1. The Stock Market Crash & The Great Depression

2. How It Appeared … On surface, economy appeared to be good
1928 & 1929 more people were buying
stocks than ever before
American economy was facing serious problems in the 20’s that most were not aware of.

3. “Sick Economy” Industries in trouble Farm Problems / in a Depression
- old industries not prosperous / being replaced
- textiles, coal, RR, steel
Farm Problems / in a Depression
- 25% of the U.S. economy
- struggling from decrease in WW I production
- surplus, low crop prices
Government
- limited regulations
- high tariffs
- income tax cut for rich

4. Leading to Depression Banks lacked regulation High Tariffs
Led to banks failing
High Tariffs
Hawley-Smoot Tariff Act
Lingering War Debt
Allies couldn’t pay back loans or reparations
Dust Bowl hurt farming
Availability of easy credit
Stock Market Crash

5. What is Stock ?
Stock prices reflects current information about the future income of that company
The more stocks purchased, helps the value of the stock to increase.
Dow Jones all time high
September 29, 1929

6. Causes of the SM Crash 1. Lack of Stock Knowledge
2. Over speculation of stocks (looked better on paper than actually were)
3. Margin Buying (Buying stocks with borrowed $$)
4. Federal Reserve rate changes

7. The Crash Tues. (10/29) - Black Tuesday
- new record of 16.4 million shares were traded
- the market suffered a loss of about 12 percent
The crash signaled the beginning of the Depression
to 1941 (ended with start of WW II)
- period when U.S. economy declined
Unemployment rose from 3% (’29) to 25% (’33)
- avg. wage in cents
- avg. wage in cents
- 13 million out of work

9. In the Cities People could not pay rent and were evicted
Built makeshift homes out of boxes and scraps
- Hoovervilles - shantytowns
( million lived in shanties )
Soup kitchens and breadlines for homeless

10. Breadlines
&
Soups Kitchens

11. In the Rural Areas Drought (Dust Bowl) on the Plains - 1931 to 1937
- businesses to close, schools to close
- forced to pack up/move (Okies)
- moved to CA ended up as migrant workers

12. Dust Bowl

15. Hoover’s Response At the start
- believed in the “do-nothing” philosophy
- advised to let things run its course (will get better)
Believed in limited government role
- against direct relief or federal welfare
- moved cautiously to aid in the depression
believed in “rugged individual” survival of fittest
- those who worked hard and tried would survive

16. FDR and the New Deal

17. FDR takes Office in 1933 depression was at a peak ¼ of the labor force
was out of work
cities were out of
money
local relief could
not be funded

18. Banking Crisis FDR declared a Bank Holiday (March 6)
> all banks would close
> stable banks would reopen
> assuring that the
open banks
could be trusted

19. Radio Fireside Chats First used to discuss banking crisis
Explained how the banks worked
Chats brought change in the countries mood
Later used to present the New Deal

20. First New Deal Program designed to help end the depression
FDR promised a plan within his 1st 100 days
Appeared to be a more practical approach to politics
More relief programs

21. Plan – the 3 “R’s” Relief – program to ease suffering
Recovery – to lay out foundation for
economic growth
Reform – programs to help prevent
future economic crises

22. Second New Deal Second phase of programs
Designed to remove the cause of the “disease”
Build on existing programs
Congress ask to provide
more relief for farmers &
workers

23. Critics for the New Deal
ND not enough
> take a greater role in aid
> more redistribution of income
> need to eliminate social &
economic inequality
> some believed gov’t
should take over banks
and some industries
> Too much deficit spending

24. Eleanor Roosevelt Social reformer Great political skills Humanitarian
Pushed for 2nd ND programs to help women and minorities
Eyes and legs for FDR

25. Affects on Women Discrimination in the work place continued
New Deal Programs
- some limited to men
- lower pay for women
Gained important gov’t positions
Greater #’s in work force
Frances Perkins
-First Female Cabinet Member
Secretary of Labor

26. Affects on Minorities Continued discrimination - 48% out of work
Discriminated against MX. migrant workers
FDR “rode the fence” on civil rights legislation
Did appoint over 100 African Americans as advisors
Mary McLeod Bethune
-advisor to the President

27. Legacy of the New Deal Extended power of the federal gov’t
- monitoring by government
Extended power of the President
Deficit Spending
- spending more than gov’t raises in taxes
- method to stimulate economy

28. Legacy of the New Deal Created Federal Social Programs
- welfare responsibility
- help in times of need
Greater Concern for workers
- labor relations act
- fair labor standards
Conservation gains
Renewed faith in Democracy