Causes of the Great Depression and the Dust Bowl

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The Great Depression and the Dust Bowl
Chapter 21
How did the Great Depression
happen, and how did Americans
respond to it?
Causes of the Depression
Section 1
 How did the prosperity of the 1920s give
way to the Great Depression?
 Vocabulary:
-Herbert Hoover
business cycle
-speculation
Great Depression
-Black Tuesday Hawley-Snoot Tariff
Standards
 SSUSH17
 The student will analyze the causes and consequences of the Great Depression.
 Element: SSUSH17.a
 Describe the causes including over production, under consumption, and stock market
speculation that led to the stock market crash of 1929 and Great Depression.
 Element: SSUSH17.b
 Explain the impact of the drought in the creation of the Dust Bowl.
 Element: SSUSH17.c
 Explain the social and political impact of widespread unemployment that resulted in
developments such as Hoovervilles.

Causes of the Depression
Prosperity Hides Troubles
Main Idea: In the late 1920s most Americans were confident in the
economy, but financial problems were starting to appear.
The Stock Market Crashes
Main Idea: By October of 1929, the stock market began to slide
downward and finally crashed, causing investors to lose millions of
dollars.
The Great Depression Begins
Main Idea: The stock market crash led to bank failures, business
shutdowns, unemployment, and eventually impacted the world
economy.
What Caused the Great Depression?
Main Idea: A combination of factors led to the Great Depression, but
there is still debate on the exact cause.
Danger Signs!
Herbert Hoover
 Mining engineer
 Secretary of Commerce for Harding and Coolidge
 Believed in cooperation between labor and
management
 Elected in 1928 as a Republican
 Economy seemed robust, but problems were under
the surface
Farm Problems
 Farmers made up ¼ of workforce
 Falling farm prices mean farmers could not pay off
debts incurred during World War I!
 Production remained high due to mechanization
 A series of draughts and other problems mean that
farmers have a very hard time surviving!
 Rural depression in the 1920s with farmers unable
to buy new consumer goods
Workers’ Problems
 Workers work long hours with wages inching up
only 8%
 Rich became much richer, while industrial workers
were less poor
Uneven prosperity of the 1920s
 The rich are getting richer while the poor are
getting poorer
 In 1929, 200 companies controlled 49% of US
industry. No free market competition!
 71% of Americans earn less than $2500/year
Income Distribution, 1929
$10,000+
$6,000-$9,999
$5,000-$5999
$4,000-$4,999
$3,000-$3,999
$2,000-$2,999
Under $1,999
Too many goods, too little demand
 Warehouses are full of goods that can’t be sold in a
saturated market. Which, by the way, is not helped
by isolationist approaches to international
diplomacy!
 Overproduction slows industry - without markets
for goods, producing more is just silly. So, we
produce less
Buying on credit
 Americans are buying goods whose value is more
than they can afford!
 Installment plans allow consumers to buy a good
and pay for it over time
 This increase of personal debt makes consumers
more dependant on an income – if there’s no
income, than they won’t be able to pay for the
goods they’ve already “bought”.
The Age of Credit Buying Begins in the 1920s
Remember that your monthly income is about $200,
and you must pay for rent, food, car, gas, utilities, etc. !!!
Vacuum Cleaner, $28.95
Refrigerator, $87.50
Washing Machine, $97.50
Bedroom Suite, $228.00
$2 down, $4 a month
$5 down, $10 a month
$5 down, $8 a month
$15 down, $15 a month
Easy Chair, $38.50
Sofa, $74.50
Piano, $445.00
$5 down, $5 a month
$5 down, $8 a month
$15 down, $12 a month
Phonograph, $43.50
Large Rug, $148.50
Corner Cabinet, $37.95
$5 down, $5 a month
$10 down, $15 a month
$5 down, $5 a month
GRAPH
Consumer Debt, 1921-1929
TRANSPARENCY
Political Cartoons: Stock Market Crash
Playing the Stock Market
 The market was advertised to new investors as a way
to “get rich quick”
 New investors did not learn about the potential
risks involved, and did not realize that the stocks
they owned could be devalued and were less safe
than if they had money in a bank!
Why is 1929 the year everything bad
happens?
 Speculation – investors gambling in stock market by




