vvv

2. 1929-1939
• Stock market
crashED
• Nobody realized
at first how
serious it would
be
• Money
“disappeared”
Many found being broke
humiliating.

3. The Roaring 20’s
• The new concept of
“credit”
• People were buying:
– Automobiles
– Appliances
– Clothes
• Fun times reigned
– Dancing
– Flappers
– Drinking

4. Why was this bad?
• Credit system
– People didn’t really have
the money they were
spending
• WWI
– In addition, the U.S. was
a major credit loaner to
other nations after WW I
– These nations could not
pay us back

5. The Stock Market
• People thought stocks
would always be going
up
• So people bought
stocks on margins
– If a stock is $100 you
can pay $10 now and
the rest later when the
stock rose
• This was also on
borrowed money

6. So What was the problem?
• When stock prices fall
– Now the person has less than $100 and
no money to pay back
– If borrowed money, also must pay that
back!

7. And then….
• With people panicking
about their money,
investors then tried to sell
their stocks
– Everybody selling, nobody
buying
– This leads to a huge decline
in stock prices
– Stocks were worthless now

8. Result…
• People who bought on “margins” now
could not pay
• Investors were average people that were
now broke

9. Banks Begin to Fail
Banks Begin to Fail
Banks were the first
thing hit by the
stock market crash
as numerous banks
closed their doors
When the stock
prices fell, many
banks lost
money on their
investments.
People who had deposits in these
People who had deposits in these
banks lost all their savings. Others
banks lost all their savings. Others
took their deposits out as quickly as
took their deposits out as quickly as
possible, creating “runs.”
possible, creating “runs.”

10. Other Causes
• Farmers that were able to grow things grew
too much and prices paid to them
• Corporations made too many goods and
couldn’t sell them

11. • Herbert Hoover was
president at the start
• Philosophy: We’ll
make it!
• What He Did: Nothing
much
• The poor were looking
for help and nobody
knew what to do

12. Hoover Responds
 Hoover met w/bankers, businessmen,& labor
leaders.
 He asked employers not to fire workers or lower
their pay.
 He asked labor leaders not to ask for higher pay or

13. Reconstruction Finance Corps
Reconstruction Finance Corps
The Reconstruction
The Reconstruction
Finance Corporation
Finance Corporation
was
was the
the government
government
agency that gave $2
agency that gave $2
billion in aid to state
billion in aid to state
and local governments
and local governments
and made loans to
and made loans to
banks, railroads, farm
banks, railroads, farm
mortgage associations,
mortgage associations,
and other businesses.
and other businesses.
The main purpose of the
The main purpose of the RFC
RFC
was to create jobs for Americans
was to create jobs for Americans
who wanted to work – Didn’t
who wanted to work – Didn’t
work – corporations used for
work – corporations used for
own needs
own needs

14. The Hoover Dam
Hoover used the
Hoover used the
Boulder Dam project as
Boulder Dam project as
a model of how federal
a model of how federal
government could
government could
encourage cooperation
encourage cooperation
b/w private groups
b/w private groups
Part of a public works program intended to
Part of a public works program intended to
stimulate business and provide jobs.
stimulate business and provide jobs.

16. Hoover believed that charities or state and local
Hoover believed that charities or state and local
governments - not the federal government – provide
governments - not the federal government – provide
food & shelter to people who were poor or out of work
food & shelter to people who were poor or out of work.
.
Relief line waiting for commodities, San Antonio, Texas.
Hoover Philosophy
Hoover Philosophy

17. Despite Hoover
Despite Hoover’
’s hope, the economy continued
s hope, the economy continued
to shrink & unemployment continued to go up
to shrink & unemployment continued to go up
Unemployed workers sit in front of a shack with
Unemployed workers sit in front of a shack with
Christmas tree, New York City, in December,
Christmas tree, New York City, in December,
The Depression Worsens
The Depression Worsens

18. • Farmers were already feeling the effects
– Prices of crops went down
– Many farms foreclosed
• People could not afford luxuries
– Factories shut down
– Businesses went out
• Banks could not pay out money
• People could not pay their taxes
– Schools shut down due to lack of funds
• Many families became homeless and had
to live in shanties

20. Many waited in unemployment
lines hoping for a job.

21. People in cities would wait in line for
bread to bring to their family.

22. Some families were forced to move
because they had no money – often to
California in search of jobs..

23. “Hooverville”
• Some families were
forced to live in
shanty towns
– A grouping of shacks
and tents in vacant
lots
• They were referred to
as “Hooverville”
because of President
Hoover’s lack of help
during the depression.

25. Free Write
President Herbert Hoover did not believe
in government programs to help the poor.
He believed that they and private charities
should do the job.
Do you agree or disagree with Hoover?
Why or why not?

27. A drought across the nation
destroyed crops…and lead to
dust storms in the Great Plains.
“The Dust Bowl”

28. Because of drought and
dust
• No crops could grow
• Homes buried
• Fields blown away
• Dust Bowl the #1 weather crisis
of the 20th century

30. Two Families During
the Depression

31. A Farm Foreclosure