The Great Depression

In the late 20s there were signs of impending problems, but most people didn’t notice them.

Prosperity was uneven, and too many people were buying on credit.

Stock market speculation and buying on the margin made the market shaky.

Too many goods were being produced too rapidly.

Farmers were suffering from plummeting post-war prices. They couldn’t pay their debts so rural banks failed.

Most workers were still working long hours for low wages By the end of the 20’s most could not afford to buy the goods they helped produce

Only about 3.5% of Americans owned stock, but the impact was felt throughout America’s economy.

Factories began to close leaving millions out of work.

Thousands of banks failed taking the savings of hundreds of thousands with them.

American investments in Germany were allowing that country to pay reparations to France and England, who in turn used the money to pay war debts to America.

When those investments dried up the chain ended up ending loan payments and in loss of European markets for our goods.

The Dust Bowl was a region in the Great Plains where drought and dust storms took place for much of the 30s.

More than 440,000 people left Oklahoma in the 1930s. People in California called them “Okies” They were NOT welcome!

California, the “land of milk and honey” was their destination.

Most arrived penniless seeking jobs long ago filled.

In 1932 Franklin Delano Roosevelt was elected president with a promise of a “New Deal” for the American people.

In radio talks called “fireside chats” he told the people “the only thing we have to fear is fear itself”.

One of his first acts was to close all of the banks in the country for four days. After this “bank holiday” only those that were solvent were allowed to reopen.

In his first 100 days vast legislation was passed to bring relief to people in need, to create jobs, and to stimulate the economy.

Some of the legislation passed during Roosevelt’s time are still with us, like Social Security, Federal Deposit Insurance,

the Securities and Exchange Commission, and the Tennessee Valley Authority.

Social Security guaranteed a minimum income to elderly or handicapped people.

Federal Deposit Insurance guaranteed you would not loose your money if your bank folded.

The Securities and Exchange Commission oversees the stock market and made it illegal to buy stock with borrowed money.

The Tennessee Valley Authority was one of the most controversial New Deal programs. The government built and operates a series of dams and power plants bringing electricity to a large area that had been without it.

Although popular with many people, FDR had detractors as well. The American Liberty League, led by the DuPont family, strongly opposed his policies. The Liberty League Republican Party & the Constitution 1933

Huey P. Long, governor of Louisiana and Father Coughlin, a radio priest, were very vocal in their disagreement with the New Deal.

It was obvious that something had to be done about the economy but not everyone agreed just what that was.

The jobless rate in some cities ran as high as 80% with hundreds of people turning out to apply for the few jobs available. Nationally Unemployment was 25% (today it is 9%)

The Great Depression did not end because of the New Deal or anything done by the government in this country. The end of the depression came with the beginning of war in Europe.