Precious Time: (10 minutes) 1.Review your notes, add Cornell question/interactions and highlight your notes Do not highlight everything, only what you think is most important Warm-Up Do you exercise? Why or why not? 3-5 sentences US History CA CONTENT STANDARD: UNITED STATES HISTORY Continuity and Change in the Twentieth Century: Students analyze the different explanations for the Great Depression and how the New Deal fundamentally changed the role of the federal government Performance Standard: Describe the monetary issues of the late nineteenth and early twentieth centuries that gave rise to the establishment of the Federal Reserve and the weaknesses in key sectors of the economy in the late 1920s Performance Standard: Understand the explanations of the principal causes of the Great Depression and the steps taken by the Federal Reserve, Congress, and Presidents Herbert Hoover and Franklin Delano Roosevelt to combat the economic crisis Performance Standard: Discuss the human toll of the Depression, natural disasters, and unwise agricultural practices and their effects on the depopulation of rural regions and on political movements of the left and right, with particular attention to the Dust Bowl refugees and their social and economic impacts in California Performance Standard: Analyze the effects of and the controversies arising from New Deal economic policies and the expanded role of the federal government in society and the economy since the 1930s (e.g., Works Progress Administration, Social Security, National Labor Relations Board, farm programs, regional development policies, and energy development projects such as the Tennessee Valley Authority, California Central Valley Project, and Bonneville Dam) Performance Standard: Trace the advances and retreats of organized labor, from the creation of the American Federation of Labor and the Congress of Industrial Organizations to current issues of a postindustrial, multinational economy, including the United Farm Workers in California. EQ: How did the Great Depression happen, and how did Americans respond to it? CAUSES AND EFFECTS OF THE GREAT DEPRESSION THE GREAT DEPRESSION the worst economic crisis in American history in the past, the government did little or nothing and the economy got better Not the first time US had bank runs the nation had to rethink the relationship between government and the welfare of regular people OVERVIEW OF CAUSES 1.Overproduction of goods 2.Under-consumption of agriculture 3.Uneven Distribution of Income 4.Consumer Debt 5.Widespread stock market speculation 6.Political Decisions (Hoover Years) 1. OVERPRODUCTION OF GOODS Manufacturing continued at wartime rates Consumers were not purchasing goods at the same rate which they were being manufactured The value and price of goods declined, hurting businesses UNDER-CONSUMPTION OF AGRICULTURE demand for farm produce fell after WWI farmers couldnt pay their loans thousands of farms were seized by banks UNEVEN DISTRIBUTION OF INCOME poor families couldnt afford to buy goods rich families didnt buy enough to help the economy 1% made over $10,000 5% made $5,000 9,000 29% made $2,000 5,000 65% made under $2,000 Warm-Up Do you exercise? Why or why not? 3-5 sentences US History CONSUMER DEBT real estate speculation Florida land grab people sold land actually in the ocean average people had no safety net when the depression began 80% of radios purchased on credit 60% of cars purchased on credit WIDESPREAD STOCK MARKET SPECULATION Buying on margin was the idea of buying stocks on credit. When the price of the stocks dropped people went in to debt and lost their life savings. HOOVER YEARS Overconfidence in the nations wealth and economy Little to no government interventions By adherence to the principles of decentralized self government, ordered liberty, equal opportunity, and freedom to the individual, our American experiment in human welfare has yielded a degree of well-being unparalleled in all the world. It has come nearer to the abolition of poverty, to the abolition of fear of want, than humanity has ever reached before. Herbert Hoover, campaign speech, 1928 I do not believe that the power and duty of the General Government ought to be extended to the relief of individual sufferingThe lesson should be constantly enforced that though the people support the Government the Government should not support the people. Herbert Hoover, 1930 THE HOOVER YEARS Black Tuesday October 29, 1929 JP Morgan himself tried to buy enough stock to stop the crash 16 million shares were sold in one day Thousands lost their jobs within two months stocks dropped $40 billion about the cost of WWI GE dropped from $400 to $283 a share OVERVIEW - EFFECTS OF THE DEPRESSION Banks and businesses fail Unemployment soars Personal income shrinks High tariffs = less trade with other countries World trade declines American loans to Europe stop Global depression all major economies are impacted BANKS AND BUSINESS FAIL Step 1 People Panic and take all of their money out of banks People stop spending money Step 2 Banks start fail out of money Try to collect on loans owed to them Step 3 Business struggle to keep doors open People loose their jobs increase in unemployment Step 4 People cant pay their loans and stop buying goods Businesses begin to fail Unemployment increases even more Step 5 Federal government limits money supply More people cant pay loans, loose homes and land Crisis in confidence AMERICAN LIFE DURING THE DEPRESSION Consistent bank runs and banks failures High unemployment Hooverville's Bread lines UNEMPLOYMENT RATES BANKRUNS AND BUSINESS FAILURES People panicked and pulled out their entire life savings from the banks This forces banks to fail This happens regularly until 1933 Leads to large numbers of business failures HOOVERVILLE'S a shantytown built by unemployed and destitute people during the Depression of the early 1930s. Named this as an insult to President Hoover A boy asleep in a cardboard box in a Ca, Hooverville, 1933 AS IF ECONOMIC DEPRESSION WASNT ENOUGH. THE DUST BOWL Manmade and Natural Disaster 1.Over development of land 2.Long drought in the Mid-West 3.Farmers went bankrupt Huge, deadly dust storms took away top soil 100 mille/hour winds blew dirt 8,00 feet into the air Dirt blew as far as Boston Okies farmers moving out of Dust Bowl Most werent from Oklahoma Black Sunday, April 1935 Oklahoma 1933