Chapter 15:

Boom &
Bust
By: Ainsley Abbott,
Ethan Carlson, Olivia
Boyle, Nick
Rollinger, and Tess
Riley
A minnesotan Named
● Wilbur Foshay always really wanted to build a business tower in Minneapolis,
he just needed a few million dollars.
● In 1916, Foshay borrowed $6000 and bought many small companies and combined
them into one large company.
● Then he sold stock. The shares of stock were bought and sold on the stock
market. Investors liked Foshay's idea and they bought stock too. Foshay had
22 million dollars by 1927 which was enough for his tower in Minneapolis.
● He built his tower and was considered on top of the world.
● Foshay didn't stay there for long. On October 29 1929, the stock market
crashed and by November Foshay was broke.
● The crash was a turning point from boom to bust in the US/MN.
 A Minnesota Named pt.2
● Minnesotans thought life was good and would get
better before the bust. Both city dwellers and
farmers thought that.
● This bust started an economic crisis called the
great depression. It swept across the nation and
touched lives throughout Minnesota.

Vocab:

Stock: A share of ownership in a company that can be

bought and sold.

Stock Market: A place where stocks are bought and

sold.

Great Depression: The 1930’s economic crisis that

began with the stock market crash of 1929.
The Crash and the Great Depression
● Americans saw the stock market as a way to get rich. Investors bought stock
at a low price, and in a short time they were worth a lot more. Stock prices
were doubling and tripling.
● Many investors were scrambling and spending all their savings on stock. It
all ended with the crash though.
● The crash is referring to the fall of stock prices and the sudden panic.
Investors scrambled to sell their stock before they lost all value. There
were no more buyers so the prices kept dropping lower and lower.
● The crash brought a nation-wide economic crisis called the Great Depression.
A year before, many businesses fired workers and cancelled equipment orders.
● More businesses went bankrupt which caused more people to lose their jobs.
Americans held onto their money instead of spending it and the economy kept
getting worse. The great depression touched everyone's lives, the rich to the
poor.
The Crash and the Great Depression
What Happens When Money Stops Flowing
This is the circular flow model. All parts of
the model are connected. When one part of it
is interrupted the other parts suffer as
Wages
well.

During the Great Depression, industries laid

Work
off employees. During that time the arrows
slowed down and sometimes stopped flowing
altogether.

As soon as the top arrows stopped flowing, Goods &

Services
they affected the bottom arrows. When
households no longer had money to pay for
goods, industries lost income. After this,
Money
industries were no longer able to produce
goods to sell.
 Before the crash: the jazz age
● Carl Warmington was 10 when he first heard jazz music.
● It was fun and happy sounding.
● It came out of African American neighborhoods.
● Carl Warmington decided to start playing jazz.
● He played in several different bands.
Lifestyle changes during the jazz age
● Jazz was illegal in bars called speakeasies.
● These bars were illegal because of Prohibition.
● Prohibition was a time period where buying and selling
alcohol was illegal.
● Alcohol was supplied in the speakeasies by bootleggers.
● Bootleggers were people who made and sold illegal
alcohol.
● More women than ever were attending college, driving
cars,and voting in elections.
● Carl Warmington played with a dance orchestra at breezy
point lodge.
● The lodge was a speakeasy, illegal gambling casino.
Lifestyle changes during the jazz age pt 2
● Breezy point was a popular place among gangsters and
movie stars.
● Warmington did not make much money at the lodge but he
enjoyed hanging out with rich people.
● Many Minnesotans did not worry about the first effects of
the stock market crash.
prohibition
● The Volstead Act, or Prohibition, went into effect in 1920.
● Named after Minnesotan named Andrew Volstead who helped
write the law.
● This act officially made the sale of liquor illegal.

Arguments For Prohibition:

Reduce drunkenness & Make nation safer

Reasons for Ending Prohibition:

Increased illegal drinking & Gangsters moved in to control

supply of bootleg
Before the Crash: The Farm Crisis
During the war, the government had encouraged
farmers to produce more food to keep American
and British soldiers from going hungry. Even
though the demand for their goods decreased,
farmers continued to produce more. By 1922
farmers earned less than half the income they
had previously received for their wheat and
corn, and the prices for their pigs and beef
cows weren’t much better either.
Farmers in Otter Tail County, turned to dairy products such as
milk and cheese, in which prices were not affected as much. Many
Otter Tail County Farmers did not suffer as much as other farmers
in the state.
 Farmers Take Action
● During the Great Depression, the economy tightened its grip on the
nation's farms
● Prices for farm products dropped even lower than they had ever been
● When farmers were unable to make payments on their farms, the banks would
put the farms in Foreclosure, claiming the property for the bank
● Many farmers decided to take action by banding together to form the
Farmer’s Holiday Association
● The Farmer’s Holiday Association’s goal was to raise crop prices and stop
foreclosure
● Ways that the Association achieved their goals were:
○ Keep food from getting to market until prices rose
○ Members refused to sell their own produce
○ They set up roadblocks to keep other farmers from selling their crops

