American Cultures - Mrs. Gilbert's Site



American Cultures Chapter 15 – Crash and Depression Name________________

Mr. Gatz/Mrs. Gilbert - Fall 2014

Section 1 (pages 508 – 512) The Stock Market Crash

LEQ – What were the causes and effects of the stock market crash?

A. The market crashes

1) What is the Dow Jones Average? An average of stock prices of major industries

2) What was the average on the following dates:

March 4, 1929 – 313 points

September 3, 1929 – 381 points

3) What happened on Black Thursday?

- When the Dow Jones average continued to drop, worried investors began to sell their

stocks and stock prices fell.

4) What did business and political leaders say about the drop?

- They told the country not to worry. President Hoover maintained that the nation’s

business “is on a sound and prosperous basis.”

5) What happened on Black Tuesday?

- Bankers pooled their money to buy stock, which only stabilized prices for a few days.

Thus, investors all over the country raced to get their money out of the stock market. On

October 29, Black Tuesday, a record 16.4 million shares were sold, which caused the

stock market to crash.

6) Below draw and label the Business Cycle

B. The Ripple Effect of the Crash

1) Initially the crash only affected who?

- The Crash initially only affected those who were heavily invested in the stock market.

Within a short time, however, the effects of the Crash spread to all Americans.

2) How long did the great depression last?

- The Depression lasted from 1929 until the U.S. entered WWII in 1941.

3) What impact did the Great Depression have on workers? Be sure to describe the “trickle down effect” from one business to another.

- When stock prices fell, businesses and consumers were unable to repay their loans to the

banks. This, in turn, caused thousands of banks to lose all their money and fail because

they were unable to collect the money they had loaned out. They were also unable to

pay consumers who, out of fear, flocked to the banks to withdraw their money. Bank

failures also wiped out people’s life savings. With no money to borrow, little incentive

to produce more goods, and lack of spending by consumers, businesses cut production

and lay off workers (or cut their pay). Consumers then spent even less money, which

caused major businesses to shut down (Ford lay off 75,000 workers; U.S. Steel lay off

225,000). These events soon affected smaller businesses, such as restaurants and

hardware stores, as they were forced to close as well.

4) What happened to the price of crops?

- The price of crops dropped, which brought even more disaster to many families.

5) What was the unemployment rate in 1932?

- By 1932, more than 12 million people were unemployed. Others worked only part-time

or had their wages cut.

6) Recreate the “World Payments” portion of the chart on page 510 below

C. Underlying Causes of the Depression

1) What problems were the underlying causes of the Great Depression?

- Unstable economy – National wealth was unevenly distributed, consumer goods were

overproduced, and farmers had been left out of the economic

boom of the 1920s.

- Over-speculation – Speculators bought stocks with borrowed money (money they

didn’t have) and then pledged those stocks as collateral to buy

more stocks.

- Government policies – During the 1920s, the Federal Reserve system cut interest

rates to encourage borrowing. Then, in 1929, the Federal

Reserve (fearing over-speculation) limited the money supply to

discourage lending. As a result, there was too little money in

circulation to help the economy recover after the Great Crash.

Section 2 (pp. 513 – 518) Social Effects

LEQ – How did the Great Depression affect the lives of people of all social standards?

A. Poverty Spreads

1) Where did people live once they were evicted from their apartments?

- Some lived with relatives or rented rooms. Others were forced to live in cars or in shacks

(Hoovervilles). Some even hit the road and drifted from place to place looking for work

(or to escape the shame of not having work).

2) What nickname was given to the collection of shelters where the homeless lived and why?

- They were called Hoovervilles, mocking the President, whom people blamed for not

resolving the crisis.

3) What did some people do rather than stay put in the Hoovervilles?

- Some became drifters, hitchhiking or illegally jumping on trains to travel across the

country in search of jobs (or to escape the shame they felt by not having work).

4) What did farmers do to protest their desperate situations?

- They dumped thousands of gallons of milk and destroyed crops.

5) What natural phenomenon made the depression even worse for mid-west farmers?

