White Plains Public Schools / Overview



The Causes of the Great Depression

US History/Napp Name: __________________

Do Now:

“Economies historically pass through good and bad periods that regularly repeat themselves. These up-and-down periods of business activity are referred to as the business cycle. The bad times are called depressions – characterized by business failures and high unemployment. The Great Depression was the worst depression in our nation’s history.

The Causes of the Great Depression

|Overproduction: |

|The 1920s witnessed a rapid economic expansion, as manufacturers made and sold new products like cars, radios, and refrigerators. |

|Many consumers lacked the money to buy these goods. |

|Manufacturers were soon producing more goods than they could sell. |

|Uneven Distribution of Income: |

|Even in the 1920s, not all groups shared in the national prosperity. |

|Many African Americans, Hispanics, Native Americans, and industrial workers already faced hard times. |

|Farmers suffered when crop prices dropped sharply, and many went bankrupt. |

|Speculation: |

|In the 1920s, as stocks soared in value, many people bought stocks hoping to “get rich quick.” |

|This drove stock prices even higher. |

|Many people were buying stocks on margin – paying only a small percentage of a stock’s value and promising to pay the rest later, when they |

|sold the stock. |

|However, if the stock’s price fell, then buyers often did not have the money to cover their losses. |

|Shaky Banking: |

|The government failed to effectively regulate either the banking system or the stock market. |

|The vast over-extension of credit made the entire economy extremely vulnerable. |

|Restricted International Trade: |

|High U.S. tariffs protected American markets but made it hard to for producers to sell abroad, since other countries retaliated by setting up |

|high tariffs of their own. |

|The Stock Market Crash: |

|On October 29, 1929, the stock market crashed; stock prices reached all-time lows. |

|Corporations could no longer raise funds. |

|People who lost money in the stock market could not repay their loans, leading to bank failures; thousands of people lost their life savings. |

|The demand for goods decreased. |

|Factories closed; workers lost jobs. |

1- What do economies experience? ________________________________________________________________________

2- Define an economic depression. ________________________________________________________________________

3- What was the Great Depression? ________________________________________________________________________

4- Why did overproduction occur in the 1920s? ________________________________________________________________________

5- What groups did not share in the national prosperity in the 1920s? ________________________________________________________________________

6- Why did many farmers suffer? ________________________________________________________________________

7- Why did stock prices soar in the 1920s? ________________________________________________________________________

8- Define speculation. ________________________________________________________________________

9- What is buying on margin? ________________________________________________________________________

10- What happened if a stock’s price fell, particularly if the investor had bought the stock on margin? ________________________________________________________________________

11- Can banks go bankrupt? Explain your answer. ________________________________________________________________________

12- What did the government fail to regulate in the 1920s? ________________________________________________________________________

13- Define laissez-faire. How was government failure to regulate an example of it? ________________________________________________________________________

14- Define tariff. ________________________________________________________________________

15- How did U.S. tariffs surprisingly hurt American business owners? ________________________________________________________________________

16- What happened on October 29, 1929? ________________________________________________________________________

17- What were corporations unable to do when the stock market crashed in 1929? ________________________________________________________________________

18- What could people who lost money in the stock market not do? ________________________________________________________________________

19- What happened to demand after the stock market crashed? ________________________________________________________________________

20- As consumers demanded fewer goods, what were business owners forced to do? ________________________________________________________________________

21- Why did rising unemployment rates make the depression worse? ________________________________________________________________________

22- What can unemployed workers not do? ________________________________________________________________________

23- At the start of the Great Depression, there was no “safety net.” What “safety net” exists today? ________________________________________________________________________

24- Herbert Hoover was President at the start of the Depression. He believed in laissez-faire and “rugged individualism” – how did these beliefs affect his actions? _______

|A significant cause of the Great Depression of the 1930’s was that |Which situation was a basic cause of the Great Depression? |

|some banking policies were unsound and had led to the overexpansion of|continued increases in wages for workers |

|credit |excessive profits for farmers |

|a decrease in protective tariffs had opened American business to |overregulation of the stock market |

|competition from abroad |overproduction of consumer goods |

|a wave of violent strikes had paralyzed the major industries | |

|consumer goods were relatively inexpensive |During the Great Depression, expressions such as Hoovervilles and |

| |Hoover blankets showed that President Hoover |

|Speaker A: “The business of America is business, and we would be wise |was seen as a role model |

