The Great Depression. Keeping track of causes As we go over the causes keep a chart in your notes so you will have easy access to the causes of the Great.

The Great DepressionThe Great Depression

Keeping track of Keeping track of causescauses

As we go over As we go over the causes keep the causes keep a chart in your a chart in your notes so you will notes so you will have easy access have easy access to the causes of to the causes of the Great the Great Depression.Depression.

1. 1. Overproduction.Overproduction.

Put explanations Put explanations herehere

2. Declining 2. Declining demand for demand for products.products.

3. "Junk Stocks."3. "Junk Stocks."

4. Speculative 4. Speculative Investing.Investing.

5. Poor Banking 5. Poor Banking Practices.Practices.

6. Declining 6. Declining prices and prices and demand for demand for crops. crops.

7. Unemployment 7. Unemployment due to due to technology.technology.

8. Installment 8. Installment buying. buying.

I. The Consumer Society I. The Consumer Society

A. A. Higher wages and shorter workdays Higher wages and shorter workdays led to an economic boom as Americans led to an economic boom as Americans traded thrift for their new role as traded thrift for their new role as consumers. American attitudes about consumers. American attitudes about debt shifted, as they became confident debt shifted, as they became confident that they could pay back what they that they could pay back what they owed at a later time.owed at a later time.

B. B. Advertising was used to convince Advertising was used to convince Americans that they needed new Americans that they needed new products. Ads linked products with products. Ads linked products with qualities that were popular to the qualities that were popular to the modern era, such as convenience, modern era, such as convenience, leisure, success, fashion, and style.leisure, success, fashion, and style.

Discussion QuestionDiscussion Question

Why did Americans’ attitudes towards Why did Americans’ attitudes towards consumerism change during the 1920s?consumerism change during the 1920s?

(Higher wages and shorter workdays led to an (Higher wages and shorter workdays led to an economic boom as Americans traded thrift for economic boom as Americans traded thrift for their new role as consumers. American their new role as consumers. American attitudes about debt shifted, as they became attitudes about debt shifted, as they became confident that they could pay back what they confident that they could pay back what they owed at a later time. Advertising was used to owed at a later time. Advertising was used to convince Americans that they needed new convince Americans that they needed new products. Ads linked products with qualities products. Ads linked products with qualities that were popular to the modern era, such as that were popular to the modern era, such as convenience, leisure, success, fashion, and convenience, leisure, success, fashion, and style. The ads promised consumers self style. The ads promised consumers self improvement, happiness, and self-fulfillment.)improvement, happiness, and self-fulfillment.)

The Roots of the Great The Roots of the Great DepressionDepression A. A. Efficient machinery led to Efficient machinery led to

overproduction, and Americans could overproduction, and Americans could not afford to buy all the goods not afford to buy all the goods produced.produced.

B. B. The uneven distribution of wealth in The uneven distribution of wealth in the United States added to the country’s the United States added to the country’s economic problems. In 1929 the top 5 economic problems. In 1929 the top 5 percent of American households earned percent of American households earned 30 percent of the country’s income. 30 percent of the country’s income. More than two-thirds of the nation’s More than two-thirds of the nation’s families earned less than $2,500 a year.families earned less than $2,500 a year.

More More Problems…Problems… C. C. Low consumption added to the economic problems. Low consumption added to the economic problems.

Worker’s wages did not increase fast enough to keep up with Worker’s wages did not increase fast enough to keep up with the quick production of goods. As sales decreased, workers the quick production of goods. As sales decreased, workers were laid off, resulting in a chain reaction that further hurt the were laid off, resulting in a chain reaction that further hurt the economy.economy.

D. D. Many Americans bought on the Many Americans bought on the installment plan, installment plan, making making a down payment and paying the rest in monthly installments. a down payment and paying the rest in monthly installments. Paying off installment debts left little money to purchase Paying off installment debts left little money to purchase other goods.other goods.

E. E. The The Hawley-Smoot Tariff Hawley-Smoot Tariff intensified the Depression by intensified the Depression by raising the tax on imports. Americans purchased less from raising the tax on imports. Americans purchased less from abroad because of the high cost. In return, foreign countries abroad because of the high cost. In return, foreign countries raised their tariffs on American products, causing fewer to be raised their tariffs on American products, causing fewer to be sold overseas.sold overseas.

