The Great Depression 1929-1941

1920’s Problems BANKS Have NO $$ PEOPLE LOST SAVINGS & JOBS Factories making Too Much, Farms growing too much BANKS Have NO $$ PEOPLE LOST SAVINGS & JOBS NO ONE TO HELP! Factories Fire Workers (Don’t need them) Farm Prices fall (Farmers can’t make $$) Banks Close because they have no money: Loans have not been paid back, can’t give people their savings Farmers & Factory Workers can’t pay back loans to Banks: DEFAULT!!

OBJ #1- Cause & Sparks of Depression QUICK REVIEW: Causes: 1. Overproduction 2. Bank Closings Spark: 1. Stock Market Crash Results: 1. Unemployment 2. Life Savings Lost TOO MUCH STUFF! BLACK TUESDAY

a. Banks close and loose $$$ OBJ #1 - Describe the CAUSES and SPARK of the Great Depression. How did Overproduction affect both farmers and industry? What system collapsed and caused millions to lose their savings? Explain how buying on Margin created the Spark. How did people lose money because of the spark? I. OBJ #1- Cause & Spark of the Depression A. Causes of the Depression 1. Overproduction, too much stuff (Factories and Farms) a. Factory Workers begin to get layed-off - Workers cannot buy goods, even more goods are overproduced b. Farmers Can’t Survive -low prices (can’t pay loans / make a living) c. Supply & Demand- Prices Drop 2. Bank Failures a. Banks close and loose $$$ b. People default on loans (Can’t pay Back) c. Banks cannot cover their deposits, because it was lent out to bad creditors **5,000 banks close between 1929-1932** d. People loose entire LIFE SAVINGS

Causes 1) Overproduction Agriculture and Industry Federal Reserve Policy Low interest rates Encourages borrowing 2) Easy Credit Availability of loans to more people

Causes (2) 3) Speculation Buying, hoping the price will rise Land Stock Market 4) Margin buying Paying part of the stock price (10%) Getting a loan to pay the rest (90%)

Causes (3) 5) Stock Market Crash October 29, 1929 Black Tuesday 6) Bank Failures Loss of Savings 7) Smoot-Hawley Tariff Raised tariffs “Shut down” world trade

OBJ #2 -Describe how the Great Depression affected people OBJ #2 -Describe how the Great Depression affected people. Who was the president when it started, and what did he do to help? Who tried to help the poor and what problems did they have? How did people try to escape the Great Depression? II. OBJ. #2 – Affects of the Depression A. Jobless / Homeless 1. 1930-1932 – Jobless goes from 4 to 12 million 2. Houses are lost, people become homeless 3. People are Desperate!!!! B. Hatred for President Hoover 1. Say’s it is NOT Government’s job to fix the Poor a. Say Churches and other groups should help b. PROBLEM: People too poor to help churches so churches can’t help as much!!! 2. People name Poor Places after Hoover a.*Hooverville- Shanty towns / Hoovermobile- cars pulled by mules b. HOBOS- look for jobs*Hooverblankets- newspapers used as traveling the rails blankets by homeless

OBJ #2- Affects of the Great Depression 3. Bonus Army a. WWI veterans who were promised a $ bonus in 1945, * Veterans want it NOW (1932) b. Veterans go to Washington and “camp out” c. Hoover sends in Army (Eisenhower, MacArthur), used tear gas, machine guns, and burned the camp down

Bonus Expeditionary Force World War I veterans Had been promised a $1,000 bonus Payable in 1945 Needed it now (1932) 17,000+ marched on Washington, D.C. Congress denies early bonus

Evicted, July 1932

Hoover’s Response “Invisible Hand” Theory The Economy will correct itself Government intervention only hurts Rugged Individualism People are responsible for taking care of themselves Most won’t want help

Hoover’s Response (2) Economy continues to decline Reconstruction Finance Corporation Government Loans to Banks, Industry, etc. “Prime the Pump” Not enough Public Works Projects Construction projects

Election of 1932 Republicans Herbert Hoover Negative Image Bonus Army, Hoovervilles Democrats Franklin D. Roosevelt Pledged a “New Deal” for America

Life in the Great Depression

Affects on People By 1931, most everyone affected Stock Market Investments worthless Bank failures Savings wiped out Business Failures Jobs Cut

Unemployment High of 25% 12,000,000+ Hoovervilles Homeless Camps

Farm Crisis Dust Bowl 1932-36 Drought Midwest Texas-North Dakota “Okies,” “Arkies”

OBJ #3 - Describe the natural disaster that affected the U. S OBJ #3 - Describe the natural disaster that affected the U.S. during the Great Depression. What was the disaster’s nick-name? What caused the disaster? Where did the people go to try and escape their troubles and how were they treated (nick-names for these people)? III. OBJ. #3- Natural Disaster “The DUST BOWL” A. Great Plains suffers a huge Drought (1931) 1. Causes: a. Drought . . .no rain b. New technology, tractors and steel plows tear-up extra sod that was holding onto soil, drought turns open soil into sand box 2. Huge Dust storms cover ‘Great Plains B. Results 1. Can’t pay banks- Banks take Farms 2. Many Great Plains farmers move to California, a. Try to get jobs on large farms b. Treated poorly in Calif. - *‘Oakies’ & ‘Arkies’-Not wanted in West

Rugged Individualism Men looked to themselves Caused mental depressions Not good enough to hold a job Not good enough to find a job

Documentation John Steinbeck The Grapes of Wrath Dorthea Lange Photography

OBJ #2- Affects of the Great Depression Wizard C. Escaping the Depression 1. Radio- Comedies, Soap Operas 2. Movies- Shirley Temple, Child Actors a. Snow White (first full-length animation) b. Wizard of OZ *Small girl escaping the Dust Bowl 3. Literature a. Steinbeck, Grapes of Wrath *About a family of ‘Okies’ escaping the Dust Bowl and how horribly they were treated of OZ

Great Depression: FDR & the New Deal(s)

Reasons for Ineffectiveness Hoover thought business should be self-regulating. Lassize-Faire He had a mania for a balanced budget. He lacked political finesse.

