1. What were the causes of the Great Depression? a.Stock Speculation b.Weak Banking System c.Economic Policies d.Overproduction of Goods e.Decline in the Farming Industry a. Stock Speculation: People over speculated on stocks, using borrowed money (bought on margin) that they could not repay when stock prices crashed, and the banks demanded payment. October 29, 1929 • Black Tuesday Bank Panic in New York City b. Weak Banking System: The Federal Reserve Board failed to prevent the collapse of the banking system. - Many people had bought on credit for consumer goods and on margin for stock purchases. These loans could not be repaid. In one of the largest pea camps in California. February, 1936. • c. Economic Policies: When President Hoover enacted tariffs on European goods, these same nations enacted retaliatory tariffs on the goods from the United States. -High tariffs strangled and discouraged international trade. -In addition, President Hoover believed it was not the role of the government to control the economy, and he called on local charities and local governments to help the needy. • Unemployed men vying for jobs at the American Legion Employment Bureau in Los Angeles during the Great Depression d. Overproduction of Goods: Farmers and factories had been producing a surplus for the war. -Prices for farm products fell so low that it cost farmers more to grow crops than they could make selling them. -Also, the markets were flooded with consumer goods that Americans could no longer afford. e. Decline in the Farming Industry: Farmers could no longer repay loans because overproduction caused the prices for farm products to fall. In addition, farming techniques no longer supported farming in much of the southern Great Plains. Farm Foreclosures • The grasses that had held the soil together had been "busted" up in order to plant wheat. When the years of drought occurred, the soil could not hold up against the powerful dust storms that moved thousands of acres of topsoil hundreds of miles away. • This area was nicknamed the Dust Bowl, and thousands of farm families were forced off their farms for good. 2. How were Americans impacted by the Great Depression? Squatter's Camp, Route 70, Arkansas, October, 1935. a. A large number of banks and businesses failed. b. One-fourth of workers were without jobs. Brother can you spare a dime? http://www.youtub e.com/watch?v=CVE 72Ae82Tw Brother, Can You Spare a Dime? (1932) They used to tell me I was building a dream And so I followed the mob. When there was earth to plow or guns to bear, I was always there, right on the job. They used to tell me I was building a dream With peace and glory ahead -Why should I be standing in line, just waiting for bread? Once I built a railroad, I made it run, Made it race against time. Once I built a railroad, now it's done -Brother, can you spare a dime? Once I built a tower, up to the sun, brick and rivet and lime. Once I built a tower, now it's done -Brother, can you spare a dime? Once in khaki suits, gee, we looked swell Full of that Yankee Doodle-de-dum. Half a million boots went slogging through hell, And I was the kid with the drum. Say, don't you remember they called me Al, It was Al all the time. Why don't you remember, I'm your pal -Say, buddy, can you spare a dime? c. Large numbers of people were hungry and homeless. They lived in makeshift communities called "Hoovervilles." Hoover Takes Action • At first, President Hoover was against offering direct government relief. • Instead, he asked private charities such as the YMCA, to help. d. Farmers' incomes fell to low levels, and many left their farms for good. This sector of the economy was the hardest hit. The Bonus Army • World War I veterans were due to be paid a bonus in 1945. • In 1932, over 20,000 jobless veterans protested in Washington, D.C. demanding immediate payment. World War I veterans block the steps of the Capital during the Bonus March, July 5, 1932 seeking early payment of a bonus scheduled for 1945 assembled in Washington to pressure Congress and the White House. Hoover resisted the demand for an early bonus. Veterans benefits took up 25% of the 1932 federal budget. Even so, as the Bonus Expeditionary Force swelled to 60,000 men, the president secretly ordered that its members be given tents, cots, army rations and medical care. Handpainted sign on Bonus Army truck states: "We Done a Good Job in France, Now You Do a Good Job in America" • In clashes with police, four veterans were killed. • Hoover ordered General Douglas MacArthur to clear out the veterans using cavalry, tanks, tear gas and machine guns. * The brutal treatment of the Bonus Army lowered Hoover’s popularity even further. The nation was poised for a new leader to lead them out of the depression. The United States Army burned this and similar camps to the ground after routing the many thousands of protestors that were camped out in the national capital with tanks, tear gas, and troops of armed soldiers. (July 28, 1932) Most people resorted to building residences out of box wood, cardboard, and any scraps of metal they could find. Some individuals even lived in sewer mains. Great Depression: Impact on Americans All Graphs from: www.digitalhistory.uh.edu/historyonline/us34.cfm Great Depression: Stock Prices Stock Prices Sep. 3, 1929 Nov. 13, 1929 American Telephone General Electric General Motors New York Central Radio U.S. Steel 1932 Low 304 197 1/4 70 1/4 396 1/4 168 1/2 34 72 3/4 36 7 5/8 256 3/8 160 8 3/4 101 261 26 150 2 1/2 21 1/4 1. What does this chart tell you about stock prices before and after the stock market crashed? Great Depression: Unemployment Rate Average Unemployment Rate 1879-89 8 percent 10 percent 1889-99 1899-1909 