1
SECTION
Section
Step-by-Step Instruction
A Family Loses Everything
“
We lost everything. . . . We tried to struggle
along living day by day. Then I couldn’t pay the
rent. I had a little car, but I couldn’t pay no license
for it. . . . I sold it for $15 in order to buy some
food for the family. I had three little children.
Review and Preview
Students have learned about the prosperity and booming economy of the
1920s. Now they will learn how hidden
weaknesses in the economy caused an
economic collapse and about the efforts
to deal with this collapse.
”
—Ben Isaacs, recalling the Depression, quoted in
Studs Terkel’s Hard Times
䊴
A victim of the Great Depression
Hoover and the Crash
Section Focus Question
Objectives
• Read about America’s economic problems
during the late 1920s.
Why did the economy collapse
after the stock market crash?
Before you begin the lesson for the day,
write the Section Focus Question on the
board. (Lesson focus: Overproduction by businesses and a banking crisis led to a downward
spiral of declining sales, job losses, and bankruptcy.)
L2
Have students consider the effects on a
community of a sudden, massive loss of
jobs. Ask: Suppose one day no one in our
community had access to any money at
all. What would people not be able to do?
(Students may respond that no one would be
able to purchase necessities such as food and
clothing.) Then ask students what the
impact of these effects would be on local
businesses and the people who work for
them. (Students may say that businesses
would close and more people would lose their
jobs.) Tell students to compare their
responses with the information they read
in the section.
Set a Purpose
■
■
• Discover President Hoover’s response to
the Depression.
A Collapsing Economy
• Understand how the Great Depression
started.
Reading Skill
Prepare to Read
Build Background
Knowledge
• Find out how the Depression affected
Americans.
Why It Matters During the 1920s, the stock market boomed
and many prospered. However, much of the prosperity was
based on borrowed money and buying stock on margin. Then
the stock market crashed. The crash was followed by a long,
severe economic downturn called the Great Depression.
Section Focus Question: Why did the economy collapse
after the stock market crash?
L2
Read each statement in the Reading
Readiness Guide aloud. Ask students to
mark the statements True or False.
Analyze Causes Analyzing causes will help
you to understand the why and how of history. As
you read the following section, try to answer the
question: What caused the Great Depression to
start? Remember that many causes can combine
to yield one effect.
Key Terms
overproduction
bankruptcy
default
bonus
In 1928, Herbert Hoover had predicted that the United
States would soon achieve the “final triumph over poverty.”
In fact, the country was heading for the worst economic
crisis in its history.
Signs of Weakness Several signs of economic weakness
surfaced during the late 1920s. Older industries, such as coal
mining, railroads, and clothing manufacture, were in decline.
Agriculture was also experiencing a prolonged downturn.
Yet, as sections of the economy declined, stock prices
continued to soar. As you have read, margin buying allowed
people to purchase stocks by paying only a fraction of the cost
at the outset and owing the balance. Margin buyers gambled
that prices would be higher when they were ready to sell. The
gamble seemed to pay off—for a while.
The Stock Market Crashes The prices for industrial
stocks doubled between May 1928 and September 1929. But
soon after, prices began a rapid slide. On Wednesday,
October 23, six million shares of stock changed hands.
Falling prices caused losses of $4 billion. Brokers who had
lent people money to buy on margin now began to recall
their loans. Investors who could not pay had to sell their
stocks. This caused prices to drop even more.
770 Chapter 23 The Great Depression and the New Deal
Differentiated Instruction
L1 Less Proficient Readers
L1 Special Needs
Teaching Resources, Unit 8,
Reading Readiness Guide, p. 16
The Stock Market Explain to students the
Have students discuss the statements in
pairs or groups of four, then mark the
worksheets again. Use the Numbered
Heads participation strategy (TE, p. T24)
to call on students to share their group’s
perspectives. The students will return to
these worksheets later.
way in which stocks were bought and sold
on margin during the 1920s. Ask them to
consider why this was a popular way for
many people to become involved in the
stock market. Students should understand
that it was possible for people to only pay
a portion of the value of the stock in order
770 Chapter 23
to buy the stock. Then, explain to the
students how the stock market crash led to
a situation in which people had to pay the
full value of the stock they owned and that
many were unable to pay the full amount.
Students should understand how this
arrangement led to the widespread financial disaster of the Great Depression.
