Disbands the Bonus ArmyArmy

Hoover called for the infantry to gas Hoover called for the infantry to gas 1,000 people who were injured.1,000 people who were injured.

Most Americans were stunned & Most Americans were stunned & outraged at the government’s outraged at the government’s treatment of veterans.treatment of veterans.

Hoover’s ResponseHoover’s Response

Extra-Credit QuestionsExtra-Credit Questions1.1. Why was Hoover reluctant to help people during the Why was Hoover reluctant to help people during the

Depression?Depression?

2.2. What types of action did Hoover take to remedy the What types of action did Hoover take to remedy the effects of the Depression?effects of the Depression?

3.3. What measures did Hoover take and what results did he What measures did Hoover take and what results did he achieve to help the economy?achieve to help the economy?

4.4. Why did Hoover use to force against World War I Why did Hoover use to force against World War I veterans?veterans?

5.5. What was the Patman Bill and what happened when it What was the Patman Bill and what happened when it failed in the Senate?failed in the Senate?

6.6. What happened to the Bonus Army?What happened to the Bonus Army?

7.7. How did the treatment of the Bonus Army affect How did the treatment of the Bonus Army affect President Hoover?President Hoover?