Contents

Section 1 : The Nation's Sick EconomyIndustries in troubleFarmers need a liftUneven incomeHoover takes the nationStock market crashesFinancial collapse

Section 2 : Hardship and suffering during the depressionThe Depression Devastates People’s LivesAfrican Americans life And Latinos Depression in rural areasThe Dust BowlEffects on familyMen in the streetsWoman, children suffer hardshipSocial and psychological effects

Section 3 : Hoover Struggles with the DepressionHoover tries to Reassure the NationHoover's PhilosophyHoover took cautious footstepsBoulder DamDemocrats win in 1930 Congressional electionsHoover Takes ActionGassing The Bonus Army

Chapter 22Section 1

The Nation's Sick Economy

In the 1920s, many problems appeared as the farmers and industries produced more than theamount that they could sell for profit. Therefore, both consumers and farmers were going deeperinto debt which signaled the Great Depression.

Industries in troubleThe "boom" in the industries in 1920s made industries produce more to get more profit, but

the reverse happened. Key basic industries (railroads, textiles, and steel) started to fall which ledto the decrease of available jobs such as furniture manufacturing and lumbering.

Farmers need a liftFarmers planted a lot of crops due to the high demand of crops during the war. After the war,

the demand dropped, prices went down and the income of farmers decreased. They lost theirfarms to pay their debt to the banks. To save those farmers, Congress passed the McNary-Haugen - a price support for key products. The government would buy surplus crops atguaranteed prices and sell them on the world market. However, President Coolidge vetoed thebill twice and he commented, "Farmers have never made money. I don't believe we can do muchabout it."

President Coolidge

Farm foreclose in Iowa

Consumers have less money to spendFarm foreclose, unemployment caused people buy less goods because the production wasgrowing much faster than wages. This made the companies had less profit, so the bank made anew system of payment called credit - an arrangement in which consumers agreed to buy nowand pay later for purchases. By making credit easily available, businesses brought manyAmerican into debt. Facing with huge debt, consumers cut back on spending.

Uneven distribution of incomeDuring 1920s, the income of the wealthiest in America rose by 75%, compared with a 9%

increased for America as a whole. 70% people earned less than 2500$ a year. Families thatearned double that could not afford their living. Therefore, people could not buy goods thatfactories produced.

Uneven income during 1920sHoover takes the nation

The election of 1928

Herbert Hoover competed with Alfred E. SmithHoover was the secretary of commerce. He was mining engineer from Iowa who had never

run for public office. Not like Hoover, Smith was a career politician who had served four termsas governor of New York. Hoover was a republican while Smith was a democrat. Hoover wonhis presidency with a message : "We in America are nearer to the final triumph over poverty thanever before". It was a clearly proof that most American was happy with Republican leadership.

Dream of Riches in Stock MarketBy 1929, economists warned people about the weakness in economy. During this period,

stock rose steadily, and sometimes it rose very high. For example, the Dow had reached a high of381 points which was nearly three times higher than 5 years earlier. This was called "BullMarket" - a period of rising stock prices. Stock prices depended on a barometer called DowJones Industrial Average. 1929, 4 millions of American owned stocks. They engagedthemselves in speculation - they bought stocks and bonds on the chance if a quick profit whileignoring the risks. Many also began buying on margin - paying a small percentage of a stock'sprice as a down payment and borrowing the rest. These became easy money for investors;therefore, they began to buy and sell uncontrollably. The bad thing was if the value of stocksdeclined, people who bought on margin could never pay loans.

The Stock Market CrashesIn early September 1912, the stock prices increased quickly and after reaching 381 points-

the number that Americans would not reach again for another 25 years, the stock prices began todecrease. On 24th October ( known as Black Thursday), the Stock Market commenced to dropfaster; at the end of the day, the prices stopped at 299.47. Some investors tried to sold theirstocks rapidly and about 13 million shares were sold. Then, when the trading was opened onOctober 29th which was known as "Black Tuesday", the worst day ever in American economichistory, it continued to drop down to 260 point ( almost 13%). More than 16.4 million shares

were traded and millions of shares could not find buyers. In sum, Dow Jones Industrial Averagehad dropped about 40% in the eight weeks since early September.

There was no doubt that the stock market had collapsed completely. Many people were in debtwhile others lost their savings. During October, stockholders lost about $16 million and by themiddle of November, they lost about $30 billion. Black Tuesday marked the beginning of theGreat Depression- a decade of economic struggles from 1929 to 1940 in the United States and allover the world.

