The Great Depression and New Deal

1. The Great Depression and New Deal Chapters 9 & 10

2. The Unhealthy Economy 1. What was the problem with credit in the 1920’s? • -It was too easy to get credit, and people bought too much when they didn’t need it. • -Although some economists warned this was bad, most consumers ignored them. • -The debt burden was too heavy for people to pay off.

3. Troubles with the Stock Market 2. What were three bad things happening in the stock market in the 1920’s? • 1. It was in a “bull market” –upward trend with no end in sight, and overspeculation. • 2. Margin buying was dangerous – people bought stock with borrowed money. • 3. Stock pools cheated people, especially average investors.

4. Black Days on Wall Street 3. October 24, 1929 is called Black Thursday, because the NYSE plunged and panic gripped Wall Street. October 29, 1929 is called Black Tuesday, since panicked investors dumped even more worthless shares onto the market, trying to get out with a little left.

5. Causes of the Great Depression 4. What were five causes of the Great Depression? • 1. Bank failures – bad loans, runs on deposits • 2. Business bankruptcies, overproduction in industry • 3. Farm Crisis – had been building since the early 1920’s • 4. War debts and global depression • 5. Uneven distribution of wealth

6. Bank Failures in the Depression 5. Why were banks affected in a bad way by the stock market crash? • -Many people had borrowed money from banks to buy stocks, they defaulted. • -Some banks (a few) failed and closed their doors. This caused panic among other people and there were “runs on the bank”, where everyone tried to get their money. • -No bank can survive a run on its deposits. Over 5000 banks closed in the depression.

7. The Depression Deepens 6. Why were many businesses and companies hit hard by the crash? • -People were not buying anything else on credit, they started cutting back on spending. • -Companies had to layoff people, shrink warehouse space, cut back on production. • -Eventually, many companies went bankrupt, and the unemployment rate hit 25%.

8. Tariffs and the Depression 7. The Smoot-Hawley Tariff of 1930 was the highest in US history, meant to protect American industries from low-cost European goods, it instead killed American business overseas.

9. African-Americans and the Depression 8. How were African-Americans affected by the Great Depression? • -Blacks were first fired and last hired by companies. • -Many black female domestic servants also got fired by the rich, to save money. • -Some blacks were so poor, they didn’t even notice there was a depression!

10. The Depression Deepens 9. Americans formed breadlines in the cities and lived in Hoovertowns on the edge of big cities, because they had lost their homes and no place to eat except at charity soup kitchens.

11. Rural America and the Depression 10. What was happening in rural America during the depression? • -Since many farmers could not afford to feed livestock, they destroyed their animals. • -Many more farmers went bankrupt or had the bank foreclose on their mortgage. • -Many sharecroppers fared even worse, and were pushed off of the land to the cities.

12. Hispanics and the Depression 11. How were Mexican-Americans affected by the Great Depression? • -Hispanics had been farm laborers in the American SW, but now they were fired. • -Some Hispanics were forcibly deported, especially the illegal ones. • -Some states (Colorado) had kicked out all their Hispanic residents due to racism.

13. Families and the Depression 12. How were families and society affected by the Great Depression? • -The marriage rate fell, and the birthrate declined. • -Families got bigger and more extended, and the divorce rate fell also.

14. Families and the Depression 12. How were families and society affected by the Great Depression? • -People got more self-sufficient, and a whole generation was very frugal and saved. • -Suicides went way up, so did crime. There was a tremendous sense of guilt.

15. The Depression-Era Film Industry 13. Why did Americans go to movie theaters more than ever in the 1930’s? • -They were climate-controlled and for very little money, you could watch all day. • -The movies offered an escape from the harsh reality of the world for poor Americans.

16. Radio Shows of the 1930’s 14. What were the three most popular radio shows of the 1930’s? • 1. The Lone Ranger • 2. The Shadow • 3. Little Orphan Annie

17. Hopefulness in Literature 15. James Hilton wrote Lost Horizon in 1933, a fiction novel about a lost civilization that is discovered in Tibet which is prosperous and peaceful. The book was a big success.