- The Dust Bowl, which was created by dust storms resulting from a severe

drought and over-farming, made the depression even worse for mid-west farmers.

6) Where did a number of mid-western farmers move to and what did they do?

- They migrated to California and found work on California’s farms as laborers.

B. Poverty Strains Society

1) Who suffered the most from the depression?

- Impoverished people who could not afford food or shelter and children who suffered

from the long-term effects of poor diet and inadequate medical care suffered the most

from the Depression.

2) What was a relief garden?

- Relief gardens were gardens that some families planted in order to feed themselves or to

use to barter food for other items.

3) What stress did the depression put on men?

- Men who had lost jobs or investments often felt like failures because they could no

longer provide for their families. Many felt embarrassed and ashamed to ask for help, or

thought their own status had fallen if their wives or children were working.

4) What stress did the depression put on women?

- Women worried about feeding their hungry children because they often had no food to

cook. They also felt stress in watching their children suffer and helpless because there

was nothing they could do to ease their suffering.

5) What discriminatory practices took place during the depression?

- There was increased suspicion and hostilities against minorities

- Whites took jobs away from minorities (African Americans, Hispanics, Asian Americans..)

- Women lost jobs to men

- Hispanics and Asians were deported (even those born in the U.S.)

- Blacks were discriminated against in government relief programs (lynchings increased –

Scottsboro Boys)

6) What injustice took place near Scottsboro, Alabama?

- 9 black youths who had been riding the rails were arrested and accused of raping 2

white women on the train. Without being given a chance to hire a defense lawyer, 8 of

the 9 were quickly convicted by an all-white jury and sentenced to death. Eventually, the

convictions were overturned, but 4 of the “boys” had already spent many years in jail.

C. Stories of Survival

1) After paying taxes and insurance, how much money did Wilson’s family have left?

- They had about $1 a week to live on.

2) What commodities did the Wilson’s family need to survive and how did they get them?

- had a family owned horse and cow that they used for plowing theirs and others fields

- chopped wood for the fireplace

- planted and tended the garden that provided the family food

- raised corn to feed the animals

- raised chickens and traded the eggs for things they couldn’t grow or raise themselves

- bought overalls (for 98 cents) and shoes (for $2)

- bought a pig for $3 and raised it for meat

- made jelly from wild blackberries

3) What kind of jobs did Wilson have and what did each one pay?

- In the summer, he delivered ice 12 hours a day, 6 days a week for $3 a week.

- Later, he bought a truck to haul coal, cotton, and oranges, then worked nights in the

woolen mill while carrying ice during the day.

- Eventually, he worked at the Chickamauga Dam, making 60 cents an hour.

4) What did Wilson do for recreation?

- He played baseball on his homemade baseball field.

5) What good paying job did Wilson get and what did it pay?

- He worked at the Chickamauga Dam, making 60 cents an hour.

Section 3 (pages 520 – 523) Surviving the Great Depression

LEQ – What did people do to survive and protect themselves and others during the

Great Depression?

A. Americans Pull Together

1. What happened to a farmer’s property when they could no longer make payments?

- The bank would foreclose on the property and then sell it at an auction.

2. What did other farmer’s do to help protect those whose property was up for auction?

- Farmers bid pennies on land and machines auctioned by banks (penny auctions) in order

to help their struggling neighbors. Buyers then returned the farms and machinery to their

original owners.

3. As the depression continued and worsened, who were forced from their homes and where did as many as 250,000 go?

- Teenagers were forced from their homes (to find work and/or to make for less mouths to

feed at home) and lived on the road, illegally riding the rails of freight trains.

4. What were people who roamed the roads and rails of America called?

- They were called hobos.

5. What were conditions like in Europe during their times of economic hardship?

- Economic problems brought riots and political upheaval.

6. What 2 political parties gained support and numbers in the 1932 election?

- Communist Party – Promised a fairer distribution of wealth

- Socialists - Called for gradual social/economic changes rather than revolution

7. What did Americans use to help them deal with the hard times of the depression?

- Humor – jokes and cartoons

B. Signs of Change

1. What was one of the biggest changes that took place in Feb. of 1933?

- Congress passed the 21st Amendment, repealing Prohibition.

