The Great Depression

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The Great Depression(1929 - 1941) : 

The Great Depression(1929 - 1941)

WALL STREET - 1929 : 

WALL STREET - 1929

New York Stock Exchange 1929 : 

New York Stock Exchange 1929

KEY TERMS OFSTOCK MARKET : 

KEY TERMS OFSTOCK MARKET 1. Dow Jones Industrial Average -Avg. value of stocks from 30 of nation’s largest firms -Sept. 1929: 381 (300 points higher than 5 years earlier) 2. Stock Pools -Group of wealthy investors “pool” together and buy a large amount of a stock -Drove up stock prices / Public bought into it 3. Institutional Investors -Pension companies & insurance firms bought stocks in large volume (rushed to unload large share amts.) 4. Margin Buying (overspeculation) -People invested money they did not have -Demand for stocks rose / Price of stocks rose

Election of 1928Hoover (Repub.) vs. Smith (Demo.) : 

Election of 1928Hoover (Repub.) vs. Smith (Demo.) HERBERT HOOVER -known for his work during WWI at home, self-made millionaire, Secretary of Commerce (Coolidge) “A chicken in every pot and a car in every garage” -suggested poverty would be ended altogether AL SMITH -known as Governor of NY, Catholic, and an opponent of Prohibition (“wet” candidate)

Election of 1928 : 

Election of 1928

Essential Question : 

Essential Question What were the main causes of the Depression. Use your homework to discus with a partner how you ranked the items listed. Come to a consensus what you feel are the top 3 - 4 reasons our country slipped into a Depression.

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October 24, 1929 PANIC ON WALL STREET DROPPED STOCK PRICES Uneasy investors trying to sell and get out of the market FRIDAY the 25th - Group of bankers bought millions of shares of stock to stave off a disaster Monday the 28th - selling frenzy resumed Tuesday, Oct. 29, 1929 (“Black Tuesday”) Ordinary people and rich alike lost their savings and their future security THE CRASH!

HOOVER’S RESPONSE : 

HOOVER’S RESPONSE “Rugged Individualism” Hoover’s political philosophy Govt. relief is not the American way 1) Unemployed should not be helped by govt. (private help) 2) No controls on economy and farm prices “U.S. can wait it out” Signed Smoot -Hawley Tariff 1930 (highest in history) which made things worse around the world

“RUGGED INDIVIDUALISM” : 

“RUGGED INDIVIDUALISM” 1. Called for private intiatives to help “Community Chests” (private welfare) to help local people 2. Indirect relief accepted Public works programs (roads, building, dams)

BONUS ARMY : 

BONUS ARMY RESULTS Early bonus not given Congress voted to give vets $ to go home -Did not satisfy vets Soldiers and tanks sent to clear Bonus Army out -63 injured / 3 killed Hoover became even more unpopular

BONUS ARMY : 

BONUS ARMY WHO: WWI Veterans with wives and children (15,000) WHAT: Expected a bonus from the federal govt. in 1945 (marched to force govt. to pay early) WHERE: Washington D.C. (outside the capital) WHEN: May - July 1932

Bonus Army “Hooverville” : 

Bonus Army “Hooverville”

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American "Panics"

Causes of Great Depression : 

Causes of Great Depression #1. Unequal Distribution of Wealth “Too much money in too few hands” #2. High protective tariffs and war debts Europe owed U.S. money and could not pay

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#3. Farm crisis Overproduction on farms after WWI (less demand) and drought conditions (25% lost farms)

Farmers moved to cities & west in search of new opportunities (“Okies”) : 

Farmers moved to cities & west in search of new opportunities (“Okies”)

5,000 BANKS CLOSE FOREVER (22% of total) : 

5,000 BANKS CLOSE FOREVER (22% of total)

Causes of Great Depression : 

Causes of Great Depression #4. Overproduction in Industry Production increases but wages don’t People buy on credit or spend less (under-consumption) Cotton because of synthetics Railroads because of automobile #5. Banking system unstable “Panics” - People cleaned out their banks Poor management / little govt. regulation 9 million lost their savings in first 3 years #6. Domino Effect Workers lose jobs - sales fall - more businesses close - more workers lose jobs - and so on

DAILY LIFE / HARD TIMES : 

