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*The GREAT DEPRESSION*1929-41
“A time when the economy collapsed & millions of people were unemployed.”
Election of 1928
Herbert Hoover elected president; followed C. CoolidgeMarch 4, 1929: “I have no fears for the future of our country. It is bright with hope”
*Stock Market
System for buying & selling shares of companies.*A share is a single unit of ownership in a corporation.By 1929 about 3 million Americans, or 10% of households owned stock.
*Bull Market - period of rising stock prices
*Bear Market – period of decline in stock prices
*Characteristics of the 1920’s Stock Market
*Bull Market
*Buying stocks on margin-investors borrow money to buy stocks
Bought on margin in hopes of getting bigger quicker profits
*Speculation-the act of buying a risky stock in hopes of getting a huge return.
Risk vs Reward
SpeculationInstead of investing in the future of companies long term, speculators took wild risks, betting the market would continue to climb, thus enabling them to sell the stock & make money quickly. “Get Rich Quick!”
People speculated
wildly on the bull
market
*Causes of the Stock Market Crash*
1. Banks did not secure loans (borrower pledges some asset, like a car or property, as collateral for the loan)
2. Investors bought stocks on margin
3. Investors speculated wildly on the “BULL MARKET”
• Known as Black Tuesday
• Just one cause of the Great Depression
October 29, 1929, The Great Crash
*Result of the Stock Market Crash*Bank Runs (customers withdraw their deposits simultaneously):
-depositors lost confidence in banks
-depositors went to the banks & withdrew their $ at the same time
-1931-32, 3,800 banks failed
Banking Collapse
• The Crash severely weakened the nations banks:
1.Banks had loaned money to people speculating on the stock market
2.Banks had invested people’s deposits in the stock market
• Bank runs emptied $ out of the banks
1.Which of the following is not a cause of the Stock Market Crash?
a. Banks did not secure loans
b. Speculation
c. Careful research before investing
d. Buying stocks on margin
2. Define-stock
3. The 1920’s stock market was characterized by a ____________ market.
4. What is a bank run? List 3 facts about the bank run.
*What event are these newspaper headlines describing?
*Causes of the Great Depression*
1. ? (What do you think the 1st cause is?)
2. Overproduction of consumer goods
3. Unequal distribution of wealth
4. High unemployment
5. High tariffs=loss of exports
6. Poor regulation of banks=bank failures
7. Overuse of credit for purchases
Gross National Product = the sum of all goods & services produced in a country in a yr.
Uneven Distribution of WealthMost Americans did not earn enough to buy the goods they helped produce.
2/3’s of families earned less than $2,500 yr.
24,000 families earned $100,000 or more and held 34% of savings.
High Tariff = loss of export sales
Hawley-Smoot Tariff:• June 1930-raised the tariff rate to the
highest level in American history
• Aimed to protect American manufacturers from foreign competition.
• Damaged American sales abroad leading to a rising cost of imported goods.
*Characteristics of an Economic Depression*
1. High Unemployment, 25%2. Overproduction of consumer goods
1. What are the 7 causes of the Great Depression?
2. Which one do you think had the greatest effect? Explain
3. The Great Depression was characterized by?
Life During the Great Depression
The Depression Worsens
Steadily grew worse during Hoover’s administration.1932-9,000 banks failed1933-12 million unemployed workers -about 25% of the workforceSuicide rate increased-highest among white men
Soup KitchensPeople without jobs often went hungry.
Lined up in bread lines and soup kitchens to receive a meal
*“Hoovervilles”Families & individuals lost their homes.
*The newly homeless put up shacks made of old crates, cardboard, scrap lumber, etc. on unused public lands. Blamed President Hoover for their situation, didn’t think he was doing enough to help them, & called their shantytowns “Hoovervilles”.Hoover blankets = newspapersHoover hogs = any varmit (rabbits, coons, opossum) that could be killed & eaten
“Hooverville”
*The Dust Bowl
*1932-drought struck the Great Plains
Neither grass nor wheat would grow and the soil turned to dust-known as the “Dust Bowl”
Struck the Texas Panhandle, Oklahoma, and Midwest states.*Causes: severe drought & poor farming techniquesEffect: Dust storms, Bankrupt farmers, & Migration to the West
“Okies”-migrants from OK
Families lost their farms, so they packed into their old cars and headed west hoping for a better life in California
Where did dust bowl refuges go?
