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.