The Great Depression

The Great Depression

I. Economic Crash A. Causes: 1. Uneven distribution of Income-Very Rich & Very Poor in the U.S. 2. Ease of Credit-banks loaned lots of money for stock speculation. When loans could not be paid back, banks failed. 3. Unbalanced Foreign Trade-High tariffs did not allow goods into the U.S. 4. Mechanization-machines meant that less people were needed in factories.

I. Economic Crash B. Effects on Americans -Many Americans were homeless, jobless, & starving. Unemployment=25% -Women lost jobs because employers believed that men needed jobs worse. -Children stopped going to school and looked for work. -Farmers experienced drought and prices so low that they could not cover their debts.

I. Economic Crash Bonus Army-about 17,000 WWI veterans & their families camped out in Washington D.C. demanding their bonus checks. On July 28, 1932, President Hoover ordered the Army to drive away the 2,000 that remained.

I. Economic Crash C. Hoover's Actions -Tax cuts, building projects (Hoover Dam), loans to businesses and industry all came too late. -He believed that local governments should help the needy & people should help each other.

I. Economic Crash C. Hoover's Actions -Hoovervilles-groups of shacks made from wood and metal scraps popped up outside cities. -Hoover was unable to adapt and deal with the difficult times. His name became associated with all the pain and suffering of the Depression.

I. Economic Crash D. Election of 1932 Franklin Delano Roosevelt (Democrat) defeated Hoover in a landslide after pledging a "new deal" for Americans. The economy continued to fall until his inauguration in March. Quote: "The only thing we have to fear is fear itself."

II. Roosevelt and the New Deal A. Early Actions-FDR made Americans feel better by promising a better future. Bank Holiday-FDR closed all banks for 3 days and passed the Emergency Banking Relief Act, ending the bank crisis.

II. Roosevelt and the New Deal B. Fireside Chats Roosevelt used these radio addresses to explain New Deal reforms. He also calmed and reassured Americans with his talks.

II. Roosevelt and the New Deal C. The New Deal Roosevelt's recovery plan that affected banking, stocks, industry, agriculture, public works, relief and resources. It created jobs and agencies: These agencies helped all Americans & brought some stability to the economy.

Civilian Conservation Corps Employed Single Young men on work projects all over the U.S. They received a portion of their pay, with the majority of it going home to their families.

Tennessee Valley Authority Built hydroelectric power plants in the Tennessee River Valley to provide power to rural areas and develop the areas resources.

Federal Emergency Relief Administration Sent federal money to states to help provide for unemployment. First assistance from the federal government towards unemployed. Many unemployed were aided with camps that taught skills.

Agricultural Adjustment Act The AAA is eventually ruled unconstitutional by the Supreme Court Aided farmers and regulated crop prices. Very controversial as many farmers were paid to reduce their production.

National Recovery Administration Allowed industries to create “codes of fair competition.” The Administration had the power to develop voluntary agreements with industries regarding work hours, pay rates, and price fixing The NRA was also ruled unconstitutional by the Supreme Court

Public Works Administration Created jobs on government building projects around the U.S. It was headed by Harold Ickes, Secretary of the Interior. The PWA spent billions of dollars for various projects. Including schools, hospitals, post offices, roads and dams.

Federal Deposit Insurance Corporation Created by the Glass-Steagall Act in 1933, it guarantees all bank deposits up to $250,000 per depositor at each bank. Initially insured $2500 in 1933, then upped to $5000 in 1935 when it became a permanent agency. Gave people confidence in the banking system again after bank failures.

Securities and Exchange Commission Regulates the stock market. Sets standards and rules for trading. It can oversee stock brokers, traders, exchanges, and the companies that list on the exchanges.

III. Effects of the Depression A. The Dust Bowl, 1931 Farmers had cleared large area of the Great Plains for agriculture. Drought struck and prairie winds caused huge dust storms. Many farmers lost everything and left the plains.

Secretary of the Interior Ickes with Indian leaders from the Flathead reservation in Montana, 1935 III. Effects of the Depression B. Social Change 1. Women-new heights were reached. Eleanor Roosevelt became a very well known and outspoken first lady. 2. Black Americans-many were in New Deal agencies and gained power as advisors. 3. Native Americans-John Collier, head of Indian affairs, helped to restore tribal governments and enlarged reservations with the Indian Reorganization Act of 1934.

III. Effects of the Depression B. Social Change 4. Hispanics-many had come into the American Southwest to work as farmers. They suffered & many left the U.S. 5. Labor Movement-unions became very active NLRA-allowed workers to form unions, also known as the Wagner Act. FLSA-banned child labor and set minimum wage.

III. Effects of the Depression C. Opposition to the New Deal Big business, wealthy, and conservative Republicans condemned FDR's actions as socialist.

III. Effects of the Depression D. 1935-2nd New Deal WPA-Works Progress Administration- built more public works

III. Effects of the Depression D. 1935-2nd New Deal SSA-Social Security Act-created Social Security, a fund to pay retirement to workers.

III. Effects of the Depression E. Roosevelt’s Power Fades 1. Supreme Court ruled NRA and AAA unconstitutional. There were also cases pending against the TVA, NLRA, and Social Security. 2. "Court Packing"-FDR requested an increase in the Supreme Court from 9 justices to 15. He lost a lot of credibility in trying to do this. 3. Recession-1937-1938-U.S. experienced an economic slowdown as FDR cut spending.

The Great Depression