Day Of Wrath

Graph: The Collapse of Stock Market

Financial CollapseBank and Business Failures

After the crash, people tried to withdraw money from the banks. In 1933, 11,000 out of25,000 banks were closed. The collapse of the stock market hit business and people terribly . Inbusiness, national expense for production had to be cut from $104 billion to $59 billion, about90,000 businesses went bankrupt. In society, people lost their jobs (from 3% in 1929 to 25% in1933), around 13 million people were unemployed. Moreover, businesses needed to reducewages, working hours and maybe laid off some workers.

Worldwide Shock WavesAmericans had difficulties trading goods and farm products abroad.Additionally, the United States was not the only country suffering from the economic

situation. Other countries like England had to withstand the industry chaos after the end of WorldWar I and Germany had to bear the expense to the Allies because of having caused all thedamage.. In 1930 the Hawley-Smoot tariff was signed. Congressman wanted to prevent othercountries from gaining American currency and protecting their goods by raising import taxes.

Willis C.Hawley (left) and Reed SmootIt led to two outcomes. First, at home, there was a rise in the unemployment rate since there

was no demand for jobs. Second, other countries took revenge on America because of theHawley-Smoot tariff.

The world trade fell in region of 40%.Causes of the Great Depression

In economists' opinion, they agreed the stock market crash was not the main cause that ledto the Great Depression in the next few years. According to them and historians, there are fourcauses leading to the economic crisis:

◦ Tariffs and war debt policies that cut down the foreign market for Americangoods

◦ A crisis in the farm sector◦ The availability of easy credit◦ A unequal distribution of income

Americans could not believe in the failure of the economic.However, the American President - Herbert Hoover encouraged his people to keep their

faith. Unfortunately, the economic situation was still in imminent danger.

Section 2 - Hardship and suffering during thedepression.

This is the big picture named "Migrant Mother" become of of the most recognizablesymbols of the Depression.

The Depression Devastates People’s LivesDepression brought a huge impact on people life: hardship, homelessness and hunger. In citiesacross the country, people lost their jobs. No money left so they ended up with sleeping in thestreet, lack of food. Some even slept in dirty and unsafe places or built makeshift out of scrapmaterial. Soup kitchens is provided by organizations or public agencies offering free or low-costfood and bread lines, which is lines of people waiting to receive food.

This picture shows the soup bread line that people were waiting for their food.

People built makeshift out of scrap materials to live.

African Americans life And LatinosThere life was especially difficult. Their unemployment rates were higher, lowest paid and racialviolence from unemployed whites competing for the same jobs 24 died in 1933.

Depression in rural areasLife in rural areas was hard but it did have one advantage over city life: Most farmers could growfood for their families. With falling prices and rising debt thousands of farmers lost their land.Many farmers turned to tenant farming and barely scraped out a living.

The Dust BowlDrought began in 1930 destroyed havoc on the Great Plains. More than 500,000 Americanswere left homeless. 356 houses had to be torn down after one storm alone. Many Americansmigrated west looking for work. Some residents of the Plains, especially in Kansas andOklahoma fell ill and died of dust. During the drought of the 1930s, with no natural barrier liketrees to keep the soil in place, it dried, then it turned to dust, and blew away eastward andsouthward in huge dust area.

This is the big picture of a farmer and his two sons during a dust storm

Place that the Dust Bowl occurred

Effects on familyDepression took a huge effects on the American Family. At the time when money was hard tofind families entertained themselves by staying at home and playing board games or listening tothe radio. In the harsh life of Great Depression some families even broke apart.

Men in the streetsMany men had difficulty with finding job because they had to support to work and support theirfamilies. They have to walk in the street everyday and searching for jobs as time passed by.Some even give up and leave their families. During the Great Depression there was no food orcash to support the poor from the government. Some place they still have support but the cashwas very low. For example, in New York at that time the weekly payment for each family is justonly 2.39$ per family.

WomanWoman worked hard to help their families. They did jobs like producing canned food or sewedclothes. They also kept and saved money for families, at those day you even have to do anythingto save just a penny. They can even worked outside but they make less money than men made.

