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

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

3. 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)

5. 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

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

7. 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.

8. President Hoover’s Response (1928-1932)
Between , 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

10. 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 in a landslide victory.

11. How severe was the Great Depression?
Banks and businesses failed – 5,000 banks closed between 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.

13. 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

14. 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

15. 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.

16. 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.