The Great Depression Begins

1
The Great Depression Begins

• An economic crisis grips the nation during the
  Great Depression. President Herbert Hoovers
  conservative response to the nations problems
  costs him many supporters.

2
Causes of Depression

• Industries in Trouble
• Key industries like railroads, textiles, steel
  barely make profit
• Mining, lumbering expanded during war no longer
  in high demand
• Boom industriesautomobiles, construction,
  consumer goods now weak
• Housing starts decline

3
Causes of Depression

• 2. Farms Fail
• International demand for U.S. grain declines
  after war
• - prices drop by 40 or more
• Farmers boost production to sell more prices
  drop further
• Farm income declines farmers default on loans
  rural banks fail
• Price-supportsgovernment buys surplus crops,
  guarantees prices
• - Coolidge vetoes price-support bill

4
Causes of Depression

• 3. Living on Credit
• Many people buy goods on credit (buy now, pay
  later)
• Businesses give easy credit consumers pile up
  large debts
• Consumers have trouble paying off debt, cut back
  on spending
• 4. Uneven Distribution of Income
• In 1920s, rich get richer, poor get poorer
• 70 of families earn less than minimum for decent
  standard of living
• Most cannot afford flood of products factories
  produce

5
Causes of Depression

• 5. Dreams of Riches in the Stock Market
• Dow Jones Industrial Average tracks state of
  stock market
• 1920s, stock prices rise steadily people rush
  to buy stocks, bonds
• Many engage in speculation, buy on chance of a
  quick profit
• Buying on marginpay small percent of price,
  borrow rest

6
Causes of Depression

• 7. The Stock Market Crashes
• Black Tuesday
• September 1929 stock prices peak, then fall
  investors begin selling
• October 29 or Black Tuesday, market, nations
  confidence plummet
• Shareholders sell frantically millions of shares
  have no buyers
• People who bought on credit left with huge debts
• Others lose most of their savings

7
Causes of Depression

• Bank and Business Failures
• Great Depressioneconomy plummets, unemployment
  skyrockets
• - lasts from 19291940
• After crash, people panic, withdraw money from
  banks
• Banks that invested in stocks fail people lose
  their money
• 19291932, gross national product cut nearly in
  half
• - 90,000 businesses go bankrupt
• 1933, 25 of workers jobless those with jobs get
  cuts in hours, pay

8
Financial Collapse

• Worldwide Shock Waves
• Great Depression limits U.S. ability to import
  European goods
• Hawley-Smoot Tariff Act sets highest protective
  tariff ever in U.S.
• Other countries cannot earn American currency
  to buy U.S. goods
• International trade drops unemployment soars
  around world

9
Financial Collapse

• Causes of the Great Depression
• Factors leading to Great Depression
• - tariffs, war debts, farm problems, easy
  credit, income disparity
• Federal government keeps interest rates low,
  encourages borrowing

10
Hardship and Suffering During the
Depression
11
The Depression Devastates Peoples Lives

• The Depression in the Cities
• People lose jobs, are evicted from homes
• Shantytowns, settlements consisting of shacks,
  arise in cities
• People dig through garbage, beg
• Soup kitchens offer free or low-cost food
• Bread linespeople line up for food from
  charities, public agencies

12
The Dust Bowl
13
The Dust Bowl

• Farmers in Great Plains exhaust land through
  overproduction
• 1930s, drought, windstorms hit soil scattered
  for hundreds of miles
• Dust Bowl area from North Dakota to Texas that
  is hardest hit
• Many farm families migrate to Pacific Coast
  states dustbowl.pdf

14
Effects on the American Family

• Men in the Streets
• Many men used to working, supporting families
  have difficulty coping
• - cannot find jobs
• About 300,000 hoboes wander country on railroad
  box cars
• No federal system of direct reliefcash or food
  from government

15
Children Suffer Hardships

• Poor diets, health care lead to serious health
  problems in children
• Lack of tax revenue leads to shortened school
  year, school closings
• Teenagers leave home, ride trains in search of
  work, adventure

16
Hoover Struggles with the Depression

• President Hoovers conservative response to
  the Great Depression draws criticism from many
  Americans

17
Hoover Tries to Reassure the Nation

• Hoovers Philosophy
• President Herbert Hoover tells Americans economy
  is sound
• Many experts believe depressions a normal part of
  business cycle
• People should take care of own families, not
  depend on government
• Widespread criticism of Hoover shantytowns
  called Hoovervilles

18
Boulder Dam

• Hoovers Boulder Dam on Colorado River is massive
  project
• - later renamed Hoover Dam
• Provides electricity, flood control, water to
  states on river basin