|to remember that.” |used the military to aid the unemployed |

|Speaker B: “Government ownership of business is superior to private |was blamed for the suffering of the poor |

|enterprise.” |supported relief and public housing for the needy |

|Speaker C: “Strict government regulation of business practices is a | |

|means to insure the public good.” |Which economic factor was a major cause of the Great Depression? |

|Speaker D: “Only through personal effort can wealth and success be |purchase of stocks on credit |

|achieved.” |increases in taxes on business |

|Which speaker best expresses the main idea of rugged individualism? |reduction of tariffs on imports |

|Speaker A |failure to produce enough consumer goods |

|Speaker B | |

|Speaker C |President Herbert Hoover’s response to the Great Depression was often |

|Speaker D |criticized because it |

| |wasted money on new social programs |

|An important factor contributing to the start of the Great Depression |caused widespread rioting and looting in major cities |

|in the United States was the |raised taxes on businesses and the wealthy |

|increase in military spending |failed to provide direct relief for the neediest persons |

|failure to maintain the gold standard | |

|reduction of tariff rates | |

|uneven distribution of wealth | |

| | |

| | |

| | |

| | |

| | |

Reading: The Dust Bowl

“The Dust Bowl of the 1930s lasted about a decade. Its primary area of impact was on the southern Plains. The northern Plains were not so badly affected, but nonetheless, the drought, windblown dust and agricultural decline were no strangers to the north. In fact the agricultural devastation helped to lengthen the Depression whose effects were felt worldwide. The movement of people on the Plains was also profound.

As John Steinbeck wrote in his 1939 novel The Grapes of Wrath: ‘And then the dispossessed were drawn west- from Kansas, Oklahoma, Texas, New Mexico; from Nevada and Arkansas, families, tribes, dusted out, tractored out. Car-loads, caravans, homeless and hungry; twenty thousand and fifty thousand and a hundred thousand and two hundred thousand. They streamed over the mountains, hungry and restless – restless as ants, scurrying to find work to do – to lift, to push, to pull, to pick, to cut – anything, any burden to bear, for food. The kids are hungry. We got no place to live. Like ants scurrying for work, for food, and most of all for land.’

Poor agricultural practices and years of sustained drought caused the Dust Bowl. Plains grasslands had been deeply plowed and planted to wheat. During the years when there was adequate rainfall, the land produced bountiful crops. But as the droughts of the early 1930s deepened, the farmers kept plowing and planting and nothing would grow. The ground cover that held the soil in place was gone. The Plains winds whipped across the fields raising billowing clouds of dust to the skies. The skies could darken for days, and even the most well sealed homes could have a thick layer of dust on furniture. In some places the dust would drift like snow, covering farmsteads.” ~ illinois.edu

Questions:

1- The Dust Bowl experiences of the Oklahoma farmers during the Great Depression demonstrated the

1) effect of geography on people’s lives

2) success of government farm subsidies

3) limitation of civil liberties during times of crisis

4) result of the Indian Removal Act

2- In the 1930s, one factor that accounted for the westward migration of farmers from the Great Plains was

1) high farm prices

2) new technologies

3) the Dust Bowl

4) the baby boom

3- Identify one cause of the Dust Bowl: ________________________________________________________________________

4- Identify one effect of the Dust Bowl: ________________________________________________________________________

5- Describe the Dust Bowl: ________________________________________________________________________

6- What did the Dust Bowl lengthen? ________________________________________________________________________

[pic]

7- Which factor contributed most to the situation shown in the cartoon?

1) low tariff rates

2) shortages of consumer goods

3) nonregulation of banks

4) creation of a national bank

Analyze the following images:

“‘Hooverville’ became a common term for shacktowns and homeless encampments during the Great Depression. There were dozens in the state of Washington, hundreds throughout the country, each testifying to the housing crisis that accompanied the employment crisis of the early 1930s. ‘Hooverville’ was a deliberately politicized label, emphasizing that President Herbert Hoover and the Republican Party were to be held responsible for the economic crisis and its miseries.” ~ washington.edu

[pic]

Identify three facts about Hoovervilles:

1- ________________________________________________________________________

2- ________________________________________________________________________

3- ________________________________________________________________________

[pic]

What is the main idea of the political cartoon?

______________________________________________________________________________

[pic]

What is the main idea of the political cartoon? ______________________________________________________________________________

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