1. The Great Depression

2. Herbert Hoover Wealthy mining engineer
Published American Individualism
Condemned govt regulation of business
Self-interest should be subordinated to public service
People should take care of themselves and not depend on govt. handouts
Believed private agencies should direct regulation and welfare policies, NOT the govt.
Elected Republican president in 1928, served

3. 1928 Election Speech
“The greatness of America has grown out of a political and social system and a method of [a lack of governmental] control of economic forces distinctly its own…”
“The departure from our American system… will jeopardize the very liberty and freedom of our people, and will destroy equality of opportunity not only to ourselves, but to our children.”

4. Causes of the Great Depression
#1. Black Tuesday (10/29/29)  stock market crashed. Panic selling  more than $10 billion in market value vanished in 5 hours (equivalent to over $100 billion today).

5. Causes of the Great Depression
#2. Bank Failures  over 5,000 banks shut down  people lost life savings. Surviving banks stopped loaning people money.

6. Causes of the Great Depression
#3. Reduction in Spending  people stopped buying products  reduction in production  more job layoffs  people spend even less and still fall into debt

7. Causes of the Great Depression
#4. American Economic Policy with Europe  1930 tariff to protect American businesses  European countries did the same to US  less international trade

8. Causes of the Great Depression
#5. Drought  Dust Bowl in Midwest  farmers could not pay taxes or debts  lost their farms  moved around looking for work (John Steinbeck’s Grapes of Wrath)

9. Dust Bowl

10. 1929-1932 1932 – economy hit rock bottom Between 1929 and 1932:
GDP (value of all goods and services in US) fell by 33%
Prices fell by 40%
More than 11 million Americans (25% of labor force) could not find work
Global impact –
Germany defaulted on reparations payments to France and Britain
France and Britain stopped paying debts to American banks
Banks failed all over the world
US was hardest hit

12. Thousands of families were evicted from their homes and were forced to move into shantytowns, nicknamed “Hoovervilles”

13. Reflections from the 1920s
Legacy of pro-business prosperity: image of successful big business collapsed as congressional investigations revealed massive irregularities and fraud among bankers and stockbrokers
Legacy of intolerance: unions, socialist organizations, and other groups that might have provided organized protests to these conditions had been wiped out during the 1920s

14. Hoover’s Response
Businessmen strongly opposed federal aid to the unemployed, said economic downturns were a normal part of capitalism
1931 President Hoover: “Government should not support the people… Federal aid… weakens the sturdiness of our national character.”

15. Importance of Mass Consumption in a Mass Production Society
Hoover passed an import tariff in 1930 that only made matters worse, as other nations did the same and international trade declined even further.
Few political leaders understood how important consumer spending had become to the American economy. Even Henry Ford felt that unemployment during the Great Depression was primarily the fault of poor people and he did not believe in charity.

16. Hoover’s Response: Too Little, Too Late
1932 – Hoover finally took action:
Created the Reconstruction Finance Corporation - Loaned money to failing banks, railroads, and other businesses
Created the Federal Home Loan Bank System – offered aid to homeowners threatened with foreclosure
Set aside nearly $2 billion to create employment through public-works projects and help fund local relief efforts
Still opposed offering direct relief to the unemployed
Refused to support unemployed WWI veterans

17. Freedom’s Changing Definition
1920s – Freedom = promoted unrestricted economic activity (yay big business!) but allowed restrictions in private life and individual conscience (boo alcohol, communism, immigrant rights, etc.)
1930s – Freedom = govt. should make constructive changes in the economy to promote social welfare, and should respect civil liberties and cultural pluralism

18. Franklin Delano Roosevelt
Democrat Franklin Delano Roosevelt led the nation through the Great Depression.
His signature domestic legislation, the New Deal, expanded the role of the federal government in the nation’s economy in an effort to address the challenges of the Great Depression.
He was elected to the presidency four times, serving from March 1933 until his death in office in April 1945.

19. The New Deal
A set of domestic policies enacted under President FDR that dramatically expanded the federal government’s role in the economy in response to the Great Depression.
First New Deal ( ) with the “alphabet soup” of relief, recovery, and reform agencies it created
Second New Deal ( ) offered further legislative reforms and created the groundwork for today’s modern social welfare system
It was the massive military expenditures of World War II, not the New Deal, that eventually pulled the United States out of the Great Depression.

20. Crash Course Videos
The Great Depression:
The New Deal: