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Chapter 22


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A school project that discusses the start of the Great Depression

Published in: Economy & Finance, Business
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Chapter 22

  1. 1. Chapter 22 The Great Depression Begins The Successes built by a generation will get destroyed in a fight for life.
  2. 2. Jamie D. A Family Activity
  3. 4. Janine G. The Great Depression Begins
  4. 5. Chapter 22: The Great Depression Begins Hardship and Suffering During the Depression The Nation's Sick Economy Hoover's Struggles in the Depression.
  5. 6. Section 1 Chapter 22 The Nation's Sick Economy
  6. 7. Matthew W. Chapter 22 | Section 1
  7. 8. Vocab <ul><li>Price Support – The maintenance of a price at a certain level through government intervention. </li></ul><ul><li>Credit – An arrangement where a buyer pays later for a purchase, often on an installment plan with interest. </li></ul><ul><li>Alfred E. Smith – The Democrat Candidate against Herbert Hoover in the election of 1928. </li></ul><ul><li>Dow Jones Industrial Average – A measure based on prices of the stock of 30 large companies. </li></ul><ul><li>Speculation – An involvement in risky business transactions in an effort to make a quick or large profit. </li></ul><ul><li>Buying on Margin – The purchasing of stocks by paying a small percentage at first and paying the rest later. </li></ul><ul><li>Black Tuesday – A name given to October 29, 1929, when stock prices fell greatly. </li></ul>
  8. 9. Vocab <ul><li>Great Depression – A period lasting from 1929 to 1941, in which the U.S. economy was in severe decline, and millions of Americans were unemployed. </li></ul><ul><li>Hawley-Smoot Tariff Act – A law enacted in 1930, that established the highest protective tariff in U.S. history, worsening the depression in America and abroad. </li></ul>
  9. 10. The Nation's Sick Economy Economic Troubles Hoover takes the Nation The Stock Market crashes Fact Check
  10. 11. Industries <ul><li>Key Industries barely made a profit. </li></ul><ul><ul><li>These basic industries include railroad, textile, and steel. </li></ul></ul><ul><li>Railroad has lost business to newer forms of transportation like buses, trucks, and private automobiles. </li></ul><ul><li>Mining and lumbering were no longer in high demand after the war. </li></ul><ul><li>Coal mining was not needed from newer forms of energy. </li></ul><ul><ul><li>New energy sources included, hydroelectric power, fuel oil, and natural gas. </li></ul></ul><ul><li>The amount of new homes built were now declining. </li></ul><ul><ul><li>Furniture manufacturing and lumbering also declined. </li></ul></ul>
  11. 12. Farmers <ul><li>During the war, wheat and corn demands rose rapidly, so farmers took out loans. </li></ul><ul><li>However, farmers now couldn't pay back their loans. </li></ul><ul><li>This led to banks foreclosing and seizing the property to pay the debt. </li></ul><ul><li>Congress tried to help by creating the McNary-Haugen bill for Federal Price-Supports for key products. </li></ul><ul><ul><li>The Federal Price-Support would help maintain the price of products at a certain level. </li></ul></ul><ul><ul><li>Key products include wheat, corn, cotton, and tobacco. </li></ul></ul>
  12. 13. Consumer Credit <ul><li>President Coolidge vetoed the McNary-Haugen bill twice and said: </li></ul><ul><li>“ Farmers never made money. I don't believe we can do much about it.” </li></ul><ul><li>Consumers were also buying less crops from farmers. </li></ul><ul><ul><li>This was because of rising prices, stagnant wages, the unbalanced distribution of income, and the overbuying on credit in the future. </li></ul></ul><ul><li>Production also expanded faster then wages, which widened the gap between the rich and poor. </li></ul>
  13. 14. Income and Credits <ul><li>By the 1920’s, many Americans bought goods on credit which was paid in monthly charges. </li></ul><ul><ul><li>Credit is when you purchase a product and pay for it later in the future. </li></ul></ul><ul><li>With low wages, most couldn’t pay off their debt so they cut back on spending money. </li></ul><ul><li>The Americans in the Higher Class had an income rise over 75% while America on average grew by 9%. </li></ul><ul><li>More then 70% of the nation’s families earned less then $2,500 a year. </li></ul>
  14. 15. The Nation's Sick Economy Economic Troubles Hoover takes the Nation The Stock Market crashes Fact Check
  15. 16. The Election of 1928 <ul><li>Hoover ran against Alfred E. Smith. </li></ul><ul><ul><li>Hoover didn't run for public office before while Smith served as Governor of NY for 4 years. </li></ul></ul><ul><li>The last 2 presidents were Republican and they led to great success. </li></ul><ul><li>Since Hoover was a Republican, people automatically voted for Hoover. </li></ul><ul><li>In 1929, many economists mentioned the weaknesses in the economy. </li></ul>