F. F. Instead of raising interest rates to stop speculation, the Instead of raising interest rates to stop speculation, the Federal Reserve Board made the mistake of lowering the Federal Reserve Board made the mistake of lowering the rates. This encouraged banks to make risky loans and misled rates. This encouraged banks to make risky loans and misled business owners into thinking the economy was still business owners into thinking the economy was still expanding.expanding.


How did the Federal Reserve Board help How did the Federal Reserve Board help cause the Depression?cause the Depression?

(Lowering the interest rate instead of (Lowering the interest rate instead of raising it helped cause the Depression in raising it helped cause the Depression in two ways. First, it encouraged banks to two ways. First, it encouraged banks to make risky loans. Second, it made it make risky loans. Second, it made it appear as if the economy was still appear as if the economy was still thriving, which caused businesses to thriving, which caused businesses to borrow money to further expand their borrow money to further expand their production.)production.)

II. The Farm Crisis II. The Farm Crisis Returns Returns A. A. American farmers did not share in the prosperity American farmers did not share in the prosperity

of the 1920s. Instead, prices dropped dramatically of the 1920s. Instead, prices dropped dramatically while the cost to improve farmers’ technology while the cost to improve farmers’ technology increased.increased.

B. B. During wartime, the government had During wartime, the government had encouraged farmers to produce more for food encouraged farmers to produce more for food supplies needed in Europe. Farmers borrowed supplies needed in Europe. Farmers borrowed money at inflated prices to buy new land and new money at inflated prices to buy new land and new machinery to raise more crops. Farmers prospered machinery to raise more crops. Farmers prospered during the war. After the war, Europeans had little during the war. After the war, Europeans had little money to buy American farm products. After money to buy American farm products. After Congress raised tariffs, farmers could no longer sell Congress raised tariffs, farmers could no longer sell products overseas, and prices fell.products overseas, and prices fell.

C. C. President Coolidge twice vetoed a bill to aid the President Coolidge twice vetoed a bill to aid the farmers, fearing it would only make the situation farmers, fearing it would only make the situation worse. American farmers remained in a recession worse. American farmers remained in a recession throughout the 1920s.throughout the 1920s.


Why were farmers left out of the economic Why were farmers left out of the economic prosperity of the 1920s?prosperity of the 1920s?

(During wartime, the U.S. government had (During wartime, the U.S. government had encouraged farmers to produce more for food supplies encouraged farmers to produce more for food supplies needed in Europe. Farmers borrowed money at needed in Europe. Farmers borrowed money at inflated prices to buy new land and new machinery to inflated prices to buy new land and new machinery to raise more crops. Farmers prospered during the war. raise more crops. Farmers prospered during the war. After the war, Europeans had little money to buy After the war, Europeans had little money to buy American farm products. After Congress raised tariffs, American farm products. After Congress raised tariffs, farmers could no longer sell products overseas, and farmers could no longer sell products overseas, and prices fell. The farmers had technological advances prices fell. The farmers had technological advances that enabled them to increase production, but that enabled them to increase production, but because there was no increase in demand, they were because there was no increase in demand, they were forced to lower prices.)forced to lower prices.)

III. Promoting Prosperity III. Promoting Prosperity

A. A. Andrew Mellon, named secretary of Andrew Mellon, named secretary of treasury by President Harding, reduced treasury by President Harding, reduced government spending and cut the federal government spending and cut the federal budget. The federal debt was reduced by $7 budget. The federal debt was reduced by $7 billion between 1921 and 1929.billion between 1921 and 1929.

B. B. Secretary Mellon applied the idea of Secretary Mellon applied the idea of supplysupply--side economics side economics to reduce taxes. to reduce taxes. Named the Mellon Bills. This idea suggested Named the Mellon Bills. This idea suggested that lower taxes would allow businesses and that lower taxes would allow businesses and consumers to spend and invest their extra consumers to spend and invest their extra money, resulting in economic growth. In the money, resulting in economic growth. In the end, the government would collect more end, the government would collect more taxes at a lower rate.taxes at a lower rate.


How did the Harding administration encourage economic How did the Harding administration encourage economic growth in the United States?growth in the United States?

