The Great depression Chapter 14
Jan 21, 2016
The Great depression
Chapter 14
Great depression
• 1929-1941
• Does not end until start of World War II
• Causes:• Uneven distribution of wealth• Debt of 1920’s• U.S. industry not competitive• Unsuccessful economic policies• Stock Market Crash• Industry and agriculture overproduction
(WW I)• Absence of cash
Election of 1928
• Al Smith (Democrat) vs. Herbert Hoover (Republican)
• Hoover won due to prosperity of the 1920’s• Rugged individualism• “Lassez-faire” economics
Hoover would eventually be personally blamed for the Depression
Stock market conditions
• Late 1920’s, stock prices continued to rise
• In the 1920’s, many were risk-takers and wanted to “gamble” with the Stock Market
• “Buying on Margin” allowed investors to use credit to purchase stock
• “Black Tuesday”-October 29, 1929….the day the market “crashed”• 16 million shares of stock sold that day• Many people lost their life savings in the
stock market
Run on banks
• Some people wanted to safely save money and put their money in banks
• People panicked and ran to the banks to withdraw all their money
• Money in banks was not insured at the time
• Once the bank gave all money out, there was no more!
• People that did get some money from the bank often hoarded their money (buried it, stuffed it in a mattress, etc.)-They were afraid to spend any money because they feared it could not be replaced
Conditions decline
• Many companies suffered once the stock values continued to decrease
• More and more people lost jobs-by 1933, the unemployment rate was 25%
• Hoover promised that there would be prosperous times around the corner and there would be a “chicken in every pot”, but that did not come to pass
Continued
• Many lost jobs, were homeless, and hungry
• Many children malnourished
• Many stood in bread lines or went to soup kitchens to get food
• There was no government assistance….no food stamps, monthly checks, unemployment, etc.
• Charities/churches did provide some support, but the government did nothing at this point
• See clip of “Cinderella Man”
Bonus army• World War I veterans
• Promised a bonus for their service payable in 1945
• Because of desperate conditions, many asked for their bonus early in 1932
• Thousands made the trip to Washington, D.C. to attempt to sway Congress to provide the money early-set up a tent city
• Congress denied their request, and those that did not leave voluntarily were forced out with tear gas and tanks
• Last straw for Hoover “Bonus Army” video
Hoover blamed
• Although Hoover promised that prosperity was “right around the corner”, that did not happen for most
• Make-shift homes made of scrap wood, metal and cardboard were referred to as “Hoovervilles”
• “Hoover-flags”
• “Hoover-blankets”
• “Hoover-hogs”
Depression effects rural areas
• Lower demand for food after World War I
• Many years of drought in area of Great Plains called the Dust Bowl• Caused by:
• High winds• Little or no rain• Lack of crop rotation
Okies
• Farmers from the Great Plains (mostly Oklahoma at first) that moved West to find work picking fruit in California
• Too many went and there were not enough jobs available
• Okies were often not welcomed out West
Effects of the Great Depression
• People suffered widespread unemployment, hunger, hopelessness, and homelessness
• Industrial and farm production failed
• World economic crisis developed
• Roosevelt won victory in 1932
• President Franklin D. Roosevelt initiated the New Deal for all Americans
• Clara Video