On October 29, 1929—known as Black Tuesday—the stock market
crumbled completely. Panicked traders rushed to sell, but there were
no buyers. Prices plummeted. Investors who thought they owned
valuable shares of stock were left with worthless pieces of paper.
Millionaires lost their fortunes overnight.
Over the next two weeks, stock prices continued to plunge.
“Everybody wanted to tell his neighbor how much he had lost,”
observed a reporter for the New York Times. “Nobody wanted to
listen. It was too repetitious a tale.”
Teach
A Collapsing Economy
The Great Depression
Begins
pp. 770–771
Instruction
What happened on Black Tuesday?
■
L2
Vocabulary Builder Before teaching this
section, preteach the High-Use Words
decline and voluntary, using the strategy on TE p. T21.
The Great Depression Begins
The stock market crash marked the start of a 12-year economic
and social disaster known as the Great Depression. The crash,
however, was less a cause than a symptom of a deepening crisis.
Key Terms Following the instruction on
p. 7, have students create a See It–
Remember It chart for the Key Terms in
this chapter.
Troubled Industries One major cause of the Great Depression
was overproduction, a situation in which the supply of manufactured
goods exceeds the demand. Factories were producing more than
people could afford to buy. With prices rising faster than salaries,
many Americans cut back on their purchases.
At the same time, housing and automobile manufacture were in
decline. These industries had supported American prosperity during
the 1920s. By the end of the decade, though, most Americans who
could afford houses and cars had already bought them. Between 1926
and 1929, spending on construction fell from $11 billion to $9 billion. In
the first nine months of 1929, car sales dropped by more than one third.
■
Read A Collapsing Economy and The
Great Depression Begins with students
using the ReQuest strategy (TE, p. T23).
■
Discuss the causes of the Great Depression. Ask: What effect do you think
speculation had on stock prices before
the crash? (Possible answer: Speculation
drove prices up as people were able to borrow
much of the money needed to buy stocks.)
■
Ask: Why was overproduction a problem? (Businesses were making more products than people could afford to buy.)
Vocabulary Builder
decline (dee KLìN) v. to lose
strength or power over time
The Stock Market Crash
Screaming newspaper headlines
announced the stock market
crash of October 1929. Giant
fortunes were lost overnight.
Critical Thinking: Evaluate
Information What is the young
man in this picture trying to
do? Do you think he will be
successful? Explain.
Section 1 Hoover and the Crash 771
Use the information below to teach students this section’s high-use words.
High-Use Word
Definition and Sample Sentence
decline, p. 771
v. to lose strength or power over time
The Populist Party declined after the election of 1896.
voluntary, p. 775
adj. not forced; done of one’s own free will
Without a draft law, registration for the armed forces was completely
voluntary.
Answers
Stock market prices plummeted to new lows and many investors
lost fortunes overnight.
Evaluate Information He is trying to sell
his luxury car at a very cheap price. He
will likely have difficulty selling it because
many other people also have lost their
money.
Chapter 23 771
Instruction (continued)
■
■
■
Crisis in Banking A nationwide banking crisis also contributed
L2
Ask: How did bankruptcy worsen the
Depression? (Rising bankruptcies reduced
the number of consumers who were capable
of buying goods. This in turn added to the
problems caused by overproduction, causing
more businesses to struggle and lay off more
workers.)
Ask: How did failing farms worsen the
banking crisis? (As farms were unable to
repay their loans, small banks that had
issued the loans failed.)
Analyze Causes
Identify two sentences on
this page or the previous
page that give causes of the
Depression.
to the Depression. In the countryside, struggling farmers were
finding it impossible to repay their bank loans. When their farms
failed, many of the small banks that had loaned farmers money also
went out of business.
City banks failed, too. Some of the largest banks had invested in
the stock market or loaned huge amounts to speculators. After the
crash, terrified depositors flocked into banks, demanding to withdraw their savings. More than 5,500 banks closed between 1930 and
1933. Many depositors were left penniless.
The Downward Spiral With people unable to buy what
factories were producing, many workers lost their jobs. Thus, they
had even less money with which to make purchases. In a vicious
circle, declining sales led to more factory closings and layoffs. Many
companies were forced into bankruptcy. Bankruptcy is financial
failure caused by a company’s inability to pay its debts. These
bankruptcies, of course, caused even more layoffs.