(Secretary of the Treasury Andrew Mellon refinanced the (Secretary of the Treasury Andrew Mellon refinanced the national debt to lower the interest on it and persuaded the national debt to lower the interest on it and persuaded the Federal Reserve to lower interest rates as well. Mellon Federal Reserve to lower interest rates as well. Mellon reduced government spending and cut the federal budget. reduced government spending and cut the federal budget. Mellon applied the idea of supply-side economics to reduce Mellon applied the idea of supply-side economics to reduce taxes. This idea suggested that lower taxes would allow taxes. This idea suggested that lower taxes would allow businesses and consumers to spend and invest their extra businesses and consumers to spend and invest their extra money, resulting in economic growth. In the end, the money, resulting in economic growth. In the end, the government would collect more taxes at a lower rate. government would collect more taxes at a lower rate. Secretary of Commerce Herbert Hoover attempted to Secretary of Commerce Herbert Hoover attempted to balance government regulation with cooperative balance government regulation with cooperative individualism. Manufacturers and distributors were asked to individualism. Manufacturers and distributors were asked to form their own trade associations and share information form their own trade associations and share information with the federal government’s Bureau of Standards. Hoover with the federal government’s Bureau of Standards. Hoover felt this would reduce waste and costs and lead to economic felt this would reduce waste and costs and lead to economic stability.)stability.)

IV. The Long Bull Market IV. The Long Bull Market

A. A. The The stock market stock market was established as a system for was established as a system for buying and selling shares of companies. A long period buying and selling shares of companies. A long period of rising stock prices is known as a of rising stock prices is known as a bull market. bull market. Prosperous times during the 1920s caused many Prosperous times during the 1920s caused many Americans to invest heavily in the stock market.Americans to invest heavily in the stock market.

B. B. As the bull market continued to go up, many As the bull market continued to go up, many investors bought stocks on investors bought stocks on margin, margin, making a small making a small cash down payment. This was considered safe as long cash down payment. This was considered safe as long as stock prices continued to rise. If the stock began to as stock prices continued to rise. If the stock began to fall, the broker could issue a fall, the broker could issue a margin call margin call demanding demanding that the investor repay the loan immediately.that the investor repay the loan immediately.

C. C. In the late 1920s, new investors bid prices up In the late 1920s, new investors bid prices up without looking at a company’s earnings and profits. without looking at a company’s earnings and profits. Speculation Speculation occurred when investors bet on the occurred when investors bet on the market climbing and sold whatever stock they had in market climbing and sold whatever stock they had in an effort to make a quick profit.an effort to make a quick profit.


Why were stock market investors Why were stock market investors in the 1920s sensitive to any fall in the 1920s sensitive to any fall in stock prices?in stock prices?

(Investors were uneasy about any (Investors were uneasy about any fall in the price of stocks because fall in the price of stocks because it meant they might be unable to it meant they might be unable to make money quickly to repay make money quickly to repay their loans.)their loans.)

Why did all these combined destroy Why did all these combined destroy the economy the economy ??

1. Overproduction. 1. Overproduction. 2. Declining demand for products. 2. Declining demand for products. 3. "Junk Stocks."3. "Junk Stocks." 4. Speculative Investing. 4. Speculative Investing. 5. Poor Banking Practices. 5. Poor Banking Practices. 6. Declining prices and demand for crops. 6. Declining prices and demand for crops. 7. Unemployment due to technology. 7. Unemployment due to technology. 8. Installment buying.8. Installment buying. You will write a letter/political cartoon You will write a letter/political cartoon

from a point of view explaining the from a point of view explaining the problemsproblems

1. Farmer in the Midwest 1. Farmer in the Midwest 2. Widow with six children in a city 2. Widow with six children in a city 3. Wife of a factory worker who has been laid off 3. Wife of a factory worker who has been laid off 4. Small businessman4. Small businessman

V. TheV. The Great Great CrashCrash

A. A. By late 1929, a lack of new investors in By late 1929, a lack of new investors in the stock market caused stock prices to drop the stock market caused stock prices to drop and the bull market to end.and the bull market to end.

B. B. As stockbrokers advised their customers As stockbrokers advised their customers of margin calls, customers responded by of margin calls, customers responded by placing their stocks up for sale, causing the placing their stocks up for sale, causing the stock market to plummet further. Stock stock market to plummet further. Stock prices fell drastically on October 29, 1929, prices fell drastically on October 29, 1929, Black Tuesday, Black Tuesday, resulting in a $10 to $15 resulting in a $10 to $15 billion loss in value. While this billion loss in value. While this did not cause did not cause the Great Depressionthe Great Depression, it did undermine the , it did undermine the economy’s ability to hold out against its other economy’s ability to hold out against its other weaknesses.weaknesses.