Children suffer hardshipChildren also had to suffered during the Great Depression. Little money led to lack of food andhealth care so children had to faced serious health problems. In 1933, some 2,600 across thenation had shut down leaving more than 300,000 students out of schools. Many teenagers lookedfor a way out of suffering. They went to work instead; they often received harsh jobs like workedin sweatshops and worked under sweaty conditions. Hundred of thousand of teenager boys andgirls hopped aboard America's freight trains to zigzag the country in search of work, adventure,and an escape out of poverty. They were sons or daughters of people that worked in sweated

labor or wealthy parents who had lost everything also called "Hoover tourists". From 1929 to1939, 24,647 trespassers were killed and 27,171 injured on railroad property.

Picture of Children fighting for their right

Social and psychological effectsThe hardship of the Great Depression had a enormous impact on social and and psychological.Between 1928 and 1932, the suicide rate rose more than 30 percent. During the Great Depressionaldults stopped going to the hospital because they couldn't afford it. Young people gave updreaming about going to school. Other people put of getting married or having children. In thathard time a woman recalled, " Ever since I was twelve years old there was one major goal in mylife...one thing... and that was to never be poor again."

Section 3 - Hoover Struggles with the DepressionHoover tries to Reassure the Nation

President Hoover political cartoon - he tried to calm the people with the current economicsituation

After the crash of stock market in October 1929, with the effort to calm the peopledown, President Herbert Hoover declared that "Any lack of confidence in economic future... isfoolish", hoping to state the issues and to show that the time of economic grow would followafter the depression. Disagree with economic experts to leave it fix itself, Hoover took action ashe believed the government would play a limited role in fixing the problem.

Hoover's Philosophy

President Hoover presents in public

His philosophy includes the ideas of the government should help individuals company tosolve their problem for a mutual interests, promoting individualism for Americans - peopleshould succeed with their own efforts, opposing federal welfare, and limiting direct relief inorder to prevent Americans become depend on the government and weaken self-respect, moralfiber. Even though his philosophy seemed nice, due to the current chaotic economic situation, itfrustrated and shocked many suffering Americans.

Hoover took cautious footsteps

Americans lined for food in the city in the Great DepressionAfter the crash of stock market, Hoover tried to work together with leaders from variety

economic fields such as banks, business and labor. He urged them to find the best solution forthe instant problem without more damage to the nation's economic status. He also createorganizations that would help funding private charities to help the poor. Despite of the effort,the nations's economic status kept falling with more bankrupt company, unemployed workersincrease weekly and more soups cooked in the kitchen.

Boulder Dam

A picture of Boulder DamThis was one of the project that would have major impact to help the worsen economic situation.Approved and supported by Hoover before he was president, the project goals were to generate

more electricity and provide water for the seven states along the Colorado river - Arizona,California, Colorado, Nevada, New Mexico, Utah, and Wyoming. In the fall of 1929, Hooverwas authorized the construction of Boulder Dam (or Hoover Dam) at 726 ft. high and 1244 ft.

long.

Democrats win in 1930 Congressionalelections

Franklin D. Roosevelt(Democrats) gained more and more popularity as Hoover(Republicans) made more mistakes

Due to the economic difficulties the nation had to face for so long, the people started to losetheir hope in Hoover's policy. In 1930 congressional elections, Democrats had better votes andgained power from the Republicans a the control of House of Representatives. People gotfrustrated more and more from the Depressions, in consequences, for example, variety ofstriking, violent, illegal actions caused by framers in hope of rising the prices of crops. Despite

of the public pressure, Hoover continued to refuse to support direct relief and forms of welfarewhich anger many Americans and president criticism build-up more rapidly.

Hoover Takes ActionHoover Backs Cooperatives

Federal Farm Board high officialsHoover backed the establishment of an organization of Federal Farm Board which

controls the type and amount of specific types of crops in order to rise the crops price and buycrops from farmers.

Number of Banks in the US from 1926 - 1940

Since the Depression, many banks went bankrupt. Facing the big problem, Hooverestablished National Credit Cooperation with the deal of nation largest banks loan smallerbanks money to save them from bankruptcy.

