Chapter 25 The Depression and FDR 1929-1941

Section 1 The Great Depression

•What is the stock market? “An organized system for buying and selling shares or blocks of investments in corporations.” (725)

What’s the big deal?

•During the 1920’s an increasing number of people began playing the stock market by buying cheap and selling high in an effort to make a lot of money quickly. Do you know someone who would like to make a lot of money quickly by playing the lottery?

Contributing Factors Before 1929

• Overproduction of food caused farmers to lose money. Many lost their farms to banks from whom they had borrowed money and could not repay their loans.

• Overproduction of factory made items caused businesses to lay off workers or reduce their hours to part time.

Stock Market Vocabulary

•On margin : Paying for a part of the stock purchase and borrowing the other part from a broker. The broker in turn borrowed money from the banks. When the value of the stock fell, neither the broker or investor could pay the loan back.

Because so many people were buying and selling stocks, the value dropped. Investor’s sold millions of shares of stock for three days. On Tuesday, October 29, 1929 sixteen million shares were traded causing investor’s to loose all their money. This event caused the beginning of the long recession known as “The Great Depression.” The stock exchange closed for few days to calm investor’s but it was too little to late.

When a record 16 million shares were traded, $30,000,000,000 vanished!

New York Stock Exchange 10/29/29

Bank failures wiped out people’s savings.

So…who did the stock market crash hurt economically?

• Farmers? Farmers were not investors, they were already poor, but had the ability to grow food so they could eat.

• Wealthy? The wealthy would not have invested all their monies into the stock market, so the stock market crash did not effect them as much.

• Middle Class Investors? Urban, middle class people who borrowed money to purchase stocks lost everything when stocks lost their value and the banks demanded repayment.

High Unemployment

• As a result of companies loosing money, people lost their jobs. The unemployment rate during the Depression rose to 25%. What happens when your parents no longer have a job?

United States Department of Labor Bureau of Labor Statistics for 2003-2013Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Annual

2003 5.8 5.9 5.9 6.0 6.1 6.3 6.2 6.1 6.1 6.0 5.8 5.7

2004 5.7 5.6 5.8 5.6 5.6 5.6 5.5 5.4 5.4 5.5 5.4 5.4

2005 5.3 5.4 5.2 5.2 5.1 5.0 5.0 4.9 5.0 5.0 5.0 4.9

2006 4.7 4.8 4.7 4.7 4.6 4.6 4.7 4.7 4.5 4.4 4.5 4.4

2007 4.6 4.5 4.4 4.5 4.4 4.6 4.7 4.6 4.7 4.7 4.7 5.0

2008 5.0 4.9 5.1 5.0 5.4 5.6 5.8 6.1 6.1 6.5 6.8 7.3

2009 7.8 8.3 8.7 9.0 9.4 9.5 9.5 9.6 9.8 10.0 9.9 9.9

2010 9.8 9.8 9.9 9.9 9.6 9.4 9.5 9.5 9.5 9.5 9.8 9.3

2011 9.1 9.0 8.9 9.0 9.0 9.1 9.0 9.0 9.0 8.9 8.6 8.5

2012 8.3 8.3 8.2 8.1 8.2 8.2 8.2 8.1 7.8 7.9 7.8 7.8

2013 7.9 7.7 7.6 7.5 7.6 7.6 7.4 7.3 7.2 7.3 7.0

Loss of income

• Companies lost money, so they let employees go.

People lost their

homes

• Can no longer make mortgage payments or rent

Unable to buy food

How did people survive?“Hoovervilles”

“squatting”

Churches and charities provided food called,

“relief.”

People sold whatever they could to buy food

Roadside stand in Birmingham, 1935

Children worked to help the family

Why do you think companies hired children?

• President Hoover thought the bad economy was only temporary. Hoover asked businesses to not make cuts and for charities to help provide more relief. He did not think government action was the solution to the problems.

• BUT, by 1931 Hoover realized the gov’t had to do something to help. Hoover authorized extra federal money for public works-projects such as highways, parks, and libraries to create new jobs.

“Prosperity is just around the corner.” President Herbert Hoover

Cause and Effect

Great Depressio

n

Section 2 Roosevelt’s New Deal

• Franklin D. Roosevelt was a distant cousin to President Theodore Roosevelt. FDR’s political career began when he was elected to the New York state senate in 1910. In 1913, he became the assistant secretary of the Navy. In 1920, Democrats nominated him for the Presidential ticket.

• At the Democratic Convention in Chicago in 1932, Roosevelt pledged himself to a, “…new deal for the American people.” As Congress passed FDR’s federal legislations, they became known as the New Deal. New Deal laws and regulations affected banking, the stock market, industry, agriculture, public works, relief for the poor and conservation of resources.

Jobs and Relief

• Roosevelt created government jobs through work relief programs such as Civilian Conservation Corps (CCC). CCC employed about 3 million young men over ten years to work on projects such as planting trees, building levees, and improving parks.

Tennessee Valley Authority

• TVA’s goal was to control flooding, promote conservation and development, and bring electricity to rural areas along the Tennessee River.

Social Security Act of 1935

• Under the Second New Deal, FDR sought passage of legislation that would give retired, unemployed or disabled people a monthly pension.

What do you think the cartoonist is trying to say about Social Security?

Quick Write

• In your notebook, write two questions you would ask someone who had lived through the Great Depression if they were visiting our class today.

Section 3 Life During the Depression

• Because jobs were so scarce, many people did not think women should work. Desperate for income, women sought employment anyways. Why do you think women were paid less than men?

First Lady Eleanor Roosevelt• FDR said of his wife,

Eleanor, that she was his, “eyes and ears,” because she made many public appearances around the country. Mrs. Roosevelt worked tirelessly for women’s rights, minorities, and other humanitarian projects.

The Dust Bowl

• Modern farm equipment had cleared the Great Plains region of grass which had held the soil in place in order to plant wheat. In the 1930’s, drought conditions occurred that dried up crops, as well as strong prairie winds that carried 300 million tons of soil away. Many families in the devastated region migrated to California.

Before After

The Black Cabinet• African Americans made

some political gains during FDR’s administration. A group of advisers known as the Black Cabinet included: Ralph Bunche who worked for the State Department, Robert Weaver, a college professor, and Mary McLeod Bethune, who established Bethune-Cookman College in Florida.

Ralph Bunche

Entertainment and the Arts

• Two different trends developed during the Depression. One sought escape from the problems such as movies and radio variety shows. The other criticized what they considered to be the social and economic injustice of the Depression with movies like The Grapes of Wrath, Gone With the Wind and the Wizard of Oz. (1939)

The Three Stooges, Groucho Marx… National Barn

Dance

http://movieclips.com/XUdK-duck-soup-movie-the-mirror-scene/

• Photographer, Dorthea Lange, is remembered for her work with migrant workers. Margaret Bourke-White also recorded the plight of farmers.

• Painters such as Grant Wood and Thomas Hart Benton showed ordinary people confronting the hardships of the Depression with determination. American

Gothic by Grant Wood

Migrant mother with her children

Poor mother with her children in Oklahoma 1936

Etymology – origin of words or phrases

• The term, “soap opera,” began during the Depression. It originated when laundry detergent companies would sponsor radio shows. Can you name a current soap opera t.v. show?

Classifying InformationWho?

accomplishments

• “I, not events, have the power to make me happy or unhappy today. I can choose which it shall be. Yesterday is dead, tomorrow hasn't arrived yet. I have just one day, today, and I'm going to be happy in it.”Groucho Marx

That’s all folks!