The Great Depression

1. The Great Depression 1929-1941

2. Causes of The Great Depression • People over speculated on stocks, using borrowed money that they could not repay when stock prices crashed. This means they bought their stock on credit or someone loaned them the money. • The stock market crashed because people panicked and started to sell their stock. As a result, stocks became worthless. • The stock market crashed on October 29th, 1929, also known as “Black Tuesday”. • The start of the Great Depression is often associated with the stock market crash.

3. Causes of the Great Depression continued • The Federal Reserve failed to prevent the collapse of the banking system. • High tariffs made trade with other countries difficult. • Farm income shrank. • Industries declined which caused layoffs and lower wages.

4. Impact and Effects of the Great Depression on Americans • During an economic depression unemployment rises, there is an increased number of bankruptcies, and an increased number of poor citizens. • During the Depression a large number of banks and businesses failed. • One – fourth of workers were without jobs. • A large number of people were hungry and homeless. • Farmers’ income fell to low levels. • Many people moved to Hoovervilles, which were shacks made by homeless people, because they were forced to leave their homes due to economic reasons.

5. The Dust Bowl • The Southern Great Plains suffered an environmental disaster during the 1930’s known as the “Dust Bowl”. • The hardest hit were western Kansas and Oklahoma, northern Texas, and eastern Colorado and New Mexico. • Causes of the Dust Bowl included drought, high winds, and careless farming techniques. • As a result thousands of farmers went bankrupt and had to give up their farms. Many migrated to California and became migrant workers, moving from place to place to harvest fruits and vegetables • John Steinbeck’s novel,“The Grapes of Wrath”,portrayed the difficulties of Dust Bowl farmers.

6. Roosevelt’s New Deal • President Franklin D. Roosevelt succeeded Herbert Hoover in 1932 as president. • Hoover was blamed for being unable to solve the problems of the Great Depression. He was president when the Great Depression began. • Roosevelt created programs that were aimed at economic relief, recovery, and reform. They will be known as the New Deal. • The New Deal programs were passed by Congress during the “Hundred Days”. Other parts of the New Deal will be passed in the years to come.

7. New Deal Programs • The New Deal affected banking, the stock market, industry, agriculture, public works, relief for the poor, and conservation of resources. • It reformed banking problems, farming overproduction, and stock market risks • The New Deal gave the federal government more control over the nation’s economy as well as the idea that the government must take responsibility for helping those in need. • Franklin Roosevelt spoke over the radio to explain his New Deal programs to the American public. These will be called “Fireside Chats”.

8. New Deal Programs continued • Specific New Deal Programs • Agricultural Adjustment Act – (AAA) Paid farmers not to grow crops. • Civilian Conservation Corps – (CCC) Provided jobs for young men. • Tennessee Valley Authority – (TVA) Built dams to provide cheap electric power to seven southern states and built schools and health centers. It improved the economic life of an entire region. • Works Progress Administration – (WPA) Employed men and women to build hospitals, schools, parks, and airports.

9. New Deal Programs continued • Public Works Administration – (PWA) Built ports, schools, and aircraft carriers. • These (1-5) provided employment and income for Americans. • Federal Deposit Insurance Corporation – (FDIC) Insured savings accounts in banks approved by the government • Social Security Act – (SSA) Set up a system of pensions for the elderly, unemployed, and people with disabilities. - The SSA created a tax on workers and employers. The money provided the pensions for retired people. - Another tax on employers funded unemployment insurance payments to people who lost their jobs.

10. New Deal Programs continued • Social Security is best defined as a retirement plan. • It was established to provide a source of income for retired workers, people with disabilities, the elderly poor, and children of parents who could not support them. • Social Security was a lasting reform of Pres. Roosevelt’s New Deal program. • Social Security, the FDIC, and unemployment insurance were efforts to reform the U.S. economy.

11. The Labor Movement • Workers benefited during the New Deal in that they gained the right to form unions, the right to collective bargaining (discussions between employers and union representatives of workers over wages, hours, and working conditions), child labor ban, and a minimum wage of 40 cents an hour. • Union membership increased during the 1930s • The Wagner Act guaranteed workers the right to form unions to bargain collectively with employers.

12. The End of the Great Depression • The Great Depression will last from 1929 to 1941. • On December 7th, 1941 the Japanese will bomb the U.S. naval base at Pearl Harbor and force the U.S. into World War II. Factories will begin producing war material thus employing workers. Farmers will produce food and crops needed for the war effort. Millions of men and women will find themselves in the armed forces. By entering the war, the U.S. economy will get the boost it had been looking for.