SWBAT identify the causes of the Great Depression
Do Now: How important is the stock market to the
U.S. economy today? How do Americans
participate in the stock market?
BUDGET SCENARIOS
 Tell the students to read the directions at the top of the
page and complete the columns on the budget sheet for
1928. Tell students that when they finish, the students with
the budget card should read the card to the group. Then
the students should complete the columns for 1933 and
answer the questions that follow the table.
 Allow time for students to work. When students have
finished working, have a spokesperson from each group
tell the worker’s income in 1928, read the worker’s 1933
card and discuss the family’s budget changes.
QUESTIONS
1. In 1933, when your income decreased, why did the percentage of your
income spent on housing and perhaps other items increase?
2. Raise your hand if your group spent the same dollar amount on food in
1928 as you did in 1933.
3. What tradeoffs did you make in order to feed yourself and/or your family?
4. How would these spending decisions affect the economy?
5. Although in your role, you retained your job, one in every four (or 25%) of
the workforce was unemployed. What effect did this have on spending?
6. If you were unemployed, what choices might you have had to make?
7. If you had additional family members come to live with you in 1933, what
happened to the income per person—per capita income—for your family?
 The country experienced deflation, which is a decline in the
average price level. During the Great Depression, the prices of
goods and services decreased by nearly 30%.
 At first, this might seem like a good thing. But as our activity
showed, with lower prices, businesses such as textile mills,
railroads, farmers, car manufacturers and others earned less
revenue.
 With less revenue, businesses could not afford to pay people as
much and/or employ as many people. In the Great Depression, the
economy suffered unemployment as high as 25%, and wages fell.
 With wages decreasing and unemployment increasing, borrowers
were not able to repay loans. Loan defaults and bankruptcies
followed, which produced more bank failures and further declines
in output, prices and employment.
A LESSON IN BANKS
 The United States, along with most of rest of the world, has a
fractional reserve banking system. This means that banks take in
deposits and lend most of the money that they take in. The banks
keep only a fraction of deposits on reserve. Ordinarily, this system
works well, but it does depend on the willingness of people to hold
bank deposits.
 Because only a small fraction of the banks’ customers’ deposits are
kept on reserve, not everyone can get all of their money out of the
bank in cash on the same day. This is generally not considered a
problem because, under normal conditions, all of the banks’
customers do not wish to withdraw all of their funds at the same
time.
People and
businesses
borrow less
from banks.
People buy fewer
goods and services.
Businesses sell fewer
goods and services
because people have
less to spend.
Prices decline.
Business
Revenues
decline.
Businesses
are able to
buy fewer supplies
and equipment.
Businesses are unable to
employ as many workers,
they must pay workers
less or a combination of
both.
Workers who are paid
less or lose their jobs
may buy fewer goods
and services and may
be unable to repay
bank loans.
More banks fail, so the
economy's supply of
money and credit
shrinks. This causes a
decline in business
revenues, which leads
to more unemployment
and/or decreases in
wages.
CAUSES OF THE GREAT DEPRESSION
 Due to the previous activities findings, by the latter half of the 1920s the stock
market was running out of new customers. Professional investors sensed danger
and began to sell off their holdings. On October 29, 1929 on Black Tuesday,
prices took the steepest dive yet. That day stocks lost $10 to $15 billion in value.
The stock market crash was not the major cause of the Great Depression, but it
undermined the economy’s ability to hold out against its other weaknesses.
 Banking crisis
 Overproduction and low demand leads to employee layoffs
 Low wages reduce consumer buying power
 Unemployment reduces buying power further
 High tariffs restrict foreign demand for American goods (Smoot-Hawley Tariff
and other protectionist policies)
SWBAT describe how the Great Depression
affected American families
Do Now: Identify and explain two causes of
the Great Depression
THE DEPRESSION WORSENS
The Depression grew worse during President Hoover’s administration.
Thousands of banks failed. Thousands of companies went out of business.
Millions of Americans were unemployed. Many of the unemployed went
hungry. They joined bread lines to receive a free handout of food. They
lined up outside soup kitchens. These were private charities set up to give
poor people a meal.
