The Great DepressionStudents will analyze the cause and effects of the Great Depression and

WWII and their impact on the development of the federal government

Key Industries in TroubleKey industries- like railroads, textiles,

steel barely make profit• Mining and lumbering- expanded during

war; no longer in high demand• Coal- especially hard hit due to availability

of new energy sources (electricity)Boom industries- automobiles,

construction, consumer goods, begin to fail Housing market- starts to decline as

people can not afford new homesElection of 1928- Republican Herbert

Hoover is elected in a landslide; very popular

Causes of the Great Depression

Causes1. Distribution of wealth- Wages had not risen with corporate profits. Over 70% of Americans were living

below the poverty line.2. Stock Market Speculation- was seen as a get rich

quick scheme. Millions of Americans pour money in expecting to get rich.

a. “Playing the market”- People began guessing on stock prices this is called speculation.

b. Buying on Margin- allowed people to borrow for the cost of the stock but only paying 10% of the price. When the crash occurs people can’t pay back the money they owe.

3. Credit Abuse- Consumers over extend themselves while buying the next new thing, credit crisis develops as people can’t pay.

Causes cont’d..4. Overproduction- Businesses were producing more consumer

goods then America could purchase, loss money led to low wages

5. Farming Collapse- International demand for U.S. grain declines after WWI and prices drop by 40%

a. Bad Cycle- Farmers boost production to sell more; prices drop faster

b. Collapse- Income from crops declines causing farmers to default on loans leading to the collapse of rural banks.

c. Price-supports bill- government buys surplus crops, guarantees prices

d. President Coolidge- vetoes price-support bill

6. Government policies – No regulation of business, high tariffs hurt farmers

7. Global economic problems – International banking created linked markets, Europe’s financial troubles after WWI affected the U.S.

WHAT THE HELL IS GOING ON OUT THERE?

Stock Market Crash – September of 1929 the market peaks and people begin selling everything.

1. “Black Thursday” – Largest amount of selling ever, prices plunged, markets closed till Tuesday.

2. October 29, 1929 “Black Tuesday” – Bottom of market fell out as people were attempting to sell all their stock

3. Margin- people who bought on credit left with huge debts, banks call for their money, people have little or no money and are wiped out

Great Depression 1929-1939

Financial Collapse- economy falls, unemployment skyrockets

Banks Collapse- people panic and withdraw their money causing banks over 20% of all banks to close wiping out millions of savings accounts

Gross National Product (GNP)- the value of all goods and services produced by a nation fell in half in four years, 104 billion to 50 billion.

Unemployment- 25% of all workers go jobless, those with jobs get salary and hours cut.

President Hoover Reacts Reaction- believed it was the responsibility of the

state and local governments to help not the federal government.

Hawley-Smoot Tariff (1930)- President Hoover signs into law the highest tariff rates in history against European goods, in response they do the same. Nobody can trade and everyone falls into greater depression. Unemployment soars.

The Depression’s Effects Soup kitchens- offer free or low-cost food

Bread lines- people line up for food from charities, public agencies. Americans find this shameful to stand in lines and reject them.

African Americans, Latinos have higher unemployment, lower pay

Shantytowns- settlements consisting of shacks, arise in cities, people dig through garbage, beg for food and money

Hoovervilles and Families Hoover was blamed primarily for the depression

People who could not pay their mortgage needed alternative housing

Villages named “Hoovervilles”

Family- some break under the strain of the depression

1. Men- commit suicide and go into depression, use to taking care of the family most can’t find jobs leave

their families.

2. Women- find jobs sewing, maid service, resented by their husbands.

3. Children- poorly fed, schools close, poor health, teenagers leave home looking for jobs.

Dust BowlDust Bowl- area from North Dakota to Texas that is hardest

hit

1. Farmers- in Great Plains exhaust land through overproduction

2. Dust Storms- 1930s, drought, windstorms hit; soil scattered for hundreds of miles

3. Depression in Rural Areas- most can grow their own food but can’t pay back loans.

4. Loss of Farms- over 400,000 lose their farms and become tenant farmers, some leave and

migrate to the Pacific Coast

Psychological Effects of the Great Depression

1928–1932, suicide rate rises over 30% Admissions to state mental hospitals triple People give up health care, college, put off

marriage, children Stigma of poverty doesn’t disappear; financial

security becomes goal Many show great kindness to strangers Develop habit of saving and thriftiness

Veterans want their money Bonus March- jobless veterans from WWI want the money

promised them (1945) now. 1. Patman Bill- called for the payment of bonuses,

Hoover and the Senate oppose the bill and its struck down.