DAILY LIFE / HARD TIMES A. THE CITY 1. People stopped buying household appliances, furniture, and jewelry 2. Movies became an escape from reality 3. Families planted their own gardens in vacant lots 4. Depression made people turn back towards their family

DAILY LIFE / HARD TIMES : 

DAILY LIFE / HARD TIMES B. THE HOMELESS 1. People lived in shacks and crates called “Hoovervilles” –over 3 million “hobos” 2. Federal govt. did little to provide direct relief to the unemployed during Hoover’s administration 3. Breadlines serving 85,000 meals everyday 4. People rode the rails looking for work all over the nation

DAILY LIFE / HARD TIMES : 

DAILY LIFE / HARD TIMES C. AFRICAN AMERICANS IN THE CITY 1. 1929 - 1/2 of all African Americans lived in the cities 2. 1936 - 30% to 60% more African Americans unemployed than whites

DAILY LIFE / HARD TIMES (1930’s) : 

DAILY LIFE / HARD TIMES (1930’s) D. CRISIS IN RURAL AMERICA 1. Farmers had more food than they could sell 2. Shot livestock and let crops rot 3. Farmers organized to stop foreclosures E. DROUGHT ON THE AMERICAN PLAINS 1. Rocky Mts to Mississippi River suffered from drought known as “The Dust Bowl” 2. Farmers partly at fault - plowed up deep rooted plants

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1. Hawley-Smoot tariff (1930) Passed by Republican congress - Europeans reacted by enacting higher tariffs 2. Debt moratorium (1931) Suspension on payment of international debts - Dawes Plan halted 3. Europe collapses in 1931 Debt payments still unpaid from WWI Worldwide Crisis

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Reconstruction Finance Corp. *$2 billion to banks and companies (indirect relief) “Trickle-down” from business Federal Farm Board *Help farmers stabilize prices by holding surplus crops in storage HOOVER - 1932

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What war is Hoover referring to and what does he mean that the Federal Govt. became a “centralized despotism” and “assumed autocratic powers”?* Define what Hoover meant by “Rugged Individualism”.* How does Hoover view the role of government?* How does FDR view the role of government?** 5) What does FDR suggest should be done?** Hoover vs. FDR *October 22, 1928 (Hoover’s campaign speech) **March 4, 1933 (FDR’s first inaugural address)

ELECTION OF 1932 : 

ELECTION OF 1932 Republican Herbert Hoover “Prosperity is just around the corner” More economic problems if you vote for FDR Democrats Franklin Delano Roosevelt “New Deal” for Americans Repeal of Prohibition Aid for unemployed Cuts in government spending

RESULTS OF ELECTION (1932) : 

RESULTS OF ELECTION (1932) Roosevelt won by a landslide Hoover won only 6 states (traditional NE Republican states) Roosevelt’s slogan was “A vote for Roosevelt is a vote against Hoover” Americans wanted a “New Deal” Both houses of Congress gained Democratic majorities

Hoover gone / FDR enters : 

Hoover gone / FDR enters “Lame-Duck Amendment” (20th Amendment) 1933 Shortened the period between the presidential election and inauguration January 20th new date for inauguration Went into effect after next election (1936) “THE 3 R’s” - New Deal “Relief” Unemployed need work “Recovery” Business and Economy need help “Reform” American economic institutions need strengthened “BRAIN TRUST” & others -Helped him as Gov. of NY (university professors) -Diverse appointments (ie. Frances Perkins - 1st woman in cabinet)

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1) Bank Holiday -March 6, 1933 -Restore faith in banks 2) Repeal 18th Amend. -Beer-Wine Revenue Act -21st Amendment 3) Fireside chats 4) Recovery Programs -FDIC, HOLC, FERA, PWA, CCC, TVA, NRA, CWA, SEC, FHA, AAA 5) Off the Gold Standard -Halt Deflation (falling prices) FDR's First New Deal

1934 Congressional Elections (Democrats given pop. Mandate) : 

1934 Congressional Elections (Democrats given pop. Mandate) 1) Relief Programs -WPA (Harry Hopkins) provided people w/ jobs -Construct bridges, roads, etc. -help for Artists and writers (Dorothea Lange) -NYA (Nat’l Youth Admin.) provided part-time jobs for youth 2) Reform Programs -Industrial workers and farmers given govt. help -NLRA (Wagner Act) REA, Increase in taxes on wealthy -SSA (1935) - Social Security Act FDR's Second New Deal

