The Market Crashes The Ripple Effect of the Crash Underlying
Causes of the Depression
Slide 4
In early 1928, the Dow Jones Industrial Average, an average of
stock prices of major industries, had climbed to 191. By March
1929, it had risen another 122 points, and by September 3 rd the
Dow Jones average rose to to an all-time high of 381. The stock
market became so popular that people kept track of the rise like
they did Babe Ruths stats.
Slide 5
Black Thursday After their peak in September stock prices began
to fall slowly. On Thursday October 24 th worried investors began
selling off their stocks. $3 billion were lost in one single day,
but business leaders, and President Hoover told the American people
that the economy was sound.
Slide 6
Black Tuesday In an effort to stop the panic a group of bankers
pooled money together to buy stock, and this worked for a few days.
On Tuesday October 29 th, 1929 investors all over the country sold
a record 16.4 million shares. Compare this to an average of 4 to 8
million per day earlier in the year. This collapse came to be known
as the Great Crash. The Great crash resulted in the loss of $30
billion.
Slide 7
Business Cycle- a span in which the economy grows, the
contracts. Look at the image of a business cycle on page 509. What
part of the business cycle was the United States experiencing?
Contraction/Trough
Slide 8
Initially the effects of the Crash were felt by those who were
heavily invested in the stock market. Only about 4 million out of
120 millions Soon millions who had never owned a share of stock
were affected.
Slide 9
Looking at page 510, list the ways in which these people were
affected. Risky Loans hurt banks Consumer borrowing Bank runs
Savings wiped out Cuts in production Rise in unemployment Further
cuts in production
Slide 10
Risky loans- hurt banks because people couldnt pay them back.
Consumer borrowing- When banks called in loans nobody could pay.
Bank Runs- People made rushes to withdrawal from their accounts.
Bank Failures- banks closed because many people couldnt pay their
loans, and everybody came to get their money out of the bank.
Savings Wiped Out- by 1933 9 million savings accounts
vanished.
Slide 11
Cuts in production- couldnt borrow money necessary to produce
more goods, and there was no one to sell to. Rise in Unemployment-
as business cuts back on production, they laid off workers. Further
cuts- as unemployment grew incomes decreased. Nobody to sell to
means further production cuts.
Slide 12
Economic Contraction. The results of the Great Crash we just
went through are symptoms of contraction. Contraction- an economic
decline marked by falling output of goods and services. A long
contraction is called a depression. The Great Crash triggered the
Great Depression which lasted until 1941.
Slide 13
Impact on Workers and Farmers In August of 1931 Henry Ford shut
down his Detroit factory which put 75,000 people out of work. As
factory jobs dried up small businesses like restaurants started to
close. Farm prices fell dramatically By 1932 12 million people were
unemployed. 25%unemployment
Slide 14
Impact on the World When the worlds leading economy fell, the
global economic system began to crumble and contract.
Slide 15
An Unstable Economy Wealth in the hands of a few who would
rather save and invest, than buy goods. Uneven distribution of
wealth made rapid recovery impossible. Overspeculation The stock
market boom was based on borrowed money instead of real value.
Government Policies The Federal Reserve cut interest rates to spur
economic growth. In 1929 they limited the money supply because they
were worried about overspeculation. Less money in circulation made
it hard to recover.
Slide 16
Poverty Spreads Poverty Strains Society Stories of
Survival
Slide 17
Hoovervilles In, 1931 census takers estimated there were 15,000
homeless people in NY city alone. Homeless people sometimes built
shanty towns, with shacks of tar paper, cardboard, or scrap
material. These towns came to be known as Hoovervilles mocking the
President, whom people blamed for not resolving the crisis. Some
families drifted across the country from town to town.
Slide 18
Farm Distress Farm families suffered from low crop prices and
most lost their farms. Southern landowners expelled tenant farmers
and sharecroppers. In protest against low prices farmers dumped
thousands of gallons of milk, and destroyed crops. The Dust Bowl
Severe drought and farming practices led to The Dust Bowl. By
tilling up the protective prairie grasses in the Great Plains they
became susceptible to harsh weather.
