Ch. 11 Part 1The Beginnings of the

Great Depression

The Election of 1928 • The Republican Herbert Hoover vs. Democrat Alfred E. Smith.• Smith was the first Roman Catholic nominated for the

presidency.• If you favored prohibition you were called a “dry.”• If you wanted prohibition repealed you were called “wet.”• Hoover was elected by a large margin of 444 to 87 electoral

votes.• Hoover promised such things as “a chicken in every pot and two

cars in every garage.”• "We in America today are nearer to the final triumph over

poverty than ever before in the history of any land. The poorhouse is vanishing from among us."

Herbert Hoover

At this point life in the US is still GREAT! The

Roaring 20s is still going strong, and

people are filled with hope.

Stock Market Increase

• A Bull Market is when stock steadily rises.• Many people used this time of progress in the

1920s to invest in the stock market.• If the price of the stock fell, the broker could

issue a Margin Call. This forced you to pay up on your loans.

• People began to sell their stock and make lots of money since the market was doing so well.

Stock Market Crash• October 24th 1929 is known as Black Thursday. This is

when prices went down.• People started getting nervous and began selling their

stock.• Then they have the weekend to think…and worry…and

talk…and worry…and worry…and worry• October 29th 1929 is known as Black Tuesday. Prices

dropped $10-$15 billion.• This drop in prices weakened the nations banks. People

then could not borrow money.• Many people began to withdraw money from banks which

forced the banks to close.

Stock prices in Great Depression

“Bank Run” at beginning of panic

Great Crash Investors

Businesses and WorkersInvestors lose

millions.

Businesses lose profits.

Consumer spending drops.

Workers are laid

off.

Businesses cut investment and

production. Some fail.

BanksBusinesses

and workers cannot repay bank loans.

Savings accounts are wiped

out.

Bank runs

occur.

Banks run out of money

and fail.

World Payments

Overall U.S. production plummets.

U.S. investors have little or no money to

invest.

U.S. investments in Germany

decline.

German war payments to Allies fall off.

Europeans cannot afford

American goods.

Allies cannot pay debts to

United States.

Great Crash Investors

Investors lose millions.

Businesses lose profits.

Great Crash Investors

Businesses and WorkersInvestors lose

millions.

Businesses lose profits.

Consumer spending drops.

Workers are laid

off.

Businesses cut investment and

production Some fail.

Great Crash Investors

Businesses and WorkersInvestors lose

millions.

Businesses lose profits.

Consumer spending drops.

Workers are laid

off.

Businesses cut investment and

production Some fail.

BanksBusinesses

and workers cannot repay bank loans.

Savings accounts are wiped

out.

Bank runs

occur.

Banks run out of money

and fail.

World Payments

Overall U.S. production plummets.

U.S. investors have little or no money to

invest.

U.S. investments in Germany

decline.

German war payments to Allies fall off.

Europeans cannot afford

American goods.

Allies cannot pay debts to

United States.

Effects of the Great Crash, 1929Great Crash

Investors

Businesses and WorkersInvestors lose

millions.

Businesses lose profits.

Consumer spending drops.

Workers are laid

off.

Businesses cut investment and

production Some fail.

Banks

Businesses and workers cannot

repay bank loans.

Savings accounts are wiped out.

Bank runs

occur.

Banks run out of

money and fail.

World Payments

Overall U.S. production plummets.

U.S. investors have little or no money to

invest.

U.S. investments in

Germany decline.

German war payments to Allies fall off.

Europeans cannot afford

American goods.

Allies cannot pay debts to United

States.

The Great Depression Begins• The Great Depression took place from 1930 to

1939. • During this time the prices of stock fell 40%.

BY 1933:• 9,000 banks went out of business and 9 million

savings accounts were wiped out.• 86,00 businesses failed, and wages were decreased

by an average of 60%. • The unemployment rate went from 9% all the way

to 25%, about 15 million jobless people.

Charities Help• Private charities and millionaires would provide

soup kitchens and bread lines.• The poor and homeless would line up to receive a

free meal.

Shantytowns and Hoovervilles • Families that could not pay rent or mortgage were forced to

live on the street.• Many people built homes of cardboard, scrap metal, and

lumber pieces.• Shantytowns and Hoovervilles were nicknames of

“neighborhoods for homeless.”• Many people who did not want to live in a cardboard home

began to wonder from city to city jumping boxcars for rides. These people were known as hobos.

Hobo Codes

The Story of Us: Great Depression

The Dust Bowl• To make matters worse, the Midwest experienced the worst

drought in history in 1932.• Without water for crops, many farmers could not pay their

rent, and thus became hobos.• The sun dried earth from Texas to the Dakotas was

nicknamed the Dust Bowl.• Many people from Oklahoma moved west to California to

work picking fruit in the fertile San Joaquin Valley. These people were known as Okies.

The Migrant Mother

The Story of Us: Dust Bowl

Surviving the Dust Bowl

Entertainment

• Many people found escape from the hard life in movies, books, and radio broadcasts.

• Some examples of depression era entertainment:Movies Books Radio ShowsAnimal Crackers The Grapes of Wrath Lone Ranger Snow White & 7 Dwarfs The Sound and the Fury The Guiding LightThe Wizard of Oz Look Homeward Angel Green Hornet Gone With The Wind George BurnsKing Kong