Higher Highs and Lower Lows: The 1920s through the 1930s!

Higher Highs and Lower Lows:The 1920s through the 1930s!

The Great War was over!!!! The troops come home…but they need jobs! The ladies have been working…and they

were proud of their accomplishments! The Great Migration brought many blacks

into northern cities.

Technological Advances of The Gilded Age led to Cultural Change

Radio broadcasting developed and expanded it even included new music genres like jazz!

Music and art expanded, even into less affluent areas…The Harlem Renaissance!

Newspapers and magazines shaped cultural norms and sparked fads with sensational writing.

Photography and filmcaptured the spirit of the era for posterity…and kept people’s minds off the difficulties that some were experiencing!

Traditional roles of women were changing: “Flappers” wore short skirts, bobbed their hair and did unlady-like things like….play sports and vote !

New products were everywhere …and everyone wanted them!

Traditional opinions were threatened:demographic changes due to the great migration and immigration gave rise to the new Ku Klux Klan (KKK)

Traditional values were questioned:Darwin’s Theory of Evolution was up against Christian creationism in the Scopes Trial

Traditional activities were even becoming unacceptable: Prohibition prevented the manufacture, sale or transportation of alcohol….but this encouraged the smuggling of alcohol and development of speakeasies

The 20s were “Roaring”!

The 20s were “Roaring” but at what cost…

Consumers were

using credit to buy new items and participate in the changes that were occurring…but they often overused credit and made risky investments in the fast growing stock market.

Gambling on the Stock Market

To purchase stocks with little money, they were bought “on the margin”….speculating that they would increase in value quickly to cover the cost!

Banks were also “gambling” on US stocks with the deposits that people made into their institutions!

The US Federal Reserve Board

It was designed to control banking and the money supply through interest rates….but it did not dothe job!

And there was no governmentagency tocontrol thestock market!

The “Roaring” 20’s all came crashing down…October 29, 1929 (Black Tuesday)

Stock prices lost ¼ of their value in 2 days

**panicked sellers **no buyers

The Bank Panic People raced to get their money out of

banks **1/4 of USA banks close in 4 years (1929-1933)

Businesses Closed With no customers, businesses could not

afford to stay open!

Unemployment 1933 **25% of the working population was

unemployed **and there were forced pay cuts for the

employed Year % jobless1928 4.2%1933 25%1940 19%1944 1.4%2010 10%

Farms and Farming No stores…no need for produce! 400K farms close in 3 years Most farmers were force into subsistence

farming (farming to live, not profit)

President Herbert Hoover(1929-1933)

The “Do-Nothing” Prez. **gave little Federal help to US people **”leave it alone”…remember laissez faire

capitalism?

Hawley-Smoot Tariff Act(1930)

Raised US protective tariff to encourage the purchase of US goods.

**killed world trade + economies

Life in the Depression Hoovervilles (homeless shacks) Bonus Army Bread lines and Soup Kitchens Schools close More Bankruptcies Home and Farm Foreclosures

Political Unrest Growth of communism in USA in labor

unions

The Dust Bowl When it rains (or doesn’t)…it pours! Huge drought + high winds in the Great

Plains Soil goes bad as it is blown away! Huge migration to CA (California) More and More Farm related Foreclosures

The Election of 1932Franklin D. Roosevelt

Optimistic outlook “We have nothing to fear, but fear

itself!”- First Inaugural Speech

How are we going

to get out of…The

Great Depressio

n

Roosevelt’s Administration

His “solution” for the Great Depression became known as the New Deal

He created a “Brain Trust”of advisors with experience in businesses, law, agriculture, etc.

He addressed the nation through “Fireside Chats” on the radio to outline his plans for …..

Relief – Recovery - Reform

I pledge you, I pledge myself, to a NEW DEAL for

the American people.

Relief, Recovery, and Reform Programs

Relief- actions to halt the economy’s decline & alleviate suffering – a bank holiday and direct payments to the people for immediate help.

Recovery-temporary programs to stimulate the economy and increase industrial demand – to bring the nation out of depression over time

Reform-permanent programs to protect against future economic disasters – to correct the unsound banking and investment practices so this never happens again….RIGHT!

The ABCs of the New Dealaka: Alphabet Soup

RELIEF RFC – Reconstruction Finance Corporation provides financial support to the banking

industry, starting with a bank holiday to reorganize financial institutions WPA – Works Progress Administration provided relief programs such as free

children’s lunches, health services and jobs that ranged from building schools, playgrounds, and libraries to repaving roads and fixing dams.

CCC – Civilian Conservation Corps provided jobs, room, and board to young men in forestry and environmental improvement areas.

RECOVERY AAA –Agricultural Adjustment Act allowed the federal government to regulate the

price of farm products by decreasing the supply. NRA – National Recovery Administration regulates industrial output to keep prices

low and established guidelines for relationships between workers and employers. REFORM

FDIC – Federal Deposit Insurance Corporation insures bank accounts up to a determined amount to and regulates the banking industry

SSA – Social Security Administration established relief and retirement benefits (direct payments) for workers, those disable from work and the elderly.

SEC – Securities Exchange Commission regulates the stock market to prevent another crash.

Did everyone agree to “The Deal”?

…NOPE! •Liberty League

•Francis Townshend

•Huey Long

•Charles Coughlin

Lasting Effects… Entitlement Programs National Debt Deficit Spending “Welfare State” / “Nanny State”

What is the role of the Federal Government

Today?

End of the Great Depression

Even with great effort the New Deal did not end the Great Depression!

The rise of dictators in several countries during this economic crisis pushed the world into another Great War!

More often than not…war can jump-start an economy as it expands and creates work opportunities!