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The Great Depression: Economic Troubles and the Stock Market Crash

Explore the economic troubles of the late 1920s, including declining industries, crop price decline, and the failure of banks and businesses. Learn about the stock market crash of 1929 and its devastating impact, leading to the Great Depression. Discover the worldwide effects of the Depression and the causes that contributed to this catastrophic event.

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The Great Depression: Economic Troubles and the Stock Market Crash

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  1. Chapter 14 THE GREAT DEPRESSION BEGINS

  2. Section 1 • Economic troubles • The Stock Market crashes • Bank and business failure

  3. Economic Troubles • Late 1920s industries – railroads, textiles, steel, mining, lumbering – barley made a profit • “Boom industries” declined- automobiles, consumer goods, construction • Crop prices declined by 40 percent -> farmers defaulted on their loans -> banks seized farms as payment for debt -> many banks failed • Price support bills for wheat, corn, cotton, tobacco were vetoed by Pres. Coolidge

  4. Economic Troubles • Installment plans were used to buy good on credit in the 1920s -> people accumulated debt • Mass production of goods, advertising, mass media pressured people into buying • Only 1/10 city homes had an electric refrigerator but the income of the rich went up by 75%

  5. The Stock Market • By 1929 most Americans still believed the economy was strong • Many invested in the stock market • Dow Jones Industrial Average = stock prices of 30 representative large firms trading on the NY Stock Exchange • The Dow reached a high in the 1920s -> average Americans bought stocks • Speculation – bought stocks on the chance of a quick profit while ignoring the risks • Buying on margin – pay a small percentage of a stock and borrow money for the rest

  6. The Stock Market Crashes • September 1929, stock prices peaked and then fell • Some panicked and sold their stocks • October 29 – Black Tuesday – shareholders quickly try to sell stocks has prices go even lower • 16.4 million shares are sold • Millions of shares are not purchased • Huge debts for those who bought stock on credit • Investors lost $30 billion

  7. The Great Depression • 1929 – 1940 beginning with the stock market crash • People took money out of banks • Banks had invested in the stock market and could not give people their money • 1,000s of banks closed • Govt. did not protect bank accounts • 90,000 business went bankrupt (railroads + automobiles) • Unemployment went from 3% (1929) to 25% (1933)

  8. Worldwide Effects • U.S. imported fewer European goods • 1930 – Hawley – Smoot Tariff Act • Raised tax on foreign goods • Other countries did not have enough money to buy American goods • Made unemployment worse

  9. Causes of the Great Depression • Tariffs and war debt cut down the foreign market for American goods • Crisis in farming • Availability of easy credit • Unequal distribution of income

  10. 1. What do you think the spirit of the farm auction was in the 1920s?

  11. 1. What does the cartoonist suggest will happen to individuals because of the crash? • 2. How does the cartoonist show the sense of fear and shock? • 3. What do the looks on people’s faces indicate about the impact of the crash? Day of Wrath

  12. Create a Political Cartoon • Illustrate some aspect of the stock market crash • Its effects on business • business people • farmers • consumers • Cartoons should • Illustrate the effects of the crash • Convey (show) the sense of fear and shock inspired by the crash • Include a caption or title that captures the essential spirit of the illustration

  13. Sample Slide with Image 1) Describe what you see in this picture. 2) When and where do you think this picture was taken? Explain your answer.

  14. The Dust Bowl

  15. The Dust Bowl • Parts of the Great Plains that experienced the most intense soil erosion and dust storms of the 1930s. • Parts of Oklahoma, Texas, Kansas, Colorado, and smaller parts of New Mexico and Nebraska.

  16. The Dust Bowl • There were more than 300 dust storms, also known as “Black Blizzards,” between 1933 and 1938. • These storms often featured fast moving clouds of dust several miles wide that covered farms and homes, destroyed crops, and made people sick.

