The Great Depression
Causes of the Depression
Prosperity Hides Troubles
1. Foreign trade hurt by tariffs.
2. Availability of easy credit.
3. Agricultural problems.
4. Distribution of wealth.
 Greater separation between the rich and poor.
 Key businesses are not making money.
 Railroad, Mining, Lumber.
 A key indicator that was on the decline was housing.
 When housing starts to fall, so do jobs in many related
industries, such as furniture manufacturing and lumbering.
 Everyone was living on credit.
 70% of the nation’s families earned less than $2,500 per year
(minimum amount needed for a decent standard of living).
Farmers had made huge profits during World War I.
1919 – Production $10 Billion
1921 – Production $ 4 Billion
The government response to this financial crisis faced by farmers
was to create price supports. Postwar production remained high because of
mechanized farm equipment and more intensive farming methods. Price support
would enable the government to buy surplus crops at guaranteed prices and sell them
to the world market.
Hoover never ran for public office, but
became popular as the Head of the
Administration during WWI and the
Secretary of Commerce under Harding and Coolidge. Americans voted
overwhelmingly for Hoover, prosperity, and the continuation of
the Republican government.
Election of 1928:
Herbert Hoover vs. Alfred Smith
Stock Market Crashes
Four million
people invested
in the stock
market, but
buying stocks
was not enough
for many.
Speculation – Practice of making
high-risk investments in hopes of
making large profits.
Buying on Margin – System of buying
stocks in which a buyer pays a
small percentage of the purchase price
while the broker advances the rest.
October 29th, 1929 – Black Tuesday
Investors lost $30 billion, which signaled the beginnings of…
The Great Depression.
Unemployment went from 3% (1.6 million) to 25% (13 million).
World Trade fell more than 40% because of the
Hawley-Smoot Tariff, the highest protective tariff in U.S. history.
The Great Depression Begins
After the crash everybody went to the bank to withdraw their
money, but many banks invested in the stock market…oops!
Of the 25,000 banks, 11,000 of them had failed because the
government did not protect or insure bank accounts.
Millions of people lost their savings accounts.
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The Great Depression
Americans Face Hard Times
H.H.H. of the Depression
Hardships
Helping Out
Hoover Tries – But Messes Up Big Time!
Misery & Despair Grip America’s Cities
Many people lost their jobs & were evicted from
their homes. Some slept in parks or sewer pipes.
People began living in shantytowns (little towns
made up of a bunch of shacks).
The poor dug through garbage cans, or begged.
Soup Kitchens offered free or low cost food.
Shantytowns a.k.a.
HOOVERVILLES
Bread Lines – Lines of people waiting to
receive food provided by charities.
Poverty Devastates Rural America
There was a huge drought in the 1930s across the Great Plains.
Farmers broke up the grassland and planted millions of acres
of farmland. Farmers overproduced on the land, making it
unsuitable for farming.
Farmers abandoned the land and the wind began to blow.
Dust blew everywhere, which is why this event is called the… Dust Bowl.
Few Americans Escape Hard Times
The depression had a tremendous social and psychological effect on
people, which led to an increase in mental illness. Suicides went up
by 30% because of the difficulties of the times.
Making ends meet was a daily struggle, and, in some cases, families
broke apart under the financial strain.
People stopped going to the doctors because they could no longer
afford the “extras.” People no longer had money for entertainment,
so people began playing board games and listening to the radios.
300,000 became “Hoboes,” which were people who wandered the
country, hitching rides on railroad boxcars and sleeping under bridges.
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The Great Depression
Hoover’s Response Fails
Cautious Response To Depression Fails
President Hoover did NOT want to use direct relief because
he believed that it would lower self-respect and “moral fiber.”
Hoover believed that it is NOT the job of the federal government to give handouts to
the public. Local and state government should help provide relief and jobs.
Hoover Adopts More Activists Policies
Hoover tried to help by doing the following:
 Hoover Dam
 Federal Farm Board
 National Credit Corporation
 Federal Home Loan Bank Act
Thousands of unemployed WWI veterans and their families set up camps
in Wash., D.C.; to demand early payment of a bonus they were due. The
bill was defeated by Congress, but most of the Bonus Army
refused to leave town.
Hoover called the army out to break up the Bonus Army’s
camps. The use of tanks and tear gas were being used
against the war veterans, which destroyed the little popularity that
Hoover had left. One
American’s Protest Hoover’s Failures
baby was killed and
Hoover was not going to be Re-elected!
a child was blinded.