*Dorothea Lange
• Traveled through the Dust Bowl states photographing the conditions that people were living in.
• *Lange’s photographs exposed the effects of the Depression & Dust Bowl on farmers
Above: An abandoned farm
Right: Two hoboes looking to hop a train
The Migrant Mother
*Mexican Repatriation Act, 1929-39*To help ease the depression, some 500,000 Mexicans, many U.S. citizens were deported back to Mexico.
*Goal = to free up jobs for white American farmers
300,000 other immigrants also deported
*Escaping the Depression*Radio– Listened to soap operas-
Guiding Light
Movies– Snow White and the
Seven Dwarfs
– Gone with the Wind
– Wizard of Oz
Comic strips
*Depression Writers
William Faulkner- wrote The Sound and the Fury
*John Steinbeck-wrote The Grapes of Wrath– Story of an Oklahoma
family fleeing the Dust Bowl to find a new life in California
*Popular culture (movies, novels, radio, comics) was shaped by the economic & social conditions of this era.
1. Who were most likely to commit suicide during the Depression?
2. What is a “Hooverville,” and why were they called that?
3. What was the Dust Bowl?
4. Why is Dorothea Lange significant?
5. What piece of legislation tried to help white farmers get jobs?
6. How did people cope with the Depression?
7. Why is John Steinbeck significant?
8. What helps shape popular culture?
Hoover Responds
*Hoover’s Response*Believed in laissez-faire capitalism– Government should play a limited role in
business– Thought that private efforts at the local
level would be enough
Hoover opposed the federal government’s direct participation in relief. Why?
– Goes against capitalism and free enterprise system
The People’s Response
1. Hunger Marches, 1932:– 1,200 hunger marchers assembled at
the nation’s capital and chanted, “Feed the hungry, tax the rich.”
The People’s Response2. Penny Auctions, Farmers
– 1930-34 creditors foreclosed on 1 million farms, evicting the families
Penny auctions – neighboring farmers would bid tiny amounts for the farm & then give the land back to
the original
owner.
The People’s Response
3. Overproduction, farmersFarmers were in debt and prices were lowFarmers destroyed their crops to raise prices , reducing the supply.
Dumping milk
Multiple Choice
1. What is gained by limiting the supply of farm products?
a. Prices increase
b. Prices decrease
c. Allowed imports to gain a foothold in the U.S.
d. Prices remain the same
*“Bonus March”WWI veterans promised a $1,000 bonus pension to be distributed in 1945
*20,000 Veterans “Bonus Army” march on Washington,1932, to demand their bonus pension early to provide some economic relief
20,000 + veteran’s camped on the White House lawn & surrounding areas
President Hoover demanded the area cleared, believed Communist were behind it
*Hoover’s Response to Bonus Army
*Called in the U.S. army to remove the Bonus Army
Gen. Douglas MacArthur called in to enforce the order
Police killed 2, 100’s arrested
Hurt Hoover’s re-election campaign in 1932
*1932 Presidential Election
*Hoover v. Roosevelt’s “New Deal” plan for ending the depression
Multiple Choice
1. Based on the map, who won the 1932 presidential election?
a. Franklin Roosevelt
b. Herbert Hoover
1. Why did Hoover oppose direct federal aid during the Depression?
2. How did farmers try to raise crop prices?
3. What was the “Bonus Army”?
4. What did the Bonus Army hope to gain?
5. How did Hoover respond to them?
6. Who ran for President in 1932? Who won?
7. What was Roosevelt’s campaign slogan & plan for ending the Great Depression?
F.D. Roosevelt Takes Office
1933-45
*FDR’s Early Political Career1910, New York State Senator
Assistant Secretary of the NavyPolio-left him paralyzedRan for governor of New York & won. Demonstrated that polio had not slowed him down.Set up a state agency to help unemployed New Yorkers during the depression.*Wife, Eleanor Roosevelt, defied tradition & promoted the New Deal, connecting with ordinary Americans.