Slide 19
The Dust Bowl Terrible weather and falling prices led to 60% of
Dust Bowl families losing their farms. Many families moved West to
CA. Relief did not come until the 1940s when it started to rain
again and WWII drove up crop prices.
Slide 20
Impact on Health Impoverished people who could not afford food
or shelter got sick more easily. Children had it the worst.
Stresses on Families Men Felt like they were like failures
Embarrassed to seen at home during work hours. Women Had to figure
out how to feed their children without husbands paycheck. Married
women were fired if their husband had a job. Only work they could
find were domestic work, typing, and nursing
Slide 21
Discrimination Increases African Americans, Hispanics, and in
the West, Asian Americans all suffered as white laborers began to
demand the low-paying jobs they had typically filled. Hispanics and
Asian Americans not only lost their jobs, but were deported as
well. Black unemployment rose to 56% Lynching increased. Scottsboro
Boys 9 black youth accused of raping 2 white women and convicted
without the benefit of lawyer.
Slide 22
Read the section titled Stories of Survival and answer the
following question. What do you think was the hardest part of such
an experience? What made it easier?
Slide 23
Americans Pull Together Signs of Change
Slide 24
Farmers Sticking Together Farmers would get together to bid
mere pennies on land and equipment so that they could help out
there fellow struggling farmer. These came to be known as penny
auctions. The success of these penny auctions led many states to
pass laws that suspended foreclosures on farms.
Slide 25
Young People Ride the Rails Many teenagers decided to hop on
trains and ride the country either for adventure or to find jobs.
These hobos witnessed the Depression around the country first hand.
Seeking Political Solutions Unlike countries in Europe, the dreary
conditions did not lead to riots and upheaval. Most trusted the
democratic process. Communists and Socialist gained more
votes.
Slide 26
Depression Humor Hoover Blankets Newspaper used as a blanket.
Hoover Flags Empty pockets turned inside out. When Babe Ruth was
criticized for asking for an $80,000 salary, which was higher than
Hoovers, he responded by saying, I had a better year then he
did.
Slide 27
Prohibition is Repealed In 1933, just 15 years after it passed,
the 18 th Amendment was repealed by the 21 st Amendment. Control of
alcohol was returned to the states. The Empire State Building At
the time it was the tallest building in the world. 102-stories, and
1,250ft tall. It was finished in 1931.
Slide 28
The End of an Era Al Capone was put in jail in 1931. Coolidge
died in January 1933. Babe Ruth retired in 1935. Charles Lindberghs
infant son was kidnapped and murdered.
Slide 29
Hoovers Limited Strategy A New Deal for America The Election of
1932
Slide 30
Even when factories started to close the Hoover Administration
insisted that conditions would soon improve. Voluntary Action Fails
Hoover believed that voluntary controls by the business leaders of
America could end the economic crisis. He held a conference of
business leaders at the White House and got their promise to keep
wages up. At first it they did, but it didnt last long.
Slide 31
The Government Acts Agricultural Marketing Act of 1929 Was
meant to raise farm prices, instead it failed miserably and
continued the downward spiral The Republicans lose the 1930 mid
term elections and lose their majority in Congress. As things got
worse Hoover decided to start spending money on roads, parks, and
dams. The Boulder Dam (Hoover Dam). Hawley-Smoot tariff The highest
import tariff in history.
Slide 32
Reconstruction Finance Corporation (RFC) Gave govt. credit to
Large industries Railroads Insurance companies Banks To many it
seemed like the govt. was helping the rich. Hoovers Unpopularity
Grows Hoover insisted that state and local govt.s should handle
relief. Too little too late John Maynard Keynes
Slide 33
Veterans March on Washington In the summer of 1932, 20,000
jobless WWI veterans and their families encamped inn Washington,
DC. They called themselves the Bonus Army, and they wanted
immediate payment of a pension bonus that had been promised for
1945. Most of the protestors were civil, but some prompted Hoover
to call in the military. Gen. MacArthur used tanks, guns, and tear
gas to make the crowd disperse.
