*The GREAT DEPRESSION*1929-41

“A time when the economy collapsed & millions of people were unemployed.”

Election of 1928

Herbert Hoover elected president; followed C. CoolidgeMarch 4, 1929: “I have no fears for the future of our country. It is bright with hope”

*Stock Market

System for buying & selling shares of companies.*A share is a single unit of ownership in a corporation.By 1929 about 3 million Americans, or 10% of households owned stock.

*Bull Market - period of rising stock prices

*Bear Market – period of decline in stock prices

*Characteristics of the 1920’s Stock Market

*Bull Market

*Buying stocks on margin-investors borrow money to buy stocks

Bought on margin in hopes of getting bigger quicker profits

*Speculation-the act of buying a risky stock in hopes of getting a huge return.

Risk vs Reward

SpeculationInstead of investing in the future of companies long term, speculators took wild risks, betting the market would continue to climb, thus enabling them to sell the stock & make money quickly. “Get Rich Quick!”

People speculated

wildly on the bull

market

*Causes of the Stock Market Crash*

1. Banks did not secure loans (borrower pledges some asset, like a car or property, as collateral for the loan)

2. Investors bought stocks on margin

3. Investors speculated wildly on the “BULL MARKET”

• Known as Black Tuesday

• Just one cause of the Great Depression

October 29, 1929, The Great Crash

*Result of the Stock Market Crash*Bank Runs (customers withdraw their deposits simultaneously):

-depositors lost confidence in banks

-depositors went to the banks & withdrew their $ at the same time

-1931-32, 3,800 banks failed

Banking Collapse

• The Crash severely weakened the nations banks:

1.Banks had loaned money to people speculating on the stock market

2.Banks had invested people’s deposits in the stock market

• Bank runs emptied $ out of the banks

1.Which of the following is not a cause of the Stock Market Crash?

a. Banks did not secure loans

b. Speculation

c. Careful research before investing

d. Buying stocks on margin

2. Define-stock

3. The 1920’s stock market was characterized by a ____________ market.

4. What is a bank run? List 3 facts about the bank run.

*What event are these newspaper headlines describing?

*Causes of the Great Depression*

1. ? (What do you think the 1st cause is?)

2. Overproduction of consumer goods

3. Unequal distribution of wealth

4. High unemployment

5. High tariffs=loss of exports

6. Poor regulation of banks=bank failures

7. Overuse of credit for purchases

Gross National Product = the sum of all goods & services produced in a country in a yr.

Uneven Distribution of WealthMost Americans did not earn enough to buy the goods they helped produce.

2/3’s of families earned less than $2,500 yr.

24,000 families earned $100,000 or more and held 34% of savings.

High Tariff = loss of export sales

Hawley-Smoot Tariff:• June 1930-raised the tariff rate to the

highest level in American history

• Aimed to protect American manufacturers from foreign competition.

• Damaged American sales abroad leading to a rising cost of imported goods.

*Characteristics of an Economic Depression*

1. High Unemployment, 25%2. Overproduction of consumer goods

1. What are the 7 causes of the Great Depression?

2. Which one do you think had the greatest effect? Explain

3. The Great Depression was characterized by?

Life During the Great Depression

The Depression Worsens

Steadily grew worse during Hoover’s administration.1932-9,000 banks failed1933-12 million unemployed workers -about 25% of the workforceSuicide rate increased-highest among white men

Soup KitchensPeople without jobs often went hungry.

Lined up in bread lines and soup kitchens to receive a meal

*“Hoovervilles”Families & individuals lost their homes.

*The newly homeless put up shacks made of old crates, cardboard, scrap lumber, etc. on unused public lands. Blamed President Hoover for their situation, didn’t think he was doing enough to help them, & called their shantytowns “Hoovervilles”.Hoover blankets = newspapersHoover hogs = any varmit (rabbits, coons, opossum) that could be killed & eaten

“Hooverville”

*The Dust Bowl

*1932-drought struck the Great Plains

Neither grass nor wheat would grow and the soil turned to dust-known as the “Dust Bowl”

Struck the Texas Panhandle, Oklahoma, and Midwest states.*Causes: severe drought & poor farming techniquesEffect: Dust storms, Bankrupt farmers, & Migration to the West

“Okies”-migrants from OK

Families lost their farms, so they packed into their old cars and headed west hoping for a better life in California

Where did dust bowl refuges go?

