The “Roaring Twenties” was considered “roaring” because it was time of prosperity and change...

The Roaring Twenties was considered roaring because it was time of prosperity and change in the U.S.

New technological improvements were changing the way people lived Homes were updated with electricity Radios, refrigerators, electric appliances and telephones were becoming a part of the American way of life

Women and American youth found new ways to exert their independence and broaden their cultural horizons with new fashions, music and dance

But beginning in 1929 and through the 1930s, the economy experienced the worst economic downturn in U.S. history- THE GREAT DEPRESSION

CAUSES OF THE GREAT DEPRESSION

Overproduction

THE PROBLEM: When WWI ended, so did the high demand for American goods and produce because The war was over, so the products werent needed in the same large quantities The European economies struggled during the post-war years, meaning Europeans no longer had the money to buy American goods This was DEVASTATING for American farmers who needed to sell the excess of goods they were producing!!!

1920s Problems Factories making Too Much, Farms growing too much Factories Fire Workers (Dont need them) Farm Prices fall (Farmers cant make $$) Farmers & Factory Workers cant pay back loans to Banks: DEFAULT!! Banks Close because they have no money: Loans have not been paid back, cant give people their savings BANKS Have NO $$ PEOPLE LOST SAVINGS & JOBS NO ONE TO HELP!

Most Americans couldnt afford all of the new luxury items of the 20s, such as cars and radios But the poor and middle classes wanted to possess these luxuries too Consumer Overspending/ Consumer Credit

Buying on credit offered a solution! Americans went on a spending spree, buying things they couldnt really afford By the end of the 1920s, 60% of the cars and 80% of the radios were bought on installment credit Buying on Credit increased personal debt.

Under-consumption After the Stock Market collapsed in October 1929, consumers quit spending except for absolute necessities, creating a big surplus of goods in the marketplace This caused Under-consumption Unable to make a profit, factories were forced to shutdown- workers lost their jobs

While many Americans prospered during the 1920s, many did not. Farmers lost income throughout the 1920s as European markets closed to American farm goods. Coal mining suffered as oil began to replace coal as a fuel. In general, workers wages failed to keep pace with prices during the period.

As a result, there developed an unequal distribution of income that led to the richest 1% of Americans owning approximately 40% of the countrys wealth.

History Channel: The Crash of 1929 https://www.youtube.com/watch?v=v_P_9T3 DKn0

The Stock Market In increasing numbers, those who could afford to invested in the stock market The stock market had become the most visible symbol of a prosperous American economy The health of the stock market is measured by the Dow Jones Industrial Average (the Dow)- a measure based on the stock prices of 30 representative large firms

Throughout the 1920s, stock prices rose steadily and the Dow reached an all-time high Eager to take advantage of this, Americans rushed to buy stocks- many of these investors were average Americans who hoped to strike it rich

Speculation The frequent buying and selling of shares for the purpose of making a quick profit

Paying a small percentage of a stocks price as a down payment and borrowing the rest BUT: If the value of stocks declined, people who bought on margin had no way to pay off the loans

The Problem: Rising stock prices + = The ability of people of ordinary people to buy on credit Unrestrained buying and selling that inflated the price of stocks above their actual value And President Hoover did little to discourage such buying or to regulate the market

Herbert Hoover Elected POTUS in 1928 He did not have complete confidence in the stability of the stock market But, in regards to the economy, he believed it was the governments job to stay out of the way

THE STOCK MARKET CRASH By September 1929, the U.S. economy was beginning to show signs of slowing down. Stockholders feared the economy was falling into a recession This caused investors to panic and sell their stock

As more and more people sold their stock, more people panicked and frantically sold their stocks, driving down their prices and causing a stock market crash Black Tuesday Oct. 29, 1929

16.4 million shares were dumped- additional millions of shares could not find buyers People who had bought stocks on credit were stuck with huge debts Others lost most of their life savings. By November, investors had lost $30 BILLION

The stock market crash signaled the beginning of the Great Depression- the period from 1929 to 1940 in which the economy plummeted (A.K.A. economic recession) and unemployment skyrocketed

The crash alone DID NOT cause the Great Depression, but it hastened the collapse of the economy and made the depression more severe

Banking Panic & Failures In addition, others who had lost their jobs or who had lost their lifesavings were unable to payback their loans to the bank After the crash, many people panicked and withdrew their money from the banks

The Result: By 1933, 11,000 of the nations 25,000 banks had failed Because the government did not protect or insure bank accounts, millions of people lost their savings accounts

HARDSHIP & SUFFERING

The Dust Bowl

The region that was the hardest hit- Kansas, Oklahoma, Texas, New Mexico & Colorado- came to be known as The Dust Bowl Many of the farmers living in this area- known as Okies- migrated to California in search of work

SOCIAL IMPACT

As profits fell and consumers reduced spending, workers began to lose their jobs. By 1932, the unemployment rate in the U.S. had reached 25%.