Slide 34
I pledge myself to a new deal for America.- Franklin Delano
Roosevelt. Democratic nominee in the 1932 election. He graduated
from Harvard. He ran for VP but lost in 1920. Contracted polio in
1921, and could only walk with assistance for the rest of his life.
Governor of New York from 1929-1932 He set up an unemployment
commission and a relief administration in NY.
Slide 35
This campaign is more than a contest between two men It is a
contest between two philosophies of government. Herbert Hoover,
October 1932 Republicans- still believed in voluntary aid.
Democrats- more government intervention. FDR won by 7 million
popular votes. FDR 1933 Inaugural Address FDR 1933 Inaugural
Address
Slide 36
1. The main purpose of the ______ system was to transport
troops safely across the Atlantic Ocean (Ch12-3). 2. During the
war, African American Soldiers served in _____ units and rarely saw
combat (Ch12-3). 3. During WWI, the govt. managed the production of
____ materials (Ch12-4). 4. The _____ was the movement of African
Americans to northern cities (Ch12-5). 5. Under the terms of the
Versailles Treaty, ____ had to pay reparations to the Allies and
accept full responsibility for the war (Ch 12-5).
Slide 37
Chapter 15
Slide 38
Restoring the Nations Hope The First Hundred Days Key Players
in the New Deal The New Deal Falters A Second New Deal The 1936
Election
Slide 39
FDR was elected in November, but was not inaugurated until
March of 1933. 20 th Amendment Moved the inauguration date up to
January 20 th. Did not go into affect until the next election so in
the mean time FDR prepared for the greatest change in govt. since
its inception.
Slide 40
Second Bonus March The administration provided campsites for
the marchers. Eleanor Roosevelt went to speak with them. The
Fireside Chats Started the first Sunday after he took office. Bold,
persistent experimentation Everybody knew he was going to do
something, but they werent exactly sure what that was New Deal The
relief, recovery, and reform programs of FDRs administration that
were aimed at combating the Great Depression.
Slide 41
March through June of 1933 Stabilizing Financial Institutions
On March 5 th, 1933 FDR ordered all banks to close for the next 4
days. He then pushed Congress to pass the Emergency Banking Act
which authorized the govt. to inspect the financial health of all
banks. Most banks were healthy and 2/3rds reopened by March 15 th.
This became known as the Bank Holiday
Slide 42
Stabilizing Financial Institutions After the bank holiday more
people put money in the bank than were taking it out which allowed
the banks to make loans. In an effort to further increase
confidence in the banks, Congress passed the Glass-Steagall Banking
Act of 1933. It established the Federal Deposit Insurance
Corporation (FDIC). The Federal Securities Act was passed to
correct the problems that led to the stock market crash. Required
companies to provide info on their finances if they offered stock
for sale
Slide 43
Stabilizing Financial Institutions Securities and Exchange
Commission (SEC) Set up to regulate the stock market. Congress also
gave the Federal Reserve Board the power to regulate the purchasing
of stock on margin. In July of 1933, FDR took decreased the value
of U.S. Currency by taking it off the gold standard. Hoped it would
raise farm prices, raise the price of other goods, and increase
export trade.
Slide 44
Providing Relief and Creating Jobs Federal Emergency Relief
Administration (FERA) Setup to help overburdened local relief
agencies. FERA also put money into public works programs which are
govt. funded projects to build public facilities. Civil Works
Administration (CWA) Public works projects that put the unemployed
to work building roads, parks, airports, and other facilities.
Slide 45
Read page 539 to the heading Key Players in the New Deal on
page 540 and list the different agency names, their acronym, and
what they are meant to do. Hint there are 8.
Slide 46
1. Civilian Conservation Corps (CCC) 2. National Industrial
Recovery Act (NIRA) 3. National Recovery Administration (NRA) 4.