  16. 17. Basics on Stocks <ul><li>However, the public believed the economy would be safe. </li></ul><ul><li>The most viable symbol of the economy was the Stock Market. </li></ul><ul><li>The Dow Jones Industrial Average was used as the barometer of the stock market's health. </li></ul><ul><ul><li>The Dow Jones was a measure based on the prices of stocks from 30 large companies. </li></ul></ul><ul><li>Through the 1920's stock prices rose. </li></ul>
  17. 18. Dow Jones <ul><li>The Dow had reached a high of 381 points, which was 300 points higher compared to 5 years ago. </li></ul><ul><li>From this “Bull Market” many rushed to buy stocks and bonds. </li></ul><ul><li>By 1929, 4 million Americans owned stocks in hopes to becoming rich. </li></ul>
  18. 19. Risky Behaviors in Stock <ul><li>People were engaging in speculation and began buying on margin. </li></ul><ul><ul><li>Speculation means investing in risky transactions to make a quick profit. </li></ul></ul><ul><ul><li>Margins mean to purchase stock by paying a small percentage of the price and borrowing the rest. </li></ul></ul><ul><li>The Government still did little to discourage these methods or regulate the market. </li></ul><ul><li>These rising prices didn't reflect the company's worth too. </li></ul><ul><li>Even worse, if Stock Values declined, people who bought on margins couldn't pay their loans back </li></ul>
  19. 20. The Nation's Sick Economy Economic Troubles Hoover takes the Nation The Stock Market crashes Fact Check
  20. 21. The Stocks are Dead <ul><li>Confidence in the market started to waver and investors quickly sold their stocks and left. </li></ul><ul><li>On October 24, this led to a plunge. </li></ul><ul><li>By October 29, the nation's confidence became lower and shareholders sold their stocks before prices became less. </li></ul><ul><li>By November, investors lost about $30 billion. This event will start The Great Depression. </li></ul><ul><ul><li>The Great Depression is a period during 1929 to 1940 which was when the US economy declined. </li></ul></ul><ul><ul><li>Many Americans would be unemployed. </li></ul></ul>
  21. 22. Failures <ul><li>Some people wanted to withdraw their money from the banks but could not since the banks invested the money. </li></ul><ul><li>By 1929, 600 banks were closed. The government didn't protect or insure bank accounts. </li></ul><ul><li>Because of that, millions of people lost their savings accounts. </li></ul><ul><li>About 90,000 businesses also went bankrupt. Millions of workers lost their jobs. </li></ul><ul><li>25% of all workers didn't have a job and those who had a job faced pay cuts and less working hours. </li></ul>
  22. 23. International Effects <ul><li>While the U.S. was affected, Europe was also affected from their war debts. </li></ul><ul><ul><li>This limited the import of European Goods. </li></ul></ul><ul><ul><li>This also made it hard to export farm goods and manufactured products. </li></ul></ul><ul><li>In 1920, Congress passed the Hawley-Smoot Tariff Act. </li></ul><ul><ul><li>This law established the highest protective tariff in U.S. history. </li></ul></ul><ul><li>This protected manufactures and farmers from foreign competition. </li></ul><ul><ul><li>In result, this prevented other countries from obtaining American Currency to buy our goods. </li></ul></ul>
  23. 24. The Nation's Sick Economy Economic Troubles Hoover takes the Nation The Stock Market crashes Fact Check
  24. 25. The Imprint of the Depression <ul><li>These factors combined, led to a falling demand of consumer goods. </li></ul><ul><ul><li>Tariffs and war debt policies cut down on the foreign market for American Goods </li></ul></ul><ul><ul><li>This led to a crisis in for Farmers. </li></ul></ul><ul><ul><li>Easy Credit would become available. </li></ul></ul><ul><ul><li>An unequal distribution of income occurred </li></ul></ul><ul><li>People still find it hard to believe an economic disaster occurred. </li></ul><ul><li>In November 1929, Hoover encouraged Americans to remain confident. </li></ul><ul><li>Of course, the most severe depression in American history is just starting. </li></ul>
  25. 26. Questions <ul><li>Why did so many men leave their homes during the Depression? </li></ul>They grew discouraged from not being able to find a job and to raise their family. <ul><li>How did the Great Depression affect women? </li></ul>Women worked outside the home but they were targets as many assumed they shouldn't have a job since there were men without a job. <ul><li>Why did Children ride on trains to leave? </li></ul>They wanted to escape from poverty and search for work and adventure.
