Chapter 22 – The Great Depression Begins
Section One – The Nation’s Sick Economy
I.
II.
III.
Economic Troubles on the Horizon
a. Industries in Trouble
i. Key industries like ______________, textiles, _____________barely make profit
ii. Mining, lumbering expanded during war; no longer in ___________ demand
iii. _____________ especially hard-hit due to availability of new energy sources
iv. Boom industries—automobiles, construction, consumer goods— now weak
v. __________________ starts decline
b. Farmers Need a Lift
i. International demand for U.S. grain declines after war
- prices drop by _______% or more
ii. Farmers boost _______________________ to sell more; prices drop further
iii. Farm income declines; farmers default on loans; rural banks fail
iv. ______________________—government buys surplus crops, guarantees prices
- Coolidge vetoes price-support bill
c. Consumers Have Less Money to Spend
i. People buy ________________due to rising prices, stagnant wages, credit debts
d. Living on Credit
i. Many people buy goods on ____________credit (buy now, pay later)
ii. Businesses give easy credit; consumers pile up large debts
iii. Consumers have trouble paying off __________, cut back on spending
e. Uneven Distribution of Income
i. In 1920s, rich get richer, poor get poorer
ii. __________% of families earn less than minimum for decent standard of living
iii. Most cannot afford flood of products factories produce
Hoover Takes the Nation
a. The Election of 1928
i. Democrat Alfred E. Smith—four times governor of ______________________
ii. Republican ______________________________ gets overwhelming victory
b. Dreams of Riches in the Stock Market
i. ________________________ Industrial Average tracks state of stock market
ii. 1920s, stock prices ______________ steadily; people rush to buy stocks, bonds
iii. Many engage in ___________________, buy on chance of a quick profit
iv. Buying on ________________—pay small percent of price, borrow rest
The Stock Market Crashes
a. Black Tuesday
i. September 1929 stock prices peak, then fall; investors begin selling
ii. ___________________ or Black Tuesday, market, nation’s confidence plummet
iii. Shareholders sell frantically; ___________________of shares have no buyers
IV.
iv. People who bought on credit left with huge debts
v. Others lose most of their savings
Financial Collapse
a. Banks and Business Failures
i. Great Depression—economy plummets, unemployment skyrockets
- lasts from _____________________
ii. After crash, people panic, _________________ money from banks
iii. Banks that invested in stocks fail; people lose their money
iv. 1929–1932, gross national product cut nearly ______________
- ___________________ businesses go bankrupt
v. 1933, ____________% of workers jobless; those with jobs get cuts in hours, pay
b. Worldwide Shockwaves
i. Great Depression limits U.S. ability to import ___________________ goods
ii. _______________________ Tariff Act sets highest protective tariff ever in U.S.
iii. Other countries cannot earn American currency to buy U.S. goods
iv. International trade _______________; unemployment soars around world
c. Causes of the Great Depression
i. Factors leading to Great Depression:
- tariffs, _______________, farm problems, ________________, income
disparity
ii. Federal government keeps interest rates_____________, encourages borrowing
Section Two – Hardship and Suffering During the Depression
I.
The Depression Devastates People’s Lives
a. Depression in the Cities
i. People lose ________________, are evicted from homes
ii. ____________________, settlements consisting of shacks, arise in cities
iii. People dig through garbage, beg
iv. Soup kitchens offer free or low-cost food
v. _______________________—people line up for food from charities, public
agencies
vi. African Americans, Latinos have higher unemployment, lower pay
b. The Depression in Rural Areas
i. Most farmers can grow food for their families
ii. About ___________________ farms lost through foreclosure
- many become tenant farmers
c. The Dust Bowl
i. Farmers in _________________________ exhaust land through overproduction
ii. 1930s, drought, windstorms hit; soil scattered for ___________________ of
miles
II.
iii. _____________________— area from North Dakota to Texas that is hardest hit
iv. Many farm families migrate to ___________________________ states
Effects on the American Family
a. Hardship and the Family
i. ______________________ is source of strength for most Americans
ii. Some families break apart under strain of making ends meet
b. Men in the Streets
i. Many men used to working, supporting families have difficulty coping
- cannot find jobs
ii. About _______________________ hoboes wander country on railroad box cars
iii. No federal system of _____________________—cash or food from government
c. Women Struggle to Survive
i. Homemakers ____________________ carefully, can food, sew clothes
ii. Women work outside home; resented by __________________________ men
iii. Many women suffer in silence, ashamed to stand in bread lines
d. Children Suffer Hardships
i. Poor diets, health care lead to serious __________________________________
in children
ii. Lack of _____________ revenue leads to shortened school year, school closings
iii. Teenagers leave home, ride____________________ in search of work,
adventure
e. Social and Psychological Effects
i. 1928–1932, suicide rate rises over ________%
ii. Admissions to state mental hospitals ___________
iii. People give up health care, college, put off marriage, children
iv. __________________________ of poverty doesn’t disappear; financial security
becomes goal
v. Many show great _________________________ to strangers
vi. Develop habit of saving and ______________________________
Section Three – Hoover Struggles with the Depression
I.
Hoover Tries to Reassure the Nation
a. Hoover’s Philosophy
i. President Herbert Hoover tells Americans economy is _________________
ii. Many experts believe depressions a normal part of _______________________
iii. Hoover: government should foster cooperation between competing groups
iv. People should take care of own families, not ______________on government
b. Hoover Takes Cautious Steps
i. Calls meeting of business, banking, labor leaders to _______________problems
ii. Creates organization to help private _________________raise money for poor
II.
III.
c. Boulder Dam
i. Hoover’s Boulder Dam on Colorado River is massive project
- later renamed _____________________
ii. Provides ____________________, flood control, water to states on river basin
Hoover Takes Action
a. Democrats Win 1930 Congressional Elections
i. As economic problems increase, Hoover, ________________________ blamed
ii. Democrats win House; Republican Senate majority down to one vote
iii. Farmers try to create food shortages to ___________________________
iv. Widespread criticism of Hoover: shantytowns called “_____________________”
b. Hoover Backs Cooperatives
i. Hoover negotiates agreements among private entities
ii. Backs _______________________________ (organization of farm cooperatives)
- buy crops, keep off market until prices rise
iii. Gets large banks to establish ________________________________________
c. Direct Intervention
i. Federal Home Loan Bank Act lowers ________________________________
ii. Reconstruction Finance Corporation—emergency funds for
______________________
iii. Hoover’s measures don’t improve economy before presidential election
Gassing the Bonus Army
a. The Patman Bill Denied
i. ______________________—veterans go to D.C. in 1932 to support Patman Bill:
- want payment of bonus
ii. Hoover opposes bill; Senate votes down bill
iii. Most veterans leave Washington; about _____________________ stay to speak
to Hoover
b. Hoover Disbands the Bonus Army
i. Hoover fears violence, calls on U.S. Army to disband Bonus Army
ii. Infantry _____________________ over 1,000 people, including children; many
injured
iii. ____________________ is stunned, outraged by government’s actions