2. What building was a symbol of hope as it was being built in NYC?

- The Empire State Building

3. How much did it cost?

- $41 million

4. How many people paid $1 to go to the top floor the first day it opened?

- More than 4,000 people

5. What were 4 signs that the bad times of the 20s were fading?

- Prohibition was repealed, which put an end to the failed social experiment. It also helped

people socialize during tough times and lessened the activity of gangsters/bootleggers.

- Organized crime gangster, Al Capone, was convicted of tax evasion and sent to prison,

which brought an end to violent crime.

- President Calvin Coolidge (who oversaw the prosperity of the 1920s) died.

- The building of the Empire State Building created jobs and became a symbol of hope.

6. What event took place that horrified the nation?

- The infant son of aviation hero Charles Lindbergh and Anne Morrow Lindbergh was

kidnapped and murdered.

Section 4 (pages 524 – 529) The Election of 1932

LEQ – How did the strategies of Hoover and Roosevelt differ and how did that impact the

election of 1932?

A. Hoover’s Limited Strategy

1. What did Hoover espouse as the key to economic recovery from the Great Depression?

- He insisted the key to recovery was confidence.

2. How effective were businesses’ voluntary actions at helping the economy?

- It failed and the public began to blame him and the Republicans for the crisis.

3. What action by Congress, with Hoover’s support, finally helped out the farmers and how effective was the program?

- Congress passed the Agricultural Marketing Act in June 1929 to provide a form of relief for

farmers by creating a Federal Farm Board, which was designed to stabilize the prices of

farm crops. The program failed, losing over $150 million and sending farm prices

continually downward.

4. What major construction project was built to help the jobless situation?

- The construction of the Boulder Dam (later renamed Hoover Dam)

5. What did congress pass to protect domestic industry and how effective was it?

- Congress passed the Hawley-Smoot tariff, the highest import tax in history, but it

backfired because European countries raised their own tariffs, which slowed down

international trade.

6. What happened to Hoover’s popularity during this time and what helped foster it?

- Hoover’s refusal to provide direct aid brought bitter public reaction and negative publicity.

His attitude toward Depression relief make him seem cold and hard-hearted and many

people blamed him for their problems. In 1932, however, Hoover let the RFC lend the

states money for unemployment relief, but it was “a little too late.”

7. What did WWI veterans do to protest their mistreatment and lack of pension funds and what unfortunate turn of events took place against the veterans?

- They marched to Washington D.C. and demanded immediate payment of a pension bonus

that had been promised for 1945. When they were turned down, most returned home,

but some stayed and camped out near the Capitol. Fearing violence, Hoover called in the

army who used force to evict the vets out of Washington, causing many injuries as the

vets tried to fight back with bricks and stones.

8. What lasting effect would this have on the voters?

- The lingering image of this ugly scene would help defeat Hoover in the next election.

B. A “New Deal” for America

1. By pledging a new deal for America, who entered the Presidential race?

- Franklin Delano Roosevelt (FDR)

2. Unlike Hoover, what was FDR willing to do with the gov’t to help the economy?

- He was willing to experiment with governmental roles and worked for Depression relief.

In 1931, he set up an unemployment commission and a relief administration, the first

state agencies to aid the poor in the Depression era.

3. When FDR became a candidate for President, what did he offer the country?

- He offered optimism and promised the country a “new deal” – programs and policies

formulated to combat the Depression.

C. The Election of 1932

1. List the 2 candidates for President in 1932 and a quote from each describing the race.

- Herbert Hoover – “This campaign is more than a contest between two men…It is a

contest between two philosophies of government.”

- Franklin D. Roosevelt – “I feel that we are coming to view through the drift of our

legislation and our public thinking in the past quarter century that private economic power

is…a public trust as well.”

2. Who won the election and by what margin?

- Franklin D. Roosevelt won the election by a huge margin of 7 million popular votes.

3. What did FDR say in his inauguration that Americans had to fear?

- He said, “So first of all let me assert my firm belief that the only thing we have to fear is

fear itself.”

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World Payments

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