First Hundred Days March 9 – June 16, 1933 Congress passed more than 15 major pieces of New Deal legislation Significantly expanded the federal government’s role in the nation’s economy

Fireside chats – radio talks about issues of public concern; explained New Deal; Americans felt like FDR was speaking directly to them

FDR Restored Confidence In his inaugural address, he said “The only thing we have to fear is fear itself….” He promised vigorous leadership and bold action, called for discipline and cooperation, expressed his faith in democracy, and asked for divine protection and guidance.

FDR’s Personal Qualities He was a practical politician who practiced the art of the possible. He was a charismatic person who exhibited a warmth and understanding of people. He knew how to handle press by focusing attention on Washington. He provided dynamic leadership in a time of crisis. He was willing to experiment

Purposes of the New Deal Relief: to provide jobs for the unemployed and to protect farmers from foreclosure Recovery: to get the economy back into high gear, “priming the pump” Reform: To regulate banks, to abolish child labor, and to conserve farm lands Overall objective: to save capitalism= 3 R’s

Sources of New Deal Ideas Brains Trust: specialists and experts, mostly college professors, idea men New Economists: government spending, deficit spending and public works, government should prime economic pump Roosevelt Cabinet: included conservatives, liberals, Democrats, Republicans, inflationists, anti-inflationists -- often conflicting, compromising, blending ideas

First New Deal (1933-1934) Emphasis: reform Political Position: conservative Primary aim: economic recovery Philosophy: economic nationalism and economic scarcity (i.e., raise prices by creating the illusion of scarcity) Objectives: higher prices for agriculture and business Beneficiaries: big business and agricultural business

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

First Agricultural Adjustment Act (AAA) Purpose: the recovery of agriculture Paid farmers who agreed to reduce production of basic crops such as cotton, wheat, tobacco, hogs, and corn

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

Civilian Conservation Corp (CCC) Purpose: relief Gave outdoor work to unemployed men between the ages of 17 and 29 They received $30 per month, but $22 went back to the family

Second New Deal (1934-1941) Emphasis: reform Political Position: liberal Primary aim: permanent reform Philosophy: international economic cooperation and economic abundance Objectives: increased purchasing power and social security for public Beneficiaries: small farmers and labor

Social Security Act Purpose: reform Gave money to states for aid to dependent children, established unemployment insurance through payroll deduction, set up old-age pensions for retirees.

National Labor Relations Act Purpose: reform Put restraints on employers and set up a National Labor Relations Board to protect the rights of organized labor to bargain collectively with employers.

Second Agricultural Adjustment Act Purpose: recovery for agriculture Paid farmers for conservation practices, but only if they restricted production of staple crops.

U.S. Housing Authority Purpose: recovery and reform Used federal funds to tear down slums and construct better housing.

The New Deal on Trial NEW DEAL By 1935, political disunity was evident. There were critics on the right and the left. NEW DEAL

Criticisms of Conservative Opponents Conservative opponents said the New Deal went too far: It was socialism (killed individualism) It added to the national debt ($35 billion) It wasted money on relief and encouraged idleness It violated the constitution & states rights It increased the power of the Presidency (FDR was reaching toward dictatorship, Congress a rubber stamp, independence of judiciary threatened, separation of powers shattered)

The Roosevelt Coalition While Republicans were still relying on their traditional base of political support (big business, big farmers, and conservatives), Democrats broadened their constituency by appealing to small farmers in the Midwest, urban political bosses, ethnic blue collar workers, Jews, intellectuals, and African Americans.

Protection of New Deal Accomplishments Steps FDR took to protect New Deal accomplishments (both failed): Court-Packing Plan (proposed increasing Supreme Court from 9 to 15 members, caused in revolt in Dem. Party) Election of 1938 evidence that FDR interfered in a state campaign upset voters Republicans gained strength in both houses of Congress

Government Expenditures The total cost of the current bailout now exceeds $4.6 trillion dollars. It has cost more than all of these government expenditures combined. Figures in parentheses have been adjusted for inflation: Marshall Plan: Cost: $12.7 billion ($115.3 billion) Louisiana Purchase: Cost: $15 million ($217 billion) Race to the Moon: Cost: $36.4 billion ($237 billion) S&L Crisis: Cost: $153 billion ($256 billion) Korean War: Cost: $54 billion ($454 billion) The New Deal: Cost: $32 billion est.($500 billion est.) Invasion of Iraq: Cost: $551billion ($597 billion) Vietnam War: Cost: $111 billion ($698 billion) NASA: Cost: $416.7 billion ($851.2 billion) TOTAL: $3.92 trillion

How does the Great Depression end How does the Great Depression end? Does the bombing of Pearl Harbor by the Japanese pull America from economic crisis? Yes? No? It is still debated today! Pearl Harbor October, 1941