The Great Depression soon spread worldwide. After World
War I, many European nations owed America huge sums of money.
A slowdown in international trade, however, caused these countries
to default, or fail to repay their loans. European nations sank into
their own economic depression.
To help students better understand the
concept of infrastructure, use the Concept Lesson Infrastructure. Provide students with copies of the Concept Organizer.
Teaching Resources, Unit 3,
Concept Lesson, p. 24; Concept Organizer, p. 6
Independent Practice
How did the Depression spread overseas?
Have students begin to fill in the Study
Guide for this section.
The Human Cost
Interactive Reading and
Notetaking Study Guide, Chapter 23,
Section 1 (Adapted Version also available.)
The Great Depression severely affected more people than any
previous downturn. During earlier depressions, most Americans still
lived on farms. They could feed their families in times of crisis. By
1930, however, far more Americans lived in cities and worked in
factories or offices. When factories or businesses closed, the jobless
had no money for food and no land on which to grow food.
Monitor Progress
As students fill in the Notetaking Study
Guide, circulate to make sure students
understand the importance of the stock
market crash and the causes of the Great
Depression. If students do not seem to
have a good understanding, have them
reread the section. Provide assistance as
needed.
The Unemployed Between 1929 and 1933, the unemployment
rate skyrocketed from 3 percent to 25 percent. Nationwide, some
13 million people were unemployed. Some cities were harder hit
than others. In Toledo, Ohio, four out of five workers had no work.
People lucky enough to have jobs saw their hours cut back and
their salaries slashed. Coal miners who had earned $7 a day before
the Depression now fought for the chance to work for a dollar.
Growing Poverty Grinding poverty crushed Americans’ spirits.
In cities, jobless people lined up at soup kitchens, waiting for meals.
People tried to sell apples or pencils on the street or to pick up trash
for food. Some men hopped freight trains in search of work.
On the outskirts of big cities, homeless people built communities
of rundown shacks. They called these makeshift towns Hoovervilles,
because they blamed the President for failing to solve the crisis. They
slept under “Hoover blankets,” or newspapers.
772 Chapter 23 The Great Depression and the New Deal
Answers
Reading Skill Possible answers:
“One major cause of the Great Depression
was overproduction” and “A nationwide
banking crisis also contributed to the
Depression.”
Because of slowing trade,
many countries that owed the United
States money were not able to repay their
loans.
772 Chapter 23
Differentiated Instruction
L1 Less Proficient Readers
L1 Special Needs
Causes and Effects Help students understand the economic processes that led to
the Great Depression by asking them to
make a cause-and-effect chart using information from the section. Have them make
a two-column chart with the headings
Cause and Effect. Then have students
write information from the section in the
appropriate column of the chart. Encourage students to compare their charts and
discuss the causes and effects they have
identified.
INFOGRAPHIC
The misery of the Great Depression touched all Americans.
Much of the most visible suffering took place in the
nation’s cities. Critical Thinking: Link Past and Present
How do you think you would react if another depression
like this one struck the United States?
Desperate for food, the jobless
lined up at soup kitchens operated
by churches and private charities.
Apple sellers were
a common sight
on street corners.
The Human Cost
p. 772
Instruction
L2
■
Have students read The Human Cost.
Remind them to answer the Section
Focus Question.
■
Ask: How did the Great Depression
affect workers who did not lose their
jobs? (Many saw their incomes fall substantially, such as miners whose wages fell
from $7 to $1 a day.)
■
Discuss the images on p. 773 with students. Ask: In what ways did people try
to cope with the Depression? (Possible
answer: They sold what they could, lived
where they could, and sought sources of
help.)
Independent Practice
Have students complete the Study Guide
for this section.
Interactive Reading and
Notetaking Study Guide, Chapter 23,
Section 1 (Adapted Version also available.)
Monitor Progress
As students fill in the Notetaking Study
Guide, circulate to make sure students
understand the human cost of the Great
Depression. If students do not seem to
have a good understanding, have them
reread the section. Provide assistance as
needed.
Percentage of Workers
Unemployment, 1927–1933
25
20
15
10
5
0
1927
1929
1931
1933
Year
Source: Historical Statistics of the United States
Unemployment reached its highest levels in
American history during the 1930s.
The homeless gathered
in miserable shantytowns,
nicknamed Hoovervilles.