C. C. The stock market crash weakened the The stock market crash weakened the nation’s banks. Banks lost money on their nation’s banks. Banks lost money on their investments, and speculators defaulted on investments, and speculators defaulted on loans. Because the government did not loans. Because the government did not insure bank deposits, customers lost their insure bank deposits, customers lost their money if a bank closed. Bank runs resulted money if a bank closed. Bank runs resulted as many bank customers withdrew their as many bank customers withdrew their money at the same time, causing the bank to money at the same time, causing the bank to collapse. YouTube - It's A Wonderful Life bank collapse. YouTube - It's A Wonderful Life bank runrun


How did the stock market crash How did the stock market crash weaken the nation’s banks?weaken the nation’s banks?

(The stock market crash caused the (The stock market crash caused the banks to lose money on their banks to lose money on their investments, and speculators investments, and speculators defaulted on bank loans. Because the defaulted on bank loans. Because the government did not insure bank government did not insure bank deposits, customers lost their money if deposits, customers lost their money if a bank closed. Bank runs resulted as a bank closed. Bank runs resulted as many bank customers withdrew their many bank customers withdrew their money at the same time, causing the money at the same time, causing the bank to collapse.)bank to collapse.)

World Wide World Wide DepressionDepression The depression that began in the United The depression that began in the United

States in 1929 went around the world in the States in 1929 went around the world in the years that followed. years that followed.

By 1932, more than 30 million people could By 1932, more than 30 million people could not find a job. That same year, industrial not find a job. That same year, industrial production worldwide was 38 percent less production worldwide was 38 percent less than it had been in 1929. than it had been in 1929.

Just as in the U.S., unemployment rates in Just as in the U.S., unemployment rates in Germany and Great Britain reached 25 Germany and Great Britain reached 25 percent in 1932. In Germany that meant that percent in 1932. In Germany that meant that over 5.5 million people were out of work.over 5.5 million people were out of work.

What should the Government What should the Government do?do?

OK, if you were in charge what OK, if you were in charge what would you do to help.would you do to help.

Brainstorm with a group and then Brainstorm with a group and then come up with 4-5 solutions to the come up with 4-5 solutions to the Depression.Depression.

What caused the Great What caused the Great Depression to become a Depression to become a worldwide event?worldwide event? Some economists say that the fact that there was an Some economists say that the fact that there was an

international monetary system tied to the price of gold international monetary system tied to the price of gold made the different economies closely related. Problems made the different economies closely related. Problems in one large economy were passed on to others and in one large economy were passed on to others and eventually back to the country where the problems eventually back to the country where the problems began. began.

Others point to the fact that a trade war developed. Others point to the fact that a trade war developed.

Throughout the 1920s, American farmers exported Throughout the 1920s, American farmers exported commodities worth an average of almost $2 billion a commodities worth an average of almost $2 billion a year. Avg exports accounted for 42% of all U.S. exports. year. Avg exports accounted for 42% of all U.S. exports. During the 1930s, avg exports dropped by almost two-During the 1930s, avg exports dropped by almost two-thirds to $765 million and accounted for only 32% of thirds to $765 million and accounted for only 32% of exports. In part, the drop was caused by protective exports. In part, the drop was caused by protective tariffs that were imposed on foreign products and the tariffs that were imposed on foreign products and the tariffs other countries imposed in retaliation. tariffs other countries imposed in retaliation.

VII. The Depression VII. The Depression Worsens Worsens A. A. By 1933 thousands of banks had By 1933 thousands of banks had

closed and millions of American workers closed and millions of American workers were unemployed. Unemployed workers were unemployed. Unemployed workers often stood at often stood at bread lines bread lines to receive to receive free food or at free food or at soup kitchens soup kitchens where where private charities gave a free meal to the private charities gave a free meal to the poor.poor.

B. B. Americans unable to pay their Americans unable to pay their mortgage or rent lost their homes. mortgage or rent lost their homes. Those unable or unwilling to move had a Those unable or unwilling to move had a court-ordered eviction notice delivered court-ordered eviction notice delivered by a court officer or by a court officer or bailiff bailiff who forced who forced nonpaying tenants out onto the street.nonpaying tenants out onto the street.

