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The Great Depression and the New Deal. Chapter 25 Pages 656-681. Roaring 20’s. The 1920’s was a time known for wealth and prosperity People were living their dream Lots of jobs, money, and happiness. Stock Market Crash. October 29, 1929 Known as “Black Tuesday” - PowerPoint PPT Presentation
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The Great Depression and the New Deal
Chapter 25Pages 656-681
Roaring 20’s The 1920’s was a time known for
wealth and prosperity
People were living their dream
Lots of jobs, money, and happiness
Stock Market Crash October 29, 1929
Known as “Black Tuesday”
Investors began selling their stocks at any price
WALL STREET CRASH OF 1929
Click icon to add picture
Stocks Lost All Value U.S. Steel went from $262 per share to
$22
Montgomery Ward went from $138 per share to $4.00
Example Say that you owned 500 shares of
Montgomery Ward
Before the Crash your stock value was $69,000(500 x 138)
After the Crash, your stock value was $2,000 (500 x 4)
Beginning of Great Depression
The Wall Street Crash marked the beginning of the Great Depression, but it did NOT cause it
Causes of Great Depression Biggest cause of the Great Depression
was the unequal distribution of wealth
The richest 0.1% of American families had as much total income as the bottom 42%.
Limited Purchasing Power With more than half the nation’s people
living at or below the poverty line, there was a lack of purchasing power
People couldn’t afford to buy anything, therefore, companies went out of business
2. Oligopolies Markets or industries dominated by a
small number of sellers
Prices were kept artificially high, not determined by supply and demand
3. Agriculture Agriculture was suffering from
overproduction
This led to lower prices and heavy debt
Why would lower prices be a problem?
4. Banks Poorly managed and regulated
Disappearing money
People were fearful and pulled their money out of banks…bad why?
5. International Problems Stock market crash ended the flow
American dollars to Europe
Industries collapsed
Stopped buying American goods
This was a global depression
The Depression Spreads An average of 100,000 workers a week
were fired in the first three years after the crash
By 1932, the unemployment rate was 25%
HOOVERVILLES
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The Economy effected people of all ages
Hoovervilles Most urban families who lost their
homes gathered together in Hoovervilles
Collection of wooden or cardboard shacks, tents, and boxes located in public areas
Called “Hoovervilles” as a jab at President Hoover
HOOVERVILLES
Click icon to add picture
Charities Soup kitchens and charities tried to
assist, but there were simply too many people that needed help
“Women’s Jobs” and “Men’s Jobs”
There was an effort made to stop hiring women, especially married women
“They are holding jobs that rightfully belong to the God-intended providers of the household”
Why? School systems refused to hire married
women
Banks and insurance companies fired married women
Few men sought these jobs, so it just made the problem worse
Great Depression Families
Families Divorce declined…why?
Desertion increased
Marriage rates fell
Birthrates fell
Sacrifice vs. Burden Some parents starved themselves to
feed and protect their children
Other parents saw their children as burdens, often leaving home and abandoning them
Last Hired, First Fired
Effects on Minorities Black unemployment rates were twice
as high as whites
Whites took jobs that were usually reserved for blacks such as street cleaning and domestic service
Discrimination In Atlanta, white citizen paraded with
banners denouncing the hiring of black workers until “every white man has a job”
Religious and charitable organization often refused to care for blacks
Protest
Examples of Protest Ranged from small desperate gestures
like stealing food and coal to more dramatic needs
One hundred women held the city council of NJ hostage to demand assistance, “bloodless battle of Pleasantville”
Help from Communists? Communists staged hunger marches
and blocked evictions
Mothers facing eviction told their children to “run quick and find the reds”
Hoover and the Depression
Herbert Hoover Biggest problem in fighting the
Depression is that he believed private relief was preferable to federal intervention