2. March joined- thousands of veterans bring their families to the shacks near the capitol.

3. Death- 2 veterans are killed in a fight with police, Hoover gets scared and orders them removed.

4. Overreaction- The army uses tear gas and tanks on the veterans to drive them out.

5. Public Outcry- Americans are stunned to see Hoover as heartless and uncaring if he’s willing to do this to veterans

ELECTION OF 1932 President Hoover (Republicans)- never fully appreciated

the problems of the Depression and believed it was only a temporary downturn, this led many people to resent him.

1. Hoover warning- says a Democratic victory will only lead worse economic crisis.

Franklin Delano Roosevelt F.D.R. (Democrats)- Governor of New York promises the American people a “New Deal”

1. Repeal Prohibition2. Aid for the Unemployed3. Cuts in government spending

Results of the Election- Roosevelt wins over 60% of the vote, Democrats win both houses of Congress.

FDR AND THE NEW DEAL

Three R’s – Relief, Recovery, Reform Relief – for people out of work Recovery – for business and the economy as a whole Reform – of American economic institutions “The only thing we have to fear is fear itself”- F.D.R.

Bank holiday – banks were closed to allow them to be reorganized by government

Repeal of Prohibition – Legalized sale of beer and wine, increases tax revenue

Fireside chats – FDR assured people that banks were safe, people put their money back

THE FIRST HUNDRED DAYS

Hundred Days- Roosevelt with Congress pass over 15 major New Deal laws to help the country.

1. Bank Holiday- Roosevelt orders all banks closed until the government can reorganize them and make them stable.

2. Repeal of Prohibition- 21st Amendment is passed and the tax money is used by Congress to provide programs.

Hundred Days cont’d.. Financial RECOVERY-

1. Emergency Banking Relief Act- reopened banks that were financially sound, people’s confidence restored they deposit money.

2. Federal Deposit Insurance Corporation (FDIC)- insures individual bank accounts and regulates banking practices

3. Home Owners Loan Corporation (HOLC)- refinancing of small homes to prevent foreclosures

4. Farm Credit Administration- low interests loans to farms in order to prevent foreclosures

5. Securities and Exchange Commission (SEC)- regulates the stock market

HUNDRED DAYS CONT’D… RELIEF Programs for Unemployed-

1. Federal Emergency Relief Administration- offered federal money to state and local

government run soup kitchens and breadlines

2. Public Works Administration (PWA)- gave money to state and local governments to

build roads, bridges, dams, and other public works.

3. Civilian Conservation Corps (CCC)- public works jobs to employ men

HUNDRED DAYS…..

4. Tennessee Valley Authority- hired thousands of men into the Tennessee Valley to build dams, build electric power plants, control flooding and erosion. Sold electricity cheaply to areas that previously couldn’t afford it.

Farm Recovery-1. Agricultural Adjustment Administration- encouraged farmers to produce less to boost prices, government will subsidy farmers

for every acre they don’t farm.

Critics of the NEW DEAL, Liberals- felt that the New Deal was doing too much

to help business and not enough to help the poor and unemployed.

Conservatives- New Deal was controlling business, pro-union and regulations.

Deficit Spending- government was spending more money than it makes on the New Deal programs causing people to get upset.

THREE BIG MOUTHS TAKE CENTER STAGE

Father Coughlin- popular priest uses radio to demand a nationalization of all banks and guaranteed income- Catholic Church yanks support after he becomes ant-Semitic and Fascist

Dr. Francis Townsend- he wants a pension plan for the elderly guaranteeing them monthly income.

