GREAT DEPRESSION

A severe economic decline that lasted 1929-WWII, causing

millions of Americans to lose jobs, farms and homes

EOC STANDARDS• e. Identify and explain the economic factors that contributed to the

stock market crash of 1929 and the Great Depression• f. Explain the economic, environmental, and social impact of the

Great Depression on American society• g. Evaluate the impact of the New Deal on various elements of

American society (e.g., social, political)

• CORE CONTENT • SS-HS-5.1.1Students will use a variety of tools (e.g., primary and

secondary sources, data, artifacts) to analyze perceptions and perspectives (e.g., gender, race, region, ethnic group, nationality, age, economic status, religion, politics, geographic factors) of people and historical events in the modern world (1500 A.D. to present) and United States History (Reconstruction to present). DOK 3

• SS-HS-5.1.2Students will analyze how history is a series of connected events shaped by multiple cause and effect relationships, tying past to present. DOK 3

• SS-HS-5.2.5Students will evaluate how the Great Depression, New Deal policies and World War II transformed America socially and politically at home (e.g., stock market crash, relief, recovery, reform initiatives, increased role of government in business, influx of women into workforce, rationing) and reshaped its role in world affairs (e.g., emergence of the U.S. as economic and political superpower). DOK 3

Causes of the Great Depression

Myths and Misconceptions• Many people believe that the crash of the stock market was

the cause of the Depression. Not so, it was only a symptom.

• Many people also believe that Herbert Hoover’s laissez-fair economic philosophy prevented the federal government from taking steps to prevent the crisis. Hoover was proactive in trying to ease the impact of the depression, it was too little, too late.

• Many people think that the Great Depression was the only major economic crisis in U.S. history. Nope, but it was the worst.

• Many people do not realize that the Depression was global and affected almost every capitalist economy on earth

• Some believe that FDR and the New Deal ended the Depression. Wrong again, WWII ended he Depression

ECONOMY of late 1920’sOPTIMISTIC ATTITUDE

• President Hoover – 1928• Economy great • “Everybody ought to be Rich”

mentality• Increase income by investments Stock market high

DEPRESSION FORESHADOWED

• Rising unemployment• Declining of the Farming industry • Stock prices dropping • Buying on Credit (did not have

money)• Too many goods, Too little demand • Unequal distribution of wealth –

• 71% families earned less $2500

STOCKMARKET 101

STOCK is partial ownership in a company

• If others want to buy stock it increases. If others do not it decreases

• BUY LOW SELL HIGH• Once you sell you receive

money- until then just a sheet of paper

BUYING ON MARGIN • (To encourage less wealthy

people to play stock market)

• Investors bought stocks for a fraction of its price

• Stock - $100.00 you paid $10.00 and borrowed the rest

• Black Thursday – October 24, 1929 Investors began selling forcing stock prices to fall

SELL SELL SELL !!!

• BLACK TUESDAY – 10/29/29– 16.4 million

shares were sold – GREAT CRASH

– Losses over 30 billion dollars

– This is the beginning of the Great Depression!

THE CRASH AFFECTS MILLIONS

• Factories closed• Farm prices fell – • Banks closed • Europeans could not afford

American made goods – started a downward cycle world wide

US Industrial Production

US Stock Market 1928-1932

US Bureau of Labor Statistics

CAUSES FOR THE GREAT DEPRESSION

• 1. Overproduction of goods• 2. Widening of Wealth Gap• 3. Stock and Real estate speculation• 4. unregulated banking practices • 5. Declining of farming industry• 6. High Tariffs –

– Hawley Smoot Tariff Act 1930

Many did not realize how severe the downturn was until 1932, when the

economy had technically “hit bottom.”

Brother Can You Spare a Dime?

Once I built a railroad, I made it run

I made it race against time Once I built a railroad, now it's

done Brother, can you spare a dime?

Once I built a tower, up to the sun

Bricks and mortar and lime Once I built a tower, now it's done

Brother, can you spare a dime?

RESPONSE TO ECONOMIC COLLASPE

• Hoover’s response – Cautious approach –

limited govt intervention

– Unemployment increased

– HoovervillesHoovervilles sprung up- (shantytowns made up of scraps in cities for the homeless)

Hoover’s Political Decisions

• Hoover promoted volunteerism. Cooperation between government and business instead of coercive policies.

• 1932- Hoover created RFC (reconstruction Finance

Corporation)• Agency issued govt

loans to banks, rr’s, businesses, etc.

• Believed TRICKLE DOWN theory-

“The sole function of the government is to bring about a condition of affairs favorable to the beneficial development of private enterprise.” ~Herbert Hoover (1930)

“The Fed will stand by as the market works itself out: Liquidate labor, liquidate stocks, liquidate real estate… values will be adjusted, and enterprising people will pick up the wreck from less-competent people."

~ Andrew Mellon (1930)

The Dust Bowl• Between 1929 and 1932, about 400,000 farms

were lost to foreclosure• Not only economic damages, but environmental

▫ Land was overworked• Drought and dust storms in the Midwest for

much of the 1930s▫ “Black Sunday” – worst dust storm – April 14, 1935▫ Dust would get into everything…kitchens, bedrooms,

hair, nails, mouths▫ Wrapped faces in damp rags to filter out the grit▫ Nostrils with Vaseline to keep noses from clogging

and bleeding▫ “dust pneumonia”▫ Many packed up families and headed west to

California along Route 66

Click below for a video!