Thought the role of the national government was to advise and encourage the voluntary efforts of private organizers, and local communities
The Government Wasn’t Helping
In NYC families got $2.39 to live on/ week
Hoover failed in relying on this and not admitting they were inadequate
Story of the “Bonus Army”
“Bonus Army” Hoover’s treatment of the Bonus Army
symbolized his unpopularity and set the stage for the 1932 election
Thousands of unemployed veterans came to Washington demanding bonuses that were due to them
They Were Early Bonuses were not due until 1945
Hoover refused to meet with them, and they constructed a shanty town at the edge of Washington and stayed
Hoover wanted them gone immediately
Bad Move Hoover ordered Gen Douglas
MacArthur to get rid of them
MacArthur disobeyed orders and led a cavalry, infantry, and tanks against them
Set the camp on fire and destroyed it
Outrage This provoked widespread outrage
They tried to paint the Bonus marchers as Communists and criminals, but it wasn’t true
Made Hoover look harsh and insensitive
Election of 1932 Hoover ran for re-election representing
the Republican Party, but he had little hopes of winning
Democrats nominated Gov Franklin D. Roosevelt of NY who promised “a new deal for the American people”
Franklin Delano Roosevelt FDR Distant cousin of TR
FDR In 1921 he had contracted polio and
had been paralyzed from the waist down
He didn’t disclose what his New Deal involved, usually spoke in general terms
He knew he was likely to get votes just because Hoover wasn’t liked
Worst Defeat Ever for Rep. Candidate
March Inauguration Hoover would continue to be President
for 4 more months and things got worse
Final blow came in 1933 when panic struck the banking system
Bank Failures 6 thousand banks had failed, robbing 9
million people of their savings
Americans rushed to withdraw their money, Hoover had to shutdown all the banks
The New Deal
New Deal “The only thing we have to fear is fear
itself”
http://www.youtube.com/watch?v=MX_v0zxM23Q
“Action Now!” First 100 days many new laws were
passed
Number one priority was to deal with the banking crisis
Issued a Bank Holiday closed all remaining banks
Emergency Banking Act extended government assistance to
sound banks and reorganized the weak ones
Had to Restore Confidence Spoke in an informal way to explain
everything to the public
FDIC Federal Deposit Insurance Corporation Guaranteed bank deposits up to $2500
Relief for the Public FDR also provided relief for the
unemployed
The Federal Emergency Relief Administration (FERA) furnished funds to state and local agencies
CCC Civilian Conservation Corps
FDR’s favorite program
combined work relief with conservation
What Did it Do? Employed 2.5 million young men to
work on reforestation and flood control projects, build roads and bridges in national forests and parks, restore Civil War battlefields, and fight forest fires
CCC
CCC
Advantages of CCC The men lived in camps and earned
$30 a month, $25 of which had to be sent home
Guaranteed work
“I’d go anywhere, I’d go to hell if I could get work there.”
Agricultural Assistance Agricultural Adjustment Administration
(AAA)
subsidized farmers who agreed to restrict production
A subsidy is a payment from the government
Controversial Object of the program was to boost
prices
Restricting production in hard times caused public outrage
“We have an overproduction of empty stomachs and bare backs”
Successful? Harmed poor farmers while aiding
larger commercial growers
In 1936 the Supreme Court declared the AAA unconstitutional
NIRA Attempted to revive American industry
Guaranteed workers the right to organize unions and to collective bargaining
New Deal Critics Conservatives
Father Charles Coughlin
Senator Huey Long
Conservatives Complained that the expansion of
government weakened the autonomy of American business
Called it “socialistic”
Father Coughlin
Father Coughlin Catholic Priest in Detroit
Had own radio show
Originally supported the New Deal
Franklin “Double-Crossing” Roosevelt
Anti-Semitic Was issuing openly anti-Jewish
statements and actually praising Adolf Hitler
Church officials took him off the radio
http://www.youtube.com/watch?v=IS9_gqCytV4
Huey Long Senator from Louisiana “Share Our Wealth”
Share Our Wealth limit individual income to 1 million and
inheritance to 5 million
Mathematically impossible, but people liked the idea.
Influenced FDR to tax the rich in the 2nd new deal.
