Unit 3

THE GREAT

DEPRESSION

The Nations Sick Economy

Economic Troubles on the horizon

1. Industries in trouble

2. Farmers need a lift

3. Consumers have less money to spend

4. Living on credit- buy now pay later

5. Uneven distribution of wealth

Dreams of Riches in the Stock Market1. Dow Jones Industrial Average- A

measure of the stock markets health

2. “Bull Market”- a period of rising stock prices

3. Speculation- buying stock on the chance of quick profit, while ignoring the risk

4. Buying on Margin- Paying a small % of a stocks price as a down payment and barrowing the rest

The Market Crashes

September 1929- Stock Prices Peaked

No Regulations on Wall Street

Black Tuesday- 10/29/1929 the bottom fell out of the market

Financial Collapse

The crash signaled the beginning of the Great Depression- The period from 1929-1940 in which the economy plummeted and unemployment skyrocketed

Bank and Business Failures

People pulled money out of the banks

Banks had invested money in stock

No Regulations on Banks

25% of the nation became unemployed

Causes of the Great Depression

High Tariffs/Few Exports

Overproduction in Manufacturing & Agriculture

Buying on Credit and “On Margin”

No Regulations on Wall Street & Banks

HARDSHIPS AND SUFFERING DURING THE

DEPRESSION

Peoples Lives Devastated

Shantytowns- Little towns consisting of shacks

Soup Kitchens/Breadlines- Free or low cost food from charitable organizations

NOT THE GOVERNMENT

Dust Bowl

Farmers from Texas to North Dakota had destroyed grasslands from drought, high winds, and over cultivation

Hardest hit regions of KS, OK, TX, NM, CO became known as the “Dust Bowl”

Okies- migrant farm workers that headed to California

Effects on the American Family

Men struggled

Walked the streets looking for jobs

Some abandoned their families

Some became “hoboes”

Suicide rates skyrocketed

Children Suffered

Poor diets and no health care

Schools shut down

Many sent to live with their grandparents

Young people quit going to college

People put off getting married and having a large family

HOOVER STRUGGLES WITH THE DEPRESSION

Hoover and the Depression

Believed handouts would weaken peoples self-respect Did not believe in direct relief- aid to the poorFederal Home Loan Bank Act- lowered mortgage rates for homeowners and allowed farmers to refinance to avoid foreclosure

Reconstruction Finance Corporation (RFC)- Provided $2 Billion for emergency financing for banks, insurance companies, railroads, and other large businesses

The Bonus Army

Consisted of 20,000 WWI veterans

Wanted early payment of a promised bonus

Hoover sent in the Army to remove them

Used tear gas and set fire to their shanties

1,000 people gassed including an 11 month old girl who died and an 8 year old boy that was left blind