Great Depression Aim: What caused the Great Depression? Do Now: Explain buying stocks on speculation. DESPAIR OF GREAT DEPRESSION

President Hoover 1928 Economic boom of the 1920s Speculation – buying/selling stock for quick profit Buying on margin – pay for small part of stock and borrow money to pay for the rest

Stock Market Crash 1929 Stock prices dropping in Sept. Thousands sell their stock Prices drop lower Black Tuesday, Oct. 29 – millions of shares sold Prices plummet Economic depression

Stock Market Crash 1929 People couldn’t repay loans (bought on margin) Bank run – people rush to bank to withdraw $ Banks don’t keep all money on hand Thousands of banks close Businesses go bankrupt Workers fired – high unemployment

Great Depression Severe economic downturn – 1929-1940s Unemployment – 25% in 1933 Banks and businesses close World depression

Hoover Stays out of business affairs Thought economy would work itself out Bonus Army – thousands of veterans march on White House to get bonus from fighting WWI Army removes veterans

“Hoovervilles” Poor areas where people lived in shacks

Great Depression Aim: How did F.D.R.’s New Deal try to help Americans? Do Now: What caused the Great Depression? DESPAIR OF GREAT DEPRESSION

Great Depression Aim: Was the New Deal more positive or more negative? Do Now: How did FDR try to help Americans? DESPAIR OF GREAT DEPRESSION

Franklin Delano Roosevelt 1932 “Only thing we have to fear is fear itself” Boost public confidence Bank holiday – shutdown of banks for 4 days Fireside chats – radio talks made by FDR Tell Americans to put money in banks

Alphabet Soup Programs FERA (Federal Emergency Relief Administration) PWA (Public Works Admin.) AAA (Agricultural Adjustment Admin.) TVA (Tennessee Valley Authority) CCC (Civilian Conservation Corps) FDIC (Federal Deposit Insurance Corporation) NRA (National Recovery Admin.) WPA (Works Progress Admin.) SEC (Securities and Exchange Commission)

The First 100 Days New Deal – policy to fight the depression through gov’t programs Congress passes most laws with little debate Three major goals Relief for the hungry and jobless Recovery for agriculture and industry Reforms to change the way the economy worked

National Recovery Act (NRA) Purpose: recovery of industry Created a partnership of business, labor, and government to attack the depression with such measures as price controls, high wages, and codes of fair competition

Agricultural Adjustment Act (AAA) Purpose: the recovery of agriculture Paid farmers who agreed to reduce production of basic crops Soil conservation

Federal Emergency Relief Admin (FERA) Purpose: relief Gave money to states so they could distribute money, clothing, and food to the unemployed

Civilian Conservation Corp (CCC) Purpose: relief Gave outdoor work to unemployed men They received $30 per month, but $22 went back to the family

Wall Street Need to prevent another crash from happening again Make sure loans are given to people who can pay it back No buying stocks on speculation or margin SEC (Securities and Exchange Commission) – set up to monitor activities on Wall Street

Social Security 1935 Workers and employers made payment into a special fund Elderly would draw from that fund when they retired

Court Packing Supreme Court – Judicial review – can rule laws of Congress unconstitutional Threatens New Deal FDR tries to add 6 judges who agreed with him So majority would vote in his favor Law doesn’t pass Hurt FDR’s image

Effects of the Depression Fear of losing $ and property again Made $ the most important thing New Deal didn’t end the Depression Did help Restored people’s confidence World War II would end it

Big Government Strengthen power of presidency Gov’t responsible for people’s well-being Rely on federal gov’t New Deal causes American debt

New Deal: Good or Bad Good Bad Government has a duty to help all citizens Government should not interfere in business and in people’s private lives New Deal helped the country through the worst days of the Depression New Deal led in increases in the national debt At a time when Europe turned to dictators to solve the Depression, the New Deal saved the nation’s democratic system The New Deal did not end the Great Depression

Debate Liberal – favor gov’t action to bring about reform Conservative – favor fewer gov’t controls and freedom in economic matters Because of New Deal – government is more involved in society than ever

Homework Paragraph Should the government play an active role in helping those who are in need? Be specific.

Dust Bowl Drought in the Great Plains Result from poor farming tactics Dry soil and dust picked up by storms Dust storms turned day into night

Topics for Test Roaring ’20s Great Depression Harding, Coolidge, and Hoover – laissez faire Assembly line and installment buying Great Depression Causes FDR New Deal programs Effects of Depression