2nd New Deal By 1935, FDR thought that not enough
had been done
Still wanted to do more
Focused on creating Social Security program
Social Security Other nations had established national
social insurance systems much earlier, but it took the Great Depression for the United States to do the same
Purpose? Provided unemployment compensation
old-age pensions
aid for dependent mothers and children and the blind
Some Left Out Did not include farm laborers and
domestic service
Left out about 25% of the American workforce
One of the most important laws in American history despite its weaknesses
The Dust Bowl Since WWI, farmers stripped the land
of grass in order to plant wheat
Drought and high winds caused crops to fail and nothing was left to hold the soil
Consequence? Dust storms blew away millions of tons
of topsoil
Darkened the sky 1,000 of miles away
Families were forced to abandon their farms
Dust Bowl Clip http://www.youtube.com/watch?v=x2Ci
DaUYr90
TVA Tennessee Valley Authority built dams to control floods and
generate hydroelectric power
agricultural development and conservation
Schools and health systems
Resettlement Administration
Focused on land reform and help to poor farmers
Attempted soil erosion projects and helped poor farmers find better land
Problem was too widespread to fix
Election of 1936 FDR (D) vs. William Landon (R)
African Americans overwhelmingly voted Democratic for the first time
So did women
FDR 528 – Landon 8
Labor Relations Many unions joined together to form
the CIO, led by John Lewis.
Gained 4 million members in 2 years.
Their most powerful form of protest was the strike
Sit Down Strikes * Sit down strike, laborers stop working
but refuse to leave the building
Supporters sit outside and form picket lines
this prevented them from bringing in scabs
“Sitting” on Inventory
General Motors Strike 12/31/1936
Executives turned off the heat and blocked entry so no food could be brought in
Police were called to the picketers outside, eventually a fight broke out.
Result? women got involved in lines and
providing food. Governor and Roosevelt refused to
battle the pickets and GM had to give in.
Memorial Day Tragedy Republic steel in Chicago
Police guarding the plant fired on strikers and their families
Ten people were killed
Long Way Left to Go A sign that labor, despite few success,
faced obstacles 1939 Supreme Court outlawed sit-down
strikes
Women and the New Deal Mixed Impact
Mostly did “women’s work” and were paid less than men
Frances Perkins became first female cabinet member of FDR
Eleanor Roosevelt Pushed for women’s rights Travelled and campaigned constantly
Minorities and the New Deal Mostly discriminated against early on
FDR didn’t want to anger Southern Democrats which he needed
Eleanor Roosevelt pushed for appointment of black officials and supported racial equality
Benefits to Minorities Improved literacy due to public
education
Black college students and graduates more than doubled
Reduced infant mortality rates and raised life expectancy rates
Court Packing Fiasco Supreme Court had shut down many
programs
No specific number of judges ever set in the Constitution
Had just always been 9
Court Packing Roosevelt said he just wanted to
lighten the burden on the existing aging judges
He asked congress for permission to appoint up to 6 more judges, one for each judge over 70 years old.
“His Guys” Wanted to appoint judges who
supported New Deal programs
Huge backlash from critics who thought he wanted to be a dictator
Withdrew his plan
Last days of New Deal New Deal was no miracle cure for the
Depression
in 1937 the economy collapsed again and went into a recession
Social security tax had a lot to do with this. Since it was automatically deducted, Americans had less money in their pockets to spend.
National Debt on the Rise National debt rose from 21 billion in
1933 to 43 billion in 1940.
Modern Day Critics Most have now found the new deal to
be lacking
Hindered economic progress and threatened America’s core beliefs in free enterprise
America wasted precious resources in the AAA
Deficit Spending paying out more money from the
annual federal budget than the government receives in revenues
New Deal required the government to borrow money
Entertainment During Depression
Americans used movies to escape Depression
25 cents for two movies
Inspirational and comedies were most popular (Can you guess 3 most popular films/characters?)
Lasting Achievements Voters began to expect President to
formulate programs to solve problems
Accepted more government intervention
Grew used to larger governments
Most Important Achievement
Restored a sense of hope to Americans
New Deal did NOT solve the Depression, but it gave people hope that the end was near
Economic Recovery would not come until World War II