773
History Background
Miners and the Company Store Miners
and other workers were sometimes paid in
scrip, which could only be redeemed at a
company-owned store or to pay for company-provided goods, such as a house.
One coal miner from West Virginia
described his experience in an interview
by Studs Terkel published in Hard Times
(1970): “About ’32, it got so they wouldn’t
let us work but two days a week. … They
didn’t let you draw no money at all. It was
all scrip. They had a man top of the hill
who took your tonnage down, how many
tons you loaded, and it was sent up to the
scrip office. If you made $20 over your
expenses—for house, rent, lights and all—
why, they laid you off till you spent that
$20.”
Answer
Link Past and Present Answers will vary,
but should reflect an understanding of the
Great Depression’s impact on people.
Chapter 23 Section 1 773
Hoover Responds
p. 774
Instruction
L2
■
Have students read Hoover Responds.
Remind students to look for cause and
effect.
■
Discuss the issue of federalism and the
division of powers between the federal,
state, and local governments. Ask:
According to Hoover, what groups
should be helping Americans during
the Depression? (He urged state and local
governments and private charities to help
Americans during the Depression.)
■
Ask: What was one effect of the violent
removal of the Bonus Army from
Washington, D.C.? (Many Americans
were outraged by the forceful treatment of
veterans.)
Independent Practice
Have students complete the Study Guide
for this section.
The Bonus Army
Impact on Families The Depression had a harsh effect on
In 1932, these World War I
veterans headed for Washington,
D.C., to demand their bonus.
Critical Thinking: Evaluate
Information What is the
meaning of the poster on the
right for the years 1918 and 1932?
American families. Many fathers left their homes in search of work.
Others, ashamed of being jobless, quit looking for work or deserted
their families. With their futures uncertain, young people put off
marriage plans. When couples did marry, they had fewer children.
For children, the Depression brought both hardship and a sense
of uncertainty. One woman recalled that, after her father lost his job,
her family had to move into a garage heated only by a coal stove:
we’d get out and get some snow and put
“itInonthethemorning,
stove and melt it and wash around our faces. Never
Interactive Reading and
Notetaking Study Guide, Chapter 23,
Section 1 (Adapted Version also available.)
the neck or anything. Put on our two pairs of socks on each
hand and two pairs of socks on our feet, and long underwear and lace it up with Goodwill shoes. Off we’d walk,
three, four miles to school.
”
Monitor Progress
—Dynamite Garland, quoted in Hard Times (Terkel)
■
■
As students complete the Notetaking
Study Guide, circulate to make sure students understand the reasons for and
effects of Hoover’s response to the
Depression. Provide assistance as
needed.
Many children suffered lifelong health problems from a lack of
food and dental care. Their education suffered as cash-strapped
school boards cut the school year or closed schools. Almost one
million rural children under the age of 13 did not attend school at all.
Tell students to fill in the last column of
the Reading Readiness Guide. Probe for
what they learned that confirms or
invalidates each statement.
Hoover Responds
What were Hoovervilles?
As you saw, many Americans blamed President Hoover for the
worsening crisis. Hoover’s advisers considered the Depression a
temporary setback. They recommended doing nothing.
Teaching Resources, Unit 8,
Reading Readiness Guide, p. 16
Government Aid Hoover disagreed. After his brilliant career in
mining and foreign aid administration, he believed in taking action.
However, he thought business leaders and local governments
should take the lead, rather than the federal government.
774 Chapter 23 The Great Depression and the New Deal
Differentiated Instruction
Answers
Evaluate Information The picture con-
trasts the government’s praise of veterans
at the end of World War I and its indifference to them in 1932.
Hoovervilles were makeshift communities of rundown shacks built
by homeless people during the Depression.
774 Chapter 23
L3 Advanced Readers
L3 Gift and Talented
Oral History Have students locate a copy
of Studs Terkel’s Hard Times, a series of
interviews about the Great Depression.
Ask students to browse the book for
excerpts which will help other students
understand life during the Great Depression. Then, ask them to perform readings
of these excerpts for the class and lead a
brief discussion of the issues raised in the
excerpts they chose.
Hoover met with business executives and encouraged city and
state governments to create public works projects to employ jobless
people. He also urged private charities to set up soup kitchens.
