THE GREAT DEPRESSION

1
THE GREAT DEPRESSION
2
BULL MARKET

• The Roaring 20s saw the stock market go up
• Bear Market- stock market goes down
• Speculation- trying to turn a quick profit
• Margin Buying- Purchasing stocks with borrowed
  money

3
STOCK MARKET CRASH

• Oct. 24, 1929- Black Thursday
• Oct. 29, 1929- Black Tuesday
• Investors begin selling stocks, causes prices to
  plunge
• Officials say it is only minor setback
• Average income is cut in half

4
RESULTS OF CRASH

• Factories close
• Workers lose jobs
• People cannot repay loans
• Run on banks lead to their collapse
• Overall economy is in decline

5
CAUSES OF DEPRESSION

• World economy in depression
• Easy credit- leads to debt
• Farmers and others in trouble
• Smoot-Hawley Tariff of 1930
• Business Cycle

6
EFFECTS

• Unemployment rises
• Breadlines
• Shantytowns- Hoovervilles
• Farm Crisis- Foreclosures

7
POPULAR CULTURE

• Movies with sound
• Upbeat musicals- Gold Diggers of 1933
• Comedy- Marx Brothers
• Disney cartoons- Mickey Mouse and Donald Duck

8

• Radio- Lone Ranger, Little Orphan Annie, and the
  Shadow
• Comic Books- Superman and Tarzan
• Readers Digest
• William Faulkner- The Sound and the Fury

9
HOOVERS RESPONSE

• Rugged Individualism- success through individual
  effort and private enterprise
• Private charities and local communities should
  assist, not federal government
• Public Works- Hoover Dam
• Agricultural Marketing Act of 1929- creates
  Federal Farm Board

10

• Federal Farm Board- buy up surplus wheat, corn,
  cotton, etc. , government could store and sell at
  later time
• Home Loan Bank Act- money for savings banks,
  building and loan associations, and insurance
  companies to allow low-interest mortgages

11

• 1932- Reconstruction Finance Corporation
• Lent money to railroads, insurance companies, and
  banks
• Begins shift to government involvement in economy

12
PROTESTS

• Hoover becomes unpopular
• Communists and Socialists parties grow
• Protests become violent (Ford Auto Plant)

13
BONUS ARMY

• May 1932- World War I veterans stage protest in
  Washington, D.C.
• Demanded early payment of pensions
• After Congress rejects idea, some protesters stay
  
• Hoover orders army to disperse veterans

14

• General Douglas MacArthur commands
• Hundreds injured and three killed
• Anger at Hoover grows

15
ELECTION OF 1932

• Rep.- Herbert Hoover
• Dem.- Franklin Roosevelt
• Roosevelt calls for major policy changes
• Wants more government involvement- the New Deal
• Roosevelt wins and Democrats strengthen
  majorities in Congress

16
THE NEW DEAL
17
ROOSEVELT ADMINISTRATION

• Brain Trust- group of advisers
• First 100 days- 15 relief and recovery measures
• Bank holiday- closed every bank until determined
  solvent
• Emergency Banking Act- government will examine
  all banks and then only financially sound can
  reopen

18
FIRESIDE CHATS

• Roosevelt goes on radio from the White House
• Explains bank holiday
• Would continue from time to time

19
NEW DEAL PROGRAMS

• Federal Deposit Insurance Corporation (FDIC)-
  insures bank deposits up to 2500
• Farm Credit Administration (FCA)- provides
  low-interest, long-term loans to farmers
• Home Owners Loan Corporation (HOLC)-
  low-interest, long-term mortgage loans

20
DIRECT RELIEF

• Relief for unemployed- reformers have pushed for
  since Progressive Era
• Sec. of Labor- Frances Perkins
• May, 1933- Federal Emergency Relief
  Administration (FERA)
• Headed by Harry Hopkins
• Americans resent- want jobs, not handouts

21

• Civil Works Administration (CWA)- organized to
  create jobs such as raking leaves and picking up
  litter
• Civilian Conservation Corps (CCC)- employed young
  men to plant trees, clear brush, develop
  campgrounds
• Money was then sent home to help families

22
RECOVERY PROGRAMS

• FDRs short-term remedy was relief, long-term
  remedy was recovery
• Many New Deal programs based on theories of
  economist John Maynard Keynes
• Keynes believed that government spending was
  needed to create jobs and boost investment

23
INDUSTRIAL RECOVERY

• 1933- Congress passes National Industrial
  Recovery Act (NIRA) in order to stimulate
  industrial and business activity
• NIRA creates two new agencies- Public Works
  Administration (PWA) and National Recovery
  Administration (NRA)
• PWA, under Secretary of Interior Harold Ickes,
  provided jobs by contracting for public works
  projects

