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The Great Depression Begins


Chapter 17: The Great Depression Begins Section 1: Causes of the Depression I. The Election of 1928 When Calvin Coolidge decided not to run in 1928, he cleared the ... – PowerPoint PPT presentation

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Title: The Great Depression Begins

Chapter 17
  • The Great Depression Begins

Section 1
  • Causes of the Depression

I. The Election of 1928
  1. When Calvin Coolidge decided not to run in 1928,
    he cleared the way for Herbert Hoover to head the
    Republican ticket.
  2. The Democrats chose Alfred E. Smith, an Irish
    American from New Yorks Lower East Side, and the
    first Roman Catholic ever nominated for president.

I. The Election of 1928
  • 3. Many Protestants were willing to believed that
    the Catholic Church financed the Democratic Party
    and would rule the U.S. if Smith got into the
    White House
  • Republicans took credit for the prosperity of the
    1920s causing Herbert Hoover to win the election

II. The Long Bull Market
  • 4. A long period of rising stock prices in known
    as a bull market.
  • 5. Because of such a market, by 1929 between 3
    and 4 million Americans, or roughly 10 percent of
    households, owned stock.

II. The Long Bull Market
  • 6. Many investors bought stock on margin,
    meaning they made only a small cash down
    payment with the rest coming as a loan from a
  • 7. A problem arose if the stock began to fall in
    price, causing the broker to issue a margin call,
    demanding the investor to repay the loan at once

II. The Long Bull Market
  • Before the 1920s, the prices investors paid for
    stocks reflected the stocks true value but
    hordes of new inventors bid prices up without
    regard to a companys earning and profit.

III. The Great Crash
  • Black Thursday (10/24/29) stock market
  • Black Tuesday (10/29/29) plummeted
    even more, 30 billion lost (total wage earned by
    all Americans in that year)
  • 8. The stock market slide was not the major cause
    of the Great Depression, but it undermined the
    economys ability to hold out against its other

III. The Great Crash
  • 9. Another way the crash weakened the banks was
    that many banks themselves had take depositors
    money and invested it in the stock market, hoping
    for higher returns than they could get by using
    the money for conventional loans.
  • 10. A bank run takes place when many
    depositors decided to withdraw their money
    at one time, usually for fear the
    bank is going to collapse.

IV. The Roots of the Great Depression
  • 11. Most economists agree that over production
    was a key cause of the Depression.
  • Most Americans did not earn enough to buy up the
    flood of goods they helped produce
  • Another cause of the Depression was the uneven
    distribution of income, 5 of all Americans owned
    30 of the nations income

IV. The Roots of the Great Depression
  • 12. Many people who had bought high-cost items
    such as refrigerators on the installment plan
    reached a point where paying off their debts
    forced them to reduce other purchases.
  • 13. When sales of goods slowed manufactures cut
    production and laid-off employees.

IV. The Roots of the Great Depression
  • Jobless workers had to cut back purchase, further
    reducing sales
  • 14. The Hawley-Smoot Tariff raised the tax on
    many imports to the highest level in American
    history, and damaged America sales abroad.

IV. The Roots of the Great Depression
  • Federal Reserve Board helped cause the Depression
    by not raising interest rate to stop speculation,
    the kept the rates low which. The low rates
  • Encourage banks to make risky loans
  • Led business leaders to think the economy was
    still expanding so they borrowed money to expand
    production (led to overproduction
  • When the Federal Reserve Board finally did raise
    interest rates, tightening credit

Section 2
  • Life During the Depression

I. The Depression worsens
A. Lining Up at Soup Kitchens
  • People without jobs often joined bread lines or
    soup kitchens (provided by charities) to get free
    handouts and food

B. Living in Makeshift Villages
  • Families or individuals who could not pay rent or
    mortgages lost their homes, often having bailiffs
    throwing their belongings on the street
  • The homeless often found themselves living in
    shantytowns also called Hoovervilles
  • Hobos

C. The Dust Bowl
  • Farmers had uprooted the wild grasses that held
    the soils moisture to plant crops, when prices
    dropped it left the fields barren.
  • 1932 a drought hit the Great Plains, with no
    grass or crops to hold down the soil, it turned
    to dust causing the Dust Bowl
  • Hoping for a better life many farmers went to
    California (Okies)

II. Escaping the Depression
  • Groucho Marx
  • Actor
  • Animal Crakers

  • Marlene Dietrich
  • Actress
  • The Blue Angel

  • Greta Garbo
  • Actress
  • Anna Karenina

  • Walt Disney
  • Movie Maker
  • Snow White and the Seven Dwarfs

  • James Stewart
  • Actor
  • Mr. Smith Goes to Washington

  • Vivien Leigh
  • Actress
  • Gone with the Wind

  • Clark Gable
  • Actor
  • Gone with the Wind

  • Jack Benny
  • Radio

  • George Burns and Gracie Allen
  • Radio

III. The Depression in Art
  • Grant Wood
  • Painter
  • American Gothic

  • John Steinbeck
  • Author
  • The Grapes of Wrath

  • William Faulkner
  • Writer
  • The Sound and the Fury

  • Margaret Bourke-White
  • Photojournalist
  • Photos in Fortune Magazine

Section 3
  • Hoover Responds

I. Promoting Recovery
  • Hoover was hoping the avoid more bank runs and
    layoffs by urging consumers and business leaders
    to become more rational in their decision making
  • Hoover won a pledge from industry to keep factors
    open and to stop slashing wages, however the
    leaders abandoned the pledges

I. Promoting Recovery
  • To increase job availability he
    increased public works, however it
    only made up a fraction of the jobs
    lost in the private sector
  • Citizens blame the party in power for the
    stumbling economy so more Democrats were elected
    to Congress

II. Pumping Money Into the Economy
  • Hoover had to make sure that banks
    could make loans to corporation also
    they could expand production and rehire workers
  • Hoover created National Credit Corporation (NCC)
    to create a pool of money to enable troubled
    banks to continue lending money in their
    communities (did not work)
  • Hoover strongly opposed the federal governments
    participation in relief because he believed only
    the state and city government should give relief

III. In an Angry Mood
  • Hunger March Supported by the Communist party,
    marched on the streets of Washington D.C.
    shouting Feed the hungry, tax the rich, the
    police rounded them up until Congress said they
    had the right to march.

III. In an Angry Mood
  • Some farmers began destroying crops
    in a desperate attempt to raise
    crop prices by reducing the supply

III. In an Angry Mood
  • Bonus Marchers Wanted Congress to enact a 1000
    bonus for each veteran which was suppose to be in
    1945 but veterans wanted it early because of the
    Depression so they marched on Washington D.C.
    (Bonus Army). Senate voted the bill down.
  • Many of the marchers stayed in D.C. because they
    had no homes or jobs, some moved into unoccupied
    building. Hoover orders the building cleared, a
    police officer fired into the crowd and killed 2

III. In an Angry Mood
  • The nationwide press coverage of veterans under
    assault by troops present and ugly picture to the
  • Hoover failed to resolve the crisis of the
    Depression, but he did more to expand the
    economic role of the federal government
    (Reconstruction Finance Corporation 1st time the
    federal government established a federal agency
    to stimulate the economy)
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