The Great Depression

1. American Studies The Great Depression

2. 1929-1940: The longest and most severe recession that our country has ever experienced The Stock Market Crash of 1929 is the spark Most of Europe is also experiencing a major depression after WWI Has a lasting effect on how Americans view themselves and the role of the government http://www.youtube.com/watch?v=iLhDSdwob04 http://app.discoveryeducation.com/search?Ntt=great+depression The great depression

3. Six Sick Segments of the Economy: • 1. Overproduction and Under-consumption • Buying on credit causes inflation • Interest rates are kept low so that it’s easier for people to get loans and credit cards • Demand for new goods decreases over time • Many buy things they can’t afford = debt • Companies borrow $ to expand and can’t pay back Causes of the great depression

4. 2. Uneven Distribution of Wealth • Top 10% had 80% of nation’s wealth • Half of the nation lived below the poverty line • Rising prices, same stagnant wages • Government helped big business not the people • Few unions = few rights for workers • Huge gap between the rich and the poor Six Sick Segments of the Economy

5. 3. Loan Repayment and War Debt (Reparations) • “Roundtrip of the Dollar”: US invests in Germany to help their depression, Germany uses money to pay back allies for war reparations, then they use the money to pay US back for WWI loans • All countries default on their loans • Worldwide depression makes it difficult to sell US goods • 1923: a five million German mark worth less than a penny Six Sick Segments of the economy

6. 4. High Tariffs: • Hawley-Smoot Tariff:60% tax on imports from Europe so people buy goods from the US • European countries put tariffs on US so that foreigners don’t buy our goods • Government makes money, not businesses • World Trade falls 40% Six sick segments of the economy

7. 5. The Farmer’s Plight • Took loans to buy land and equipment during WWI • Plenty of profit during WWI feeding world armies • After war, prices drop by 40%, can’t pay debts • Surplus: Growing more than they can sell for profit • Coolidge refuses to pass McNairy-Haugen Bill for federal price-supports on key products • Many lose land and are forced to become sharecroppers Six Sick Segments of the Economy

8. 6. Over-speculation on the Stock Market • Bought based on speculation that economy would keep growing • Expected to hit it big, when demand drops, stock prices drop • People buy on credit, company seems to be worth more than it really is • Keeps stock prices artificially high, less money in system than there appears to be • Buying stock on the Margin (credit) causes banks to lose money they loaned Six Sick Segments of the economy

9. The 1930’s were a time of pain and suffering for many Americans due to the Great Depression. Many blamed President Hoover for the depression but it was later discovered many of the problems were created during the 1920’s. Explain two reasons why the United States fell into depression. (2pts.) Practice question

10. Wages fall, businesses close, unemployment rates skyrocket • Averages from 25-50% across the country throughout the decade • Many lose their homes to foreclosure • No federal system of relief, no corporate bailouts, no safety net • Women lose jobs/wages so that some men can find work: they search constantly • Conditions for African Americans were the worst • Competition for jobs: First fired, last hired • 24 lynched in 1933 America’s Dark ages

11. -Unemployed were given apples to sell in order to make some money -Men didn’t want to beg, wanted to earn money honestly

12. Breadlines and soup kitchens form in an attempt to feed families • Suffer serious health problems from malnutrition and lack of health care • Many can’t pay rent and are forced to live in shacks = shanty town or “Hooverville” • Only time in history where more people are leaving the US than coming here • Divorce and suicide rates rapidly increase • Many men and children leave their homes and roam the country • Riding the rails: Migrants or bums or “Hoover Tourists” Effects of the great depression

13. Popular Song “Brother, can you spare a dime?” Schools eliminate dress code: People can’t afford new clothes or shoes

14. Sleeping under newspapers: Hoover blankets Turned-out empty pockets: Hoover flags

15. Banks failed at record rates • Those who didn’t lose $ in stock market, lost it to the bank • Didn’t have enough money in vaults due to giving out loans • People lose confidence in banks and want all their money back • Banks run out of money and are forced to close • Many from this era lose their life savings and never trust the banks again • 9 million saving accounts gone The run on the banks

16. Presidents of the 1920s believed in Laissez-Faire, Hoover didn’t believe in govt intervention • Many believed it was a normal cycle of the economy where others blamed Hoover for Depression • Forced to provide some relief with worsening conditions • Hoover believed in “rugged individualism”: Individuals should be able to help themselves • Hoover Dam: Approved to create jobs and new hydroelectric power source President Herbert Hoover (1929-1933)

17. WWI Veterans were promised a bonus to be paid in 1945 • Vets need money now and march/protest in Washington D.C. to demand it be paid • Hoover refuses and sends troops to get rid of them • Troops use tear gas and bayonets to force the veterans and their families to leave • Burn down their shantytown, many are injured • Final blow to Hoover’s damaged image The bonus army

18. -Troops turn against veterans -Eisenhower and MacArthur were some of the troops who kicked out the Bonus Army -One baby was killed, an 8 year old boy was blinded -Hoover called the veterans “traitors and communists”

