The Great Depression and The New Deal

1929 - 1940

Stock Market Challenge

• What is the Stock Market?• What causes something to be

valuable?• What factors cause a stock to rise or

fall?• What is the difference between a

recession and a depression?

Causes of The Great Depression

• The optimism of the 1920’s concealed problems in the American economic system• In October of 1929, The stock market

crashed. It was at record lows and everyone lost their life savings• There were 3 main causes of the Great

Depression

#1) The “Crash”• People over speculated on stocks, using

borrowed money they could not repay when stock prices crashed

#2) No Bank safety net• The federal reserve failed to prevent the

collapse of the banking system

#3) No international trade• High tariffs discouraged international trade

Severe impact on Americans

• A large number of banks and other businesses failed• One fourth of workers were without

jobs• Large numbers of people were

hungry and homeless• Farmers incomes fell to low levels

http://www.youtube.com/watch?v=aPtbekTh2qo&NR=1

“Brother Can You Spare a Dime”A popular depression era song

• Sirloin Steak (per pound)• Chicken (per pound)• Bread (1 loaf)• Potatoes (per pound)• Bananas (per pound)• Milk ( a quart)• Cheese (per pound)• Canned Tomatoes• Oranges (I dozen)• Cornflakes (small box)

• .29 (cents)• .22• .05• .02• .07• .10• .29• .09• .27• .08

The New Deal

3 Goals (3 R’s)Relief Recovery Reform

“The only thing we have to fear, is fear itself” – FDR’s inaugural address

• http://www.americanrhetoric.com/speeches/fdrfirstinaugural.html

• In the 1932 presidential election Herbert Hoover ran for re-election against New York Governor Franklin D. Roosevelt (FDR)

• FDR easily won with the promise of a new deal that would pull the country out of the Depression

What was the New Deal?• There were five (5) major features to the New Deal

Five parts of the New Deal

1. Social Security2. Federal work programs3. Environmental improvement

programs4. Farm assistance programs5. Increased rights for labor

New Deal Programs Worksheet

• Get with 6:00 clock partner and the person on the left go and get each of you a textbook.

• Use text pages 732-734 to fill in the New Deal Chart

• When you are done put your textbooks away and raise your hand for me to check it.

Franklin Roosevelt's “NEW DEAL”

• There were lots of programs set up by the New Deal, but here are 4 Primary programs to know!

#1)SSA

Social Security Act

Set up as a system of pensions for the elderly, unemployed and disabled

#2)FDIC

Federal Deposit Insurance Corporation

All Savings accounts in approved banks were insured and protected by the government

**Remember the Federal Reserve FAILED to protect the banks…The FDIC was created So it would never happen again**

#3)PWA

Public Works Administration

Things built for public use such as parks, schools, roads, and libraries

#4)SEC

Securities and Exchange Commission

Laws regulating the sale of stocks and bonds in the Stock Market

The SEC prevents corporations from cheating and lying about their stock values and gains and losses

Great Depression Final thoughts

Though the New Deal programs had many successes, it was ultimately WWII that ended the Great Depression!

Though we have 3 main causes of the Great Depression, a major key factor was Americans large personal debts….We simply borrowed and spent too much money that we couldn’t pay back!