Dust storm in the Great Plains, 1935.

Farm Forclosure Sale, 1933.

“Okies” travel with all their possessions on Route 66 to California, 1935.

Men waiting in a breadline provided by a private charity in New York City, 1932.

Civilian Conservation Corps clearing land for soil conservation (1934).

The 1930s - Part IThe Great

Depression

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What is the Business Cycle?

• The normal ups and downs in a free market economy.

• Rapid Growth - inflation (new businesses, high profits, rising prices)

• Slow Down - recession or depression (slow growth, bankruptcies, and high unemployment)

What were the causes behind the Great Depression?

• Over-Production (Mass Marketing, Easy Credit, Warehousing Surplus Goods)

• Under-Consumption (Uneven Distribution of Wealth)

• “Sick Industries” - Coal Mining, Textiles…

• Declining Farm Prices • Excessive Stock Speculation• Unwise Federal Policies,

Such As Cutting Government Spending and Increasing the Tariff

What Started the Great Depression?

The Crash of the Stock Market

• Too Much Speculation• Too Much Buying on the Margin• Black Tuesday - A Panic Set off a Chain

Reaction• Soon Led To Bank Closures, Lost Savings,

Declining Profits and Massive Unemployment.

Describe everyday life during the Great Depression.

• Numbers of Banks and Bank Suspensions• Year Number as of 12-31

Suspensions• 1929 24,633 659• 1930 22,773 1350• 1931 19,970 2293• 1932 18,397 1453• 1933 15,015 4000• 1934 16,096 57

Describe everyday life during the Great

Depression.• 25% of the work force

unemployed• Hundreds of bank

closures.• Thousands of

bankruptcies• Millions homeless.• Hoovervilles, Hoover

blankets, Hoover flags• The Dust Bowl• Hunger and starvation.

Other Images From the Depression

The 1932 Election

How did Franklin Roosevelt’s New Deal differ from the approach taken by

Herbert Hoover?

Herbert Hoover• Laissez Faire

Philosophy• Mistakes - Reduced

the budget and passed the Hawley-Smoot Tariff

• Some public works projects, but efforts were too little and too late…

Franklin Roosevelt

• Did not say much prior to his inauguration• In March, 1933, immediately took action by

declaring a bank holiday.• Recruited a “brain trust” to serve as his

advisors.• Took a very pragmatic approach.• Had the support of a very Democratic Congress.• Many programs were launched in the first one

hundred days.• Collectively, FDR’s approach to dealing with the

Great Depression was called the New Deal.

* Federal Emergency Relief Administration (FERA) a Hoover program to create unskilled jobs for relief; replaced by WPA in 1935.

* United States bank holiday, 1933: closed all banks until they became certified by federal reviewers * Abandonment of gold standard, 1933: gold reserves no longer backed currency; still exists * Civilian Conservation Corps (CCC), 1933: employed young men to perform unskilled work in rural areas; under Army supervision; separate program for Native Americans * Tennessee Valley Authority (TVA), 1933: effort to modernize very poor region (most of Tennessee), centered on dams that generated electricity on the Tennessee River; still exists * Agricultural Adjustment Act (AAA), 1933: raised farm prices by cutting total farm output of major crops (and hogs) * National Recovery Act (NRA), 1933: industries set up codes to reduce unfair competition, raise wages and prices; * Public Works Administration (PWA), 1933: built large public works projects; used private contractors (did not directly hire unemployed)

What were some of the most important accomplishments of

the New Deal?

• *

Continued… * Federal Deposit Insurance Corporation (FDIC) / Glass-Steagall Act: insures deposits in banks in order to restore public confidence in banks; still exists * Securities Act of 1933, created the SEC, 1933: codified standards for sale and purchase of stock, required risk of investments to be accurately disclosed; still exists * Civil Works Administration (CWA), 1933-34: provided temporary jobs to millions of unemployed * Indian Reorganization Act, 1934 moved away from assimilation * Social Security Act (SSA), 1935: provided financial assistance to: elderly, handicapped, paid for by employee and employer payroll contributions; required years contributions, so first payouts were 1942; still exists * Works Progress Administration (WPA), 1935: a national labor program for 2+ million unemployed; created useful construction work for unskilled men; also sewing projects for women and arts projects for unemployed artists, musicians and writers. * National Labor Relations Act (NLRA) / Wagner Act, 1935: set up National Labor Relations Board to supervise labor-management relations; In 1930s it strongly favored labor unions. Modified by Taft-Hartley (1947); still exists * Fair Labor Standards Act (FLSA), 1938: established a maximum normal work week of 40 hours, and a minimum pay of 40 cents/hour; still exists

How should the New Deal be assessed?

• Critics on left claimed that the New Deal had not done enough.

• These included Huey Long, Father Charles Coughlin and Dr. Francis Townsend.

How should the New Deal be assessed?

• Critics on the right claimed that the New Deal discouraged free enterprise and was the beginning of socialism.

• These included the American Liberty League and some of America’s biggest corporations.

How should the New Deal be assessed?

• The Supreme Court declared some New Deal legislation to be unconstitutional.

• This changed after FDR pushed his controversial court-packing scheme.

How should the New Deal be assessed?

• America's Gross National Product 1928 to 1939:

• 1928 $100 billion• 1933 $55 billion• 1939 $85 billion

• Number unemployed in America:

• 1929 2.6 million• 1933 15 million• 1935 11 million• 1937 8.3 million• 1938 10.5 million• 1939 9.2 million• 1940 8 million

How should the New Deal be assessed?

• Overall, most historians agree that the New Deal did NOT end the Great Depression (It officially ended with the start of World War II)

• However, it did enable the nation to survive the Depression while preserving our constitutional democracy, our capitalist economic system and the American way of life.