Slide 33: 

NATIONAL INDUSTRIAL RECOVERY ACT (NIRA) and NATIONAL RECOVERY ADMIN (NRA) were established to end animosity b/n labor and business  all was redirected to industrial growth  fair labor codes established - wages, no child labor, shortened work hours business people challenged the NRA, claiming it was communist they formed the LIBERTY LEAGUE - at LL's urging, the Supreme Ct. overturned the NIRA & NRA, claiming that fed. gov't was exceeding its authority (by interfering in state jurisdiction)

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Union membership: 3 million (early 1930s) to over 10 million by 1941 CIO formed (1935) Congress of Industrial Organizations John L. Lewis (UMW president) leader Broke away from AFL and organized unskilled workers in auto, steel, & southern textile industries STRIKES! GM Plant (Flint, MI) - 1937 “sit-down strike” GM yielded to demands (UAW union) U.S. Steel Corp. Voluntarily recognized one of the CIO unions NEW DEAL & LABOR National Industrial Recovery Act & Wagner Act (1935)

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TENNESSEE VALLEY AUTHORITY (TVA) - used to promote hydroelectric power, control flooding - lower rates  private industry, manuf. fertilizer fed. gov't. took ownership (nationalization v. privatization)

Slide 38: 

Kansas Cityfrom Politics, Farming, & the Law Thomas Hart Benton,1936

Slide 39: 

The Annual Moveby Otis Dozier, 1936

Slide 40: 

Construction of the Damby William Gropper

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AGRUCULTURAL ADJUSTMENT ACT (AAA) - passed in 1933 to aid formers- its objective was to restore farmers' purchasing power and to restore the family farm - AAA had farmers cut back on crop production by paying them equivalent SUBSIDIES (paid not to produce) bad side of AAA: 1) food production down when millions were starving 2) Black sharecroppers were hurt: white landowners paid not to farm so they got rid of Black tenant farmers 1935, AAA was declared unconstitutional by courts (too much control over individual states), so it was revised and introduced as new legislation EX: Food Stamp Act of 1939 - gave away surplus food to poor, also guaranteed (small) farmers a market

Slide 42: 

UNEMPLOYMENT - still a major problem FDR like Hoover was wary of gov't handouts - he wanted people to earn their keep so gov't agencies were created - temporarily - to address the unemp. Problem CIVILIAN CONSERVATION CORPS (CCC) - in 1933 - set to establish work for young men (18-25) in areas of reforestation, soil conservation, flood control, road construction - also took them out of urban labour markets - but Blacks not permitted to enrol

Slide 43: 

other agencies had specific mandates too...NATIONAL YOUTH ADMIN. (NYA) - created jobs for young in urban areas FED. EMERGENCY RELIEF ACT (FERA) - aimed at older workers- these and other similar agencies worked well, but unemp. was still at 6 million in 1941(solution for this would be the ind. boom of WW2) NEW DEAL - SOCIAL REFORM ASPECT- after 1935, w/ immediate economic relief & reform addressed, New Deal turned to Social Welfare - more legislation... National Labor Relations Act (aka Wagner Act)- it legitimized unions and labour tactics such as collective bargaining & collective action (strikes, etc...) - it outlawed BLACKLISTS & other anti-union practices

Slide 44: 

Social Security Act (1935)- feared by opponents as "creeping socialism"- this act typifies the WELFARE STATE - unemployment insurance, old age pensions Problem: it took some $ out of circulation (payroll deductions) at a time when purchasing power was already low- also, it only covered the unemployed 1936 - "Soak The Rich" tax

Slide 45: 

ELECTION OF 1936 - FDR won easily (v Repub. Alf Landon - Kansas governor) this victory gave FDR a mandate to continue his New Deal policies first objective: to reorganize the Supreme Court - they disallowed some New Deal legislation FDR wants # of judges changed from 9 15 (to "pack the court") - great opposition, so FDR w/drew this proposal but judges retired & FDR got to appoint new ones  they approved all New Deal legislation

Slide 46: 

FDR (Democrat) -Popular with workers and farmers -Unpopular with business Alf Landon (Republican) -Gov. of KS -Criticized New Deal for spending too much (agreed with most) RESULTS: 60% of popular vote (VT + ME only states lost) Solid South, white ethnic groups in cities, midwest farmers, labor unions (1930s - 1960s were Democratic strongholds) African Americans left the “party of Lincoln) - mainly in northern cities ELECTION OF 1936