19
Hoover Takes Action

• Direct Intervention
• Federal Home Loan Bank Act lowers mortgage
  rates
• Reconstruction Finance Corporationemergency
  funds for businesses
• Hoovers measures dont improve economy before
  presidential election

20
Gassing the Bonus Army

• Bonus Armyveterans go to D.C. in 1932 to support
  Patman Bill
• - want payment of bonus
• Hoover Disbands the Bonus Army
• Hoover fears violence, calls on U.S. Army to
  disband Bonus Army
• Infantry tear gas over 1,000 people, including
  children many injured
• Public is stunned, outraged by governments
  actions

21
Bonus Army in Washington
22
The New Deal

• President Franklin D. Roosevelts New Deal
  programs stimulate the economy and the arts. The
  New Deal leaves a lasting, yet controversial mark
  on American government.

23
Americans Get a New Deal

• Waiting for Roosevelt to Take Over
• With Brain Trust, FDR formulates policies to
  alleviate problems
• New Dealrelief for needy, economic recovery,
  financial reform

24
First 100 Days

• The Hundred Days
• FDR launches Hundred Days passes over 15 major
  New Deal laws
• Emergency Banking Relief Act permits Treasury
  Dept. to inspect banks
• - decides which are insolvent, sound, or need
  loans
• - public confidence in banks revived

25
Fireside Chats

• An Important Fireside Chat
• FDR gives fireside chatsradio talks explaining
  New Deal measures
• First chat discusses need for public support of
  government, banks

26
Promoting Fair Practices

• NIRA establishes codes of fair practice for
  industries
• - creates National Recovery Administration (NRA)
• NRA sets standards, prices, limits production
• Federal Emergency Relief Administrationdirect
  relief to needy

27
The New Deal Comes Under Attack

• Opposition to the New Deal
• Deficit spendingspending more money than
  government takes in
• - funds New Deal
• Liberals New Deal does not do enough to help
  poor, fix economy
• Conservatives New Deal used to control
  business, socialize economy

28
The New Deal Comes Under Attack

• The Supreme Court Reacts
• Supreme Court strikes down NIRA, AAA as
  unconstitutional
• FDR proposes Court-packing bill Congress,
  press protest
• Starting in 1937, justices retire FDR appoints
  seven new ones

29
Three Fiery Critics

• Some conservative opponents form American Liberty
  League
• Think measures violate respect for personal
  rights, property
• Father Charles Coughlin withdraws initial support
  of New Deal
• - wants guaranteed income, banks nationalized
• Dr. Francis Townsend devises pension plan for
  elderly
• Presidential hopeful, Senator Huey Long has
  popular social program

30
Helping the American People

• Rural Assistance
• Agricultural Adjustment Act (AAA) raises food
  prices, lowers supply
• Tennessee Valley Authority creates jobs
  renovating, building dams
• Providing Work Projects
• Civilian Conservation Corpspublic works jobs
  for young men
• Public Works Administrationmoney to states to
  create jobs
• Civil Works Administration builds rural
  schools, pays teachers

31
Roosevelt Extends Relief

• Programs for Urban Workers
• Works Progress Administration (WPA)creates
  jobs
• WPA workers build airports, roads, public
  buildings
• Women workers sew clothes for the needy
• WPA employs professional writers, artists,
  performers
• National Youth Administration (NYA)education,
  jobs, counseling
• Gives aid to students in exchange for part-time
  work

32
Improving Labor and Other Reforms

• The Social Security Act
• 1935, Social Security Act creates Social Security
  system provides
• - insurance for retirees 65 or older
• - unemployment compensation
• - aid to disabled, families with children
• Expanding and Regulating Utilities
• Rural Electrification Administration brings
  electricity to farms

33
African-American Activism

• African Americans Take Leadership Roles
• FDR appoints more than 100 African Americans to
  government
• - Mrs. Roosevelt plays key role
• Educator Mary McLeod Bethune heads Division of
  Negro Affairs of NYA
• Helps organize Black Cabinet of
  African-American advisers

34
New Deal Reforms Endure

• The New Deal Ends
• Congress wants to cut back programs by 1939, New
  Deal over
• New Deal does not end Depression does reduce
  suffering, give hope
• Federal government goes deeply into debt to
  create jobs, give aid
• Massive spending on equipment, supplies for WW
  II end Depression

35
New Deal Reforms Endure

• Social Security
• Federal government takes responsibility for
  citizens welfare
• Provides for aged, disabled, needy
• Federal Deposit Insurance Corporation (FDIC)
  regulates banking
• Securities and Exchange Commission (SEC)
  regulates investment
• National Labor Relations Board (NLRB) still
  mediates labor disputes

36
End of Notes

• Next Stop
• The Road to War