Lesson 2: The Vicious Cycle, the Bonus Army and the Bank Holiday
This lesson covers what was perhaps Hoover's greatest failure - the Bonus Army, and Roosevelt's greatest success - the "bank holiday".
NOTE: To use this lesson you must have an internet-capable computer with speakers.
Bell Activity: Have students answer the question "What were the underlying problems that led to the Great Depression?" in their journals.
The Vicious Cycle
The crash of the stock market (understandably) made people nervous. Many decided to withdraw money from banks to insure that they could cover their basic needs. (You might have to explain to students that there were no ATM's or online banking at the time.) These large numbers of withdrawals caused many banks to run out of currency, forcing them to close their doors. Many banks called in outstanding loans, both personal and business, forcing businesses to close and lay off their workers. The ensuing panic led to more "bank runs".
The Bonus Army: The results of the cycle were severe. Unemployment skyrocketed, as can be seen here:
At the lowest point, nearly 25% of workers were unemployed. In the spring of 1932, before that year's presidential election, nearly 20,000 unemployed World War I veterans marched to the Capitol in Washington D.C. seeking bonuses that the government had promised them. They camped out on the mall, and vowed not to leave until they received their money. At the orders of President Hoover, army troops forcibly removed them from the mall. Images of this can be found at the following links:
Either project or print these images, and ask students their reactions. Also ask students how this event might affect Hoover's presidency?
Hoover would lose the 1932 election to Franklin Roosevelt in a landslide.
The Bank Holiday: When Roosevelt took office in 1933, his first priority was to stabilize the banking system, which was on the verge of collapse. He did this by closing all banks in the country temporarily to prevent more panicked withdrawals. Roosevelt called this action a "bank holiday", and explained it in the first of his famous radio addresses, which were known as "fireside chats".
The Fireside Chat: The audio of this fireside chat can be found here: http://millercenter.org/president/speeches/detail/3298
Play it for your students. If you have a computer projector, use it to display the text of the speech. If you don't have a projector, print the speech so students can follow along.
After listening to the speech, discuss it with your students. What was the purpose of the speech? Did students understand it? Comment upon FDR's choice of language and the fact that radio was in its golden age as a communications medium.
Both the "holiday" and the chat worked. As banks reopened, bank runs were much reduced. FDR had one of the larger successes of his presidency.