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Chapter Overview
This chapter examines the causes of the Great Depression and describes how families, businesses, and the government responded to the economic crisis.

9.1 Causes of the Depression

Section 1 identifies the causes of the Great Depression. An aura of optimism surrounded the nation as President Herbert Hoover took office in 1928. As industrial production flooded markets, stock prices reached new highs. Many investors confidently purchased stocks on margin and engaged in speculative trading. Optimism disappeared, however, when on October 21, 1929, sliding stock prices triggered a massive sell-off, and the stock market crashed. Banks that had loaned to speculators and invested depositors' funds lost their cash reserves. Bank failures caused Americans to not only lose their bank savings, but also their faith in the banking system. Several factors added to the nation's economic troubles. An uneven distribution of income left most families with little expendable income. When Americans cut back on spending, manufacturing slowed production, which in turn led to lower wages and unemployment. As high tariffs restricted foreign demand for American goods and the Fed tightened available credit, the economy spiraled downward.

9.2 Life During the Depression

Section 2 describes the hardships of the Great Depression. By 1933 more than 12 million workers were unemployed-about one-fourth of the nation's workforce. Families often went hungry, and many lost their homes. Some of the homeless constructed makeshift shacks in shantytowns called Hoovervilles, while others simply wandered about the country, riding the rail lines. The economic troubles that farmers had experienced in the 1920s worsened with the droughts of the 1930s. Drought transformed the unplanted fields of the Great Plains into a vast "Dust Bowl." Many farmers who could not pay their mortgages lost their land. Some headed west looking for migrant work in California, but their living conditions only seemed to worsen. While movies and radio programs offered Americans a temporary escape from despair, Depression-era writers and artists focused on revealing families' real suffering.

9.3 Hoover Responds

Section 3 discusses President Hoover's response to the Depression. In the months following the stock market crash, President Hoover kept an optimistic outlook. He hoped that the voluntary actions of business leaders and labor and government officials would provide relief, but his programs proved inadequate against deepening economic troubles. Hoover was unwilling to use deficit spending to fund relief efforts, and he strongly opposed federal participation in direct relief. However, the programs he created failed to impact the growing financial crisis. In 1932, despite Hoover's protests, Congress provided federal funds for public works and loans to the states for direct relief. By then it was too late to reverse the economy's accelerating collapse. Frustrated Americans participated in hunger marches, while farmers destroyed crops in a desperate attempt to raise crop prices. When World War I veterans marched to Washington asking for their war bonuses, they were met with violence. The lasting effects of the Depression and the handling of the Bonus Marchers made Hoover's chances of reelection look slim.

PROJECT (begins March 2/3 2011)

INDIVIDUAL - Writing Prompt: (10 points)
Write 1 complete paragraph - approximately 5 sentences
“‘We have always known that heedless self-interest was bad morals; we know now that it is bad economics.’
- What do you think this quotation means? Do you agree or disagree with it? Why?
Do you think this quotation could be applied to contemporary America? How? (minimum 3 sentences)
To what other moments in history could this quotation be applied? When and how? (give two examples)

INDIVIDUAL (20 points)
Read and outline the article found here - in your outline pay particular attention to key ideas, dates, persons involved, economic conditions and consequences of their decisions


Answer the following questions

  1. What are the parallels between the economic challenges facing the United States today and those that existed when F.D.R. took office?
  2. In what ways are the economic challenges facing the United States today different from those that existed when F.D.R. took office?
  3. What parallels does Joe Nocera, the author of the article, draw between President Herbert Hoover and President George W. Bush?
  4. Do you think these comparisons are fair? Why or why not? (3 sentences minimum)
  5. What parallels does Joe Nocera draw between President Franklin D. Roosevelt and President Barack Obama?
  6. Do you think these comparisons are fair? Why or why not? (
3 sentences minimum)
  • What could Barack Obama learn by studying how F.D.R. stepped into his role as president?

Group work - 10 points
A hard copy for the linked document will be given to you . or you and a partner - work together to complete the hand out. Neatness counts! Make sure that all answers are as complete and neat as possible. You may supplement the article with additional internet resources.

Writing - 20 points
FINALLY - answer the following question -
INDIVIDUAL - Do you think that President Obama could be “another F.D.R.” Why or why not? What will he have to do to fix the economy? Minimum 2 paragraphs and 3 internet resources cited for your response. Simple web links for citations are acceptable. Make sure to correctly cite quotes within your response. Your response must be your own work, excessive (more than 1/2 of your work) copying of any other student's work or web resource(s) will be dealt with as Plagiarism and the project graded a zero

Section 1

Vocabulary Define: stock market, bull market, invest, margin, margin call, speculation, sum installment, reaction.
People and Terms Identify: Alfred E. Smith, Black Tuesday, Hawley-Smoot Tariff.

  1. INDIVIDUAL - How important is the stock market to the U.S. economy today?
  2. How do Americans participate in the stock market?
  3. Several situations led to the stock market crash. List these causes (there are six (6) of them)
  4. How did religion play a part in the 1928 presidential election?
  5. Why did many investors buy stocks on speculation in the late 1920s?
  6. Why did many banks collapse in 1929?
  7. Describe the Hawley-Smoot Tariff.
  8. How did the Hawley-Smoot Tariff contribute to the Great Depression?

Section 2

Vocabulary Define: suspend, bailiff, shantytown, Hooverville, hobo, Dust Bowl, colleague, soap opera, technique.
People and Terms Identify: Walt Disney, Grant Wood, John Steinbeck, William Faulkner.


  1. INDIVIDUAL - What images come to mind when you hear the words Great Depression?
  2. INDIVIDUAL -Where do you think these images come from?
  3. Art during the 1930s reflected the Depression. Describe how it did so in painting, writing and photography.
  4. Why did many farmers in the Great Plains leave their land in the 1930s and head west?
  5. What part did movies and radio shows play in Americans’ lives during the Great Depression?
  6. What was the subject of John Steinbeck’s The Grapes of Wrath?

Section 3

Vocabulary Define: series, public works, community, contribute, relief, foreclose.
People and Terms Identify: Reconstruction Finance Corporation, Bonus Army.


  1. For what issues have groups of people in the United States held demonstrations or protests in recent years?
  2. INDIVIDUAL - What issues do you think are important enough to demonstrate for?
  3. During the 1930s, the government proposed several programs to help end the Depression. Explain what each listed program was designed to do. (public works, National Credit Corporation, Reconstruction Finance Corporation, Emergency Relief and Construction Act)
  4. Why did President Hoover propose the creation of public works projects?
  5. What was the purpose of the National Credit Corporation?
  6. Why did veterans march on Washington, D.C., in 1932?