Chapter 7, Lesson 3
The Good Times End
Mr. Julian’s 5th Grade Class
Essential Question
•What were the
causes of the Great
Depression?
Places
• New York, New York
People
• Herbert Hover
Vocabulary
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Unemployment
Stock market
Great Depression
Credit
Beneath the Surface
• When Herbert Hoover was elected to President in
1928, the U. S. economy was the best it had ever
been.
• However, many farmers had to borrow money to
help feed the war effort during WW I.
• After the war, less food needed to be produced, yet
farmers need to sell the same amount of crops to
pay their debt.
Beneath the Surface
• Factories were also producing more goods than
people could buy.
• Factories began to lay off workers to save money.
• Unemployment is the condition of being out of
work.
• Other businesses were suffering as well.
The Stock Market Crash
• The good time ended when the stock market
crashed on October 29, 1929.
• Many people invest in companies in hope of making
a profit.
• These investments are called stocks and the stock
market is located in New York, New York.
The Stock Market Crash
• In September 1929 prices began to fall slowly,
causing many stockholders to sell their stocks.
• The selling of stocks causes the entire market to
drop.
• In October with the market already down, the
crash happened causing most investors to sell their
stocks.
• October 29, 1929 is known as “Black Tuesday.”
The Stock Market Crash
• As the stock market fell, billions of dollars
were lost. Many people lost all of their
money!
Causes of the Depression
• Within weeks of the stock market crash, the
entire country entered the Great Depression.
• The stock market crash was only one of the
many causes of the depression.
• One reason the crash caused panic was that
people bought stocks on credit, or borrowed
money.
Causes of the Depression
• The credit problem hurt many banks. When people
could not pay back their loans, banks went broke
as well. Many banks had to close.
• People heard of the banks closing and they rushed
to their bank to withdrawal their money.
• These banks did not have enough cash for every
customer and these banks had to close as well.
Causes of the Depression
• The last reason for the depression was the
high tariffs placed on farming goods.
• A tariffs is a tax placed on good that are
produced in other countries and sold in the
U.S.
Hard Times
• People began to cut back on their spending.
• Because fewer people were buying goods, more
businesses had to close placing more people out of
work, which lowered the economy even further.
• People that still had jobs had to take pay cuts.
• Because fewer people were working the government
received few taxes.
• Some schools had to close because there was not
any money to pay teachers.
Surviving the Depression
• The Great Depression changed the lives of millions.
• Most people could not find jobs, people delayed
getting married and having children.
• Families struggled to survive.
• Some children had to quit school to help the family
earn money.
Surviving the Depression
• Charity groups and local governments struggled to
help those in need.
• Hungry people stood in line for hours to get a piece
or two of bread and a bowl of soup.
• Homeless people built shelters out of cardboard or
other materials.
• Groups of these shelters became known as
“Hoovervilles.”
Surviving the Depression
• Empty pockets became know as “Hoover
Flags” and newspapers were called “Hoover
Blankets.”
The Election of 1932
• Most people blamed President Hoover for the Great
Depression.
• Hoover believed that the economy would just fix
itself.
• Franklin Delano Roosevelt promised to take bold
action to fight the depression.
• FDR won the election and many people had hope for
the first time since the beginning of the depression.
Timeline
• 1928 - Herbert Hoover was elected President
• 1929 - Many people lost all of their money when the
stock market crashed.
• 1932 - More than 25 percent of workers in the U.S.
were unemployed.
• 1932 - Franklin D. Roosevelt was elected President
after he promised bold action to fight the Great
Depression.
Writing Response
• In two or more paragraphs, explain the
reasons for the Great Depression.