GREAT DEPRESSION GREAT DEPRESSION AND THE NEW DEALAND THE NEW DEAL

1929 - 19421929 - 1942LIFE IN THE 1930’SLIFE IN THE 1930’S

What was the Great What was the Great Depression?Depression? The worst economic crisis of the centuryThe worst economic crisis of the century Over 13 million people unemployed Over 13 million people unemployed That’s 35 % unemployed/50% for African-That’s 35 % unemployed/50% for African-

Americans/ Latinos Americans/ Latinos A crisis in the banking industryA crisis in the banking industry ““Dust bowl”Dust bowl” as a result of drought and poor as a result of drought and poor

farming practicesfarming practices Farmers lost cropsFarmers lost crops Many people lost their homesMany people lost their homes A social and psychological crisisA social and psychological crisis

Three areas of problemsThree areas of problems

Consumer spending:Credit Banking industry:

Reckless practices

Farming Sector: Dust Bowl

overproduction

Business cycle Business cycle

Great Depression Great Depression Business cycleBusiness cycle

Business cycle since the Business cycle since the Great Depression: healthierGreat Depression: healthier

Why is the Great Depression Why is the Great Depression important today? important today?

1)1) Changed the Changed the relationship of relationship of Americans to their Americans to their government government permanently permanently

We now look to We now look to government to government to solve economic solve economic problemsproblems

Why is the Great Depression Why is the Great Depression important today? important today?

2)2) Permanently Permanently enlarged the enlarged the federal federal governmentgovernment

• Liberals loved thisLiberals loved this• Conservatives Conservatives

hated ithated it

What caused the Great What caused the Great Depression?Depression?

Unequal distribution of wealthUnequal distribution of wealth Stock market crash of 1929Stock market crash of 1929 Industrial Industrial overproductionoverproduction – farmers and – farmers and

businesses were producing more goods than businesses were producing more goods than could be bought and used. could be bought and used.

Easy creditEasy credit Banks had made unwise loansBanks had made unwise loans Banks lent too much moneyBanks lent too much money People could not pay back their loansPeople could not pay back their loans

Unequal Distribution of Unequal Distribution of WealthWealth

No middle classNo middle classHowever, because of the However, because of the

availability of credit, people availability of credit, people are “buying” goodsare “buying” goods

Buying Buying on crediton credit creates creates a a false demandfalse demand for for productsproductsBuying on credit Buying on credit

created created false false demanddemand

What happens to demand when people have reached their credit limit?

Remember that banks have made some unwise loans as well.

Industrial OverproductionIndustrial Overproduction = = too many too many products and not enough buyersproducts and not enough buyers

WAGES NOT KEEPING UP WITH WAGES NOT KEEPING UP WITH INFLATION INFLATION

SUPPLYSUPPLY GREATER THAN GREATER THAN DEMANDDEMAND

Chain reactionChain reaction

Fewer goods are sold.

Demanddrops.

In order to stay in businesscompanies cut

wages

People lose theirconfidence &

start saving their money

Demanddrops even

further.

Companies are forced to cut costs

by laying people off

Even more peopleLose their confidenceAnd spend less money

People lose their jobs.

The Spiral Of

Depression

Stock Market CrashStock Market Crash

Many stocks purchased in huge numbers Many stocks purchased in huge numbers Drove up the value of company stocks Drove up the value of company stocks

artificiallyartificially Stock prices fellStock prices fell Huge sums of money lostHuge sums of money lost

Thursday, October 24, 1929

BlackBlack TuesdayTuesday

Complete Analyzing Political Cartoons:

The Americans PAGE 487

““Migrant Mother”: The Face Migrant Mother”: The Face of the Great Depression of the Great Depression

The ResultsThe Results

Bank FailuresBank Failures

The Results:The Results:UnemploymentUnemployment

UnemploymentUnemployment

DustbowlDustbowl

A traveler noticed a nice new hat by the side of the road, and he stopped to pick it up. Under the hat was a man, buried up to his neck in the dust! As he dug the poor fellow out, the traveler asked if he wanted a ride into town. "No, I'll get there myself," the man replied, "I'm on a horse." (Excerpt from THE DUST BOWL by Tricia Andryszewski, p. 33.)

Poor farming practices + Poor farming practices + drought = drought = DustbowlDustbowl

Dust clouds + high winds Dust clouds + high winds = terrifying experience= terrifying experience

What areas were affected What areas were affected by the Dust Bowl? by the Dust Bowl?

OKIESOKIES: Refugees from the : Refugees from the Dust Bowl. They usually Dust Bowl. They usually

went to Californiawent to California

The Results: HARD TIMESThe Results: HARD TIMES

Loss of homesLoss of homes ““HoovervillesHoovervilles””

Here were all these people living in old rusted-out car bodies. ... One family ... [was] living in a piano box. This wasn't just a little section, this was maybe 10 feet wide and 10 feet long. People living in whatever theycould junk together. ..."

The Results: Soup kitchensThe Results: Soup kitchens

The results: The results: People on “ relief ” People on “ relief ”

The results: The results: Social UnrestSocial Unrest: Fear : Fear of a Socialist Revolutionof a Socialist Revolution

The ResultsThe Results: Social : Social unrest and labor activityunrest and labor activity

DepressionDepression

DepressionDepression

DepressionDepression

Did everyone suffer Did everyone suffer during the Great during the Great Depression?Depression?

Two Presidents respond to the Depression:Two Presidents respond to the Depression: One fails and the other One fails and the other changes the role of changes the role of government forever!government forever!