*Dorothea Lange

• Traveled through the Dust Bowl states photographing the conditions that people were living in.

• *Lange’s photographs exposed the effects of the Depression & Dust Bowl on farmers

Above: An abandoned farm

Right: Two hoboes looking to hop a train

The Migrant Mother

*Mexican Repatriation Act, 1929-39*To help ease the depression, some 500,000 Mexicans, many U.S. citizens were deported back to Mexico.

*Goal = to free up jobs for white American farmers

300,000 other immigrants also deported

*Escaping the Depression*Radio– Listened to soap operas-

Guiding Light

Movies– Snow White and the

Seven Dwarfs

– Gone with the Wind

– Wizard of Oz

Comic strips

*Depression Writers

William Faulkner- wrote The Sound and the Fury

*John Steinbeck-wrote The Grapes of Wrath– Story of an Oklahoma

family fleeing the Dust Bowl to find a new life in California

*Popular culture (movies, novels, radio, comics) was shaped by the economic & social conditions of this era.

1. Who were most likely to commit suicide during the Depression?

2. What is a “Hooverville,” and why were they called that?

3. What was the Dust Bowl?

4. Why is Dorothea Lange significant?

5. What piece of legislation tried to help white farmers get jobs?

6. How did people cope with the Depression?

7. Why is John Steinbeck significant?

8. What helps shape popular culture?

Hoover Responds

*Hoover’s Response*Believed in laissez-faire capitalism– Government should play a limited role in

business– Thought that private efforts at the local

level would be enough

Hoover opposed the federal government’s direct participation in relief. Why?

– Goes against capitalism and free enterprise system

The People’s Response

1. Hunger Marches, 1932:– 1,200 hunger marchers assembled at

the nation’s capital and chanted, “Feed the hungry, tax the rich.”

The People’s Response2. Penny Auctions, Farmers

– 1930-34 creditors foreclosed on 1 million farms, evicting the families

Penny auctions – neighboring farmers would bid tiny amounts for the farm & then give the land back to

the original

owner.

The People’s Response

3. Overproduction, farmersFarmers were in debt and prices were lowFarmers destroyed their crops to raise prices , reducing the supply.

Dumping milk

Multiple Choice

1. What is gained by limiting the supply of farm products?

a. Prices increase

b. Prices decrease

c. Allowed imports to gain a foothold in the U.S.

d. Prices remain the same

*“Bonus March”WWI veterans promised a $1,000 bonus pension to be distributed in 1945

*20,000 Veterans “Bonus Army” march on Washington,1932, to demand their bonus pension early to provide some economic relief

20,000 + veteran’s camped on the White House lawn & surrounding areas

President Hoover demanded the area cleared, believed Communist were behind it

*Hoover’s Response to Bonus Army

*Called in the U.S. army to remove the Bonus Army

Gen. Douglas MacArthur called in to enforce the order

Police killed 2, 100’s arrested

Hurt Hoover’s re-election campaign in 1932

*1932 Presidential Election

*Hoover v. Roosevelt’s “New Deal” plan for ending the depression

Multiple Choice

1. Based on the map, who won the 1932 presidential election?

a. Franklin Roosevelt

b. Herbert Hoover

1. Why did Hoover oppose direct federal aid during the Depression?

2. How did farmers try to raise crop prices?

3. What was the “Bonus Army”?

4. What did the Bonus Army hope to gain?

5. How did Hoover respond to them?

6. Who ran for President in 1932? Who won?

7. What was Roosevelt’s campaign slogan & plan for ending the Great Depression?

F.D. Roosevelt Takes Office

1933-45

*FDR’s Early Political Career1910, New York State Senator

Assistant Secretary of the NavyPolio-left him paralyzedRan for governor of New York & won. Demonstrated that polio had not slowed him down.Set up a state agency to help unemployed New Yorkers during the depression.*Wife, Eleanor Roosevelt, defied tradition & promoted the New Deal, connecting with ordinary Americans.

