Chapter 14/Section 1
The Nation’s Sick Economy
Key Idea
Economic problems affecting industries, farmers, and consumers lead to the Great Depression.
Although the economy of the 1920s boomed,trouble lurked beneath the surface.
· The textile,steel, and railroad industries were barely profitable.
· The biggest problemwas on the farms.
· Demand for fooddropped after WWI.
· Unable to pay debts, many farmers lost their land.
· Congresstried to help by passing laws that wouldboost food prices—but they were vetoed.
In the 1928 presidential election, however, Americans felt prosperous.
· Republican HerbertHoover, pointing to good years underHarding and Coolidge, won the election.
Meanwhile, the stock market continued itsamazing rise.
· People bought stocks, hoping tobecome rich.
· Many bought on margin, borrowingagainst future profits to pay for stocks.
· Ifprices did not rise, there would be trouble.
· On Oct. 29, 1929, known as Black Tuesday, the bottom fell out of the market.
· More than 16 million shares ofstock were sold that day.
· By mid-November investorshad lost more than $30 billion.
President Hoover insistedthat the economy would recover.
· Many people,panicking, pulled their money from banks.
· Thousands of banks failed, and people lost their deposits.
· Millions of Americanslost their jobs as businesses closed
· Unemployment had been 3 percentin 1929; by 1933, it was 25 percent.
The Depression spread around the world.
· Congress passed the high Hawley-Smoot Tariff to reduce imports.
· Instead, it cut the demand for American exports.
The great stock market crash signaled thebeginning of the Great Depression,
but the main causes were:
· Aging industry in America.
· Farmers’problems.
· The problem of easy credit.
Chapter 14/Section 2
Hardship and SufferingDuring the Depression
Key Idea
The Great Depression brings suffering ofmany kinds and degrees to people of all walks of life.
The Depression devastated many Americans.
· Millions of people went hungryor homeless.
· Cities across the country were full ofpeople who had lost their homes.
· They slept under newspaper or builtshantytowns—Hoovervilles.
· People stood in line to get food fromsoup kitchens set up by charities.
The Depression also hurt people in rural areas.
· 1929-1932: about 400,000 farmerslost their land because they could not make payments.
· To make things worse, a longdrought—the Dust Bowl—struck the Great Plains.
· Many farmers from Oklahoma (and elsewhere)—Okies—packed up their belongings andmoved to California to try and find jobs.
The Depression placed heavy pressures on thefamily.
· Many men abandoned their families.
· Women found work if they could, but were paid less than men.
· Some peopleargued that employers should hire men rather thanwomen.
· Children suffered from poor diets and lack ofhealth care.
· Childrenwent to work to try to help their families.
Chapter 14/Section 3
Hoover Struggles withthe Depression
Key Idea
President Hoover tries to restore confidenceand halt the Depression, but his actions are ineffective.
President Hoover at first believed thatthe Depression would correct itself.
· Eventually, Hoover began to change,but was careful not to take too much power.
· He believed that private groups shouldgive food and shelter to the needy.
· He did not think that the governmentshould provide direct aid to people.
· Despite his efforts,the economic situation got worse.
Eventually, Hoover did have government take a more active role in some ways.
· He began majorpublic works program, including building roads, bridges, anddams, to provide jobs.
By 1932, the economy had still not improved.
· Hoover created the Reconstruction FinanceCorporation to fund projects that wouldcreate jobs.
· The RFC was a major change in policy,but it came too late.
Hoover’s popularity plummeted in1932 when World War I veterans came to Washington.
· The Bonus Army demanded early payment of thebonuses they had been promised and began to live in tents near the Capitol building.
· When Congress refused their demands, Hoover ordered the veteransto leave.
· The sight ofU.S. army troops gassing American citizens—including children—outraged many people.
· Hooverfaced the 1932 presidential campaign more unpopularthan ever.3