*A New Style of Leadership
“First of all, let me assert my firm belief that the only thing we have to fear is fear itself…This nation asks for action, and action now!”
• *FDR was more willing to use government intervention to solve the economic problems
http://www.history.com/videos/fdr-delivers-first-fireside-chat#national-recovery-administration-created
Problems FDR Faced When He took Office
1. Failure of Banks
2. Farming Problems
3. Unfair Business Practices
4. People can’t Pay Mortgages
5. High Unemployment = 25%
*The First New Deal1933
http://www.youtube.com/watch?v=RjFPJp3lNCo&safety_mode=true&persist_safety_mode=1&safe=active
*FDR’s First 100 Days
*New Deal Goal: Provide federal aid to many sectors of the economy
*A NEW DEAL for all Americans came in 3 parts: Relief, Recovery, & Reform = (3 ‘R’s)
First 100 Days: March 9-June 16, 1933
Congress passed 15 major acts to address the economic crisis
*Deficit Spending*Roosevelt financed many of his programs with deficit spending.
*Deficit Spending-government pays out more money than it receives in revenues.
Money is borrowed rather than raising taxes.
*Purpose to stimulate
the economy!
Do we still use deficit
spending today?
*1. Bank Holiday*
March 1933, all banks were closed for 3 days & inspected
Unstable banks were closed, stable banks were issued a license &
allowed to reopen
*“Fireside Chats”*Roosevelt addressed the nation by radio. Political strength = ability to communicate with people over the radio through his fireside chats
60 million people listened
1st, Assured the people that their money would be secure in banks.
1. Which of the following is not a part of Roosevelt’s New Deal programs?
a. Recovery
b. Renewal
c. Relief
d. Reform
*Banking Reforms*
Passed 2 new regulations for banks & the stock market to correct abuses & protect bank deposits:– Securities & Exchange Commission (SEC) -
regulates the stock market and prevents fraud– Federal Deposit Insurance Corporation
(FDIC)-provides government insurance for bank deposits up to $100,000.
Fiat Money-moved the U.S. off the gold standard & onto fiat money (paper currency) backed only by government faith.
*2. Farming Problems
*Agricultural Adjustment Administration (AAA) - provided relief for farmers
Government paid farmers not to raise certain crops
What ‘R’ is this?
Unfair Business Practices
National Industrial Recovery Act– National Recovery Administration
(NRA)
– Allowed business, labor, and government to cooperate in setting up voluntary rules for each industry
– Declared unconstitutional
*3. Work Programs to Combat High Unemployment
A. *Civilian Conservation Corps (CCC) = provided 3 million jobs in conservation for young unemployed men 17-28.
• planted trees, fought forest fires, & built reservoirs
• $30/month
What ‘R’ is this?
CCC camp in West Virginia
CCC camps across the U.S.
CCC Workers
*High Unemployment
B. *Public Works Administration (PWA)
– Construction projects improved schools, highways, dams, sewer systems, water works, & other government facilities
What ‘R’ is this?
*C. Tennessee Valley Authority (TVA)
*Goal = control floods & provide electricity to one of the poorest areas of the U.S.
1933, Hydroelectric (electricity thru H20) dam building project.
Employed 28,000
Built 29 plants & lots of
dams• What ‘R’?
Matching
a. FDIC
b. SEC
c. PWA
d. AAA
e. CCC
f. TVA
1. Regulated the Stock Market
2. Hydroelectric power
3. Help for farmers
4. Job assistance
5. Protect our savings
6. Built schools & other gov. projects
1. Unemployment had reached what by the time FDR was president?
2. List 4 effects of the Depression.3. What is the “New Deal”? What are the 3
parts?4. Identify the “First Hundred Days.”5. What were “fireside chats”?6. What was the first thing FDR did as
president?7. Identify the purpose of the following:
FDIC, SEC, AAA, CCC, TVA, PWA.
The Second New Deal1934-36
*The Second New Deal
*Stronger focus on more social welfare benefitsWelfare State = nation in which the government is responsible for the economic well being of its citizens.
Criticisms of the New Deal
Liberals
• Wanted more government intervention in the economy to help poor Americans.