Bonus Army of 1932• Veterans marched on Washington DC

to demand their bonus from services during WWI

• Hoover sent Douglas MacArthur in to remove the veterans who would not leave using tear gas and bayonets

African Americans

• Higher unemployment rates and they received the lowest pay

• Faced increased racial violence from whites competing for jobs

• 1933: 24 African Americans died by lynching

Next. The FDR MystiqueNext. The FDR MystiqueNext. The FDR MystiqueNext. The FDR Mystique

ELECTION OF 1932FDR (DEM)

•Promised jobs •He used his “Brain Trust” of trusted aides to help write speeches, etc.•Used the radio

HOOVER (REP)•“Prosperity is Just Around the Corner”•Seen as a “do nothing” president

NEW DEAL• His first Hundred Days were filled with

legislation, over 15 pieces of major legislation

• Expanded the role of the federal government• 1st job was to restore public confidence in

banks

• March 6-10 Nationwide Bank Holiday– Closed all banks to prevent withdrawals– Passed the Emergency Banking Relief Act to

inspect the country’s banks– Banks that couldn’t pay debts remained closed,

restored confidence

FDIC • FEDERAL DEPOSIT INSURANCE

CORPORTATION • To insure individuals savings and

deposits.

3 Rs – Relief, Recovery, and Reform

• Relief – short range goals

• Recovery – long range goals

• Reform – deal with current abuses

Emergency Banking Relief Act of 1933

• Power to regulate the banking system

• Close and reopen banks

• Safer to keep money in a reopened bank than in the back yard!

Fireside Chats• Roosevelt used the

radio to talk to Americans

• Focused on Priming the Pump

• Click picture for his first fireside chat during the bank holiday

Federal Emergency Relief Administration (May 1933)

•$500 million for states agencies for the poor

Civilian Conservation Corps (CCC)

• Most popular of all the New Deal alphabet agencies…

• Employment in fresh air government camps for about 3 million uniformed young men

• Reforestation, firefighting, flood control, swamp drainage

• Paid $30 a month, sent $25 home to their families

• Agricultural Adjustment Act (AAA)– help farmers meet mortgages, raised farm prices & paid farmers to grow less

• Home Owners’ Loan Corporation (HOLC) – to refinance mortgages on non-farm homes

Civil Works Administration (CWA)

• Provided 4 million temporary jobs during cruel winter months

• Built 40,000 schools and half a million roads

Tennessee Valley Authority (TVA)—

• renovated five dams and constructed 20 new ones.

• Created jobs, provided flood control, hydroelectric power

SEC – Securities Exchange Commission

• Watchdog over stock market and protect investors.

The Supreme Court

• Struck down two New Deal acts because federal government overstepped their roles (NIRA and AAA)

• FDR tried to pass a court-reform bill in 1937 reorganizing the federal judiciary and appoint new justices

• Criticized it upset judicial independence and checks and balances

• Over next four years, FDR appointed 7 new justices from resignations

Some people hated the New Deal

• Didn’t go far enough to help the poor and reform the economic system

• FDR spent too much on direct relief and used New Deal to control business and socialize economy

• Huey Long—Share-Our-Wealth promised “Every Man a King”– Had 7.5 million members until he was

assassinated• Father Charles Coughlin – Catholic priest

who became anti Semitic– Broadcasted on radio economic, political, and

religious ideas

Second Hundred Days (or Second New Deal)

• Spring 1935• More relief for farmers and workers• Eleanor Roosevelt travelled the country

to remind her husband of the suffering

• 1936 election FDR wins overwhelmingly– 1st time African Americans voted solidly

Democratic and labor unions supported a candidate

Works Progress Administration (WPA)

• 1935• Employment on useful projects• $11 billion spent to give jobs to over

8 million workers

• WKU’s Cherry Hall was a recipient of the WPA money and workers

• Federal Art Project was also started

Wagner Act• 1935 (National labor relations board) • Protected right of workers to join unions

and collective bargain• Prohibited unfair labor practices like

threatening workers, firing union members, and interfering with union organizing

• 1938 Fair Labor Standards Act• Set maximum hours at 44 and minimum

wage at $0.25• Set rules for 16 and under, and banned

dangerous work for under 18

Social Securities Act

• 1935• “Aged” insurance

for retirees 65 or older and their spouses

• Unemployment compensation system– $15-$18 a week

• Aid to families with dependent children and the disabled

Rural Electrification Administration

• 1935• Brought electricity to isolated

areas• In 1935, only 12.6% of American

farms had electricity• 48% in 1945, 90% in 1949

New Roles for Women• More women working outside of

home• Frances Perkins

– Secretary of labor– First woman to head an executive department

– Helped create the Social Security system

• Mary McLeod Bethune– Leader of the Black Cabinet and

director of Negro Affairs in the National Youth Administration

– Advised FDR on racial issues and made provided job training and benefits to minority students

1937 A Troubled Year• Moving Forward

– Supreme court upheld many New Deal programs • March 1937 upheld a Washington law

that granted Minimum Wage• Ruled both, a key part of the Wagner Act

and Social Security constitutional.– Farm Tenancy Act - 1937

• Gave tenant farmers and Sharecroppers a chance to buy land of their own

• Recovery in Doubt– FDR scaled back federal deficit spending– 1937 - A bad year for recovery. Massive drop in

stocks and by the end of the year another 2 million American unemployed.

Impact of the New Deal

• Relief, Recovery, Reform– Which area was the New Deal most

successful?• Changing relationships

– Changed the link between the American people and the Government

– New Role for Government meant a much larger Government.• As a result many more people now looked

to the Government for help

End of the New Deal• Weakened support – 1937

– What happened in 1937 to cause loss of support?

• The 1938 Election– Republicans and Southern Democrats gained seats

in the House and the Senate– Why did this happen?

• After the New Deal – After 1938 FDR lacked the support to pass New

Deal Styled programs.– Problems in Europe now held the attention of the

American Public. – In 1939 and 1940 international conflict will

ultimately do what FDR’s programs could not.