Work Period: Great Depression Notes Activity: Political Cartoon. Opening: Reading Journal 6.3. Closing: Quiz
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1 STANDARD 6.0- DEMONSTRATE AN UNDERSTANDING OF THE CONFLICT BET WEEN TRADITIONALISM AND PROGRESSIVISM IN THE 1920S AND THE ECONOMIC COLLAPSE AND THE POLITICAL RESPONSE TO THE ECONOMIC CRISIS IN THE 1930S Opening: Reading Journal 6.3 Work Period: Great Depression Notes Activity: Political Cartoon Closing: Quiz
2 Explain the causes and consequences of the Great Depression OBJECTIVE
3 THE GREAT DEPRESSION BEGINS Photos by photographer Dorothea Lange
4 THE NATION S SICK ECONOMY As the 1920s advanced, serious problems threatened the economy while Important industries struggled, including: Agriculture Railroads Textiles Steel Mining Lumber Automobiles Housing Consumer goods
5 CONSUMER SPENDING DOWN By the late 1920s, American consumers were buying less (demand declined) Rising prices, stagnant wages and overbuying on credit were to blame Most people did not have the money to buy the flood of goods factories produced (overproduction)
6 A SUPERFICIAL PROSPERITY Many during the 1920s believed the prosperity would go on forever Wages for most workers fell while productivity increased
7 GAP BETWEEN RICH & POOR WIDENED Photo by Dorothea Lange The gap between rich and poor widened The wealthiest 1% saw their income rise 75% The rest of the population saw an increase of only 9% More than 70% of American families earned less than $2500 per year
8 THE UNFORTUNATE CYCLE Companies did not pass on their prosperity to their employees by paying them more, so workers couldn t afford to buy the products they made. When consumers reached their limit of installments, they had to stop spending. No spending means layoffs for workers.
9 FARMERS STRUGGLE Photo by Dorothea Lange During World War I European demand for American crops soared After the war, they faced international competition, depressed prices, debt and taxes Farmers defaulted on bank loans causing banks to fail BEFORE the crash in Fewer banks= limited number of loans for everyone else.
10 Gov t abandoned policy of progressivism and limited regulation of Big Business (unlike Sherman Anti-Trust and trust-busing of TR) Return to laissez-faire meant corporations became increasingly powerful The tariff was raised and the Supreme Court overturned child labor and minimum wage laws for women Income taxes for wealthy slashed, and they invested in luxury goods and the stock market instead of new factories REPUBLICAN ADMINISTRATIONS
11 THE STOCK MARKET By 1929, many Americans were invested in the Stock Market The Stock Market had become the most visible symbol of a prosperous American economy ( get rich quick )
12 SEEDS OF TROUBLE The Stock Market s bubble was about to break By the late 1920s, problems with the economy emerged Speculation: Too many Americans were engaged in speculation buying stocks & bonds hoping for a quick profit Margin: Americans were buying on margin paying a small percentage of a stock s price as a down payment and borrowing the rest
13 In September the Stock Market had some unusual up & down movements On October 24, the market took a plunge...the worst was yet to come On October 29, now known as Black Tuesday, the bottom fell out 16.4 million shares were sold that day prices plummeted People who had bought on margin (credit) were stuck with huge debts THE 1929 CRASH
14 By mid-november, investors had lost about $30 billion
15 Stock market crash video clip ACTIVITY ONE
16 THE GREAT DEPRESSION The Stock Market crash signaled the beginning of the Great Depression The Great Depression is generally defined as the period from in which the economy plummeted and unemployment skyrocketed The crash alone did not cause the Great Depression, but it hastened its arrival
17 FINANCIAL COLLAPSE After the crash, many Americans panicked and withdrew their money from banks Banks had invested in the Stock Market and lost money In banks fail By ,000 of the 25,000 banks nationwide had collapsed Bank run 1929, Los Angeles
18 THE FEDERAL RESERVE The Federal Reserve (1913), the nation s central bank, has the capacity to regulate the money supply by making loans to banks, which then make loans to businesses, which hire workers, who buy products. Early in the 1920s, the Fed pursued easy credit policies. Charged low interest rates which helped fuel stock market speculation mania. In the late 1920s, the Fed tried to tighten money in order to curb stock market speculation, ultimately discouraging lending.