Shantytowns-Hoovervilles Because they couldnt pay their debts, many unemployed Americans lost their homes These newly homeless Americans settled in camps or shantytowns of shacks and tents built from scrap materials such as packing crates and rusted-out car bodies

These camps soon earned the title Hoovervilles, named after President Hoover, who was blamed by many Americans for the onset of the depression

There was no federal relief system to provide money or food to the needy While there were some public assistance programs and private charities, they were quickly overwhelmed by the sheer number of people who needed help

Many Hooverville residents depended on soup kitchens and bread lines to survive

Charitable establishments that offer free or low-cost food

Lines of people waiting to receive free food Bread Lines

Women & Minorities Were especially hit hard Women were often fired because many companies felt jobs should go to men first African Americans were usually the last to be hired, but first to be fired

Men Had a difficult time coping with the fact that they could no longer support themselves or their families Many had to travel around the country in search of work Some even abandoned their families out of shame

Were malnourished Many child welfare programs were cut Many schools were forced to shorten the school year or shut down completely Thousands had to go to work in sweatshops

Test Essay Question What caused the Great Depression? Be sure to include: overproduction (why were factories/farming producing so much & why did this cause a problem later?) Credit (describe Americans spending habits during the 20s and why this caused problems later) Underconsumption Stock market speculation & buying on margin The stock market crash Bank failures

The New Deal

The Election of 1932 By the end of 1932, Americans were ready for a change. Democratic candidate Franklin Delano Roosevelt (FDR), beat Hoover in the election by a landslide. Democrats also won large majorities in the House & Senate.

As soon as FDR entered office, he initiated programs to end the Depression. These programs became known as the NEW DEAL.

New Deal policies focused on 3 goals: 1.Relief- relief/welfare for the needy 2.Recovery- economic recovery 3.Reform- financial reform

Fireside Chats FDR spoke directly to the people in radio talks called Fireside Chats. He explained the New Deal measures and asked for public support. These chats did a lot to restore the nations confidence.

In regards to the problems caused by the Great Depression, he tried to encourage the American people:

In his first 100 days, Congress quickly passed many important laws. These laws expanded the federal governments role in the nations economy.

New Deal Programs: Banking & Finance Reform One of the first things FDR did in office was declare a bank holiday, closing the banks to prevent more bank failures

1933: Federal Deposit Insurance Corporation (FDIC) Created by the Glass-Steagall Act The FDIC protected individual bank accounts up to $5,000 ($250,000 today), reassuring bank customers that their money was safe

1933: EMERGENCY BANKING RELIEF ACT (EBRA) Banks were inspected by the Treasury Department Banks that were deemed stable or healthy were allowed to reopen.

FDRs bank holiday, the FDIC the EBRA helped restore public confidence in the banks

1933: Federal Securities Act- required corporations to provide complete information on all stock offerings and made them liable for any misrepresentations

1934: Securities & Exchange Commission (SEC)- established to regulate the stock market and to prevent people from rigging the market for their own profit

The FDR administration also established programs to provide relief through work projects

1933: Civilian Conservation Corps (CCC)- put young, unemployed men to work building roads, developing parks, planting trees and helping in erosion-control and flood- control projects Provided 3 million men with work and wages between 1933 and 1942 Many of the projects these men work on were located in the Great Plains states and were aimed at preventing another Dust Bowl

1933: National Industrial Recovery Act (NIRA)- Provided money to states to create jobs in the construction of schools and other community buildings

When the CCC and NIRA failed to make a sufficient dent in unemployment, FDR established the CWA

1933: Civil Works Administration (CWA)- Provided work in federal jobs Built 40,000 schools and paid the salaries for 50,000 teachers Built more than a million miles of road Critics of the CWA claimed that the programs were make- work projects and were a waste of money

New Deal Programs: Rural Development 1933: Tennessee Valley Authority (TVA) Established to develop the impoverished Tennessee River Valley region (which runs through 7 states)

Provided flood control by constructing 20 new dams. Each dam had its own power plants and parks Provided inexpensive, hydroelectric power that brought new employment for men and women to the region with industries such as textile mills At its peak, the TVA employed 28,000 people

Opposition to the New Deal By the end of the 100 Days, millions of Americans had benefited from the New Deal programs Public confidence in the nations future had also rebounded Nevertheless, the New Deal did not end the Depression and opposition grew among some groups

FDR reluctantly financed the New Deal through DEFICIT SPENDING spending more money than the govt received in revenue. Some liberals felt the ND did not do enough to help the poor. Some conservatives said it gave the federal govt too much control over agriculture and business.