Foreclosure: A legal process in which a money lender, such as a bank, takes over ownership of a property
because the borrower fails to make payments for the property to the lender.
Farmers Take Action
 One family in otter tail county feels the sting
Conrad and Elizabeth Toso lived in Otter Tail County. Them
and many people other people made the switch to dairy
farming. They lived in Maplewood with their 9 children.
Maplewood was a heavily forested land. Their farm was 40
acres. They could take care of up to 10 milk cows. They
didn't make much income as their farm was so small, but it
was still enough to live on. “We never went hungry,” Conrad
remembered, but the table was always clean, the children
always ate what was on the table.”
One family in the otter tail county feels the sting pt. 2
After the stock market crashed a major depression set in.
This was just the beginning of rough times for Minnesota
farmers.
After the crash: the job crisis
In the fall of 1930, a year after the crash, Carl
Warmington couldn’t find a job after he had finished his
gig at the Breezy Point Lodge. Private organizations such
as the Salvation Army, were struggling to provide welfare
to the growing population of people without jobs and
homes. He still felt luckier than most, because he had a
place to live at his parent’s house. One day, Warmington
visited a man who worked for a private organization that
gave vouchers or tickets for meals and lodging to
homeless men in Minneapolis. This was called the “soup
line” because of the many men who lined up to get a hot
meal.
Welfare: aid in the form of money or necessities
for people experiencing financial hardships.
The “Soup Line”
Few jobs many people
● People in every industry were hit hard by the
Great Depression. Unskilled and skilled
workers were both affected but more so
unskilled.
● African Americans and American Indians were
laid off first and hired last. Men were
considered the economic providers in the
family.
● Women were fired so that men could keep their
job. Most women were married and their
husbands wages went down dramatically. Some
men lost their jobs altogether.
● Women also struggled to provide anything for
themselves and family.
● A few years into the crisis Roosevelt’s wife
wrote a book named, “It's up to the women.”
A Job for Carl Warmington
● In early 1931, Carl Warmington got
an office job. Before long, he
moved to the department of public
relief, which helped people with
food, housing, counseling, health
care and cloths.
● Over the years, Warmington and his
colleagues helped as many lives
improve as possible, but there was
only so much he could do. The
great depression was a national or
federal crisis. Not a city crisis.
“City funds were limited,”
Warmington recalled.
 A new president is elected
● In 1932, the American people elected Franklin D.
Roosevelt. He promised “A new deal for the American
people.”
● His first challenge was to fight panic and restore
confidence in the economy. In the first 100 days, he
passed 15 bills that had to do with the crisis. Roosevelt
proposed, congress passed, then Roosevelt signed it.
● He gained support by taking his ideas right to the
Americans. Many Americans approved of his ideas and felt
hope for the future.

Vocabulary:

New Deal: The federal program developed during Roosevelt's

presidency to improve the economy and provide public relief.
The new deal
● The New Deal was an experiment, no
one really knew how to end the Great
Depression
● Though the New Deal failed to end
the Great Depression, it did provide
work and welfare for the unemployed
● The New Deal helped in ways such as:
○ The government began to
regulate, or make rules for,
banks and the stock market
○ It began programs that assisted
farmers and unemployed workers
● These programs were designed to
increase the general well being of
the people
After the crash: the new deal
● County. By 1932, the Great Depression had driven
prices for farm products lower than they had been
even during the darkest days of the 1920s
● In 1933, a new federal agency called the
Agricultural Adjustment Administration (AAA)
started a program to raise prices for farm goods,
this would provide relief for farmers.
● Many farmers, including Conrad and Elizabeth
Toso, were skeptical at first
● The AAA offered to buy any cattle that farmers in
Otter Tail County could not afford to keep. The
Tosos sold six of their ten cows for $20 apiece.
The money they received from this New Deal
program helped them get through the summer
More Help on The Way
● In 1936 the drought struck again
● The Works Progress Administration gave money to put
people to work
● the most popular new deal agency was the REA
● In 1936 about 800 farmers in Otter Tail County were being
helped by the REA
● Most minnesotans didn’t have electricity for another
10-15 years
● The New Deal got over $1 billion into MN in 1933-1939
The “indian new deal”
● Laws passed in 1930 that
changed life on American Indian
Reservations
● The main reform was called the
Indian Reorganization Act,
(IRA) which provided American
Indian nations with the ability
to control their own affairs
more than they had for many
years
● Another part of the Indian New
Deal was the Johnson-O’Malley
Act or JOM
● This act gave public
schools money to cover
costs of educating
American Indian students
rather than providing
separate schools
● THe IRA ended the policy
of allotment, which
reduced the amount of land
American Indians owned on
their reservations. It
also enabled tribes to
create independent tribal
governments to serve their
people.
The new deal lives on
Many structures built by
the WPA in Minnesota ● Camden- Water fountains and other structures at Camden
still exist today. On State Park
● Duluth- Wade Stadium
the right is a short ● Grand Marais- Harbor sea wall
list of some of the ● Little Falls- Picnic shelter and other structures at Charles A.
better-known examples Lindbergh State Park
● Mahnomen County- Livestock pavilion and other structures at
from around the state.
the county fairgrounds
● Minneapolis- Sandbox and other structures at Minnehaha Park
● Morrison County- Stone entrance walls at Camp Ripley
● Pipestone County- Split Rock Bridge
● St. Cloud- Granite walls at St. Cloud State University’s Selke
Field
● St. Paul- Seal Island and other structures at Como Zoo
St. paul's gangster Era
During the 1920s and early 1930s St. Paul has
home to some of the country's worst gangsters. St.
paul in this time was a shockingly safe place to
live. After prohibition ended, a crime wave swept
through st. paul. Gangsters and mob bosses stopped
making money from selling illegal alcohol they
started finding more ways to make money. Crimes
such as murder bank robbery, and kidnapping
increased inside and out of the city limits.
Detectives from the FBI arrived to clean up the
crime in the city.
St. paul's gangster PT.2
● In the spring of 1934 after a long investigation of
crimes and gangsters in St. paul. FBI detectives finally
got a break. They delved into the kidnapping of banker
Edward Bremer.
citations :
❖ https://www.britannica.com/event/Prohibition-United-States-history-1920-1933
❖ http://en.wikipedia.org/wiki/Jesse_James
❖ https://www.emaze.com/@ACROZRIF/How-the-Great-Depression-Impacted-on-Farmers
❖ http://old-photos.blogspot.com/2012/09/soup-line.html