  17. The Dust Bowl • Many people abandoned their homes and looked for work in Western states • However, many stayed behind and attempted to maintain their lives and farms. Migrant family in San Francisco, 1935 Farmer leveling dust hills in Texas, 1938

  18. Today’s Central Historical Question: What caused the Dust Bowl?

  19. Procedure (after groups are organized)1. Record your first hypothesis2. Read Document A independently (5 minutes)3. As a group, complete the section of the graphic organizer for that document (4-5 minutes) -----Natural disaster or people’s actions4. Share as a class (2-3 minutes)5. Repeat process for documents B, C, and D6. Rewrite/change your hypothesis (if necessary) after discussing documents b, and c

  20. Procedure – Guiding Questions1. Document A – with me 2. Document B – complete guiding questions with your group (5 minutes) and discuss with class (3 minutes)3. Document C and D – complete guiding questions with your group (10 – 15 minutes)

  21. Document E 1. What were four causes of the Dust Bowl that professor Hurt identifies? 2. What were the long term effects of mechanized agriculture on the farmland?3. Is this a reliable account? Why or why not?

  22. Justification Paragraph – What caused the Dust Bowl? 1. State your claim – “The Dust Bowl was caused by……” 2. State the reason – “The reason this led to the Dust Bowl was because ……..” 3. Cite evidence (at least 2 documents) – “In Document A it states ……..” 4. Use academic language – “As a result of…” “If ……… then ……..” “This was a cause or effect of ……..” “Documents A and B are similar or different because…” “On the other hand…..” “As opposed to ……” “From the perspective of….”5. Use content vocabulary (at least 3) – overcropping, drought, cultivated, erosion, catastrophe, volatile, incessant, conserve, cultivated, abandoned, prosperous, gales, irreparably, Great Plains, etc.

  23. Discussion • 1. What caused the Dust Bowl? • 2. Whose hypotheses changed across rounds? How? Why? • 3. Which documents and what evidence did you find most convincing? Why?

  24. Journal • Write about three aspects of the Dust Bowl that you did know about before viewing the documentary.

  25. Section 2 • Hardship and suffering during the Depression

  26. DUST BOWL DOCUMENTARY • http://www.pbs.org/wgbh/americanexperience/films/dustbowl/player/

  27. The Depression in the Cities • Shantytowns – little towns consisting of shacks • Soup kitchens – offered low-cost or free food • Breadlines – charitable organizations gave away free bread • Latinos and African Americans had the lowest pay and were targets of racial violence

  28. How did the Great Depression affect minorities?

  29. The Depression in Rural Areas • Most farmers could grow food for their families • Thousands of farmers lost their land

  30. Effects on the American Family-- family unity but some broke apart-- some men abandon their families because they cannot find jobs-- “hobos” = wanderers/beggars (300,000)

  31. Why did so many men leave their homes?

  32. Women and Children Struggle to Survive • No direct relief – cash or food provided by the govt. • Women who worked were looked down upon • Malnutrition leads to children developing rickets

  33. “Wild Boys”

  34. How did the Great Depression affect women and children?

  35. Psychological Effects • Dreams are crushed • Suicide goes up by 30% • Fewer marriages • More people in mental institutions • Develop habits of savings • Help strangers

  36. Questions • 1. How is what happened to men during the Great Depression different from what happened to women and children? • 2. How did the Dust Bowl conditions in the Great Plains affect the entire country? • 3. In what ways did the Great Depression affect people’s outlook?

  37. Section 3: Hoover Struggles with the Depression

  38. President Hoover’s 1928 campaign add • When the Depression begins in 1929 how do you think people respond to this idea? ….and a car in every garage.”

  39. Hoover’s Philosophy of Govt. • Encourages voluntary cooperation between businesses and workers • Federal govt. should only guide relief • “rugged individualism” – people should look after themselves

  40. President Hoover believed the government could help the economy by ______________________________________________________.

  41. Hoover’s Cautious Reaction • Bring leaders together from business, banking, labor • Work together to find solutions • Asks employers not to cut wages • Ask labor leaders to not strike

  42. Economy in 1930 • Unemployment continues to rise

  43. Hoover Takes Action • Federal funds used for public works programs • 1929 – authorizes the construction of the Hoover Dam • Provides electricity, flood control, regular water supply to California, Nevada, Arizona

  44. Hoovervilles

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