The Supreme Court Challenges the New Deal The Supreme Court found two important parts of the NEW DEAL unconstitutional: NIRA & AAA (Agricultural Adjustment Act)The Supreme Court found two important parts of the NEW DEAL unconstitutional: NIRA & AAA (Agricultural Adjustment Act) This angered FDR so he proposed a court-packing bill to allow him to appoint more new Supreme Court justices. Critics claimed FDR was trying to pack the Court with justices who would support his New Deal policiesThis angered FDR so he proposed a court-packing bill to allow him to appoint more new Supreme Court justices. Critics claimed FDR was trying to pack the Court with justices who would support his New Deal policies

Huey Long The most serious challenge to the New Deal came from Senator Huey Long of Louisiana. He was an early supporter of the New Deal, but he turned against FDR because he was eager to win the presidency for himself He proposed a program called Share Our Wealth. Under the banner Every man a king, he promised something for everyone In 1935, at the height of his popularity, Long was assassinated. This proposed a guaranteed household income for each American family paid for by high taxes on the wealthiest Americans.

The Second New Deal

The programs President Roosevelt introduced after his original New Deal failed to completely fix the American economy. So FDR started the Second New Deal to provide more extensive relief to both farmers and workers

Eleanor Roosevelt First Lady of the World He was encouraged to launch this 2 nd phase of reform by his wife, Eleanor Roosevelt A social reformer, she was deeply interested in humanitarian causes and social progress She traveled all over the United States to observe social conditions so she could keep the president informed as to the state of the nation.

As a supporter of womens activism, she was also instrumental in convincing Roosevelt to appoint more women to government positions She was instrumental in changing the role of the first lady from being a largely ceremonial to position to an active & influential one

Election of 1936 The Second New Deal was already under way by the time of the presidential election of 1936 This helped Roosevelt win another overwhelming victory

Significance of his victory: Showed that the continuation of his New Deal programs was supported by the American people It was the first time most African Americans voted Democratic It was also the first time that all labor unions supported a single candidate

National Labor Relations Act (Wagner Act) One of the first reforms of Roosevelts Second New Deal It established collective bargaining rights for workers It prohibited unfair labor practices such as: intimidating workers attempting to keep workers from organizing unions firing union members Set up a government agency where workers could testify about unfair labor practices

With this protection, labor union membership grew. By 1945, 37% of the U.S. work force was unionized.

Rise of Industrial Unionism & the CIO After passage of the Wagner Act, industrial workers began to unionize. The American Federation of Labor (AFL) had been hesitant to organize industrial unionism, because it was committed to craft or skill-based workers such as carpenters and railroad engineers. As a consequence, the Congress of Industrial Organizations (CIO) was created to represent industrial workers who felt they were not being represented by the AFL. The AFL and CIO clashed on and off before merging in 1955 to become the AFL-CIO that exists today.

1935: Social Security Act One of the most important achievements of the ND! This law consisted of three components: 1.Old-age insurance for retirees aged 65 or older and their spouses; funds come from what workers and employers pay into the system. 2.Unemployment compensation payments to workers who lost their jobs; paid by a federal tax on employers and administered by the state 3.Aid to the disabled & families with dependent children this helped people who could not be expected to work. All are still with us today.

By the end of the 1930s, the economy had improved. Industrial production had reached 1929 levels. Unemployment was still high, but many felt the worst days of the Depression were behind them. FDR would not initiate any new programs, as his attention was increasingly turn to events happening in Europe, particularly the rise of Adolf Hitler in Germany

Legacy of the New Deal New Deal economic and financial reforms (the FDIC, the SEC & Social Security) have helped to stabilize the nations finances and economy Thanks to the ND, there are now safety nets in place- during economic downturns, peoples savings are still safe and they can receive unemployment compensation if they lose their jobs

Legacy of the New Deal One of the most important legacies of the ND has been that the federal government has assumed some responsibility for the social welfare of its citizens

The ND expanded the powers of the federal government by: Creating federal jobs Regulating supply and demand Settling labor disputes Legacy of the New Deal

The Great Depression, the New Deal, and the upcoming threat to peace in Europe and Asia helped Franklin D. Roosevelt to be elected to FOUR CONSECUTIVE TERMS as PRESIDENT.

The “Roaring Twenties” was considered “roaring” because it was time of prosperity and change...

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