Unit VII, Segment 1 of 1 [From History Alive! Pursuing American Ideals

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American History A

Mr. Bekemeyer

The Great Depression (Causes & the Human Impact)

(Unit VII, Segment 1 of 1)

[From History Alive! Pursuing American Ideals – Chapters 30 (Sections ALL),

31 (Section 3), and 32 (Sections ALL)]

I. The Coolidge Era and the Consumer Economy

A. The Business of America _________________________ (President)

1. fit __________________ spirit of the 1920s

B. American Business Flourishes

1. President _____________________ (Republican) successor Herbert


a. favored governmental policies that kept taxes down and business profits up

b. ___________________ were high, which helped American manufacturers

c. Government interference in business was _________________

C. The Impact of the Auto

1. Auto

☺ _________________ of the American economy

2. How Auto Changed America

a. Paved roads, traffic lights, motels, billboards

b. Home design (garages, driveways)

c. Gas stations, repair shops, shopping centers

d. Freedom for rural families

e. ___________________ for women and young people

f. by 1920 80% of world’s vehicles in U.S.

D. American Standard Of Living Soars 1920-1929

1. (_____________________________)

a. Americans owned 40% of the world’s wealth

b. average annual income rose 35% during the 1920s (for the top earners)

c. discretionary income increased

E. A ________________ Prosperity

1. Many during the 1920s believed the prosperity would go on forever

a. Wages, Production, GNP, stock market all rose significantly

But. . . .

II. Causes of the Great Depression

A. The 1920s were a decade of consumer ________________ & the economy

looked ________________ on the surface:

1. _____________ did increase in the 1920s, but there were some severe

________________ with the U.S. economy

2. In October 1929, the “_____________________________” came to an end

& the Great Depression began…why?

Factors that Contributed to the Great Depression

Document A

Document B

Document C

Document D

Document E

Document F

One sentence thesis: Why did the Great Depression begin?

B. Causes of the Great Depression

1. Agricultural overproduction

a. bank issue

2. Industrial overproduction

3. Uneven division of wealth

4. Over-extension of credit / Stock Market Crash

a. bank issue

5. International economic situation

a. bank issue

6. Banking catastrophe

3 strikes against the banks

C. Causes in Detail

1. Agricultural Overproduction

a. The end of WWI led to a decline in demand for ______________________


i. Too much food led to a 40% drop in crop prices

ii. Farmers could not pay back loans & many had their farms foreclosed

iii. Some rural banks __________________

2. Industrial Overproduction

a. Mass-production of consumer goods led to _________________________

b. People did not need as many appliances & cars by the end of the decade


c. Railroads, textiles, steel, coal mining, construction were barely profitable

3. Uneven Division of Wealth

a. Despite rising wages, the _____________ between the rich & poor grew wider in the 1920s

b. 70% of Americans were considered “poor”

c. Most of the spending in the 1920s was done by 30% of the population

4. Credit:

a. Many Americans used ____________________ to live beyond their means

b. By “buying now & paying later,” Americans generated large debts

c. As a result, Americans cut back on spending by the end of the decade

Easy credit created a stock market bubble

41/2. The Stock Market:

a. In the 1920s, the stock market soared & people ______________________

with stocks

i. bull market upward trend in stock market

b. Many people borrowed money to pay for stocks, called buying on margin

c. There was no regulation of the market & some companies altered stock

values to raise profits

i. bear market -- downward trend in the stock market

d. On October 29, 1929 (_______________________________) the stock

market crashed

e. People rushed to sell, prices plummeted, & investors lost $30 billion

f. Speculators who bought on the margin, could not pay off there debts

g. Many lost their ________________

5. International Economic situation:

a. France / England borrowed to finance war

i. reparations from Germany / Austria used to make payments

ii. over time, G and A could not make ____________________ payments

iii. 1927 - 1928 F and E borrowed more $ to pay debts

b. Post-war debts in Europe & high protective tariffs in America limited

international ________

c the Great Depression led to a global depression in Europe, Asia, & Latin


d. world trade fell by 40%

e. exacerbated the ___________________________

6. Bank Failures:

a. After the crash, people tried to __________________ their money from


b. In 1929, 600 banks failed due to lack of funds & the inability to recoup


c. The failure of the banks left many Americans without their _____________

III. Effects of the Great Depression

A. The Great Depression led to a collapse of the U.S. _________________________

1. 9,000 banks & 90,000 businesses failed by 1933

a. Gross National Product (GNP)

i. the total value of all goods and services produced in a given year

ii. 1929 -- GNP = $103 Billion iii. 1933 -- GNP = $56 Billion

2. 15% unemployment throughout the 30s, sometimes as high as 25%

B. Consumer Confidence:

1. Millions of Americans lost their jobs or took pay cuts to keep jobs

2. The lack of confidence in the future kept people from _____________


3. The lack of spending made the depression _______________ until the 40s

C. Depression Life

1. Shantytowns ("______________________________")

a. with no money for mortgages, many forced onto streets

i. selling an apple

2. America had record poverty & suicide rates; Fathers abandoned families;

Healthcare ___________________

3. Private charities created soup kitchens & ______________________ to help

a. bread lines and soup kitchens synonymous with _____________________

D. The effects of the depression were made worse by the _____________________:

1. Heavy droughts & over-farming in the West destroyed the Plains

2. In the early 1930s, windstorms swept away loose soil

3. Farmers in the Plains left their farms & searched for ____________ or

better land in West coast states

4. Farmers in crisis

a. drought creates setting for (________________________)

IV. President Hoover’s Response to the Great Depression

A. Confidence economics

1. “Prosperity is right around the corner.”

2. ____________________________

Success comes through individual effort / private enterprise

3. Who should relieve the suffering?

a. Community / Church resources

b. Examples: Salvation Army, Community Chest, Red Cross

B. President Herbert Hoover initially rejected _____________________________

in response to the depression:

1. He tried to reassure Americans that prosperity would return

2. He called for volunteerism & “__________________________________”

C. As the depression worsened, Hoover called for more gov’t action

1. The gov’t issued relief checks to help the unemployed

2. The Reconstruction Finance Corps (RFC) loaned money to failing ______________________

3. Building projects like Hoover Dam

D. These efforts did not end the depression & many citizens lost __________ in President Hoover

E. Bonus Army

1. Who? 15,000 WWI __________________

2. What? Marched to Washington D.C. to get $$$ bonus they were supposed to receive in 1945

3. What did Hoover do? Called out the troops, Army dispersed the "BA"

V. Conclusions

A. The Depression of the 1930s came as a shock to Americans:

1. When the stock market crashed in 1929, businesses closed & millions were


2. Americans lost faith in Hoover & began looking for new leadership & an more __________________________________ to solve their problems

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