18. Hoover’s response to the Depression 16. How did Hoover respond to the Great Depression? • -He remained optimistic throughout, and never used the word “Depression”. • -He felt the best way to recovery was through individual effort, not government help. • -He thought that if the government gave people handouts, it would ruin their work ethic.

19. Charity and the Depression 17. Community Chests were created by Hoover to encourage voluntary contributions to be offered and distributed on a local level, without federal government involvement. They were almost complete failures.

20. Building the US toward prosperity 18. Hoover did spend millions of dollars on building projects, to provide some jobs and stimulate business. His biggest project was called Boulder Dam, later renamed Hoover Dam, near Las Vegas, Nevada.

21. Farmers and the Depression 19. What did Hoover try to do to help farmers? • -The government bought up farm surpluses, hoping to store them until prices rose. • -Farmers planted more than ever, and the plan failed. • -Hoover also tried to help farmers protect their mortgages by offering low interest loans.

22. Helping Industry in the 1930’s 20. The Reconstruction Finance Corporation was started in 1932 by Congress, to loan money to banks and big business to begin “pump priming”, or “trickle-down” economics.

23. Changes in the government 21. How did the federal government change in response to the Great Depression? • -Previously, the government was “laissez-faire”, or only favored indirect relief. • -Andrew Mellon said that the Depression was a good thing – “purge the rottenness”. • -While the government came to favor direct relief, many people blamed Hoover.

24. Socialism and Communism 22. Why were Socialism and Communism becoming more popular during the Depression? • -The Socialists helped organize protests, demanded jobs be created for unemployed. • -The Communists helped expose racial injustice, and supported labor unions.

25. Racism in the 1930’s 23. The Scottsboro Boys were a group of nine African-American boys aged 13-21, sentenced to death on a questionable rape charge, which was later overturned because the defendants were denied basic civil rights. They all were released by 1950.

26. The Bonus Expeditionary Force 24. The Bonus Army was a group of WWI veterans who had been promised a life-insurance policy, but were denied early payment of these pension bonuses.

27. The Bonus Expeditionary Force 25. What happened to the Bonus Army? • -Congress debated a bill to give the veterans their benefits, but it was rejected. • -Some in the Bonus Army went home, but many others stayed camped out, defiant. • -Hoover sent in the real army, and after a “battle”, hundreds were injured and 3 died.

28. The 1932 Election 26. Franklin D. Roosevelt was the Governor of New York and was nominated to run against Hoover in 1932 for President.

29. The 1932 Election 27. Describe Roosevelt and the 1932 Presidential Campaign. • -Roosevelt was a liberal progressive politician, similar to his cousin Theodore. • -He contracted polio in 1922, which stalled his political career, but he fought back.

30. The 1932 Election 27. Describe Roosevelt and the 1932 Presidential Campaign. • -He was a vibrant, active and optimistic candidate who promised a “New Deal”. • -He won a huge, crushing victory over Hoover, and the Dems. got control of Congress.

31. The 1932 Election 28. Eleanor Roosevelt was married to Franklin and a niece of Theodore. She was one of the most active first ladies in US history, taking on a number of causes and showing great courage in speaking out for minorities, women and the poor.

32. FDR’s First Administration 29. The Brain Trust was an informal group of advisors for FDR, made up of experts in their fields, with college professors who had broad, daring plans for the country.

33. Banking Holidays 30. What were banking holidays, and how were they supposed to work? • -FDR shut down all the banks right after he became President, for one week. • -People had to do without money, issuing IOU’s, bartering, etc. to get by.

34. Banking Holidays 30. What were banking holidays, and how were they supposed to work? • -Only healthy banks would be allowed to reopen during the next week. • -This worked to increase confidence in the banking system, and people reinvested.

35. FDR and the Radio 31. Fireside Chats were how FDR communicated his plans to the American people. He held a number of these during his Presidency, where he would give calm speeches over the radio in a kind, grandfatherly sort of manner.

36. FDR’s Cabinet 32. Frances Perkins became the first female cabinet member in history, when FDR appointed her Secretary of Labor in 1933.