19. President Hoover was blamed for the Great Depression even though later historians discovered it was not entirely his fault. However there were many impacts on people’s lives due to depression. Which of the following was not an impact? A. Race Riots B. Hoovervilles C. Bonus Army D. Unemployment Practice question

20. Environmental disaster: Drought, high winds and poor farming practices cause huge dust storms • Great Plains blow away, people and homes covered in dust • “Black Blizzards” cause the “Brown Plague” • Farmers: Losing money, can’t grow food, lose the family farm, failing health • Many move west to California for fertile land to become migrant workers picking fruit, etc. • “Okies and Arkies” follow Route 66 to the Promised Land • Many can’t find enough work when they arrive The Dust bowl

22. http://www.youtube.com/watch?v=iLhDSdwob04

23. What affect did the Dust Bowl have on farmers? a. It created better soil for the farmer’s crops. b. It destroyed their crops and forced them to move to the East coast c. Made them use more tractors to plant more crops. d. It destroyed their crops and forced them to move to the west coast Practice Question

24. Hoover is re-nominated by Republicans • Most people want him gone, widespread hatred • Democrats nominate Franklin Delano Roosevelt • Governor of NY: Providing aid to his people • “My plan will do the greatest good for the greatest number” • Wants to correct issues that caused the Depression • FDR wins a landslide victory • Congress is Democratic • Lame Duck Period: worst of the depression • http://www.youtube.com/watch?v=1aXpty_1xo4&safe=active Election of 1932

25. -Calls his advisors the Brain Trust -Has Polio which impedes his mobility -Graduated from Harvard Teddy Roosevelt’s Nephew

26. Plan to “shuffle the cards, give people a new hand in life”, provide aid and relief • RRR: Relief for the needy, Recovery for the economy, Reform finances • Greatly expands the role of the government in the economy • Try new things, admit if they don’t work • Wife Eleanor Roosevelt is highly active first lady • 1st 100 Days: Highly eventful period of FDR’s president, enacts emergency measures • Create stability: 15 major pieces of legislation • Needs to build trust with the people The new deal

27. Bank Holiday: Close them for examination and to prevent withdrawals • Emergency Banking Relief Act: Provides loans to banks so they can stabilize and reopen • Needs people to put money back in • Builds trust with Fireside Chats: President explains issues in plain terms to the people • Successful: Billions re-deposited, ends banking crisis • http://www.youtube.com/watch?v=z9CBpbuV3ok&safe=active The new deal: First 100 days

28. 1933: Glass-Steagall Banking Reform Act • Banks can’t use people’s $ to speculate on the stock market • Federal Deposit Insurance Corporation (FDIC) • Insures your $ in the bank so that you will always get it back • Federal Securities Act: Corporations must provide complete and honest information to their stock holders • Securities and Exchange Commission (SEC) • Regulates the Stock Market to prevent unfair deals and reduce buying on the margin FDR’s New Deal

29. National Housing Relief Act: Help pay mortgage to avoid foreclosures • Public Works Programs: Provide jobs through government funded projects • Plants trees, create park trails and lodges • Painting murals, interviewing surviving former slaves and Civil War vets to record history • Built airports, bridges, schools, roads, etc. Roosevelt’s new deal

30. FDR became president because of his ideas for getting the United States out of depression. FDR created many government programs that tried to improve different aspects of people’s lives. Which of the following was the name of FDR’s ideas? A. Rugged Individualism B. Neutrality C. New Deal D. Normalcy Practice question

31. “Migrant Mother” Photograph by Dorothea Lange who was paid by a public works program to document the Depression

32. TVA: Public work program that helped the poor rural areas of the Tennessee River Valley • Economic Planning and Development • Bring hydropower electricity and teach better use of the land for farming • Build or repair 20 dams to use for flood control and electricity (90% were without it) • Build low cost housing, provide clean running water • Plant trees and control forest fires 1933: Tennessee valley authority

33. FDR is re-elected in 1936, 1940 and 1944 • Social Security Act: 1935 • Old Age and Disability Pension: safety net for those who can’t work • Half paid by employee, half by employer, over lifetime • Fair Labor Standards Act: 1938 • Sets minimum wage (25 cents) 40 hour week • Employers and work programs still often discriminated against African Americans Franklin Roosevelt's New Deal

34. Successful in providing relief with some reform and recovery • There is economic improvement but the nation still has a deficit • Government has more control and provides more social programs/aid to the people • It takes the massive employment and spending during WWII to pull us completely out of the Depression Impact of the new deal

35. How did the U.S. government’s role in the economy change as a result of the Great Depression? A. The federal government had a diminished role in regulating economic activity. B. The federal government maintained the role it had in economic matters before the Great Depression. C. The federal government expanded its role in regulating economic activities and promoting economic growth. D. The federal government transferred its role in economic affairs over to the state governments. Practice question