THE NEW DEAL &BLACK TUESDAYUnit 6 – The Great Depression

BOOM TIMES After WWI the US suffered from an economic

decline US cut back on government contracts with

factories Soldiers came back and there were no more

jobs for them President Woodrow Wilson was criticized for the

economic drop. President Warren Harding

Created more jobs by encouraging wealthy Americans to invest in new businesses. Incentives: Motivating influence or a reward for

increased productivity. President Calvin Coolidge

Decreased government involvement in business and gave more control to business owners

The economy started to get better.

BUSINESS BOOM 1920 – 1929: US manufacturing doubled.

As jobs and wages increased so did people’s ability to buy more goods. Assembly Line: System that used conveyer belts to move parts

and partly assembled cars from one groups of workers to the next. Henry Ford – Wanted to make affordable cars and the assembly line

helped. 1908 – Model T costs $850 1925 – Model T costs $290 Allowed people to pay using an “installment plan” Raised workers wages to $5 an hour

STOCK MARKET CRASHES Buy On Margin – Purchasing stocks on credit.

Stockholders planned to sell their stocks high, pay back the loan with their profit and keep the remaining amount. People assumed that stocks would continue to increase. They never

imagined what would happen if the prices of stocks fell. Thursday, October 24th – After several months of slow

decrease in stock prices, panic hits the stock market. Within 3 hours the market lost $11 billion dollars in value.

Black Tuesday (Tuesday, October 29th 1929) – People wanted to sell their stocks, and so few wanted to buy, that stock prices crashed. The United States will not recover from this economic recession

for 10 years. Recession: A temporary depression in economic activity or

prosperity. Because of the length and severity of the recession we call it – The

Great Depression

CAUSES OF GREAT DEPRESSION Historians debate the causes of the

Great Depression, below are some of the most popular reasons. Overproduction – Factories

continued to produce goods when the majority of consumers already owned these goods.

Uneven Distribution of Wealth – In 1929 the wealthiest Americans earned 1/3 of the nation’s total income. While 40% of Americans earned only 1/8 of the nation’s income.

Declining World Trade – Europe was still recovering from WWI and could not afford American goods. The US issued high tariffs on European goods to discourage the purchase of non-American products.

PRESIDENT HOOVER Unemployment – The number of people

searching for work. President Hoover knew Americans needed

help but Hoover felt it was up to private institutions and individuals to help Americans gain employment – not the federal government. Hoover started a few projects around the

country to help put people back to work but Americans thought he should do more.

Hoovervilles – A collection of huts and shacks, at the edge of a city, housing the unemployed during the 1930s. Bonus Army – A group of WWI veterans who

set up a Hooverville outside of Washington, D.C and demanded the government pay them their military bonuses early.

2,000 – 17,000 Men Hoover asked General MacArthur to use US

troops to close the Hooverville. Several veterans were killed.

31st President Herbert Hoover

PRESIDENT ROOSEVELT President Franklin D.

Roosevelt – “The only thing to fear is fear itself.”

The Hundred Days – Roosevelt called Congress into session to work on programs to help aid economic recovery. The New Deal

Fireside Chats – Sunday radio addresses that restored the confidence of Americans. Emergency Banking Relief

Act: Approved more government involvement in the banking industry.

Encouraged Americans to use banks again.

THE NEW DEAL 1933 – 25% of the nation’s

workforce was unemployed New Deal Programs helped get

Americans back to work. Civil Works Administration:

(CWA) Employed over 4 million workers repairing roads and airports.

Civilian Conservation Corps: (CCC) Gave hundreds of thousands jobs for planting trees and restoring national parks.

Tennessee Valley Authority: (TVA) Built dams and generators thus bringing electricity and jobs to people in the Tennessee Valley.

THE NEW DEAL First Lady Eleanor Roosevelt was concerned

that the New Deal Programs were not reaching the younger generations. National Youth Administration: (NYA) This gave

part-time work to many youth while also allowing them to stay in school.

Social Security (1935) – Created to help those who were “unable to maintain themselves independently through no fault of their own”. Provided some financial security to those who

were elderly, disabled, children, and unemployed.

First time the national government is taking direct responsibility for the economic situation of Americans.

Taxed working Americans and business to help fund Social Security.