US History Chapter 11-12 Great Depression & New Deal

1. US History Chapter 11-12 Great Depression & New Deal

2. Starter #1: Tuesday 11/29 • QUARTER 2 WEEK 5  • Read the Inside Story on page 320 • How did Americans behave on the eve of disaster? • What economic warning signs began to appear in the fall of 1929? • Why do you think the economic warning signs were ignored?

3. Appearance of Prosperity • 1922-1928 Gross National Product GNP rose 30% (total value of goods/services produced in nation) • Optimistic – reckless behavior • Unemployment 3% • Welfare Capitalism – workers happy • Used money for Leisure/entertainment

4. Stock Market Expansion • Stock: ownership of company – sold in shares • 1920-1929 overall value of stocks went up 4 times • Began to use stock market to invest – save money • Quote page 322

5. The Election of 1928 • Coolidge did not run for reelection – Republicans chose Herbert Hoover • Never held elected position – oversaw food production during WWI • Many felt Hoover would lead America well during its prosperous time

6. Economic WeaknessesWealth Distribution • Wealth in US grew – wealthiest 1% of country held wealth – saw up 60% increase in wages • Workers saw only 8% increase • Farmers & Coal Mining were hit hard • Able to buy goods (cars, radios, appliances) with readily available credit • Running out

7. Credit and The Stock Market Credit • Installment Credit • Buying on Margin • Huge Risks • Margin Calls: Brokers forcing investors to repay loans if stock fell below certain point

8. The Federal Reserve • Nation’s Central Bank • Regulates nation’s money supply in order to promote healthy economic activity • Late 1920’s the FED wanted to make it more difficult to for brokers to offer margin loans • Banks stopped giving $ -- turned to Corporations

9. The Stock Market Crashes • 1928 – 50% gain • 1929 – 27% gain, high point Sept 3 • Nervous Investors – sales dropping • Thursday 10/24 sold stocks, many followed • Few people willing to buy, prices dropped • Bankers tried to prevent by buying stocks • Friday went okay, Monday sank

10. Black Tuesday October 29, 1929 • Dumped 16 million shares • Dropped 16 Billion dollars • Lost ½ of market’s pre-crash value

11. The Effects of the Crash • INDIVIDUALS • Ruined individual investors • Margin buyers hit hard – forced to sell stocks for less than they paid for • BANKS • Panic led to a rush to withdraw money • Banks had also invested in stock market • Lead many out of business • Bank Run

12. Effects of the Crash • BUSINESS • Unable to get investors to help expand • Consumers not buying products • OVERSEAS • Fragile economies of Europe post WWI hit • Called in loans given to Europe • High Tariffs – protect own businesses

13. Starter #2: Wednesday 11/30 • Read the Inside Story on page 328 • Why do you think so many homeless teenagers “rode the rails” during the Great Depression? • Recall what you have read about children in the workplace in earlier chapters. How did attitudes towards childhood and education at the time of the Great Depression differ from present-day attitudes?

14. The Development of the Great Depression • Stock Market crash revealed flaws in the American economy • Great Depression: most severe economic downturn in the history of the US

15. Bank Failures • Unnerving development • Some didn’t trust stock market, but lost money anyway because had in banks • Today banks have insurance from federal government • Today’s banks required to keep greater percentage of its assets in cash to be paid out to depositors • 1929 no insurance – susceptible to “runs” • By December 1930 – 350 banks closed

16. Farm Failures • Farmers produced more than they could sell – prices dropped • 1933 prices down 50% from 1929 • Typical for farmers to get loans from government • 1933 – 364,000 farms went bankrupt • Foreclosure: bank or other lender takes over ownership of a property from owner who has failed to make payments

17. Unemployment • 1933 GNP dropped 40% from pre-crash levels • Unemployment 25% • Harlem NYC unemployment 50%

18. The Human Impact of the Great Depression • Hoovervilles and Hoboes • Competition for jobs fierce • No government aid in early 30’s – 1 in 4 families in need received help • Lost homes to foreclosures or not paying rent • Hoovervilles: sprawling neighborhoods of shacks sprang up on outskirts of town for newly homeless – shantytowns named for bitter reference to president Hoover who they blamed for Depression

19. Continued… • Sold apples on streets • Hoboes: hopped trains to travel town to town trying to find work • Most were men who left families because could no longer care for

20. The Emotional Toll • Biggest toll was on minds and spirits • Personal failure • Angry • Brother can you spare a dime?