  26. 27. Section 1 Chapter 22 The Nation's Sick Economy
  27. 29. Section 2 Chapter 22 Hardship and Suffering during the Great Depression
  28. 30. Jamie D Chapter 22 | Section 2
  29. 31. Vocab <ul><li>Shantytown – A neighborhood in which people live in makeshift shacks. </li></ul><ul><li>Soup Kitchen – A place where free or low cost food is served to the needy. </li></ul><ul><li>Bread Line – A line of people waiting for free food. </li></ul><ul><li>Dust Bowl – The region including Texas, Oklahoma, Kansas, Colorado, and New Mexico, that was made worthless for farming by drought and dust storms during the 1930's. </li></ul><ul><li>Direct Relief – The giving of money or food from the government to needy people. </li></ul>
  30. 32. Suffering during the Depression From Cities and Farm People coping through Fact Check
  31. 33. At the Cities <ul><li>Many people lost their jobs. They ended up evicted from their homes. </li></ul><ul><li>This left people to sleep on streets, parks, or sewer pipes. Some also built makeshift shacks out of junk. </li></ul><ul><li>Shantytowns were soon created. </li></ul><ul><ul><li>Shantytowns were neighborhoods full of makeshift shacks. </li></ul></ul><ul><li>The poor had to beg for food. They also got food from garbage cans, soup kitchens, or bread lines. </li></ul><ul><ul><li>Soup Kitchens offered free or low cost food to the needy. </li></ul></ul><ul><ul><li>Bread Lines were a line of people waiting for free food. </li></ul></ul>
  32. 34. Everywhere Else <ul><li>African Americans and Latinos had problems trying to get food and a job. </li></ul><ul><li>Latinos were targeted by Americans and were wanted deported. </li></ul><ul><li>Some left voluntarily while others were deported by the federal government. </li></ul><ul><li>However, people in rural areas had an advantage, as Farmers could grow their own food for their families. </li></ul><ul><li>With debt, thousands of Farmers lost their lands through foreclosure. </li></ul><ul><ul><li>Foreclosure is where a mortgage holder takes property back if there were some unpaid payments. </li></ul></ul>
  33. 35. Old McDonald's Farm <ul><li>The Dust Bowl affected several states for farming from drought and dust storms. </li></ul><ul><ul><li>These states include Texas, Oklahoma, Kansas, Colorado, and New Mexico. </li></ul></ul><ul><li>Farmers used tractors to plow the land, which removed the protective layer of prairie grasses. </li></ul><ul><li>However, this exhausted the land through overproduction of crops. This rendered the land unsuitable for farming. </li></ul><ul><li>Wind also scattered the top soil which exposed sand and grit. The dirt eventually traveled hundreds of miles. </li></ul><ul><li>Farmers soon headed with their families to California. Some found work as farmhands but others wandered for work. </li></ul>
  34. 36. Suffering during the Depression From Cities and Farm People coping through Fact Check
  35. 37. Effects on American Families <ul><li>Americans believed in traditional values and emphasized the importance on family unity. </li></ul><ul><li>Men however had problems, as they had to wander the streets to find a job. </li></ul><ul><li>Some Men became so discouraged so they stopped trying or abandoned their families. </li></ul><ul><li>During the early years of the Depression, there was no federal system of direct relief. </li></ul><ul><ul><li>This was the giving of money or food by the government directly to needy people. </li></ul></ul>
  36. 38. Women <ul><li>Women had to can food, sew clothes, and manage the budgets. </li></ul><ul><li>Many also worked outside the home but they got less money then men did </li></ul><ul><li>They soon became targets as many thought they had no right to work since there were still unemployed men. </li></ul><ul><li>Many women were staving to death in cold attics and rooming houses. </li></ul>
  37. 39. Children <ul><li>Children also had poor diets, lack of Health Care, and Lack of Money. </li></ul><ul><li>Falling taxes caused schools to have shorter years or to close the school. </li></ul><ul><li>Thousands worked in Sweatshops and others hopped aboard trains. </li></ul><ul><li>They traveled to find work, adventure, and escape from poverty. </li></ul><ul><li>Many riders were beaten or jailed by bulls or fell prey to murderous criminals. </li></ul><ul><ul><li>Bulls were armed freight yard patrol men </li></ul></ul>
  38. 40. Suffering during the Depression From Cities and Farm People coping through Fact Check
  39. 41. Social and Psychology <ul><li>Some people were so demoralized that they lost their will to survive. </li></ul><ul><li>Many accepted sacrifices that will affect them for life. </li></ul><ul><li>Adults stopped getting health-care and Kids gave up college. </li></ul><ul><li>Others didn't get married, raising large families, or children. </li></ul><ul><li>Many showed kindness to strangers who were down on luck. </li></ul><ul><li>People gave food, clothing, and a place to stay for the needy. </li></ul><ul><li>Strong bonds were made in communities to help each other. </li></ul>
  40. 42. Questions <ul><li>What industrial weaknesses signaled a declining economy? </li></ul>Basic Industries barely made a profit. Housing, Mining and Lumbering was also in low demand. Farmers were also losing their properties from foreclosures. <ul><li>What happened to ordinary workers during the Depression? </li></ul>Many workers lost their jobs. Those who had a job faced pay cuts and reduced working hours. <ul><li>How did the Depression affect the world's economy? </li></ul>This did not permit us to import goods from Europe. Also those in other nations could not purchase goods from us due to us a lack of American Currency.