Huey Long- A senator and former governor of Louisiana he was immensely popular in his home state.

1. “Share Our Wealth”- program that promised a minimum annual income of 5k for every American family to be

paid by taxing the wealthy2. New Leadership- Long challenges Roosevelt for

leadership of the Democratic Party by announcing his run for the presidency in 1935.

3. Killed- Long is assassinated in 1935 and his popularity and ideas die with him

ROOSEVELT VS. SUPREME COURT

Supreme Court- strikes down several New Deal laws such as the AAA, NRA as unconstitutional

“Court-packing bill”- Roosevelt proposes that the president be allowed to appoint a new justice for each member over 70.5.

1. Reaction- Congress and the Press are outraged at Roosevelt for trying to tamper with the

system of checks and balances. (Dictator)2. Aftermath- most of the older justices were retiring by 1937 and he was able to appoint 7 new justices to support his New Deal laws.

ELEANOR ROOSEVELT – LEADER IN HER OWN RIGHT

Most active first lady in history – wrote newspaper column, gave speeches, traveled the country

Served as the president’s social conscience Influenced him to support minorities

and the less fortunate United Nations- Universal Declaration of Human Rights Women’s Activism – League of Women Voters, Women’s Democratic News (author), Chair of women’s delegation to Democratic National Convention

WOMEN AND MINORITIES PART OF THE NEW DEAL

Frances Perkins- Secretary of Labor, is the first female cabinet member.

1. FDR- appoints several women but America still discriminates against them, hires after all men.

African-Americans- FDR appoints more than 100 African Americans to government, Mrs. Roosevelt plays key role.

1. Mary McLeod Bethune- appointed to head the division of Negro Affairs. Eleanor Roosevelt’s close friend she will

organize the “Black Cabinet” during Roosevelt’s presidency.

2. Marian Anderson- famed African-American opera singer she is not allowed to sing in Constitution Hall by the Daughters of the American Constitution, in Washington D.C.

a. Eleanor Roosevelt- resigns from the (DAR) and arranges for Anderson to sing on the steps of

the Lincoln Memorial, heard throughout the country on radio.

SECOND NEW DEAL New Deal Coalition- Women, Working Class,

Minorities, Labor Unions, Middle Class, Immigrants, North/South

Works Progress Administration (WPA)- creates jobs building airports, roads, public buildings

Social Security Act – Federal insurance program based on collection of taxes throughout working careerRetirees collect monthly over the age of 65Other benefits paid to: unemployed, blind, disabled,

dependent children and their mothers

Wagner Act – National Labor Relations Act, gave workers right to join union and union’s right to bargain collectively, outlawed unfair labor practice.

I just want to forget my PROBLEMS!!!!

Movies- over 65% of the population goes, escape from reality; shows romance, fun, wealth.

1. Gone with the Wind- the most popular movie of the 1930’s and all time.

2. Gangster movies, comedies, musicals all very popular ways to forget your troubles.

Radio- 90% of all households have a radio and are the center of all families.

1. Orson Wells- “War of the Worlds”2. Dramas and variety shows at night3. Soap Operas during the day4. Children shows during after school hours

Artists and the Great Depression

Support- great time for artists so to speak, federal aid pays for art classes to be taught, hire artists and writers

1. Richard Wright- Native Son, about the African- American experience

2. John Steinbeck- Grapes of Wrath, about Dust Bowl migrants

End of the New Deal 1933-1937: the economy shows signs of

life, banks are stable, unemployment down to 15%, corporations are beginning to make money

1. Americans- begin to have hope and see the need to end the New Deal programs, so does Congress.

2. The end- The New Deal ends in 1939 as attention is changed to the aggressive rise of Nazi Germany.

Impact of the New Deal Finance and Banking:

1. FDIC- protects individual investors against bank

failures

2. SEC- still monitors the Stock Market

Social Security- still provides help for the elderly and needy

Labor and Unions:

1. National Labor Relations Board- still mediates problems between unions and companies

Environment

1. Tennessee Valley Authority- still provides electricity

2. Soil Conservation- maintain soil to prevent another Dust Bowl