4 percent 1909-19 4 percent 1919-29 4 percent 1929-39 18 percent 1939-49 5 percent 1949-59 4 percent 1959-69 5 percent 1969-79 6 percent 2. What does this chart tell you about workers? Great Depression: Bank Failures Bank Failures 1929 659 1930 1,352 1931 1,456 1932 2,294 1933 5,190 3. What does this chart tell you about the number of banks (and businesses) that failed? Great Depression: Unemployment Unemployment as Percentage of the Labor Force 1900 5 percent 1910 5.9 percent 1920 4 percent 1925 4 percent 1929 3.2 percent 1930 8.7 percent 1932 23.6 percent 1933 24.9 percent 1934 21.7 percent 1935 20.1 percent 1936 16.9 percent 1937 14.3 percent 1938 19 percent 1939 17.2 percent 1940 14.6 percent 1950 5 percent 4. What does this chart tell you about people’s lives up until 1940? Great Depression: Family Income Family Income, 1929 over $10,000 2.3 percent $5,000-10,000 8 percent 2,500-$5,000 19 percent $2,000-2,500 11 percent $1,500-2,000 18 percent $1,000-1,500 21 percent under $1,000 21 percent 5. What does this chart tell you about families? • A large number of banks and businesses closed. • 25 % of workers were without jobs. • Large numbers of people were homeless and living in poverty. • Household incomes fell to low levels. In 1932, Franklin D. Roosevelt was Elected President • FDR offered Americans a “New Deal ”. FDR Gave Many Americans Hope. "The only thing we have to fear is fear itself..." 3. What were the major features of the New Deal? “New Deal Rhythm” – Political Propaganda http://www.youtub e.com/watch?v=Vn 0QN5zXz9w President Roosevelt won in a landslide election. -He used government programs to help the nation recover from the Great Depression in his "New Deal for Americans". 1933 - "We're in the Money" http://www.youtube.com/wat ch?v=UJOjTNuuEVw $$$ We're in the money $$$ We're in the money, We're in the money; We've got a lot of what it takes to get along! We're in the money, The sky is sunny; Old Man Depression, you are through, You done us wrong! We never see a headline 'Bout breadline, today, And when we see the landlord, We can look that guy right in the eye . We're in the money Come on, my honey Let's spend it, lend it, Send it rolling around! All: We're in the money, We're in the money; We've got a lot of what it takes to get along! We're in the money, The sky is sunny; Old Man Depression, you are through, You done us wrong! We never see a headline 'Bout breadline, today, And when we see the landlord, We can look that guy right in the eye. Look that guy right in the eyeLook that guy right in the eyeWe're in the money Come on, my honey Let's spend it, lend it, send itLet's spend it, lend it, send it Rolling, rollingRolling around! Additional Verse Gone are my blues, And gone are my tears; I've got good news To shout in your ears. The silver dollar has returned to the fold, With silver you can turn your dreams to gold! Hundred Days • In the first onehundred days, FDR and Congress enacted many programs to directly aid Americans. • Hoover eventually set up public works programs, where the government hired people to construct schools, dams and highways. The New Deal included these programs: CCC TVA AAA NRA SSA FDIC WPA PWA a. Federal Work Programs - CCC - PWA - WPA CCC: Civilian Conservation Corps Provided jobs for young men to plant trees and build bridges. PWA: Public Works Administration • Built ports, schools, bridges, dams, and aircraft carriers. http://www-tc.pbs.org/wnet/wp-content/blogs.dir/10/files/2009/06/pwa3.jpg WPA: Works Progress Administration: Built hospitals, schools, parks, airports, and employed artists, writers, musicians. b. Environmental Improvement Programs: TVA: Tennessee Valley Authority Built dams to provide cheap electric power to southern states. Fort Loudon Dam, Tennessee. c. Farm Assistance Programs • AAA: Agricultural Adjustment Act • Paid farmers not to grow crops. http://www.tamu.edu/upress/BOOKS/2005/bigvolanto.jpg d. Increased Rights for Labor NRA: National Recovery Act • Helped set standards for production, prices, and wages. http://www.iss.k12.nc.us/schools/nihs/smeyer /USAnra.jpg e. Safety Net • SSA: Social Security Act • Set up a system of pensions for elderly, unemployed, and people with disabilities. SSA: Social Security ActSet up a system of pensions for elderly, unemployed, and people with disabilities.) f. Banking Safety • FDIC: Federal Deposit Insurance Corporation • Insured savings accounts in banks. http://www.sanfranciscosentinel.com/wpcontent/uploads/2009/03/fdic-cartoon-2-2.jpg • Great Depression Images • http://www.youtube.com/watch?v=gplaqa2yRgg • What Caused the Great Depression? • http://www.youtube.com/watch?v=Ff1picZAWc0 • The Plow That Broke the Plains, ca. 1937 • http://www.youtube.com/watch?v=fQCwhjWNcH8 1. What is “stock speculation”? •Stock speculation is buying stock on margin (credit) 2. Why did so many Americans over speculate in the 1920’s? • Americans assumed that stocks values would keep going up and they would make the borrowed money back. 3. What are “import tariffs” and why would high tariffs discourage international trade? • Import tariffs are taxes on items shipped to our country. • High tariffs make the price of items go up and Americans lees like likely to buy them. 4. What happened to many banks and businesses when the stock market crashed? • Many banks and business went bankrupt and their employees lost their jobs. 5. What percentage of American workers could not find a job during the Great Depression? •25% or one fourth of Americans was out of work. 6. What is the job of the Federal Reserve? • The job of the Federal Reserve is to regulate the economy by controlling the flow of money into the banking system. It failed to do this in the 1920s.