C. C. Many of the homeless built shacks in Many of the homeless built shacks in shantytowns, shantytowns, which they referred to which they referred to as as “Hoovervilles” “Hoovervilles” because they because they blamed the president for their financial blamed the president for their financial trouble. trouble. Hobos, Hobos, or homeless Americans or homeless Americans who wandered around hitching rides on who wandered around hitching rides on railroad cars, searched for work and a railroad cars, searched for work and a better life.better life.

YouTube - The Great Depression YouTube - The Great Depression (Britannica.com)(Britannica.com)

DUST BOWLDUST BOWL

D. D. As crop prices dropped in the 1920s, As crop prices dropped in the 1920s, many American farmers left their fields many American farmers left their fields uncultivated.uncultivated.

A terrible drought in the Great Plains, A terrible drought in the Great Plains, beginning in 1932, caused the region to beginning in 1932, caused the region to become a become a “Dust Bowl.”“Dust Bowl.”

E. “The OKIES” E. “The OKIES” Many Midwestern Many Midwestern farmers and Great Plains farmers lost farmers and Great Plains farmers lost their farms. Many families moved west their farms. Many families moved west to California hoping to find a better life, to California hoping to find a better life, but most still faced poverty and but most still faced poverty and homelessness.homelessness.

YouTube - U.S. Dust Bowl of 1930'sYouTube - U.S. Dust Bowl of 1930's


What happened to unemployed workers and What happened to unemployed workers and Midwestern and Great Plains farmers during the Midwestern and Great Plains farmers during the Depression?Depression?

(Unemployed workers often went to bread lines or soup (Unemployed workers often went to bread lines or soup kitchens to receive free food. Americans unable to pay kitchens to receive free food. Americans unable to pay their mortgage or rent lost their homes. Many of the their mortgage or rent lost their homes. Many of the homeless built shacks in shantytowns. Hobos wandered homeless built shacks in shantytowns. Hobos wandered around hitching rides on railroad cars, searching for around hitching rides on railroad cars, searching for work and a better life. As crop prices dropped in the work and a better life. As crop prices dropped in the 1920s, many American farmers left their fields 1920s, many American farmers left their fields uncultivated. A terrible drought in the Great Plains, uncultivated. A terrible drought in the Great Plains, beginning in 1932, caused the region to become a beginning in 1932, caused the region to become a “Dust Bowl.” Many Midwestern farmers and Great Plains “Dust Bowl.” Many Midwestern farmers and Great Plains farmers lost their farms. Many families moved west to farmers lost their farms. Many families moved west to California hoping to find a better life, but most of them California hoping to find a better life, but most of them still faced poverty and homelessness.)still faced poverty and homelessness.)

IX. Escaping the IX. Escaping the Depression Depression

A. A. Americans escaped the hardships of the Americans escaped the hardships of the Depression by going to the movies and listening to Depression by going to the movies and listening to radio broadcasts. Stories tended to be about radio broadcasts. Stories tended to be about overcoming hardships and achieving success.overcoming hardships and achieving success.

B. Walt Disney B. Walt Disney produced the first feature-length produced the first feature-length animated film, animated film, Snow White and the Seven DwarfsSnow White and the Seven Dwarfs, in , in 1937. Other films, like 1937. Other films, like The Wizard of OzThe Wizard of Oz, , MrMr. . Smith Smith Goes to WashingtonGoes to Washington, and , and Gone with the WindGone with the Wind, , contained stories of triumph over adversity and contained stories of triumph over adversity and visions of a better life.visions of a better life.

C. C. Families gathered around the radio daily to hear Families gathered around the radio daily to hear news or listen to comedy shows like George Burns or a news or listen to comedy shows like George Burns or a dramatic series like the Lone Ranger. Melodramas, dramatic series like the Lone Ranger. Melodramas, called called soap operas, soap operas, became very popular with became very popular with housewives. Soap operas received their name housewives. Soap operas received their name because makers of laundry soaps often sponsored because makers of laundry soaps often sponsored them.them.


Why were movies and radio Why were movies and radio programs important during the programs important during the Depression? Depression?

(Movies and radio programs (Movies and radio programs allowed Americans to escape allowed Americans to escape their own lives and use their their own lives and use their imagination.)imagination.)

