Why?
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During the 1920s, the US felt an economic
boost from WWI.
Businesses did well
Wealth increased for many
Economy thrived
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So, what went wrong?
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over production of agriculture and industry
expansion of credit
financial speculation
agricultural crop failures
tariff barriers
laissez- faire
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Meant that businesses were producing goods
faster than US consumers could buy them.
Especially evident in agriculture
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Made it easier for people to borrow money to
buy goods
People’s debts increased as they borrowed
more than they saved
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Many people bought stocks on speculation
(making risky investments in hopes for a big
return)
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Dust Bowl
◦ For 1,000s of families in the Midwest, the
Depression was made even worse by an
environmental crisis known as the Dust Bowl.
◦ Land was damaged by poor farming techniques.
◦ In the early 30s, massive drought dried up the land.
◦ The Dust Bowl was a series of storms that hit the
Midwest causing enormous clouds of dust created
by the high winds.
◦ Destroyed areas and left them uninhabitable
◦ 100,000s of people were displaced
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Smoot–Hawley Tariff Act
◦ Raised US tariffs to a historically high level
◦ Discouraged trade among countries
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Government supported
Hands off approach to regulating economy
Trusted natural demands of the market would
keep economy strong
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over production of agriculture and industry
expansion of credit
financial speculation
agricultural crop failures
tariff barriers
laissez- faire
Set the stage for the pending economic
disaster- The Great Depression
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over production of agriculture and industry
expansion of credit
financial speculation
agricultural crop failures
tariff barriers
laissez- faire
Standard 7.7
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8.4 Identify the changes in social and cultural
life caused by the Great Depression and the
Dust Bowl
(i.e., Hoovervilles, Bonus Army, migrations,
worldwide economic depression, Democrat
victory in 1932, widespread poverty,
unemployment, religious revivalism).
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On October 29th, 1929, a date known as Black
Tuesday – The Stock Market crashed!
Prices dropped drastically.
Many who bought risky stocks lost
everything.
The Great Depression lasted for more than a
decade and remains the greatest economic
crisis in US history.
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Following the stock market crash of 1929, the
US economy unraveled.
People rushed to withdraw money from
banks.
By 1933, the money from nine million savings
accounts had vanished.
31,000 businesses failed.
People stopped investing in the stock market.
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At one point, ¼ people of working age did not
have a job. (25% then - what is it today?)
In 1928, only 1.5 million people in the US
were unemployed.
By 1932, over 12 million people became
jobless.
◦ Homeless
◦ Relied on soup kitchens and breadlines
◦ Homemade shacks – Hoovervilles
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The Great Depression affected nations around
the world.
By the 1930s, manufacturing, international
banking, and trade had made nations
interdependent.
Economic trouble in one country means
economic trouble in others.
Which country was probably the worst off
after WWI and why?
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Unemployment and fear of losing a job
caused despair and great anxiety
Farmers and their families suffered b/c of low
food prices
Men – depressed b/c couldn’t support
families
Women – worried about how to feed children
(gender roles?)
Minorities suffered – often first to be let go
Factory workers – often laid off and had
wages decreased
Increase of
unemployment
Bankruptcy
Increase of
business
failures
Decrease of
price level
Excess
inventory
Prepossession
Decrease of
production
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Herbert Hoover
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Became scapegoat for the Great Depression
Tried to get some public works up and going
but did not succeed ins slowing the
Depression down
Believed that charities and local organizations
should help people
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Thousands of people moved in order to find
work, food, or shelter
Many farmers and families moved to
California to escape the Dust Bowl
African Americans continued to leave the
South due to discrimination and lack of jobs
People moved to cities like New York and
Boston, hoping to find work.
Others were forced to move because their
business failed or they went bankrupt.
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Some families were
forced to live in shanty
towns
◦ A grouping of shacks
and tents in vacant lots
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They were referred to
as “Hooverville”
because of President
Hoover’s lack of help
during the depression.
“The Dust Bowl”
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In 1924, Congress had promised veterans a
bonus to be paid in 1945.
In the Spring of 1932, thousands of veterans
marched to Washington, DC, in what became
known as the Bonus Army March.
They marched on the Capitol demanding
early payment of their bonuses.
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Hoover ordered federal troops to remove the
marchers who refused to leave.
General Douglas MacArthur used force to try
to move the marchers and his men ended up
killing women and children.
This further damaged Hoover’s image of an
uncaring President.
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1933-45
“the only thing we have to fear is fear itself”
Image of hope for Americans
First President to use the radio to his
advantage – ‘fireside chats’
Helped to instill confidence and succeeded in
getting people to redeposit their money into
banks
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When he was
inaugurated, poor
sections (like
Harlem) had 50%
of the pop.
unemployed
Instated the “New
Deal”
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Civilian Conservation Corps – CCC
Provided jobs for young men to work on
parks, flood control, and reforestation
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Tennessee Valley Authority – TVA
Built dams to provide electricity, control
floods, reclaim lands, and introduce scientific
farming methods to southern states;
Set up schools and health centers
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Indian Reorganization Act
Purpose – to conserve Indian lands
◦ ‘Indian New Deal’ ‘Indian Raw Deal’
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Public Works Administration – PWA
Built schools, ports, aircraft carriers
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Federal Deposit Insurance Corporation
FDIC
Insured savings accounts in banks approved
the government
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Works Progress Administration – WPA
Employed artists and writers as well as people
to build hospitals, schools, parks, and
airports
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Social Security Act -SSA
Set up pensions and insurance for elderly or
disable workers
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Fair Labor Standards Act – FLSA
Established minimum wages and maximum
hours for businesses engaged in interstate
commerce
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Although FDR’s New Deal was a revolutionary
approach to government, it actually failed to
end the Great Depression. On the eve of
World War II, much of the nation was still
unemployed and the economy was still
hurting.
So, what ended the Great Depression?
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World War II (1939-45)