Great Depression, FDR, and the New Deal Notes US History II

REMEMBER WHAT THE 1920S WAS LIKE? CONSUMERS BUYING STUFF, PEOPLE DANCING, LISTENING TO MUSIC, WATCHING MOVIES…BUT IT WON’T LAST FOREVER.

A COLLAPSING ECONOMY The 1920s was a time of prosperity and a booming stock market Not everyone experienced this prosperity equally and it was developed on shaky credit and business practices Agriculture, coal mining, railroads, and clothing manufacturing was in decline But, while this was happening stock prices continued to climb Buying on the margin was popular (credit)

Black Tuesday The prices for industrial goods doubled from May 1928 to September 1929 October 29, 1929 “Black Tuesday” stock market crumbled completely This kicks off the 12 year “Great Depression” in the US and many parts of the world

The Great Depression: 1929-1940 Define: The Great Depression: the economic crisis beginning with the stock market crash in 1929 and continuing through the 1930s. Stock Market: a particular market where stocks and bonds are traded; stock exchange.

Causes of the Great Depression Over Production - business produced more than could be sold Installment Buying - people borrowed money they could not repay Over-speculation on stocks with borrowed money – buying stocks on-margin (credit) Federal Reserve System failed to prevent the collapse of US banks. Banks were speculating with peoples’ saving hoping to make money High tariffs choked off international trade The Great Depression affected the lives of all Americans.

President Hoover’s Response (1928-1932) Between 1929-1933, he unemployment rate skyrocketed from 3%-25% Nationwide, 13 million people were out of work Many families were pushed into poverty with no work or food On the outskirts of big cities people built communities of rundown shacks- known as Hoovervilles President Hoover blamed for failing to solve the crisis Hoover-Blankets: newspapers Hoover-Flags: empty pants pockets pulled inside out–demonstrating no coins in one’s pockets Hoover-Wagons: cars pulled by horses because gasoline was too expensive https://www.youtube.com/watch?v=ISniZI_H7mE

A New President Hoover thought business leaders and local governments should provide aid instead of the federal government Tried to encourage charities and businesses to employ the jobless and assist Because the American people didn’t think he was doing enough to help the country and he was becoming more unpopular, FDR won the 1932 in a landslide victory.

How severe was the Great Depression? Banks and businesses failed – 5,000 banks closed between 1929 and 1932 13-15 million people (or 1/4 of the U.S. population at the time) Hungry and homeless people were found in bread lines and soup kitchens. Farmers’ incomes fell to low levels.

What was The New Deal? The New Deal was the plan of Franklin Delano Roosevelt (FDR) to use dozens of new programs to help the nation recover from its economic crisis called “The Great Depression.” FDR wanted to offer help to Americans, rebuild the country, and make sure another great depression would not happen. His programs were divided into three areas: relief, recovery, and reform

Relief Programs Relief: These programs gave direct aid to the poor and unemployed: Civilian Conservation Corps (CCC) – hired single men (ages 18-25) to work in improving the environment (conserving natural resources), planting trees, building bridges, new parks. Works Progress Administration (WPA) – hired workers for federal work programs – building hospitals, schools, airports

Recovery Programs Recovery: These programs created jobs and helped businesses grow by restarting consumer demand. Agricultural Adjustment Act (AAA) – paid farmers to produce fewer crops to reduce the supply. It also made loans for farmers to buy their own land. National Recovery Administration (NRA) – enforced codes that regulated wages, prices, and working conditions.

Reform Programs Reform: These programs made lasting changes to our financial system to avoid another depression or future economic disasters. Social Security Act – set up a system of pensions for the elderly. Tennessee Valley Authority (TVA) – helped to improve the environment by building 40 dams and planting new forests. It also set up schools and health care centers.