III. The Depression in Art III. The Depression in Art A. A. Homeless and unemployed Americans were the Homeless and unemployed Americans were the

subjects of art and literature during the 1930s. subjects of art and literature during the 1930s. Artists and writers tried to capture the real life Artists and writers tried to capture the real life drama of the Depression.drama of the Depression.

Thomas Hart Benton Thomas Hart Benton and and Grant Wood Grant Wood emphasized traditional American values in their emphasized traditional American values in their art.art.

B. John Steinbeck’s B. John Steinbeck’s 1939 novel 1939 novel The Grapes of The Grapes of Wrath Wrath told the story of an Oklahoma family fleeing told the story of an Oklahoma family fleeing the Dust Bowl to find a new life in California. the Dust Bowl to find a new life in California. Steinbeck, like many writers of this time, wrote of Steinbeck, like many writers of this time, wrote of poverty, misfortune, and social injustice.poverty, misfortune, and social injustice.

C. C. Novelist Novelist William Faulkner’s William Faulkner’s In his novels, he In his novels, he exposed hidden attitudes of Southern whites and exposed hidden attitudes of Southern whites and African Americans in a fictional Mississippi county.African Americans in a fictional Mississippi county.

XI. Hoover-too little too XI. Hoover-too little too latelate

A. A. In an effort to promote economic recovery, President In an effort to promote economic recovery, President Herbert Hoover held a series of conferences bringing Herbert Hoover held a series of conferences bringing together the heads of banks, railroads, big business, together the heads of banks, railroads, big business, labor, and government. Hoover received a pledge from labor, and government. Hoover received a pledge from industry to keep factories open and stop cutting wages.industry to keep factories open and stop cutting wages.

B. B. After the pledge failed, Hoover increased After the pledge failed, Hoover increased public public worksworks—government-financed building projects. Hoover —government-financed building projects. Hoover asked the nation’s governors and mayors to increase asked the nation’s governors and mayors to increase public works spending. At the same time, however, public works spending. At the same time, however, Hoover refused to increase government spending or Hoover refused to increase government spending or taxes. He feared that deficit spending would actually taxes. He feared that deficit spending would actually delay an economic recovery.delay an economic recovery.

C. C. Americans blamed the Republican Party for the Americans blamed the Republican Party for the Depression. As a result, in the midterm congressional Depression. As a result, in the midterm congressional elections of 1930, the Republicans lost 49 seats and elections of 1930, the Republicans lost 49 seats and their majority in the House of Representatives.their majority in the House of Representatives.


How did Hoover promote economic recovery? How did Hoover promote economic recovery? (President Herbert Hoover held a series of (President Herbert Hoover held a series of

conferences bringing together the heads of conferences bringing together the heads of banks, railroads, big business, labor, and banks, railroads, big business, labor, and government. Hoover received a pledge from government. Hoover received a pledge from industry to keep factories open and stop industry to keep factories open and stop cutting wages. After the pledge failed, Hoover cutting wages. After the pledge failed, Hoover increased public works to replace some increased public works to replace some construction jobs. Hoover asked the nation’s construction jobs. Hoover asked the nation’s governors and mayors to increase public works governors and mayors to increase public works spending. At the same time, however, Hoover spending. At the same time, however, Hoover refused to increase government spending or refused to increase government spending or taxes. He feared that deficit spending would taxes. He feared that deficit spending would actually delay an economic recovery.)actually delay an economic recovery.)

XII. Pumping Money Into the XII. Pumping Money Into the Economy Economy A. A. President Hoover tried to President Hoover tried to

persuade the Federal Reserve Board persuade the Federal Reserve Board to put more currency into to put more currency into circulation, but the Board refused.circulation, but the Board refused.

B. B. Hoover set up the National Credit Hoover set up the National Credit Corporation (NCC), which created a Corporation (NCC), which created a pool of money to rescue banks, but pool of money to rescue banks, but it was not enough to help.it was not enough to help.

C. C. By 1932 Hoover felt the government had to By 1932 Hoover felt the government had to provide funding for borrowers. He asked provide funding for borrowers. He asked Congress to set up the Congress to set up the Reconstruction Finance Reconstruction Finance Corporation Corporation (RFC) to make loans to banks, (RFC) to make loans to banks, railroads, and agricultural institutions. The railroads, and agricultural institutions. The economy continued to decline when the RFC was economy continued to decline when the RFC was too cautious in its loan amounts.too cautious in its loan amounts.