Direct Intervention

Hoover tried to loan out money to banks

Sometimes, things didn't work as Hoover expected

Realizing his policy wasn't working so well, the president appealed to Congress to pass aseries of measures to reform bankings. He also encouraged the government to spend federalmoney to investigate in private companies, hoping to save them from bankruptcy. In 1932,Hoover signed into a law called Federal Home Loan Bank Act. This law helped farmers andhomeowners from putting all their properties into loans. The Glass-Steagall Banking Actpassed by the Congress which separate investment comercial banking to prevent another crash.Another measure of Hoover was the Reconstruction Finance Corporation (RFC) whichallowed cooperators to loan up to $2 billion for emergency financing for banks. In the end,business continued to fail and people was out of patients leading to the failures of the RFC

Gassing The Bonus Army

The Patman Bill Denied

Veterans gathered to support the bill

Spring 1932, from 10,000 to 20,000 WWI veterans "marched" to Washington D.C fromvarious parts of the country to support the under-debating bill called the Patman Bill. This groupcalled themselve Bonus Expeditionary Force or Bonus Army. Patman Bill founded byCongressman Wright Patman who believed that the bonus for veterans' services in WWI shouldbe paid immidiately in cash ($500 per veteran on averrage). Even through Hoover opposed thelegislation, he still respect and even support the "Army" with food and supplies. Unfortunately,on June 17, the Senate voted down the Patman Bill. As the result, Hoover tried to call the armyto leave yet approximately 2,000 of them remained there. Afraid that the angry mob wouldbecome violent, Hoover tried to disband them using millitary power. On July 28, the BonusArmy was disbanded by tear gas bombs. In consequences, 1000 peole were gassed by the

infantry, including an 11-month-old baby and 8-year-old-boy who suffered partial blindness, 2were shot and many were injured. Stunned and outraged, Americans would then sure who to votefor in the next election. Franklin Delano Rossevelt was sure to win.

Work CitedBook (All section):

Danzer, Gerald, et al. The America. United States.McDougal Littell. 20071. Section 1:

◦ PictureFarm foreclose in Iowa URLUneven Income during 1920s URLCredit URLHoover Image URLAlfred E. Smith Image URLhttp://www.whitehouse.govWillis C. Hawley and Reed Smoot URLThe collapse of Stock Marker URLVideo about The Crash of Stock Market URL

◦ Information**http://www.nytimes.com/library/financial/index-1929-crash-2.htmlhttp://en.wikipedia.org/wiki/Dow_Jones_Industrial_Averagehttp://americanhistory.about.com/od/greatdepression/tp/greatdepression.htmhttp://bioguide.congress.gov/scripts/biodisplay.pl?index=H000379http://bioguide.congress.gov/scripts/biodisplay.pl?index=s000644http://millercenter.org/academic/americanpresident/hooverhttp://www.whitehouse.gov/about/presidents/calvincoolidgehttp://www.u-s-history.com/pages/h1495.html

2. Section 2◦ Picture:

Migrant Mother URLBread Lines URLMakeshift URLDust Storm URLMap "Dust Storm" URlMap "Dust Storm" URLChildren fought for their right URL

◦ Information◦

http://en.wikipedia.org/wiki/Soup_kitchenhttp://www.drought.unl.edu/whatis/dustbowl.htm

3. Section 3◦ Picture:

President Hoover political cartoon URLPresident Hoover presented in public URLBoulder Dam URL

Franklin Roosevelt and Herbert Hoover URLFederal Farm Board URLNumber of Bank URLHoover tried to loan money URLSometimes, things didn't work as Hoover expected URLVeterans gathered to support the bill URL

Information: Book

Words Cite:Hoover - http://en.wikipedia.org/wiki/Herbert_HooverIndividualism - http://www.individualism.com/Crash of stock Market - http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929Private Charities - http://www.econlib.org/library/Enc/Charity.htmlFranklin D. Roosevelt - http://www.whitehouse.gov/about/presidents/franklindrooseveltDemocrats - http://en.wikipedia.org/wiki/Democratic_Party_(United_States)House of Representatives - http://en.wikipedia.org/wiki/United_States_House_of_RepresentativesFederal Farm Board - http://en.wikipedia.org/wiki/United_States_House_of_RepresentativesNational Credit Cooperation - http://eh.net/encyclopedia/article/butkiewicz.finance.corp.reconstructionFederal Home Loan Bank Act - http://eh.net/encyclopedia/article/butkiewicz.finance.corp.reconstructionGlass-steagall Bank Act - http://www.investopedia.com/articles/03/071603.aspRFC - http://www.infoplease.com/ce6/history/A0841310.htmlBonus Army - http://en.wikipedia.org/wiki/Bonus_ArmyPatman Bill - http://en.wikipedia.org/wiki/Bonus_ArmyTear Gas Bomb - http://pad.vfly.net/en/359/damages-from-rdx-tear-gas-bomb-alone/