Slide 47: 

Critics on “the right” Schechter v. U.S. (1935) -NRA unconstitutional -AAA deemed unconstitutional in a later case *FDR’s Answer (believed he had the mandate of the people after ‘36) -Court-reorganization plan (1937) Authorize president to appoint one justice for each justice over than 70 (six) Presidential power to appoint justices Reaction: FDR tampering with “checks and balances” Aftermath: Some justices retired anyway SSA & Wagner Act constitutional THE SUPREME COURT “NINE OLD MEN”

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the late 1930's – new Qs arose… FDR concerned w/ int'l issues in 1939 he proposed no new major domestic reform measures (1st time in his pres.) ELECTION OF 1940 - FDR broke with tradition & ran a 3rd time FDR v. Wendell Wilkie - the big issue here was American support of the Allies (G.B.), now embroiled in WWII v. Nazi Ger. both U.S. pol. parties wanted to support G.B. but to remain neutral - in fact a CONSENSUS had developed b/n the Dems. and Repubs. both parties approved of (most) New Deal legislation & wanted an isolationist foreign policy- FDR won in 1940 (and again in 1944)

Slide 49: 

a 3rd revolution in American culture and politics- more gov't involvement but w/in the context of traditional U.S. democracy (not socialist…) New Deal helped in stimulating the U.S. economy, but only WWII would solve any lingering problems  unemployed found jobs in munitions factories and the military as the U.S. became the ARSENAL OF DEMOCRACY New Deal saw expansion of U.S. gov't in : 1) eco. - constant gov't intervention/deficit spending 2) social reform - welfare state - after this pt the U.S. gov't was expected to play a role in any economic crisis so FDR fundamentally reformed (not transformed) American society…

Slide 50: 

Liberals (“the left”) -New Deal (33-34) did too much for business and too little for unemployed and poor -Failed to address problems with minorities, women, and elderly Conservatives (“the right”) -New Deal bordered on socialism or communism -Increased business regulations, pro-union labor, deficit spending -Formed American Liberty League to stop New Deal from undermining capitalism Leading Demagogues “the left” 1) Father Charles Coughlin -National Union for Social Justice (inflation and nationalization of banks) 2) Dr. Francis Townsend -2% federal sales tax placed on goods to give $200/month to retired citizens over 60 3) Huey Long (“The Kingfish”) -”Share Our Wealth” program promised $5,000 for every American family paid for by taxing the rich -Killed by assassin (may have run for President in 1936 New Deal Opponents

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1930s "Changing Fashions in Government"

Slide 52: 

Changes in U.S. society and govt. 1. Extended the Power of the Federal Govt. -Federal govt. involvement became permanent -SEC, FDIC, TVA, FHA still around today 2. Extended the Power of the President -FDR broadened the role of the President (active role) -Large & complex nation must have strong executive 3. Deficit Spending Deficit spending: Spending more money than the govt. raises in taxes -Balance the budget vs. deficit spending

How Congress Uses Fiscal Policy to Influence the Economy (“Keynesian economics”) : 

How Congress Uses Fiscal Policy to Influence the Economy (“Keynesian economics”) BUDGET Congress & President Overheated Economy! Inflation, low unemployment, lack of savings and investment, lack of confidence in economy Recession! High unemployment, slow economic growth, business failures Increase Govt. Spending Decrease Taxes More $ goes to business Consumers spend more $ in economy Business expands bringing economic growth Business creates more jobs Decrease Govt. Spending Raise Taxes Less $ goes to business Consumers spend Less $ in economy Business slows growth - Hiring fewer workers “Prime the Pump!” “Slow things down!”

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4. Federal Social Programs Initiated Welfare: Govt. responsible for the economic security of its people -Social Security aid to to elderly, disabled, and unemployed -Later included students and mothers with dependent children 5. Greater Concern for Workers National Labor Relations Act: Workers’ rights to join unions and bargain with employers/ Wagner Act Fair Labor Standards Act: Safer workplaces, minimum wage, 40-hour work week, freedom from discrimination 6. Conservation Gains -Soil conservation, Dams built to prevent floods, Conservation Awareness

Slide 55: 

7. Renewed Faith in Democracy -FDR revived the faith and strength of the American people -New Deal carried America through a time when democracy was questioned

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