buying on margin
Black Tuesday, October 29, 1929, the bottom fell out
of the stock market
Stock market collapsed in the Great Crash
Business cycle – periodic growth and contraction of
the economy
Crash market the beginning of the Great
Depression, a period lasting from 1929 to 1941
“Everybody ought to be
rich”
Dow Jones
Industrial
Average
moves from
91 to 313
by March,
by
September
DJIA is up
to 381
Black
Thursday –
October 23.
The stock
markets
experience a
$3 Billion loss
in a single day!
Bankers pool
their money to
buy more
stock.
Stability is
important and
they hope
they can
help..
Black Tuesday
– October 29.
Investors pull
all their money
out of the
market if
possible.
Total Loss = $30 Billion
After the Great Crash…
Comes the DEPRESSION!!!
Banks Close
 -Banks closed their doors when they could
not
return the money that people had deposited
there…
 -But there was no consumer protection if money
was in a failed bank, so many people just lost all
their money and couldn’t do anything about it.
 -Misguided monetary policy – Federal Reserve had
too little money in circulation, resulting in banks
forced to close
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TRANSPARENCY
Progress Monitoring Transparency
Businesses Close and Unemployment
Rises
 Businesses closed plants and laid off workers
 In 1931, Ford closed several factories, putting 75,000
workers out of work
 Consumers spent less, so businesses cut production
even more
 By 1933, 25% of American workers were out of work
Other Problems of President Hoover
 Hawley-Smoot Tariff – highest import tax in history
backfires! Other countries raise their taxes also, results
in a slowdown of international trade
 Bonus Army – WWI veterans march on Washington, DC.
They wanted payment of bonus promised in 1945.
NOTE TAKING
Reading Skill: Recognize Causes
Effects on the World
 No American Investment in
Germany meant they could
not make reparations
payments, which meant the
Allies weren’t paying their
debts.
 Europeans could no longer
afford to buy American
goods
 Started a downward spiral
in the global economy…
DIAGRAM
Worldwide Depression
NOTE TAKING
Reading Skill: Recognize Sequence
Americans Face Hard Times
Section 2
 How did the Great Depression affect the
lives of urban and rural Americans?
 Vocabulary:
-bread line
Dust Bowl
-Hooverville
Okies
-tenant farmer repatriation
Americans Face Hard Times
Misery and Despair Grip America’s Cities
Main Idea: Millions of Americans lost their jobs and were affected by
poverty and hard times during the depression.
Poverty Devastates Rural America
Main Idea: Droughts caused those in rural areas to suffer even more
during the depression and many farmers who lost their land were forced to
migrate to new regions.
Few Americans Escape Hard Times
Main Idea: The depression touched almost all Americans in some way, as
poverty and suffering spread across the country.
Continued…
If there’s no way like the American way,
then what’s behind this box?
GRAPH
The 1930's American Economy
INFOGRAPHIC
Effects of the Great Depression
Effect on Families
 -Families all moved in together
 -The divorce rate significantly decreased; people
could not afford to live apart from their families
 -Companies would not hire women whose
husbands did not have jobs – they figured that
they’re more likely to move for the husband to
find work and did not want to invest in an
employee who would be temporary
 -bread lines - handouts
Hoovervilles
 The people lowest on the
economic ladder took the
hardest hit.
 In 1932, they estimated the
homeless in NY City alone
was 15,000.
 Homeless people built
shanty towns with tar
paper, cardboard, or scrap
metal. These came to be
known as Hoovervilles.
 The people blamed the
president for the crisis.
Poverty in Rural America
 Commodity prices plunge
 Many farmers lost farms and moved
 Between 1930 and 1934, nearly one million farmers
lost their farms
 Some became tenant farmers
The Dust Bowl
 -Extreme drought and dust storms through much of




the 1930s significantly harmed agricultural interests
-Living in the Midwest became extremely difficult!
-Okies – name for Dust Bowl refugees; most Okies
went to California, Oregon, or Washington
-Commercial farms grew
-Dams on western rivers brought irrigation to the
Great Plains
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TRANSPARENCY
Progress Monitoring Transparency
CHART
The Great Plains, 1929-1939
TRANSPARENCY
The Dust Bowl
Minorities
 U.S. government tightened the rules to obtain a
visa, targeting Mexican Americans
 More than 300,000 Mexicans and Mexican
Americans were coerced into leaving the U.S.
between 1930 and 1935
 African Americans were “were the last to be hired
and the first to be fired”
NOTE TAKING
Reading Skill: Categorize
Hoover’s Response Fails
Section 3
 Why did Herbert Hoover’s policies fail to
solve the country’s economic crisis?
 Vocabulary:
-localism
-RFC
-trickle-down economics
-Douglas MacArthur
Hoover Dam
Bonus Army
Hoover’s Response Fails
Cautious Response to Depression
Main Idea: Hoover originally responded to the depression by encouraging
volunteerism and asking local governments to intervene, but these methods
failed.
Hoover Adopts More Activist Policies
Main Idea: Hoover took stronger action and gave federal money to banks
and businesses, but little of this money reached the people.
Americans Protest Hoover’s Failures
Main Idea: Many Americans were unhappy with Hoover's response to the
depression. One group, known as the Bonus Army, led a protest march in
hopes of getting help from the government.
Herbert Hoover
 Hoover followed a
hands-off policy
 Volunteerism: asked
businesses to keep
employment at current
levels
 Asked government to
reduce taxes, lower
interest rates, and create
public-works programs;
volunteerism failed
NOTE TAKING
Reading Skill: Identify Supporting Details
TRANSPARENCY
Building the Hoover Dam
GRAPH
Hoover Dam Energy Use
Protests
 Some rejected capitalism and accepted socialism or




communism
Bonus Army marched on Washington; World War I
veterans who sought a bonus promised to them in
1945
20,000 camped out in Washington
Hoover ordered General Douglas MacArthur to
clear the veterans; used force, causing injuries
Ended Hoover’s chance for reelection in 1932
INFOGRAPHIC
The Bonus Army
Election of 1932
% of the
Popular
Vote
Electoral
College
Votes
Roosevelt
57.4
472
Hoover
39.7
59
 Roosevelt wins in 42
states with votes
from upset citizens,
while Hoover only
won 6 states!
Roosevelt’s first inaugural address:
March 4, 1933
The only thing we
have to fear is fear
itself…
Roosevelt’s “New Deal”
 His proposal to relieve the stresses of the Depression with
government involvement and several new agencies to protect
consumers and investors.
(more info coming later…)
Roosevelt’s Secret Weapon…
 His wife Eleanor – a very public figure involved in participating
in the life of the country and talking to the people
No one can make
you feel inferior
without your
consent…
You gain strength,
courage, and
confidence by
every experience in
which you really
stop and look fear
in the face…
Roosevelt’s Fireside Chats
 A series of Sunday night
radio addresses to the
nation
 Gave info on policy,
diplomacy, and current
issues
TRANSPARENCY
The Great Depression
PM
TRANSPARENCY
Progress Monitoring Transparency
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