  41. 43. Section 2 Chapter 22 Hardship and Suffering during the Great Depression
  42. 45. Section 3 Chapter 22 Hoover's Struggles during the Depression
  43. 46. Lisa C Chapter 22 | Section 3
  44. 47. Vocab <ul><li>Herbert Hoover – President during the Great Depression. </li></ul><ul><li>Boulder Dam – A dam on the Colorado now called the Hoover Dam. This was built during the Great Depression as a public-works program to stimulate business and provide jobs. </li></ul><ul><li>Federal Home Loan Bank Act – This law enacted in 1931 lowered home mortgage rates and allowed farmers to refinance their loans and avoid foreclosure </li></ul><ul><li>Reconstruction Finance Cooperation – An agency established in 1932 to provide emergency financing to banks, life-insurance companies, railroads, and other large businesses. </li></ul><ul><li>Bonus Army – A group of World War 1 veterans and their families who marched on Washington D.C. in 1932 to demand the immediate payment of a bonus they have been promised from military service. </li></ul>
  45. 48. Hoover’s Struggles in the Depression Hoover Reassuring Hoover Reaction Kill the Bonus Army Fact Check
  46. 49. Hoover’s Attempt <ul><li>After the crash of the stock market, president Herbert Hoover assured Americans that the economy is safe. </li></ul><ul><li>Hoover believed that it was the Government’s job to foster cooperation between interests and groups in society. </li></ul><ul><li>However, Americans believed in “Rugged Individualism” </li></ul><ul><ul><li>This meant people should succeed by their efforts. </li></ul></ul><ul><li>Because of this, Hoover did not support Federal Welfare. </li></ul><ul><ul><li>This supposedly protected our moral. </li></ul></ul><ul><li>However this frustrated Americans as we were not concerned about moral. </li></ul>
  47. 50. Hoover's on the Case <ul><li>After the Stock Market's crash, he called key leaders to work together to find solutions here. </li></ul><ul><ul><li>The leaders worked to find solutions and to prevent mistakes. </li></ul></ul><ul><li>He created an organization to help private charities generate contributions for the poor. </li></ul><ul><li>During Fall 1929, he authorized construction for the Boulder Dam. </li></ul><ul><li>This provided electricity, flood control, and a regular water supply. </li></ul><ul><ul><li>This enabled the growth of California's agriculture economy. </li></ul></ul>
  48. 51. Republicans are going down <ul><li>As the economy grew worse, the political tide turned against Hoover and the Republicans. </li></ul><ul><ul><li>First of all, Democrats won more seats in Congress by 1930. </li></ul></ul><ul><ul><li>Second of all, Republicans also lost control in the House of Representatives. </li></ul></ul><ul><ul><li>Finally, their majority in the Senate shrunk to 1 vote. </li></ul></ul><ul><li>Americans grew frustrated and they showed this in a few ways. </li></ul><ul><ul><li>Farmers destroyed their corn, milk, and wheat supply instead of selling it at a loss. </li></ul></ul><ul><ul><li>Some Farmers declared a farm holiday and refused to work on the fields. </li></ul></ul><ul><ul><li>Some Farmers blocked the roads to prevent food from getting to the market. </li></ul></ul><ul><ul><li>Some used force to prevent authorities from taking the Farms as foreclosure. </li></ul></ul>
  49. 52. Hoover’s Struggles in the Depression Hoover Reassuring Hoover Reaction Kill the Bonus Army Fact Check
  50. 53. Hoover's Backs Cooperatives <ul><li>Some people called shantytowns, “hootervilles”. </li></ul><ul><ul><li>The poor wrapped themselves in Hoover blankets. </li></ul></ul><ul><ul><li>Hoover flags were also empty pockets that were turned inside out. </li></ul></ul><ul><li>Hoover tried to help the Depression by negotiating with private entities. </li></ul><ul><ul><li>This reflected Hoover's thoughts on small government. </li></ul></ul><ul><li>Hoover helped the banking system by persuading the largest banks to establish the National Credit Cooperations </li></ul><ul><ul><li>This organization loaned money to smaller banks to help them starve off bankruptcy. </li></ul></ul>