President Hoover 1928-1932President Franklin Roosevelt

1932 - 1945

Hoover fails to respond Hoover fails to respond effectively to the effectively to the DepressionDepression ““rugged rugged

individualism”individualism” Thought government Thought government

relief would be bad for relief would be bad for people’s characterpeople’s character

VoluntaryVoluntary associations associations CharityCharity Failed to recognize how Failed to recognize how

big the economic crisis big the economic crisis waswas

FDR FDR and the and the New DealNew Deal increase the size increase the size of the federal government and bring it of the federal government and bring it

into our lives into our lives

Worldwide Worldwide Depression leads Depression leads to social and political unrestto social and political unrest

And the rise of dictators And the rise of dictators in Europe and Japanin Europe and Japan

But many in the US are But many in the US are burying their heads in the burying their heads in the sand….. AMERICA FIRST!sand….. AMERICA FIRST!

America FirstAmerica First movement.. movement..

1933 – 1933 – FDRFDR TAKES OVER – TAKES OVER –AND JUST IN TIMEAND JUST IN TIME

The New Yorker Magazine’s The New Yorker Magazine’s view of the inauguration!view of the inauguration!

Election of 1932Election of 1932

FDRFDR: The nation’s only : The nation’s only 4 term4 term President. Served through the President. Served through the Great Depression and WW IIGreat Depression and WW II

Families on ReliefFamilies on Relief

““The only thing we have The only thing we have to fear …..to fear ….. is fear itself”is fear itself”

“Our greatest primary task is to put people to work”

Franklin Delano Roosevelt

FDR: “This generation of FDR: “This generation of Americans has a rendezvous Americans has a rendezvous with destiny”with destiny”

FDR inspires FDR inspires confidence confidence

A New President A New President and a New Dealand a New Deal

I NEVER FORGET I NEVER FORGET THAT I LIVE IN A THAT I LIVE IN A HOUSE OWNED BY HOUSE OWNED BY ALL THE ALL THE AMERICAN PEOPLE AMERICAN PEOPLE AND I HAVE BEEN AND I HAVE BEEN GIVEN THEIR GIVEN THEIR TRUST.” TRUST.”

FDRFDR

Reversing the Spiral of Reversing the Spiral of DepressionDepression

Government Spending $

Alphabet Agencies

More Jobs

More Spending

Demand for goods increases

More goods have to be produced

More people withJobs = more pay $

More Spending

Demand for goods increases

More goods have to be produced

More Jobs

More Pay = More Taxes

Cycle of

Prosperity!

Democrats called this Process

‘Pump Priming’

FDR’s FDR’s New DealNew Deal: : Relief, recovery, reformRelief, recovery, reform

Relief for the needyRelief for the needy Jobs providedJobs provided Banking, Business and government reformedBanking, Business and government reformed

FDR gets to workFDR gets to work: : The First 100 daysThe First 100 days

Emergency BankingEmergency Banking ActAct

Bank “holidays”: Bank “holidays”: banks are ordered banks are ordered closed on certain closed on certain daysdays

Glass – Steagall ActGlass – Steagall Act creates creates FDICFDIC: : Federal Deposit Federal Deposit InsuranceInsurance

The Alphabet AgenciesThe Alphabet Agencies

FDR’s New DealFDR’s New Deal: Government : Government grows and takes over parts of the grows and takes over parts of the economyeconomy

AAA – Agricultural Adjustment ActAAA – Agricultural Adjustment Act CCC – Civilian Conservation CorpsCCC – Civilian Conservation Corps NRA – National Recovery ActNRA – National Recovery Act WPA – Works Project AdministrationWPA – Works Project Administration PWA – Public Works AdministrationPWA – Public Works Administration SSA – Social Security AdministrationSSA – Social Security Administration REA – Rural Electrification AdministrationREA – Rural Electrification Administration TVA – Tennessee Valley Authority TVA – Tennessee Valley Authority

Fireside ChatFireside Chat: May 7, : May 7, 19331933

AAAAAA: paid farmers not to : paid farmers not to farm, production, $$farm, production, $$$$

CCCCCC: employed young men : employed young men to work in national parks, to work in national parks, build roads, hiking trails, build roads, hiking trails,

etcetc

WPA – Works Project WPA – Works Project AdministrationAdministration

The WPA put artists to The WPA put artists to workwork

WPA: created millions of WPA: created millions of jobs for unskilled and jobs for unskilled and

skilled workersskilled workers

Dorothea Lange documents Dorothea Lange documents the Depression for the the Depression for the FSAFSA

Her most famous photo: Her most famous photo: Migrant MotherMigrant Mother

(and how a photo –and a photographer- (and how a photo –and a photographer-

can lie)can lie)

Dorothea Lange documents Dorothea Lange documents Japanese internmentJapanese internment 1942 1942

HomeworkHomework: A New Deal : A New Deal for the Artsfor the Arts

http://www.archives.gov/exhibit_hall/new_dehttp://www.archives.gov/exhibit_hall/new_deal_for_the_arts/index.htmlal_for_the_arts/index.html

Problems and Criticisms Problems and Criticisms of the New Dealof the New Deal

Some programs were Some programs were wastefulwasteful Charges of Charges of socialismsocialism At first, the U.S. Supreme Court struck At first, the U.S. Supreme Court struck

down some of FDR’s New Deal programsdown some of FDR’s New Deal programs FDR responds to this threat to his New FDR responds to this threat to his New

Deal with the Deal with the court- packing schemecourt- packing scheme

Court – packing scheme: FDR Court – packing scheme: FDR

declares war on the Supreme Courtdeclares war on the Supreme Court