24
NRA

• NRA, under Hugh Johnson, promotes codes of fair
  competition among businesses
• Businesses agree to work together to stabilize
  prices, wages, hours, and production levels
• NRA suspends anti-trust laws
• Guaranteed workers right to organize

25

• People lose confidence in NRA
• 1935- declared unconstitutional by Supreme Court

26
AAA

• 1933- Congress passes Agricultural Adjustment Act
  which established the Agricultural Adjustment
  Administration (AAA)
• Paid farmers to reduce their crops (subsidies)
• Supreme Court declares unconstitutional

27
TVA

• 1933- Tennessee Valley Authority (TVA) created to
  build 38 dams and several power stations to
  provide electricity, flood control, and
  recreational facilities for the region
• Best known of New Deal programs and most
  successful

28
CRITICISM OF NEW DEAL

• Both liberals and conservatives criticized the
  New Deal
• Liberals argued it did not go far enough in
  providing assistance to needy
• Conservatives felt it went too far in government
  intrusion

29
CONSERVATIVE

• American Liberty League- largely composed of
  Republican business interests and disenchanted
  Democrats, led by Al Smith
• Complained that the New Deal was destroying the
  Constitution and free enterprise
• Felt it would lead nation into bankruptcy

30
LIBERAL

• Wanted more government involvement- Francis
  Townsend promotes idea of old-age pensions
• Huey Long, the Kingfish, proposes
  Share-Our-Wealth
• Sought to challenge Roosevelt as third-party
  candidate- but was assassinated in 1935

31
SECOND NEW DEAL

• 1934- Democrats pick up more congressional seats
  in mid-term elections
• Encourages New Dealers to propose more programs
• 1935- Works Progress Administration (WPA) begins
  under Harry Hopkins
• CWA had ended previous year, unemployment was
  still high

32

• WPA employs people to build airports, bridges,
  public buildings, and roads
• National Youth Administration (NYA)- gives young
  people between ages of 16 and 25 part-time jobs
  to help them stay in school

33
SOCIAL SECURITY

• Social Security Act passed in 1935
• Provided unemployment insurance for workers
• Provided pensions for retired people over 65
• Provided payments to blind and disabled
• Paid for by payroll tax on employers and
  employees wages

34
OTHER PROGRAMS

• Rural Electrification Administration
  (REA)-extends power lines to rural areas
• Revenue Act of 1935 (Wealth Tax Act)- increases
  taxes on richest people
• Corporations had to pay tax on any profit over
  10

35
ELECTION OF 1936

• Dem.- Franklin Roosevelt
• Rep.- Alf Landon
• Republicans criticize New Deal for ignoring
  Constitution
• Roosevelt wins by large margin
• Democrats forms coalition of farmers, southern
  whites, city dwellers, industrial workers, and
  northern blacks

36
ROOSEVELT AND THE SUPREME COURT

• Roosevelt asks Congress for the power to appoint
  one new justice for each one 70 years old or
  older, up to 6 new justices
• Critics call it a court-packing scheme and say
  that it would upset balance between branches of
  government
• Congress refuses
• By 1945, 8 of 9 are Roosevelt appointees

37
LABOR

• Wagner-Connery Act guarantees labors right to
  organize and to collective bargaining
• 1935- John L. Lewis, head of United Mine Workers
  (UMW), and other union leaders form Congress of
  Industrial Organizations (CIO) to compete with
  the AFL

38
CIO

• The CIO represents all workers in a given
  industry- United Auto Workers (UAW)
• CIO welcomes blacks, immigrants, and female
  members
• Winter of 1936-37 UAW strikes against General
  Motors
• Use sit-down strike
• Union membership grows

39
FARMERS

• 1937- Farm Security Administration (FSA) makes
  low-interest, long-term loans to tenant farmers
  and sharecroppers
• 1938- Congress passes a second AAA
• Gets farmers to continue production cutbacks
• Critics complain of high cost of subsidies

40
MIDTERM ELECTIONS

• Recession occurs in 1937
• Midterm elections- critics say New Deal not
  working
• Roosevelt seeks to oust conservative Democrats
  who did not support his programs
• Republicans gain seats in Congress
• New Deal ends in 1939

41
DUST BOWL

• Severe drought hits the Great Plains during the
  1930s
• Okies- people who left to go to California for
  jobs

42
ART AND LITERATURE

• Margaret Mitchell- Gone With the Wind
• John Steinbeck- The Grapes of Wrath
• Regionalists- artists who stressed local themes
  in their paintings- Grandma Moses and Grant
  Wood
• Wood- American Gothic