  51. 54. Direct Intervention <ul><li>In 1932, Hoover signed the Federal Home Loan Bank Act into law. </li></ul><ul><li>However, the most ambitious economic measure was the Reconstruction Finance Cooperation. </li></ul><ul><li>The RFC was an example of federal involvement in the economy. </li></ul><ul><li>However in the end, these acts were too small, and happened way too late. </li></ul><ul><li>While Hoover's image is awful now, there would be another incident in 1932 there would be another nail in the coffin. </li></ul>
  52. 55. Hoover’s Struggles in the Depression Hoover Reassuring Hoover Reaction Kill the Bonus Army Fact Check
  53. 56. The Bonus Army <ul><li>During 1932, 10,000 to 20,000 veterans and their families came to Washington D.C as the Bonus Army. </li></ul><ul><li>Walter Waters lead this group and the came to support a debated bill in Congress called the Patman Bill. </li></ul><ul><ul><li>This bill would authorize the Government to pay bonuses to World War 1 veterans who weren't compensated enough. </li></ul></ul><ul><li>Congress approved this Bonus in 1924, that was suppose to be paid in 1945 as cash and a life insurance policy. </li></ul><ul><li>However Congressman Wright Patman believed this bonus (about $500) should be paid immediately. </li></ul>
  54. 57. Communists Invasion <ul><li>Hoover thought those in the Bonus Army were communists and people with criminal records. </li></ul><ul><li>He opposed the legislation but respected the marcher's right to assemble peacefully at first. </li></ul><ul><ul><li>Hoover even provided the Army with food and supplies so they can make a shantytown near Congress. </li></ul></ul><ul><li>On June 17, the Senate voted the Patman bill. Hoover then asked the Bonus Army to leave. </li></ul><ul><li>Most left, but 2000 stayed to meet the president. </li></ul><ul><li>Hoover was worried this Army would become violent. Therefore, Hoover decided the Army should be disbanded. </li></ul>
  55. 58. He did what? <ul><li>On July 28, Douglas MacArthur and Dwight D. Eisenhower led 1000 troops to roust the veterans. </li></ul><ul><li>A government official said: </li></ul><ul><ul><li>“ The 12 th infantry was in full battle dress. Each had a gas mask and his belt was full of tear gas bombs... At orders, they brought their bayonets at thrust and moved in. The bayonets were used to jab people, to make them move. </li></ul></ul><ul><ul><li>Soon, almost everyone disappeared from view because tear gas bombs exploded. The entire block was covered in tear gas. Flames were coming up, where the soldiers had set fire to the buildings to drive these people out... Through the whole afternoon, they took 1 camp after another.” </li></ul></ul>
  56. 59. The Results <ul><li>This effort gassed 1000 people including an 11-month old baby and 8-year old boy who was blind. </li></ul><ul><li>2 People were shot and many more were injured. </li></ul><ul><li>Obviously, Americans were angry at the government's treatment on the veterans. </li></ul><ul><li>Hoover's image suffered and as the election came, his opponent would be the Democratic Franklin Delano Roosevelt. </li></ul><ul><li>The downturn in the economy and Hoover's inability to deal effectively with the Depression has sealed his political fate. </li></ul>
  57. 60. Hoover’s Struggles in the Depression Hoover Reassuring Hoover Reaction Kill the Bonus Army Fact Check
  58. 61. Questions <ul><li>What did Hoover believe the Government's job is? </li></ul>The main function of the government was to foster cooperation between competing groups and interests in society. <ul><li>What were some of the projects proposed by Hoover? </li></ul>He started the Hoover Dam which helped. The Federal Home Loan Act and Reconstruction Federal Cooperation did not really save the Government. <ul><li>What did the Bonus Army want? </li></ul>They wanted to encourage Congress to pass the Payman Bill so they would get their bonus quicker.
  59. 62. Section 3 Chapter 22 Hoover's Struggles during the Depression