37. FDR’s Cabinet 33. Harry Hopkins was head of FERA, a member of the Brain Trust, and a liberal who wanted to “tax, tax, tax, and spend, spend, spend” to create direct relief to get out of the Depression.

38. The First New Deal 34. Complete the chart below concerning the New Deal agencies created in the 100 days. AGENCYPURPOSE 1. Federal Deposit Insurance Corp. (FDIC) 1. Insured bank deposits up to 5,000 for each person. Today, it still exists and insures up to 250,000. 2. Home Owners Loan Corp. (HOLC) 2. Granted low-interest, long-term home mortgage loans to help people keep their houses.

39. The First New Deal 34. Complete the chart below concerning the New Deal agencies created in the 100 days. AGENCYPURPOSE 3. Farm Credit Administration (FCA) 3. Helped farmers pay off mortgages and back taxes, buy back lost farms, and buy seed and equipment. 4. Federal Emergency Relief Admin. (FERA) 4. Distributed $500 million in direct relief to families to keep them alive until long term measures work.

40. The First New Deal 34. Complete the chart below concerning the New Deal agencies created in the 100 days. AGENCYPURPOSE 5. Civil Works Administration (CWA) 5. Closed FERA, made Americans do little jobs to get their relief money, paved roads, raked leaves. 6. Civilian Conservation Corps (CCC) 6. Hired 2.5 million young unemployed to work in national parks, planted trees, built trails and parks.

41. The First New Deal 34. Complete the chart below concerning the New Deal agencies created in the 100 days. AGENCYPURPOSE 7. Securities and Exchange Comm. (SEC) 7. Regulates companies that sell stocks and bonds, serves as “policemen” of Wall Street. 8. Public Works Administration (PWA) 8. Built large scale engineering projects like dams, roads, airports and bridges. Indirect relief!

42. The First New Deal 34. Complete the chart below concerning the New Deal agencies created in the 100 days. AGENCYPURPOSE 9. National Recovery Admin. (NRA) 9. Set hours, prices, wages and working conditions, so that competition would be reduced. It failed.

43. The First New Deal 34. Complete the chart below concerning the New Deal agencies created in the 100 days. AGENCYPURPOSE 10. Agricultural Adjustment Admin. (AAA) 10. Paid farmers to produce less farm commodities. This reduction helped raise prices, and incomes. 11. Tennessee Valley Authority (TVA) 11. Built hydroelectric dams to generate electricity, control floods, prevent erosion and help farmers.

44. FDR’s Economic Advisors 35. John Maynard Keynes was a noted British economist who proposed that the only way for a nation to fully recover from a depression was for its government to spend money to encourage investment and consumer spending. He called this “priming the pump”.

45. FDR’s Cabinet 36. Harold Ickes was the Secretary of the Interior who headed up the PWA and was a big fan of indirect relief. He was willing to spend government money, but wanted to get something needed in return for the investment.

46. FDR’s Cabinet 37. Henry Wallace was the Secretary of Agriculture who headed the AAA. Although his plans were ruled unconstitutional by the Supreme Court, he became a trusted advisor of FDR and eventually appointed Vice President in 1940.

47. FDR’s Cabinet 38. Robert Weaver was the first African-American cabinet member, working first in the Interior Department but later becoming head of Housing and Urban Development.

48. The New Deal and African Americans 39. How did FDR and the New Deal treat African-Americans? • -FDR appointed many blacks to his cabinet, and many New Deal agencies hired them. • -Blacks in government jobs did not make as much as whites for doing the same job. • -An anti-lynching law failed to pass because FDR did not support it.

49. The New Deal and Native Americans 40. John Collier was named head of the Bureau of Indian Affairs by FDR and he pushed for an “Indian New Deal” to revitalize Indian life and culture. Laws passed by Congress encouraged Indian tribes to reorganize, return to native cultural habits, and educate young Indian men at colleges for free.

50. Critics of the New Deal 41. Complete the chart below concerning critics of the New Deal. CriticComplaint/Scheme 1. Al Smith 1. Founded the American Liberty League, left the Democratic party, wanted to stop taxing the rich. 2. Francis Townsend 2. California Doctor whose savings were wiped out, he pushed for an old-age pension and savings system.