UNIT 6 Chapter 22 – Crash and Depression Chapter 23 – The New Deal THE GREAT DEPRESSION Presidents of the United States George Washington; Federalist (1788) #21 - … John Adams; Federalist (1796) Chester A. Arthur; Republican (1881) Thomas Jefferson (1800) Grover Cleveland; Democrat (1884) James Madison (1808) Benjamin Harrison; Republican (1888) James Monroe (1816) Grover Cleveland; Democrat (1892) John Quincy Adams (1824) William McKinley; Republican (1896) Andrew Jackson; Democrat (1828) Theodore Roosevelt; Republican (1901) Martin Van Buren; Democrat (1836) William Howard Taft; Republican (1908) William Henry Harrison; Whig (1840) Woodrow Wilson; Democrat (1912) John Tyler; Whig (1841) Warren G. Harding; Republican (1920) James K. Polk; Democrat (1844) Calvin Coolidge; Republican (1923) Zachary Taylor; Whig (1848) Herbert Hoover; Republican (1928) Millard Fillmore; Whig (1850) Franklin D. Roosevelt; Democrat (1932) Franklin Pierce; Democrat (1852) James Buchanan; Democrat (1856) Abraham Lincoln; Republican (1860) Andrew Johnson; Democrat (1865) Ulysses S. Grant; Republican (1868) Rutherford B. Hayes; Republican (1876) James Garfield; Republican (1880) America: Pathways to the Present Chapter 22 Crash and Depression (1929–1933) OBJECTIVES CORE OBJECTIVE: Analyze the causes and effects of the Great Depression Objective 6.1: What were the main causes of the Great Depression? Objective 6.2: Describe the social problems and struggles created by poverty during the Depression. Objective 6.3: How did Americans pull together to survive the Great Depression? Objective 6.4: Analyze the differences between President Hoover’s response to the Great Depression and Franklin Roosevelt’s promise for change. THEME: America: Pathways to the Present Chapter 22: Crash and Depression (1929–1933) Section 1: The Stock Market Crash Section 2: Social Effects of the Depression Section 3: Surviving the Great Depression Section 4: The Election of 1932 When the economy… The Market Crashes The market crash in October of 1929 happened very quickly. In September, the Dow Jones Industrial Average, an average of stock prices of major industries, had reached an all time high of 381. On October 23 and 24, the Dow Jones Average quickly plummeted, which caused a panic. On Black Tuesday, October 29, 1929, the stock market set a record for loss in value most people sold their stocks at a tremendous loss. 16.4 million shares were sold This collapse of the stock market in October 1929 is called the Great Crash. Overall losses totaled $30 billion. The Great Crash was part of the nation’s business cycle, a span in which the economy grows, and then contracts. Effects of the Great Crash, 1929 Great Crash World Payments Investors Investors lose millions. Businesses lose profits. Businesses and Workers Consumer spending drops. Businesses cut Workers investment are laid and production production. off. Some fail. Banks Businesses and workers cannot repay bank loans. Savings accounts are wiped out. Overall U.S. production plummets. Allies cannot pay debts to United States. U.S. investors have little or no money to or no invest. money to invest. Banks run out of money Europeans U.S. and fail. cannot investments afford in Germany Bank American decline. runs goods. occur. German war payments to Allies fall off. The Great Depression The economic contraction that began with the Great Crash triggered the most severe economic downturn in the nation’s history—the Great Depression. The Great Depression lasted from 1929 until the United States entered World War II in 1941. The stock market crash of 1929 did not cause the Great Depression. The Depression was the result of underlying problems with the country’s economy. Causes of the Depression An Unstable Economy The prosperous economy of the 1920s lacked a firm base. The nation’s wealth was unevenly distributed. Industry produced more goods than most consumers wanted or could afford. Overspeculation Speculators bought stocks with borrowed money and then pledged those stocks as collateral to buy more stocks. The stock market boom was based on borrowed money. Government Policies During the 1920s, the Federal Reserve cut interest rates to assist economic growth. In 1929, the Federal Reserve limited the money supply to discourage lending. There was too little money in circulation to help the economy after the Great Crash. JENGA! Social Effects of the Depression When the economy… Poverty Spreads People of all levels of society faced hardships during the Great Depression. Unemployed laborers, unable to pay their rent, became homeless. Sometimes the homeless built shacks of tar paper or scrap material. These shanty town settlements came to be called Hoovervilles. THE DUST BOWL Farm families suffered from low crop prices. As a result of a severe drought and farming practices that removed protective prairie grasses, dust storms ravaged the central Great Plains region. The Great Plains, stripped of its natural soil, was reduced to dust, became known as the Dust Bowl. The combination of the terrible weather and low prices caused about 60 percent of Dust Bowl families to lose their farms. Poverty Strains Society Impact on Health Some people starved and thousands went hungry. Children suffered from poor diet and medical care. Stresses on Families Living conditions declined as families crowded into apartments. Men felt like failures because they couldn’t provide for families. Working women were accused of taking jobs away from men. Discrimination Increases Competition for jobs produced a rise in hostilities against minorities Affected groups: African Americans, Hispanics, and Asian Americans. Lynchings increased. Aid programs discriminated against African Americans. Social Effects of the Depression—Assessment What factors contributed to disaster for farming families living in the Dust Bowl? (A) Drought (B) Farmers plowing under prairie grasses (C) Decreased prices for agricultural goods (D) All of the above The shanty towns made up of temporary shacks were called: (A) Roosevilles (B) Hoovervilles (C) Greenspans (D) Simpson towns Social Effects of the Depression—Assessment What factors contributed to disaster for farming families living in the Dust Bowl? (A) Drought (B) Farmers plowing under prairie grasses (C) Decreased prices for agricultural goods (D) All of the above The shanty towns made up of temporary shacks were called: (A) Roosevilles (B) Hoovervilles (C) Greenspans (D) Simpson towns