D. D. Hoover opposed the federal government’s Hoover opposed the federal government’s participation in participation in reliefrelief—money that went directly —money that went directly to very poor families. He felt relief was the to very poor families. He felt relief was the responsibility of state and local governments.responsibility of state and local governments.

E. E. In July 1932, Congress passed the Emergency In July 1932, Congress passed the Emergency Relief and Construction Act to get money for Relief and Construction Act to get money for public works and for loans to the states for direct public works and for loans to the states for direct relief.relief.


What actions did President Hoover take to try to What actions did President Hoover take to try to pump money back into the American economy? pump money back into the American economy?

(Hoover tried to persuade the Federal Reserve (Hoover tried to persuade the Federal Reserve Board to put more currency into circulation, but Board to put more currency into circulation, but the Board refused. Hoover set up the National the Board refused. Hoover set up the National Credit Corporation (NCC), which created a pool of Credit Corporation (NCC), which created a pool of money to rescue banks, but it was not enough to money to rescue banks, but it was not enough to help. Hoover asked Congress to set up the help. Hoover asked Congress to set up the Reconstruction Finance Corporation to make Reconstruction Finance Corporation to make loans to banks, railroads, and agricultural loans to banks, railroads, and agricultural institutions. The economy continued to decline institutions. The economy continued to decline when the RFC was too cautious in its loan when the RFC was too cautious in its loan amounts.)amounts.)

XIII. In an Angry Mood XIII. In an Angry Mood A. A. By 1931 discontentment over the By 1931 discontentment over the

economy led to violence. Looting, rallies, economy led to violence. Looting, rallies, and hunger marches began. During a and hunger marches began. During a hunger march at the nation’s capital, hunger march at the nation’s capital, police denied protestors food, water, and police denied protestors food, water, and medical treatment. Congress intervened, medical treatment. Congress intervened, stressing the marchers’ right to petition stressing the marchers’ right to petition their government. Congress permitted their government. Congress permitted them to march on to Capitol Hill.them to march on to Capitol Hill.

B. B. Between 1930 and 1934, creditors Between 1930 and 1934, creditors foreclosed, foreclosed, or took possession of, or took possession of, almost a million farms. Some farmers almost a million farms. Some farmers destroyed their crops, hoping the destroyed their crops, hoping the reduction in supply would cause the reduction in supply would cause the prices to go up.prices to go up.

C. C. In 1924 Congress enacted a $1,000 bonus In 1924 Congress enacted a $1,000 bonus to be paid to veterans in 1945. In 1931 a bill to be paid to veterans in 1945. In 1931 a bill was introduced in the House that authorized was introduced in the House that authorized early payment of the bonus. In 1932 theearly payment of the bonus. In 1932 the “Bonus Army” “Bonus Army” marched to Washington, D.C., marched to Washington, D.C., to ask Congress to approve the legislation.to ask Congress to approve the legislation.

D. D. After Hoover refused to meet with the After Hoover refused to meet with the Bonus Army, and the Senate voted the new Bonus Army, and the Senate voted the new bonus bill down, some of the marchers left. bonus bill down, some of the marchers left. Some marchers stayed, moving into deserted Some marchers stayed, moving into deserted buildings in Washington, D.C. When Hoover buildings in Washington, D.C. When Hoover ordered the buildings cleared, disputes ordered the buildings cleared, disputes between the remaining people and the police between the remaining people and the police (and later the army) resulted in several deaths.(and later the army) resulted in several deaths.


What positive things did Hoover do as What positive things did Hoover do as president? president?

(Hoover did more to expand the role of (Hoover did more to expand the role of the federal government than any the federal government than any previous president. His authorization of previous president. His authorization of the Reconstruction Finance Corporation the Reconstruction Finance Corporation was the first time an American president was the first time an American president had used federal power to intervene in had used federal power to intervene in the economy during peacetime.)the economy during peacetime.)

Who can stop the Who can stop the Madness?????Madness?????

FDR can FDR can

The Great Depression. Keeping track of causes As we go over the causes keep a chart in your notes so you will have easy access to the causes of the Great.

Documents

new products

new role

american attitudes

economic boom

great depression slide

shorter workdays

modern era

higher wages