Many people could not afford to pay their rent or mortgage and lost
their homes. Those who could not or would not move were given an
eviction notice. Court officials called bailiffs threw them and their
belongings in the street. Many of these homeless people put up shacks on
unused or public lands, forming communities called shantytowns
throughout the country. Many called the shantytowns Hoovervilles,
because they blamed President Hoover for their problems.
Many homeless and unemployed people began to wander around
the country. Known as hobos, they often sneaked rides on railroad
cars to get from place to place.
In addition to the Depression, farmers soon faced a new problem.
For a long time, farmers on the Great Plains had plowed the soil.
They uprooted the grasses that held the soil’s moisture and planted
wheat. When crop prices decreased in the 1920s, however,
Midwestern farmers left many of their fields unplanted. In 1932 the
Great Plains experienced a severe drought. The unplanted soil
turned to dust. Much of the Plains became a Dust Bowl. The winds
blew the dry soil, blackening the sky for hundreds of miles. As the
drought continued, the number of dust storms increased. Many
families packed their belongings into old cars or trucks and headed
west to California, to find better opportunities. There most remained
homeless and in poverty.
INTERSTELLAR – DUST STORM
https://www.youtube.com/watch?v=fUEGdBbtSG4
ESCAPING THE DEPRESSION
Americans turned to entertainment to escape their situation, if only for a little
while. Many went to the movies. Most often, Americans would see people on the
screen who were happier and richer than they were. Comedies provided
people with a way to escape their daily fears. Many European actors, such as
Marlene Dietrich and Greta Garbo, became superstars. Americans also enjoyed
cartoons. Walt Disney produced the first feature-length animated film in 1937,
Snow White and the Seven Dwarfs. Even films that focused on the serious side of
life were generally optimistic.
Americans also listened to the radio. They listened to the news broadcasts.
They also enjoyed different kinds of programs. One of the most popular heroes
on the radio shows was the Lone Ranger. Short daytime dramas were also
popular and provided people with escapes. Some of these dramas were
sponsored by the makers of laundry soaps and were nicknamed soap operas.
THE DEPRESSION IN ART
Art and literature in the 1930s showed what life was like in the
Depression. Painters such as Grant Wood showed traditional American
values, particularly those of rural Americans in the Midwest and the South.
Novelists such as John Steinbeck wrote about the lives of people in the
Depression. In The Grapes of Wrath, Steinbeck told the story of an
Oklahoma farm family who fled the Dust Bowl to find a better life in
California.
Some writers during the Depression influenced literary style. In a
technique known as stream of consciousness, William Faulkner showed
what his characters were thinking and feeling even before they spoke.
Magazines became popular during the Depression. Magazine
photographers traveled throughout the nation taking pictures of life
around them. Many of these photographs were printed in magazines,
which became very successful.
EXIT TICKET
Identify and explain two ways people
sought to forget about the Depression
HOMEWORK
Read, annotate and answer the questions from Gary
B. Nash’s American Odyssey: The Twentieth Century
and Beyond
SWBAT evaluate President Hoover’s
attempts to revive the economy
Do Now: Take out HW handout for review
PAIRED READINGS
American Odyssey
According to the text, what
policies did Hoover propose to
combat the Great Depression?
According to the text, what
were the effects of Hoover’s
policies? Were they successful
or unsuccessful?
Do you think the text portrays
Hoover in a positive or a
negative light? Why? Include
citations from the source!
Fighting Quaker
PRIMARY SOURCE READINGS
1931 State of the
Union Address,
Herbert Hoover
According to the
text, what specific
policies did Hoover
propose to end the
Great Depression?
According to the
text, what role
should the federal
government play in
the recovery? What
role should
individuals and/or
local governments
play?
Which secondary
source most
Hoover Radio
Address, Feb. 12,
1932
1932 State of the
Union Address,
Herbert Hoover
Hoover’s Statement
on Public v. Private
Relief Efforts
EXIT TICKET
1. Did the secondary sources agree or disagree with
the primary sources?
2. Are the primary sources biased? If so, how do you
know?
3. What if we solely relied on this primary source to
understand Hoover’s response to the Great
Depression?
4. Why is it important to use a variety of sources
when analyzing history?
HOMEWORK
Complete the “Your Turn: How did Hoover
Respond?” handout