21. Devastation in the Dust Bowl • 1931 Great Plains entered drought • Period of below average rainfall, lasting several years • Careless agricultural practices left region vulnerable • Topsoil blown away • Dust Bowl

22. Fleeing the Plains • End of 30’s 2.5 million people left Great Plains • Took Route 66 to California to work on farms or orchards • Okies – after state of Oklahoma, insulting, inaccurate • Woody Guthrie – singer-songwriter • John Steinbeck – The Grapes of Wrath

23. Starter #3: Thursday 12/1 • Read the Inside Story on page 335 • Why do you think Congress refused to agree to the veterans’ demands for payment of their bonuses? • How do you think the soldiers felt about having to clear the veterans from the area?

24. Herbert Hoover’s Philosophy • “Rugged Individualism” • Felt government should stay out of business • People should believe in their own responsibility and power • Speech page 336

25. The Associative State • Wanted voluntary cooperation between business associations and government • Called meetings with key leaders to discuss national goals • Hoover Dam • Harness Colorado River to provide electricity and reliable water source

26. Hoover’s Response to theGreat Depression • Voluntary Cooperation • Not provide direct aid – help people help themselves • Cooperative: want common goal • Tried to utilize these after crash

27. Direct Action • Hard to cooperate in face of economic disaster – individual decisions • Reconstruction Finance Corporation (RFC) • Allowed $2 Billion in direct government aid • Changed role of federal government • Many thought too little too late

28. The Smoot-Hawley Tariff Act • Raised tariffs – so that people would buy cheaper US goods • Europe also raised tariffs • Trade plunged

29. The Nation Responds to Hoover • The President Loses Favors • Doubted his credibility/compassion – “I am convinced, that we have passed the worse.” • Wondered why he was giving money to banks/businesses and not individuals

30. Bonus March Did not approve payment to unemployed veterans Wanted a balanced budget Meet his goal – he increased taxes in 1932

31. The Voters React • Mid term election – Democrats won majority of seats in House • Clear a Democratic would win the election • Hoover didn’t even bother campaigning until 1 month before election

32. Starter #4: Monday 12/5 • Section 1 • How did the success of the American stock market also increase the dangers of investing in the market? • Section 2 • How did the Great Depression affect ordinary Americans? • Section 3 • What was President Hoover’s basic belief about the proper relationship of citizens to their government?

33. Starter #5: Tuesday 12/6 • Read the Inside Story on page 346 • In Roosevelt’s view, what was wrong with Hoover’s policies? • How did Roosevelt establish a personal connection with ordinary citizens?

34. Launching the New Deal • 1932 FDR won the Presidency • Fought Polio • Governor of NYC 1929 – helped 1 of 10 families, more than Hoover did • Campaigned on – relief for the poor & public works projects: government-funded building projects that would provide jobs • Landslide victory – map page 347 • FDR won 57% of popular vote – took all but 6 states • Democrats took control of House & Senate

35. Political Partnership • Greatest asset personality • Cheerful, optimistic, confident • Fireside Chats: addresses meant to sound as though Roosevelt were in your living room, talking personally to you • “I never saw him, but I knew him.”

