The Depression Hits

1. Great Depression: The period between __________________ of economic hard times that followed the _____________ • The stock market crash did NOT cause the Depression BUT • it shook people’s confidence of the __________________ • People were shocked & confused as to how the 20s • __________________ vanished CAUSES  • ___________________of the banking system • Banks made “unwise” _______________ • Banks lent $$ to people who invested in the stock market • When market crashed, borrowers could not repay loans • Without the $$ from loans, the banks could not give ______________________ their $$ when they needed it • Result: many banks were ___________________________ • Overproduction • Factories & _____________ produced vast amount of products • Wages didn’t keep up with prices = workers could NOT afford to buy goods • Farmers had little $$ for cars & other items • Factories/ farms produced more _____________ than people were buying • As orders slowed, factories _______________or fired people The Depression Hits • Bank Closures • - ___________+ banks closed between 1929-1932 • - If bank closed – depositors lost the $$ that they had deposited • - Often, a family’s life savings vanished ________________________ • Hard Times • - When the crash happened, millions of Americans lived in __________________and worked in ___________________ • - When factories closed, the jobless had no $$ for _____________ & no _______________to grow any on • Rising Unemployment • - As depression spread, ___________________________ soared • - _________ workers were jobless • Millions worked shortened hours or took pay cuts so people literally worked themselves to death • ________________________________________________________ • Streets filled with peddlers, beggars, scavengers • Shoe shiners & _____________________________ • Those who were rich now experienced _________________________________

2. Hoover was deeply concerned as well as confused BUT didn’t think the gov’t should become directly involved in helping to end the business crisis • The Human Cost • - ________________ & birth rates dropped • - Hungry people searched through ________________ • - Many families split up as men & boys left to find work & hopefully one day return • - Many “_________________________________” living in railroad cars & hitching • - A return to tenement housing & slum situations • - Families starting _________________________to preserve food • - The G.D. shook the belief in an American identity • - Total _____________________replaced confidence • - He thought that would cause ____________ to become too ________________ • - We just fought with other countries led by __________________ • - He felt it was up to ______ ___________to work together to end the downslide Government Relief Programs: programs to help the needy • - At first, ________________ was against these & he urged business leaders to keep workers employed/ maintain wages • - Hoover called on private charities to help the needy • Churches set up _________________________________: places where the hungry could get a free meal • Ethnic communities organized their own relief efforts • - Conditions grew ______________________ • - Hoover realized other steps were needed • - He set up _____________________: projects built by the gov’t for public use • Gov’t hired workers to build ________________, dams & highways • By providing jobs, it enabled people to earn $$ • Hoover asked Congress to approve the Reconstruction Finance Corporation • (________): 1932 – loaned money to banks, railroads & insurance companies to help them stay in business • The hope was that by saving these businesses, he would save thousands of ___________

3. Snowball Effects of the G.D. After the crash, the economy slid downhill at a fast pace Stock market crash  ____________________ no $$ from investors  businesses could NOT grow or expand  businesses could NOT get loan $$ from banks BECAUSE __________________________________________________ Bankrupt: when businesses are unable to pay debts Factories cut back on production  ________________________ people were fired  unemployed workers had little $$ to spend  ________________________________ businesses went bankrupt & closed  more people were fired from working WW1 Loans After WW1, U.S. had loaned large amounts of $$ to ______________________________ to pay off war debts…stock market crash  U.S. banks stopped making loans as they were hemorrhaging $$  _______________________________________________________ European banks began to fail