The Great Depression & The New Deal

1. The Great Depression & The New Deal

2. Cultural Figures of the 1930s Writers ____________________ Radio Stars ____________________ Movie Stars ____________________ Painters ____________________ Writers

3. “What Would You Do?” It is 1929 and the U.S. economy has collapsed. Farms, businesses, and banks nationwide are failing, causing massive unemployment and poverty. You are out of work with little prospect of finding a job. • What would you do to feed your family? • What can you do to find a paying job? • What can unemployed and impoverished people do to help each other?

4. Complete the chart, describing the hardships faced during the Great Depression NEXT SLIDE

5. Why did the coal mining industry suffer?

6. Why did the coal mining industry suffer? New sources of energy were used, including hydroelectric power, fuel oil, and natural gas

7. Why did the farming industry grow weak?

8. Why did the farming industry grow weak? • End of the war led to less demand for crops • Farmers had taken out loans during the war; when demand fell and crop prices fell, farmers went in debt • Farms were lost, and they defaulted on their loan

9. Why did more Americans start living on credit?

10. Why did more Americans start living on credit? • People were buying less due to high prices, stagnant wages, an uneven distribution of income, and overbuying on credit • People lived on credit so they could have new items. • When you purchased items on credit, you would have to pay interest charges • People went into debt.

11. Why did the uneven distribution of income affect producers of goods?

12. Why did the uneven distribution of income affect producers of goods? Many people could not afford expensive goods, such as refrigerators, and other new appliances.

13. What is meant by a “bull market”?

14. What is meant by a “bull market”? A period of rising stock prices. Americans were rushing to buy stocks during a “bull market”.

15. Explain what is meant by buying stocks on “speculation” and “buying on margin”.

16. Explain what is meant by buying stocks on “speculation” and “buying on margin”. Speculation: Buying a stock/bond on the hopes of a quick return (profit) on your investment Buying on Margin: paying only a small percentage of what the stock is worth, or only putting a down payment on the stock & borrowing the rest • Very little regulation of the stock market existed & the government did not interfere.

17. What did shareowners do with their stocks in September/October of 1929?

18. What did shareowners do with their stocks in September/October of 1929? They sold them as quickly as they could because they suspected the stock market would crash.

19. What was Black Tuesday?

20. What was Black Tuesday? • The day (October 29, 1929) the stock market crashed. • 16.4 million shares were dropped that day, & many could not find buyers. • People who had bought stocks were either left in debt or their savings were gone. • Within a few weeks, $30 billion was lost buy investors.

21. Why did banks fail after the stock market crash?

22. Why did banks fail after the stock market crash? Many banks failed because they had no money… they had used people’s money to invest in the stock market as well! At this time, the government had not started to protect & insure the money in the banks.

23. Why did the Great Depression impact Europe as well?

24. Why did the Great Depression impact Europe as well? • Europe was still trying to recover from the war. • Many nations were trying to pay off war debts & Germany was paying reparations. • America limited imports to protect its economy (Hawley-Smoot Tariff). • In return, other nations did not buy our products .

27. What did Hoover believe was the government’s chief function during the Depression?

28. What did Hoover believe was the government’s chief function during the Depression? • To foster cooperation between conflicting groups and interests • The government should step in to solve problems, but not force cooperation.

29. Why did Hoover oppose federal welfare?

30. Why did Hoover oppose federal welfare? • He believed hand-outs would weaken people’s self-respect & “moral fiber”. • He believed America was based on “individualism” and it was not the job of the government to take care of individuals and their families. • Individuals (people, charities, local organizations) should pitch in to help, not the government.

31. Name three ways Americans protested Hoover’s efforts to get the nation out of the Depression?

32. Name three ways Americans protested Hoover’s efforts to get the nation out of the Depression? • The Republicans (Hoover’s party) were voted out of Congress in the 1930 elections. • Farmers burned and dumped their crops rather than sell them at a loss. • Farmers blocked roads to prevent food from getting to market. • Shantytowns were called “Hoovervilles”; Newspapers were called “Hoover blankets”; Empty pockets (inside out) were called “Hoover flags”.

33. What were some of the projects Hoover proposed to get the nation out of the Depression? How effective were they?

34. What were some of the projects Hoover proposed to get the nation out of the Depression? How effective were they? • Boulder Dam- successful in getting power and water to California; aided in agricultural production • Federal Home Loan Bank Act- lowered mortgage rates & allowed farmers to refinance their loans • Reconstruction Finance Corporation- offered financing to businesses, believing this would help average people; this was unsuccessful and was seen a “too little, too late”

35. What did Hoover ultimately do about the Bonus Army?

36. What did Hoover ultimately do about the Bonus Army? • Tear gassed, troops moved in with bayonets, fires were started, people were shot. • People were stunned at the government’s response to these veterans.

37. Franklin Roosevelt’s New DealIdentify the following important aspects of the New Deal • New Deal • Fireside Chats • Glass-Steagall Act (especially the FDIC) • Federal Securities Act • Agricultural Adjustment Act (AAA) • Civilian Conservation Corps (CCC) • Works Progress Administration (WPA) • Social Security Act

38. New Deal

39. New Deal • Roosevelt’s program for getting the nation out of the Great Depression • He wanted to give the American people a “New Deal” • Three goals: • Relief for the needy • Economic Recovery • Financial Reform

40. Fireside Chats

41. Fireside Chats • Roosevelt gave “fireside chats” to keep the nation informed on issues of public concern. • He gave these national addresses of the radio & Americans felt he was speaking directly to them!

42. Glass-Steagall Act (FDIC)

43. Glass-Steagall Act (especially the FDIC) • Glass-Steagall Act established the FDIC. • The FDIC (Federal Deposit Insurance Corporation) provided government insurance for individual bank accounts up to 5,000. • This made people feel their money was safe. • Banks also had to act cautiously with their customer’s money.

44. Federal Securities Act

45. Federal Securities Act • This law provided regulation of the stock market. • Corporations are required to provide complete information regarding their stock offerings.

46. Agricultural Adjustment Act

47. Agricultural Adjustment Act (AAA) • The government regulated the amount of crops produced. • By doing this, crop prices rose because production was lowered. • The government paid farmers NOT to cultivate all of their land. • This did help farmers have more money because prices increased. • This law was found unconstitutional by the Supreme Court (they stated that agriculture was a local matter, not a federal matter).

49. Civilian Conservation Corps

50. Civilian Conservation Corps (CCC) • A work relief program that put young men (18-25) to work building roads, developing parks, planting trees, and helping in soil erosion and flood control • They helped plant trees in the Great Plains to prevent another Dust Bowl. • Workers were paid in cash; they ate and lived for free.