36. Roosevelt’s Philosophy • Reform-minded Democrat – similar to the Progressives • Government’s job to take DIRECT ACTION • EXPANDED GOVERNMENT’S INFLUENCE!! • Quote pg. 348 • Eleanor Roosevelt • Husband’s eyes & ears during his sickness • Powerful political force, helped change the role of First Lady • Newspaper column “My Day”

37. Roosevelt Takes Action • Banks were his FIRST concern • Public lost confidence in banking system (349) • Large withdrawal of money hurt “healthy banks” • Closed all Banks – “Bank Holiday” • Emergency Banking Act • government officials went and examined banks to determine its soundness & took steps to correct problems • Within a week banks began to reopen, people redeposited money • FDIC (Federal Deposit Insurance Corp) • Government insurance for depositors’ savings

38. The Hundred Days • New Deal • Key parts of Roosevelt’s program • Relief • for those suffering effects of Great Depression • Recovery • of the depressed economy • Reforms • prevent serious economic crisis in the future

39. New Deal Programs • Civilian Conservation Corps (CCC) • Employed 18 to 25 year old men, conservation projects, send pay home • Agricultural Adjustment Act (AAA) • Enacted subsidies: government payment to grow fewer crops • National Industrial Recovery Act (NIRA) • Businesses must cooperate with each other to set prices & levels of production • Public Works Administration (PWA) • $3.3 billion for public-works programs

40. New Deal Programs • Federal Securities Act • Share financial information with public • Securities & Exchange Commission (SEC) • Governments watchdog over the nation’s stock markets • Tennessee Valley Authority (TVA) • Developing resources of entire TN valley (p. 354)

41. Beyond the Hundred Days • “In the hundred days from March to June we became again an organized nation confident of our power” • Civil Works Administration (CWA) • Provided winter employment to 4 million workers to build highways, sewer lines, airports • Indian Reorganization Act • Reversed previous policies by recognizing the Tribe, limited sale of land, provided assistance, granted some self-rule

42. Trouble for the New deal • NEVER before had GOVERNMENT assumed such a central role in the business & personal lives of its citizens • Critics of the New Deal • Too friendly to banks & businesses • Banks still too powerful • Did not do enough for older Americans

43. Opposition from the courts • New Deal changed the relationship between the American people and their government • Threatened to alter the balance of power among President, Congress, & Courts • President too much power • Supreme Court ruled against New Deal • Schechter Poultry Corp v. United States (356) • Destroyed key parts of the NIRA • United States v. Butler • AAA – tax used to raise money was unconstitutional

44. Starter #6: Monday 12/12 • Read the Inside Story on page 357 • What was the Civilian Conservation Corps? • What do you think was the most important thing that participants in the CCC get out of it, and why?

45. Starter #7: Tuesday 12/13 • Read the Inside Story on page 365 • What spurred Frances Perkins’ interest in improving conditions in the workplace? • What was Perkins position in FDR’s administration? • What challenges might Perkins have faced in her position?

46. Starter #8: Wednesday 12/8 • Read Inside Story on page 371 • Do you think that Eleanor Roosevelt’s action in response to the DAR refusal to allow Marian Anderson to perform were appropriate under the circumstances? Why or why not? • How did the DAR’s refusal result in a triumph for Marian Anderson?

48. Key Ideas from Sections 2 & 3 • Second New Deal • Instead of direct handouts – made people work for their money • Social Security • Provided pension, regular payments, for people 65 and older • Labor Unions gained strength • Sit-down strike • Required workers to stay at factory day and night until dispute was resolved • Court-Packing Plan • Deficit • Government spends more money than it takes in

49. The Impact of the New Deal • Was the promise of relief, recovery, & reform met? • Relief - yes • Millions enjoyed some help, direct relief, Social Security, unemployment insurance • Recovery - no • Wages, jobs did rise, yet dropped in late 1930s – still 10 million unemployed • Reform – yes • FDIC- restore confidence in banks, SEC – stock market

50. Changing relationships • New Deal changed some basic relationships in American society • New role for government = BIGGER GOVERNMENT • People now turned to government whenever they needed help • Is this good or bad?? • Quote page 373