Public Works Administration (PWA) 5. Home Owners Loan Corporation
(HOLC) 6. Federal Housing Administration (FHA) 7. Agricultural
Adjustment Administration (AAA) 8. Tennessee Valley Authority
(TVA)
Slide 47
Brain trust an informal group of intellectuals who helped draft
policies. Groundbreaking Appointments FDR appointed the first women
to a cabinet post Secretary of Labor, Frances Perkins FDR also
appointed many African Americans to policy making positions. Mary
McCleod Bethune became the highest ranking of those when she was
the Director of Negro Affairs of the National Youth Administration
(NYA)
Slide 48
Eleanor Roosevelt Mrs. Roosevelt traveled a lot for her husband
because his injury made it hard for him to travel. She sometimes
made it tough on him.
Slide 49
The programs did not end the Depression and some saw the New
Deal as giving the Federal Govt. to much power. Read the section
titled The New Deal Falters on page 542 and list what the Supreme
Court did to New Deal Programs.
Slide 50
1. Though relatively few in number, ______ represented womens
desire to break with the past. (Ch13-1) 2. The new manners and
morals of the 1920s were reflected in womens ______. ( Ch13-1) 3.
Life changed for American women in the 1920s, in that many of them
were _____ to political office. (Ch13-1) 4. The growth of radio and
other mass media in the 1920s produced a national ________.
(Ch13-2) 5. African Americans from the South brought a new musical
form called _____ to northern cities. (Ch13- 2)
Slide 51
Despite some naysayers FDR still had most of the publics
support. With the 2 nd New Deal FDR included more social welfare
benefits, stricter controls over business, stronger support for
unions, and higher taxes on the rich. Essentially FDR worked to do
more for ordinary Americans.
Slide 52
New Expanded Agencies Works Progress Administration (WPA)
Provided work for more than 8 million citizens Built or improved
tens of thousands of playgrounds, schools, hospitals, and
airfields, and it supported creative work of many artists and
writers. Rural Electrification Rural Electrification Administration
(REA) Provided loans to power companies and rural families to run
power lines or wire their house or barn. Within 4 years about 25%
of rural households had electricity. Demand for electric appliances
grew aiding the manufacturing industries.
Slide 53
New Labor Legislation Wagner Act Legalized union practices such
as collective bargaining, and closed shops, which are workplaces
open only to union members. It outlawed spying on union activities
and blacklisting, a practice in which employers agreed not to hire
union leaders. It also set up the National Labor Relations Board
(NLRB) to enforce its provisions. In 1937 the Supreme Court upheld
the constitutionality of the Wagner Act in NLRB v. Jones and
Laughlin. This case established the federal govt.s ability to
regulate labor disputes linked to interstate commerce.
Slide 54
New Labor Legislation In 1938 the Fair Labors Standards Act
banned child labor and established the minimum wage for all workers
covered under the act.
Slide 55
FDR won the electoral vote 523-8. This landslide victory showed
that the American people supported the New Deal, yet it still had
critics.
Slide 56
The Limitations of the New Deal Political Critics Other Critics
Modern Day Critics The Court-Packing Fiasco
Slide 57
Women Many aspects of New Deal legislation put women at a
disadvantage. Womens wages were set lower, and men and boys were
favored. African Americans African Americans were not offered
professional level, or skilled jobs on public works projects. The
federal govt. abandoned a law that would have made lynching a
federal crime. African Americans did still vote for FDR, because he
did seem genuinely concerned about the fate of African
Americans.
Slide 58
New Deal Does Too Much Republicans believed the New Deal went
too far. Rich people did not like FDR for passing higher taxes on
individuals with incomes over $50,000. The Social Security Act
aroused suspicion of the first step towards a militaristic,
regimented society, and they felt it hurt the hardworking
Americans. The American Liberty League was lead by Alfred E. Smith
and argued that the New Deal smacked of Bolshevism.
