USH Notes GPS 17

The Great Depression Main causes: Overproduction Underconsumption Contributing factors that made the Great Depression worse The Stock Market Crash of 1929 Speculation led to plummeting stock prices Mass selling of stocks led to business and bank closures Made the depression worse and made recovery more difficult

The Great Depression (contd) Bank closures – people lost everything; no such thing as deposit insurance at the time Reluctance to invest in stock market after the crash Led to a continuous fall in stock prices, leading to business closures. Unemployment rate = 25% (1 of 4 workers were unemployed) Rampant homelessness Hoovervilles – villages of homemade shacks (named mockingly for Pres. Herbert Hoover, who was blamed for not doing enough to end the depression) Soup kitchens and breadlines became commonplace

OVERPRODUCTION AND UNDERCONSUMPTION (LOW DEMAND) EMPLOYEE LAYOFFS Causes: Effects: OVERPRODUCTION AND UNDERCONSUMPTION (LOW DEMAND) EMPLOYEE LAYOFFS LOW WAGES REDUCED CONSUMER BUYING POWER (CONSUMERS COULD NOT BUY AS MUCH) HAWLEY-SMOOT TARIFF (high tariffs on foreign goods) LESS FOREIGN DEMAND FOR AMERICAN GOODS UNEMPLOYMENT A FURTHER REDUCTION IN DEMAND FOR AMERICAN GOODS

The Dust Bowl An environmental situation that made the Great Depression even worse for many people Drought in the Plains combined with fallow fields led to huge dust storms Many people lost homes and farms and fled to other parts of the country Ex. Okies moving to California

The Dust Bowl

USH Notes GPS 18

The New Deal Pres. Franklin D. Roosevelt’s plan to end the Great Depression Government took a bigger role in helping Americans in times of desperation; people have expected this of the government ever since Believed in deficit spending to help Americans (the gov’t borrowed money to pay for programs) Started government programs to put Americans to work and to kick start the economy

First New Deal Plan Included: Civilian Conservation Corps (CCC) Tennessee Valley Authority (TVA) Agricultural Adjustment Act (AAA) Federal Deposit Insurance Corporation (FDIC) Public Works Administration (PWA) and Civil Works Administration (CWA) Securities and Exchange Commission (SEC)

Tennessee Valley Authority (TVA) Established in 1933 to build hydroelectric dams in parts of the rural South; meant to bring jobs and cheap electricity to the area Mainly to attract industry to the South Secondary impact would be environmental – dams would control flow of rivers and flooding

Second New Deal Included: Wagner Act/National Labor Relations Act Social Security Works Progress Administration (WPA)

Wagner Act Also called the National Labor Relations Act Signed July 1935 Guaranteed workers the right to organize unions without interference from employers and to bargain collectively. Set up the National Labor Relations Board (NLRB), which organized factory elections by secret ballot to determine whether workers wanted a union or not. Effect of the Wagner Act: Stimulated a burst of labor activity, including the formation of more labor organizations and more strikes.

Social Security Act Three programs Old age insurance for retirees over 65; ensured that retired people would have some income Unemployment compensation/wages Aid for the disabled and for impoverished families with children