19 GNP DROPS, UNEMPLOYMENT SOARS Between , the U.S. Gross National Product (GNP) the total output of a nation s goods & services fell nearly 50% from $104 billion to $59 billion 90,000 businesses went bankrupt Unemployment leaped from 3% in 1929 to 25% in 1933
20 HAWLEY-SMOOT TARIFF To protect American industry from foreign competition, Congress passed the toughest tariff in U.S. history called the Hawley- Smoot Tariff It was meant to protect U.S. industry yet had the opposite effect-limited international trade. Foreigners were unable to sell their goods in US markets and did not have dollars to buy American goods. Other countries enacted their own tariffs and soon world trade fell 40%
21 PRESIDENT HOOVER Went farther than any other president and urged companies to voluntarily maintain wages and hours. Lower consumer demand made this impossible and companies laid off workers and cut hours. Advocating rugged individualism, Hoover urged that prosperity was just around the corner Hooverblankets Hoovervilles Hooverflags
22 HARDSHIPS DURING DEPRESSION The Great Depression brought hardship, homelessness, and hunger to millions Across the country, people lost their jobs, and their homes (25% unemployed) Many wandered from town to town selling apples and pencils door to door. No system of unemployment insurance Wages and hours were cut and people bought only essential goods. Runs on the banks (people tried to withdraw all of their money) caused banks to collapse
23 SOUP KITCHENS Unemployed men wait in line for food this particular soup kitchen was sponsored by Al Capone One of the common features of urban areas during the era were soup kitchens and bread lines Soup kitchens and bread lines offered free or low-cost food for people
24 THE DUST BOWL A severe drought gripped the Great Plains in the early 1930s Wind scattered the topsoil, exposing sand and grit The resulting dust traveled hundreds of miles One storm in 1934 picked up millions of tons of dust from the Plains an carried it to the East Coast Kansas Farmer, 1933
25 Dust storm approaching Stratford, Texas
26 Storm approaching Elkhart, Kansas in 1937
27 Dust buried cars and wagons in South Dakota in 1936
28 HARDEST HIT REGIONS Boy covers his mouth to avoid dust, 1935 Kansas, Oklahoma, Texas, New Mexico, and Colorado were the hardest hit regions during the Dust Bowl Many farmers ( Okies ) migrated to California and other Pacific Coast states The plains had been damaged by overgrazing since the 1890s, and the winds blew the top soil away.
29 Photographer Dorothea Lange captures a family headed west to escape the dust storms
30
31 EFFECTS OF DEPRESSION Families undernourished Schools closed (couldn t pay teachers) Marriages delayed Birthrate fell Men abandoned families Some families worked together Women/children forced to work States and charities couldn t fix the problem Needed the gov t to step up.
32 A 1932 incident further damaged Hoover s image That spring about 15,000 World War I vets arrived in Washington to support a proposed bill The Patman Bill would have authorized Congress to pay a bonus to WWI vets immediately The bonus was scheduled to be paid in The Army vets wanted it NOW BONUS ARMY
33 BONUS ARMY TURNED DOWN Thousands of Bonus Army soldiers protest Spring 1932 Hoover called the Bonus marchers, Communists and criminals On June 17, 1932 the Senate voted down the Patman Bill
34 BONUS MARCHERS CLASH WITH SOLDIERS Hoover told the Bonus marchers to go home most did 2,000 refused to leave Hoover sent a force of 1,000 soldiers under the command of General Douglas MacArthur and his aide Dwight Eisenhower
35 AMERICANS SHOCKED AT TREATMENT OF WWI VETS MacArthur s 12 th infantry gassed more than 1,000 marchers, including an 11-month old baby, who died Two vets were shot and scores injured Americans were outraged
36 Hoover had little chance to be re-elected in Americans demanded help from their government.
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