*A New Style of Leadership

“First of all, let me assert my firm belief that the only thing we have to fear is fear itself…This nation asks for action, and action now!”

• *FDR was more willing to use government intervention to solve the economic problems

http://www.history.com/videos/fdr-delivers-first-fireside-chat#national-recovery-administration-created

Problems FDR Faced When He took Office

1. Failure of Banks

2. Farming Problems

3. Unfair Business Practices

4. People can’t Pay Mortgages

5. High Unemployment = 25%

*The First New Deal1933

http://www.youtube.com/watch?v=RjFPJp3lNCo&safety_mode=true&persist_safety_mode=1&safe=active

*FDR’s First 100 Days

*New Deal Goal: Provide federal aid to many sectors of the economy

*A NEW DEAL for all Americans came in 3 parts: Relief, Recovery, & Reform = (3 ‘R’s)

First 100 Days: March 9-June 16, 1933

Congress passed 15 major acts to address the economic crisis

*Deficit Spending*Roosevelt financed many of his programs with deficit spending.

*Deficit Spending-government pays out more money than it receives in revenues.

Money is borrowed rather than raising taxes.

*Purpose to stimulate

the economy!

Do we still use deficit

spending today?

*1. Bank Holiday*

March 1933, all banks were closed for 3 days & inspected

Unstable banks were closed, stable banks were issued a license &

allowed to reopen

*“Fireside Chats”*Roosevelt addressed the nation by radio. Political strength = ability to communicate with people over the radio through his fireside chats

60 million people listened

1st, Assured the people that their money would be secure in banks.

1. Which of the following is not a part of Roosevelt’s New Deal programs?

a. Recovery

b. Renewal

c. Relief

d. Reform

*Banking Reforms*

Passed 2 new regulations for banks & the stock market to correct abuses & protect bank deposits:– Securities & Exchange Commission (SEC) -

regulates the stock market and prevents fraud– Federal Deposit Insurance Corporation

(FDIC)-provides government insurance for bank deposits up to $100,000.

Fiat Money-moved the U.S. off the gold standard & onto fiat money (paper currency) backed only by government faith.

*2. Farming Problems

*Agricultural Adjustment Administration (AAA) - provided relief for farmers

Government paid farmers not to raise certain crops

What ‘R’ is this?

Unfair Business Practices

National Industrial Recovery Act– National Recovery Administration

(NRA)

– Allowed business, labor, and government to cooperate in setting up voluntary rules for each industry

– Declared unconstitutional

*3. Work Programs to Combat High Unemployment

A. *Civilian Conservation Corps (CCC) = provided 3 million jobs in conservation for young unemployed men 17-28.

• planted trees, fought forest fires, & built reservoirs

• $30/month

What ‘R’ is this?

CCC camp in West Virginia

CCC camps across the U.S.

CCC Workers

*High Unemployment

B. *Public Works Administration (PWA)

– Construction projects improved schools, highways, dams, sewer systems, water works, & other government facilities

What ‘R’ is this?

*C. Tennessee Valley Authority (TVA)

*Goal = control floods & provide electricity to one of the poorest areas of the U.S.

1933, Hydroelectric (electricity thru H20) dam building project.

Employed 28,000

Built 29 plants & lots of

dams• What ‘R’?

Matching

a. FDIC

b. SEC

c. PWA

d. AAA

e. CCC

f. TVA

1. Regulated the Stock Market

2. Hydroelectric power

3. Help for farmers

4. Job assistance

5. Protect our savings

6. Built schools & other gov. projects

1. Unemployment had reached what by the time FDR was president?

2. List 4 effects of the Depression.3. What is the “New Deal”? What are the 3

parts?4. Identify the “First Hundred Days.”5. What were “fireside chats”?6. What was the first thing FDR did as

president?7. Identify the purpose of the following:

FDIC, SEC, AAA, CCC, TVA, PWA.

The Second New Deal1934-36

*The Second New Deal

*Stronger focus on more social welfare benefitsWelfare State = nation in which the government is responsible for the economic well being of its citizens.

Criticisms of the New Deal

Liberals

• Wanted more government intervention in the economy to help poor Americans.

