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Explore the dangers signs, stock market crash, social effects, and the election of 1932 during the Great Depression. Learn about FDR's New Deal and its impact on the economy.
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Do Now:Vocabulary Quiz 1. NEW DEAL 2. DEMAGOGUE • DUST BOWL 4. WELFARE CAPITALISM 5. NATIONALIZATION 6. WAGNER ACT 7. REVENUE 8. HUNDRED DAYS 9. SOCIAL SECURITY 10. HOOVERVILLE • A leader who manipulates through scare tactics • A period of drought and storms • Period at the start of FDR’s presidency • Makeshift shelter for homeless • Conversion to gov’t ownership • Plan of relief, recovery and reform • Government income • Provides money for those who cannot support themselves • Law that helped unions by legalizing collective bargaining • Companies meet workers’ needs without Union prompting
DO NOW… What were 3 cultural changes that occurred during the Roaring 20’s?
THE GREATDEPRESSION Chapter Objectives: • Danger Signs • Stock Market Crash • Social Effects • Dust Bowl • Election of 1932 • New Deal
Economy Appears Healthy:Not all is as it appears! • Wonderful Prosperity: economy seemed healthy – stock market surged, higher wages, & unemployment low • Welfare Capitalism: raised wages, paid vacations, health insurance • Public had high confidence in business • Lots of investment in stock market
WARNING SIGNS • Uneven Prosperity: rich got richer • Buying on Credit: increase in personal debt • Speculation: making high-risk investments, hoping for a high gain • Buying on margin: Buying stock by borrowing on future gain • Too many goods: demand dropped at the end of the 1920’s
THE CRASH • Dow Jones Industrial Average: average of stock prices of major industries • Black Thursday: 1st drop in stock market; bankers were able to contain damage • Black Tuesday: stock market collapse – October 29, 1929 • Those who heavily invested in the stock market lost everything
Effects of the Crash • Ripple effect: produced economic chaos throughout the world for many years • Income and profits fell causing factories to close • Banks close: people rushed the banks to take out their money; many could not return their customers’ money • Global effects: when the US economy collapsed, it hurt the global economy
Causes of the Crash • Overspeculation: the stock market boom was based on borrowed money, not real value • Government policies: interest rate cuts to encourage growth and cuts in money supply to limit lending • Unstable economy: wealth unevenly distributed, more goods produced than sold, & farmers did not enjoy the economic boom
SOCIAL EFFECTS OF THEGREAT DEPRESSION • The number of jobless people rose dramatically • Many suffered from poor diet & medical care • “relief gardens” • Black unemployment soared. • Many hispanics & Asian-American were deported • Justice system ignored rights
Surviving the Depression • People pulled together to help each other. • Communist party & Socialists offered promises of fairer distribution of wealth • Humor helped people: - Hoover flag: turned out pocket - Hoover blanket: old newspaper • Prohibition repealed: 21st amendment • Construction of the Empire State Building
Election of 1932:Hoover’s Failure • Hoover’s attempts to fix depression failed. - Voluntary Action - Help the rich first – trickle down theory - Hawley-Smoot Tariff: highest import tax in history (1930) • Most blamed Hoover for allowing the Depression to continue
A New Deal for America:Franklin D. Roosevelt • Former governor of New York • Genuine compassion for ordinary people • Planned to use programs begun for relief in New York at the national level - unemployment commission - relief administration • Won the election of 1932 by 7 million votes
BANK HOLIDAY • FDR’s first step was to restore confidence in the nation’s banks. • Closed all banks for 4 days • Emergency Banking Act: allowed the government to assess the health of all banks • Assured Americans that the banks were safe • FDIC: insures deposits up to $5,000. ($100,000 today)
Second New Deal Wagner Act (1935): • Legalized union practices • Outlawed spying on unions & blacklisting • Set up the National Labor Relations Board Social Security System (1935): • Old age pensions & survivor’s benefits • Unemployment insurance • Aid for dependent children, blind, & disabled people
Critics of the New Deals LIMITS • Men & boys favored over women • Did nothing to end discrimination in the North • Limited success in ending poverty TOO MUCH • New Deal went too far • Programs like socialism • High taxes for rich
Court–Packing Scheme • Beginning in 1935, the Supreme Court began striking down New Deal programs • FDR developed a strategy for gaining Court support. • The Constitution did not limit the number of Justices on the Supreme Court • FDR proposed to increase the Court to 15 Justices that he would appoint to support his programs
Alphabet Soup Quiz SECURITIES & EXCHANGE A. COMMISSION (SEC) AGRICULTURAL ADJUSTMENT ACT (AAA) TENNESSEE VALLEY AYTHORITY 4. CIVILIAN CONSERVATION CORP (CCC) CIVIL WORKS ADMINISTRATION