Eventually, Hoover realized that voluntary action alone would
not relieve the crisis. In 1932, he formed the Reconstruction Finance
Corporation (RFC) to fund critical businesses, such as banks, insurance companies, and railroads. The RFC also gave money to local
governments to fund public-works projects. Despite such measures,
the economic situation continued to worsen.
Assess and Reteach
Vocabulary Builder
voluntary (VAHL ahn tair ee)
adj. not forced; done of one’s
own free will
To further assess student understanding,
use the Progress Monitoring Transparency.
the President’s fate. Eight years earlier, Congress had approved a
bonus, or extra payment, of $1,000 for every veteran of World War I.
This bonus was not to be paid until 1945. Made desperate by the
Depression, some veterans demanded immediate payment.
When Hoover refused, an angry “Bonus Army” of at least
20,000 veterans marched to Washington, where they camped out. But
Congress also rejected their plea. Most marchers left, but about
2,000 stubbornly remained in tents or abandoned buildings. To clear
them out, government forces used tear gas, tanks, and machine guns.
This lopsided attack killed at least one veteran, injured 100, and left
the tent city a smoldering ruin. Many Americans were outraged by
the image of government forces firing on unarmed veterans.
Progress Monitoring Transparencies,
Chapter 23, Section 1
Reteach
Extend
Looking Back and Ahead The treatment of the Bonus
Army further damaged Hoover’s fading popularity. In the next
section, you will see how voters turned to a dynamic new leader.
Comprehension
and Critical Thinking
1. (a) List List the major troubles
that industries faced in the Great
Depression.
(b) Analyze Cause and Effect
How did those troubles cost people their jobs?
2. (a) Describe What actions did
President Hoover take to try to
ease the economic crisis?
(b) Detect Points of View Why
do you think Hoover wanted business leaders and local governments to take the lead?
Reading Skill
For: Self-test with instant help
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Web Code: mva-8231
Writing
3. Analyze Causes Reread the text
following the subheading “The
Downward Spiral.” Identify the
causes in this downward spiral.
Key Terms
Answer the following questions
in complete sentences that show
your understanding of the key
terms.
4. How can overproduction hurt the
economy?
5. When would a company declare
bankruptcy?
6. What happens when a company
or individual defaults on a loan?
L1
If students need more instruction, have
them read this section in the Interactive
Reading and Notetaking Study Guide and
complete the accompanying question.
What was the goal of the Bonus Army?
Check Your Progress
L2
Have students complete Check Your
Progress. Administer the Section Quiz.
Teaching Resources, Unit 8,
Section Quiz, p. 25
The Bonus Army In June 1932, a protest began that would seal
Section 1
Assess Progress
7. Review this section, including
photos and other visual elements.
List three possible topics for a
multimedia presentation that
includes non-print media such as
photographs, sound recordings,
interviews, computer presentations, and film. Choose one of the
three topics and write a sentence
describing the topic and the kinds
of materials you might use in your
presentation.
L3
Explain that there have been several economic crises in the history of the United
States. Have students research the fouryear depression beginning in 1893. Ask
students to summarize the causes of the
crisis and note any similarities between
those and the causes of the Great Depression.
For: Help in starting the Extend
activity
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Progress Monitoring Online
Students may check their comprehension of this section by completing the
Progress Monitoring Online graphic
organizer and self-quiz.
Answer
Section 1 Hoover and the Crash 775
Section
1 Check Your Progress
1. (a) Industries were overproducing
goods as incomes began falling. As a
result, businesses had fewer customers.
(b) The declines in sales made businesses less profitable, and they began laying
off workers.
2. (a) He encouraged city and state gov-
ernments to create public works projects
and he formed the RFC.
(b) Possible answer: He did not want
the federal government to grow.
3. Workers who lost jobs had less money
to make purchases. This decline in consumer spending hurt businesses, which
were forced to lay off more workers.
4. Overproduction can hurt the economy
by forcing companies to lay workers off
since there is no need to produce more.
5. A company would declare bankruptcy
when it is no longer able to pay its bills.
The goal of the Bonus Army
was to receive immediate payment of a
bonus promised to every veteran of World
War I that was to be paid out in 1945.
6. The loan is not honored, and the bor-
rowed money is not paid back.
7. Possible answers: Automobiles during
the Great Depression, Children during
the Great Depression, Life in Hoovervilles; Students’ sentences will vary, but
they should describe materials that
would be useful in their presentation.
Chapter 23 Section 1 775