CHAPTER 12: THE GREAT
DEPRESSION
1928-1932
SECTION 1
Causes of the Depression
Prosperity Hides Troubles
Optimism Sweeps Hoover to Victory
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In the 1920’s the U.S. economy was booming
Herbert Hoover – an accomplished public servant –
to run for the White House
Hoover’s philosophy was cooperation and
competition
Problems Plague the Agricultural
Sector

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Farmers made up one fourth of the American
workforce / to meet the need created by WWI
New technology and methods created bumper
crops / debts
Low prices lead to less profits and fewer purchases
Wealth Is Distributed Unevenly

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During the 1920’s wages rose steadily and did
disposable income
Worker productivity increased astronomically
One percent of the population earned roughly the
same as the bottom 42 percent
A healthy economy needs more people to buy more
products which creates more wealth
Easy Credit Hides Problems

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Credit hid the unstable economic activities
Installment plan
80% of radios and 60 % of cars were purchased in
this manner
This was a new mentality of buying unlike the past
The Stock Market Crashes

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Stock prices were based on little more than
confidence
Speculation – investors gambled, with money they
did not have on stock increases to turn quick profits
October 24 “Black Thursday” SELL SELL SELL SELL
Cont…
Black Tuesday – October 29 the bottom of the
market fell out
 16 million shares were sold, billions were lost
 With a high of 381 in September to a low of 198.7
the Dow Jones dropped like a brick
(today 12,891.9)
 Business Cycle – explained the
periodic growth and contraction
of economy

The Great Depression Begins
The Backs Collapse


Great Depression – a period lasting from 1929 to
1941 in which the economy faltered and
unemployment soared
People lost confidence in the economy and ran to
withdraw their saving from banks ( not enough $)
Businesses Close and Unemployment
Rises

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The fall of stock prices and slowing of consumer
spending led to less production and layoffs Ect. Ect.
Ect. Ect.
This was like a
snowball rolling
down a hill
Tariffs Add to the Woes
The government tried to protect American products
from foreign competition using tariffs
 Hawley-Smoot Tariff – raised prices on foreign
imports so they could not compete in the American
market
 This would help
destroy international
trade

The Depression Goes Global

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Germany ceased their reparation payments
U.S. suspended France and Britain's war debt
payments
International economy had largely been funded by
U.S. loans
What Caused the Great Depression?
Economists disagree on the exact causes of the
Great Depression
 Milton Friedman believed that the depression
resulted from a contraction in money supply
 John Maynard Keynes believed the lack of
government interference was the cause
(Read page 372)

Key Concepts

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


How did the prosperity of the 1920’s give way to
the Great Depression?
What economic problems lurked beneath the
general prosperity of the 1920’s?
What happened on October 29, 1929?
How did the stock market crash contribute to the
onset of the depression?
What were the primary causes of the Great
Depression?
SECTION 2
Americans Face Hard Times
Misery and Despair Grip America’s
Cities


The Great Depression had a deep and lasting
impact on the lives of the people who lived through
it
Every American was touch by the effects of the
Great Depression directly or indirectly
Searching for a Job and a Meal

Between 1921 and 1929 unemployment rates
never rose above 3.7 percent by the peak of the
Great Depression the rate was at 24.9 percent
Cont…
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Workers faced staggering layoffs and signs that
read “No help wanted here” and “We don’t need
nobody”
Women tried to find work and many families went
to soup kitchens
Bread Line – people lined up for handouts from
charities or public agencies
Descending Into Poverty
“They used to tell me I was Building a dream
And so I followed the mob.
When there was earth to plow or guns to bear,
I was always there, right on the job.
They used to tell me I was building a dream
With peace and glory aheadWhy should I be standing in line,
Just waiting for bread?
Once I built a railroad, I made it run,
Made it run against time.
Once I built a railroad, now its doneBrother can you spare a dime?”
Song lyrics, “Brother Can You Spare a Dime?”
Looking for a Place to Live

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Americans lost their jobs, ran through their savings,
sold furniture, pawned jewelry, and moved; many
ended on the streets
Hoovervilles – makeshift shantytowns of tents, and
shacks built on public land or vacant lots
Poverty Devastates Rural America
Commodity Prices Plunge
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Crop prices fell and debts increase again for farmers
Tenant Farmers – working for bigger landowners
rather them for themselves
Farmers were also faced with drought
They were unable to pay their bills and land was
foreclosed they were force to leave
The Great Plains Becomes a Dust Bowl

Dust Bowl – high plains regions of Texas, Oklahoma,
Kansas, New Mexico, and Colorado
Cont…
Desperation Causes Migration

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Okies – Dust Bowl refugees, regardless of their
states of origin
Up to 800,000 people migrated out of Missouri,
Arkansas, Oklahoma, and Texas (looking for jobs)
Few Americans Escape Hard Times
The Depression Attacks Family Life

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Hoover coined the term depression because he
thought it sounded better then “panic” or “crisis”
Men felt they had betrayed their families, once
“breadwinners” lost their familial status.
If employed they felt guilty for their luck while
many of their friends and family suffered
Women and children suffered too. Women “made
due,” children roamed free
Minorities Suffer Hardships

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Minorities were the last to be hired and first to be
fired
Blacks used resources like family and religion to
cope
“The Negro was born in depression, It didn’t mean too much to him,
The Great American Depression, as you call it. There was no such
thing. The best he could be was a janitor or a porter or shoeshine
boy. It only became official when it hit the white man.”
Cont…

Repatriation – efforts by local, state and federal
governments to encourage or coerce Mexican
immigrants and their naturalized children to return
to Mexico
Key Concepts



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How did the Great Depression affect the lives of
urban and rural Americans?
How did the Great Depression Affect American
cities in the early 1930s?
How did the Dust Bowl make life even more difficult
for farmers on the Great Plains?
How did the depression take a toll on women,
children, and minorities in America?
SECTION 3
Hoover’s Response Fails
Cautious Response to Depression Fails
Hoover Turns to Volunteerism
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Though Hoover did not cause the Great Depression
he worked tirelessly to solve the nations problems
Hoover simultaneously called for the government to
reduce taxes, lower interest rates, and create
public-works programs
He asked wealthy Americans to give more to
charities
Volunteerism Fails to Bring Relief
Volunteerism did not work
 Businesses cut wages and laid off workers, and
farmers boosted production because it was in the
best interests of their families
 Localism – the policy whereby problems could best
be solved at local and state levels
 Hoover also
favored “rugged
individualism”

Hoover Adopts More Activist Policies

Hoovervilles and homelessness were on the rise,
trucks pulled by horse or mule were called “Hoover
wagons,” campfires “Hoover heaters,” cardboard
boxes “Hoover houses.”
Cont…
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Reconstruction Finance Corporation (RFC) –
passed in 1932, it gave more than a billion dollars
of government loans to railroads , business, and
banks
Trickle-Down economics – the idea that money
poured into the top of the economic pyramid will
trickle down to the base
Cont…

Hoover Dam – “Boulder Dam,” construction brought
much needed employment to the Southwest
Americans Protest Hoover’s Failures
Some Urge Radical Change

Some thought the answer to the country’s problems
was the rejection of capitalism and the acceptance
of socialism or communism.
The Bonus Army Marches on
Washington

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World War I veterans seeking the bonus Congress
had promised them (in 1945) converged on the
Washington D.C. demanding early payment in
1931
Bonus Army – name given to these veterans
Hoover Orders the Bonus Army Out

Douglas MacArthur – (General) along with federal
troops were asked by Hoover to “surround the
affected area and clear it without delay”