Slide 59
New Deal Does Not Do Enough Progressives and Socialists
attacked the New Deal saying it didnt do enough. Upton Sinclair
argued that the govt. needed to do more to cure the permanent
crisis. New Deal had only limited success in eliminating poverty,
and as a result Progressivism was revived in Minnesota and
Wisconsin. They called for a redistribution of income.
Slide 60
Some new deal critics were demagogues, leader who manipulate
people with half- truths, deceptive promises, and scare tactics.
Father Charles E. Coughlin At one point he advocated the
nationalization, or govt. takeover and ownership, of banks then he
changed his mind and defended the sanctity of private property
including banks. National Union for Social Justice was formed in
1934 During their rise to power he showered praise on Hitler and
Mussolini.
Slide 61
Huey Long He was from Louisiana and worked to help the
underprivileged by improving education, medical care, and public
services. At first he supported FDR, but he broke with him at the
beginning of the New Deal. He advocated the redistribution of
wealth. His popularity helped push FDR to pass steeper taxes on the
wealthy in the 2 nd New Deal. Had Long not been shot by a political
rivals son-in- law in 1935 he could have posed a problem in the
1936 election.
Slide 62
Some say that the New Deal hindered economic progress and
threatened American enterprise. Some say that it created the
federal bureaucracy that usurps state govt.s in making policy.
Deficit spending- paying out more money from the annual federal
budget than the govt. receives in revenue.
Slide 63
Nothing done by FDR aroused more suspicion than his attempt the
pack the Supreme Court. Roosevelt asked Congress to add 6
additional Supreme Court Judges. He did this so he could appoint
judges favorable to the New Deal.
Slide 64
The Recession of 1937 Unions Triumph The New Deals Effects on
Culture Lasting New Deal Achievements
Slide 65
The New Deal was not a miracle cure, and in August of 1937 the
nation entered a recession, which is a period of slow economic
activity. FDR had cut back on spending because he was worried about
the national debt. The national debt had risen from $21 billion in
1933 to $43 billion by 1940. National debt comes from having to
borrow when the govt.s revenue, or income, doesnt match its
expenditures.
Slide 66
By 1945 36% of the workforce was unionized. CIO Started as the
Committee for Industrialization within the American Federation of
Labor (AFL). The CIO was meant to be a recruiting arm of the AFL,
but the AFL did not approve of its dealings. The CIO was expelled
from the AFL and changed its name to the Congress of Industrial
Organizations. John L. Lewis became its first president.
Slide 67
The CIO was a coalition, or alliance of groups with similar
goals. Their main goal was to challenge the conditions of industry,
and their main tool was the strike. The Era of Strikes Sit-down
strike- is a strike in which laborers stop working, but refuse to
leave the building while supporters picket outside the building.
The first sit-down strike occurred at 3 rubber tire plants in
Akron, Ohio.
Slide 68
Sit-down strikes were so successful that the Supreme Court
ruled in 1939 that they were illegal because they were an obstacle
to negotiation. Henry Ford resisted unionism, and some of his men
beat UAW members trying to distribute leaflets.
Slide 69
Literature The Good Earth, Pearl S. Buck a saga of peasant
struggle in China. Their Eyes Were Watching God, Zora Neale Hurston
A novel about a strong willed African American woman and the
Florida town she lived in. The Grapes of Wrath, John Steinbeck A
powerful tale about the Dust Bowl Let Us Now Praise Famous Men,
James Agee and Walker Evans non-fiction book about sharecropping in
Alabama.
Slide 70
Radio and Movies Comedians like Jack Benny, George Burns,
Gracie Allen. Soap Operas became popular. The Wizard of Oz was
released in 1939 Walt Disney created Mickey Mouse and released Snow
White and the Seven Dwarfs. The WPA and the Arts FDR felt that the
arts were not luxuries that Americans should have to give up. WPA
funded historians to go around and collect stories from over 2000
former slaves.
Slide 71
The New Deal did not end the nations suffering. Many New Deal
bridges, dams, tunnels, public buildings, and hospitals exist to
this day. The TVA, FDIC, and the SEC still exist today. Social
Security Above all the New Deal gave people hope.