Conservatives
• New Deal imposed too many regulations on business
• Expanded Federal Government power -at the expense of state’s rights
*Huey Long*Governor & Senator from Louisiana, “Kingfish”*Created the“Share our Wealth” programSocialistGive every American family $5,000 to buy a house, car, and radio and an annual income of $2,500 Assassinated 1935
*Father Coughlin
*Controversial Roman Catholic priest from Detroit that used radio to express his personal economic viewsReached 30-40 million listeners Blamed the country’s economic woes on a conspiracy of Jews & bankers supporting HitlerWanted FDR to do more for the economy by regulating banks & socializing many industries
*Huey Long & Father Coughlin*Both believed that FDR’s New Deal programs were not radical enough to help the poor!
*Works Progress AdministrationWPA
*Largest New Deal agency, employing 8.5 million unemployed unskilled workers to carry out public works projectsConstructed highways, airports, bridges, public buildings, & parksArtists & musicians sculpted works to beautify the walls of public buildings & entertain cities.
*Hoover Dam, 1931-36
*Built to control flooding on the Colorado river & to transform it into a hydroelectric power (electricity) source for the region, esp. California.726’ tall5 million barrels of concreteOver 5,000 workers 112 workers died
H
*Social Security Act, 1935
*Goal: to provide financial support for the elderly, disabled, & young childrenMeant to supplement your own retirement income; not to be lived on.
1. What was the focus of the 2nd New Deal?
2. Who was Huey Long & what did he propose?
3. What media did Father Coughlin use to spread his views?
4. What did H. Long & Father Coughlin have in common?
5. Who did the WPA employ?
6. Why was Hoover Dam built?
7. Who was able to receive Social Security?
*Roosevelt’s Second Term
Election of 1936
• First Lady, Eleanor Roosevelt:
-helped gain African American & women’s votes for her husband
-*actively & aggressively promoted the New Deal Programs & bonded
with the public
• FDR won in another landslide showing most Americans supported FDR & the New Deal legislation
African Americans and WomenRoosevelt appointed more than 100 African Americans to positions in his administration-known as the Black CabinetFrances Perkins-first women appointed to a cabinet post; Secretary of Labor
*FDR’s Court-Packing Plan
*The Supreme Court declared many of FDR’s New Deal programs unconstitutional
Made FDR furious, calling the supreme court justices “nine old men”*FDR wanted to challenge the principle of _______ & _______ on the Supreme Court by giving more power to the executive branch.
*Roosevelt’s Public Reasoning
• To increase the number of justices FDR sent a bill to Congress: If any justice had served for 10 years and did not retire within six months after reaching the age of 70, the president could appoint an additional justice to the court.
• *Too old to handle
their workload
1.How does the baseball player in the cartoon reflect Roosevelt’s public reason for wanting to add justices?
a. The justices were getting to old to handle their workload.
b. The justices needed to shave their beards.
c. They were too old to play on the baseball team.
2. What was the real reason he wanted to ‘pack’ the Supreme Court?
*Legacy of the New Deal
1. Created a ‘safety net’ for average Americans
2. *Changed political thinking in the U.S. allowing the government to become more involved in peoples life’s.
3. *Restored a sense of hope among the people!
4. Government size increased dramatically
*Changes in American Government from the New Deal programs*
The power of the president increased.
Increased concern for American workers.
More governmental
regulations on
economy &
businesses.
*Lasting New Deal Programs*FDIC—insures our bank deposits
SEC—regulates the stock market
SSA—helps those that can’t work
FHA—federal housing loans
TVA—hydroelectric power
*The Depression Comes to an End*Economic problems associated with the Great Depression were ended with U.S. involvement in WWII.
Unemployed went back to work in the war industry or as soldiers.
1. Why was Eleanor Roosevelt different than most first ladies?
2. What public reason did FDR give for packing the Supreme Court?
3. What private reason did he give? 4. What New Deal agencies are still around
today?5. What profound changes in American Gov.
were created by the New Deal?6. What major event brought an end to the
Great Depression?
7. Place these historical eras in order:
a. WWII
b. The Great Depression
c. The Gilded Age
d. The American Revolution
e. WWI