Conservatives

• New Deal imposed too many regulations on business

• Expanded Federal Government power -at the expense of state’s rights

*Huey Long*Governor & Senator from Louisiana, “Kingfish”*Created the“Share our Wealth” programSocialistGive every American family $5,000 to buy a house, car, and radio and an annual income of $2,500 Assassinated 1935

*Father Coughlin

*Controversial Roman Catholic priest from Detroit that used radio to express his personal economic viewsReached 30-40 million listeners Blamed the country’s economic woes on a conspiracy of Jews & bankers supporting HitlerWanted FDR to do more for the economy by regulating banks & socializing many industries

*Huey Long & Father Coughlin*Both believed that FDR’s New Deal programs were not radical enough to help the poor!

*Works Progress AdministrationWPA

*Largest New Deal agency, employing 8.5 million unemployed unskilled workers to carry out public works projectsConstructed highways, airports, bridges, public buildings, & parksArtists & musicians sculpted works to beautify the walls of public buildings & entertain cities.

*Hoover Dam, 1931-36

*Built to control flooding on the Colorado river & to transform it into a hydroelectric power (electricity) source for the region, esp. California.726’ tall5 million barrels of concreteOver 5,000 workers 112 workers died

H

*Social Security Act, 1935

*Goal: to provide financial support for the elderly, disabled, & young childrenMeant to supplement your own retirement income; not to be lived on.

1. What was the focus of the 2nd New Deal?

2. Who was Huey Long & what did he propose?

3. What media did Father Coughlin use to spread his views?

4. What did H. Long & Father Coughlin have in common?

5. Who did the WPA employ?

6. Why was Hoover Dam built?

7. Who was able to receive Social Security?

*Roosevelt’s Second Term

Election of 1936

• First Lady, Eleanor Roosevelt:

-helped gain African American & women’s votes for her husband

-*actively & aggressively promoted the New Deal Programs & bonded

with the public

• FDR won in another landslide showing most Americans supported FDR & the New Deal legislation

African Americans and WomenRoosevelt appointed more than 100 African Americans to positions in his administration-known as the Black CabinetFrances Perkins-first women appointed to a cabinet post; Secretary of Labor

*FDR’s Court-Packing Plan

*The Supreme Court declared many of FDR’s New Deal programs unconstitutional

Made FDR furious, calling the supreme court justices “nine old men”*FDR wanted to challenge the principle of _______ & _______ on the Supreme Court by giving more power to the executive branch.

*Roosevelt’s Public Reasoning

• To increase the number of justices FDR sent a bill to Congress: If any justice had served for 10 years and did not retire within six months after reaching the age of 70, the president could appoint an additional justice to the court.

• *Too old to handle

their workload

1.How does the baseball player in the cartoon reflect Roosevelt’s public reason for wanting to add justices?

a. The justices were getting to old to handle their workload.

b. The justices needed to shave their beards.

c. They were too old to play on the baseball team.

2. What was the real reason he wanted to ‘pack’ the Supreme Court?

*Legacy of the New Deal

1. Created a ‘safety net’ for average Americans

2. *Changed political thinking in the U.S. allowing the government to become more involved in peoples life’s.

3. *Restored a sense of hope among the people!

4. Government size increased dramatically

*Changes in American Government from the New Deal programs*

The power of the president increased.

Increased concern for American workers.

More governmental

regulations on

economy &

businesses.

*Lasting New Deal Programs*FDIC—insures our bank deposits

SEC—regulates the stock market

SSA—helps those that can’t work

FHA—federal housing loans

TVA—hydroelectric power

*The Depression Comes to an End*Economic problems associated with the Great Depression were ended with U.S. involvement in WWII.

Unemployed went back to work in the war industry or as soldiers.

1. Why was Eleanor Roosevelt different than most first ladies?

2. What public reason did FDR give for packing the Supreme Court?

3. What private reason did he give? 4. What New Deal agencies are still around

today?5. What profound changes in American Gov.

were created by the New Deal?6. What major event brought an end to the

Great Depression?

7. Place these historical eras in order:

a. WWII

b. The Great Depression

c. The Gilded Age

d. The American Revolution

e. WWI