The Great Depression and the New Deal

1. The Great Depression and the New Deal Chapter 25 Pages 656-681

2. 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

3. Stock Market Crash • October 29, 1929 • Known as “Black Tuesday” • Investors began selling their stocks at any price

4. Wall Street Crash of 1929

5. Stocks Lost All Value • U.S. Steel went from $262 per share to $22 • Montgomery Ward went from $138 per share to $4.00

6. 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)

7. Beginning of Great Depression • The Wall Street Crash marked the beginning of the Great Depression, but it did NOT cause it

8. 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%.

9. 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

10. 2. Oligopolies • Markets or industries dominated by a small number of sellers • Prices were kept artificially high, not determined by supply and demand

11. 3. Agriculture • Agriculture was suffering from overproduction • This led to lower prices and heavy debt • Why would lower prices be a problem?

12. 4. Banks • Poorly managed and regulated • Disappearing money • People were fearful and pulled their money out of banks…bad why?

13. 5. International Problems • Stock market crash ended the flow American dollars to Europe • Industries collapsed • Stopped buying American goods • This was a global depression

14. 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%

15. Hoovervilles The Economy effected people of all ages

16. 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

17. Hoovervilles

18. Charities • Soup kitchens and charities tried to assist, but there were simply too many people that needed help

19. “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”

20. 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

21. Great Depression Families

22. Families • Divorce declined…why? • Desertion increased • Marriage rates fell • Birthrates fell

23. 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

24. Last Hired, First Fired

25. 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

26. 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

29. Protest

30. 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”

31. Help from Communists? • Communists staged hunger marches and blocked evictions • Mothers facing eviction told their children to “run quick and find the reds”

32. Hoover and the Depression

33. 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

34. 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

35. Story of the “Bonus Army”

36. “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

37. 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

38. 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

39. 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

40. 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”

41. Franklin Delano Roosevelt • FDR • Distant cousin of TR

42. 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

43. Worst Defeat Ever for Rep. Candidate

44. 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

45. 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

46. The New Deal

47. New Deal • “The only thing we have to fear is fear itself” • http://www.youtube.com/watch?v=MX_v0zxM23Q

48. “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

49. Emergency Banking Act • extended government assistance to sound banks and reorganized the weak ones

50. Had to Restore Confidence • Spoke in an informal way to explain everything to the public