American Studies. 1929-1940: The longest and most severe recession that our country has ever...
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Transcript of American Studies. 1929-1940: The longest and most severe recession that our country has ever...
THE GREAT DEPRESSIONAmerican Studies
THE GREAT DEPRESSION
1929-1940: The longest and most severe recession that our country has ever experienced
The Stock Market Crash of 1929 is the spark Most of Europe is also experiencing a major
depression after WWI Has a lasting effect on how Americans view
themselves and the role of the government http://www.youtube.com/watch?v=iLhDSdwo
b04 http://app.discoveryeducation.com/search?N
tt=great+depression
CAUSES OF THE GREAT DEPRESSION
Six Sick Segments of the Economy: 1. Overproduction and Under-
consumption Buying on credit causes inflation Interest rates are kept low so that it’s easier for
people to get loans and credit cards Demand for new goods decreases over time Many buy things they can’t afford = debt Companies borrow $ to expand and can’t pay
back
SIX SICK SEGMENTS OF THE ECONOMY 2. Uneven Distribution of Wealth
Top 10% had 80% of nation’s wealth Half of the nation lived below the poverty
line Rising prices, same stagnant wages Government helped big business not the
people Few unions = few rights for workers Huge gap between the rich and the poor
SIX SICK SEGMENTS OF THE ECONOMY 3. Loan Repayment and War Debt
(Reparations) “Roundtrip of the Dollar”: US invests in
Germany to help their depression, Germany uses money to pay back allies for war reparations, then they use the money to pay US back for WWI loans
All countries default on their loans Worldwide depression makes it difficult to sell
US goods 1923: a five million German mark worth less than a
penny
SIX SICK SEGMENTS OF THE ECONOMY 4. High Tariffs:
Hawley-Smoot Tariff:60% tax on imports from Europe so people buy goods from the US
European countries put tariffs on US so that foreigners don’t buy our goods
Government makes money, not businesses World Trade falls 40%
SIX SICK SEGMENTS OF THE ECONOMY 5. The Farmer’s Plight
Took loans to buy land and equipment during WWI
Plenty of profit during WWI feeding world armies
After war, prices drop by 40%, can’t pay debts
Surplus: Growing more than they can sell for profit
Coolidge refuses to pass McNairy-Haugen Bill for federal price-supports on key products
Many lose land and are forced to become sharecroppers
SIX SICK SEGMENTS OF THE ECONOMY 6. Over-speculation on the Stock
Market Bought based on speculation that economy
would keep growing Expected to hit it big, when demand drops,
stock prices drop People buy on credit, company seems to be
worth more than it really is Keeps stock prices artificially high, less money in
system than there appears to be Buying stock on the Margin (credit) causes
banks to lose money they loaned
PRACTICE QUESTION
The 1930’s were a time of pain and suffering for many Americans due to the Great Depression. Many blamed President Hoover for the depression but it was later discovered many of the problems were created during the 1920’s. Explain two reasons why the United States fell into depression. (2pts.)
AMERICA’S DARK AGES
Wages fall, businesses close, unemployment rates skyrocket Averages from 25-50% across the country throughout
the decade Many lose their homes to foreclosure No federal system of relief, no corporate bailouts,
no safety net Women lose jobs/wages so that some men can find
work: they search constantly Conditions for African Americans were the worst
Competition for jobs: First fired, last hired 24 lynched in 1933
-Unemployed were given apples to sell in order to make some money
-Men didn’t want to beg, wanted to earn money honestly
EFFECTS OF THE GREAT DEPRESSION Breadlines and soup kitchens form in an attempt to
feed families Suffer serious health problems from malnutrition and lack
of health care Many can’t pay rent and are forced to live in shacks
= shanty town or “Hooverville” Only time in history where more people are leaving
the US than coming here Divorce and suicide rates rapidly increase Many men and children leave their homes and roam
the country Riding the rails: Migrants or bums or “Hoover Tourists”
Popular Song “Brother, can you spare a dime?”
Schools eliminate dress code: People can’t afford new clothes or shoes
Sleeping under newspapers: Hoover blankets
Turned-out empty pockets: Hoover flags
THE RUN ON THE BANKS
Banks failed at record rates Those who didn’t lose $ in stock market, lost it
to the bank Didn’t have enough money in vaults due to
giving out loans People lose confidence in banks and want all
their money back Banks run out of money and are forced to close Many from this era lose their life savings and
never trust the banks again 9 million saving accounts gone
PRESIDENT HERBERT HOOVER (1929-1933)
Presidents of the 1920s believed in Laissez-Faire, Hoover didn’t believe in govt intervention Many believed it was a normal cycle of the economy
where others blamed Hoover for Depression Forced to provide some relief with worsening
conditions Hoover believed in “rugged individualism”:
Individuals should be able to help themselves Hoover Dam: Approved to create jobs and new
hydroelectric power source
THE BONUS ARMY
WWI Veterans were promised a bonus to be paid in 1945
Vets need money now and march/protest in Washington D.C. to demand it be paid
Hoover refuses and sends troops to get rid of them
Troops use tear gas and bayonets to force the veterans and their families to leave
Burn down their shantytown, many are injured Final blow to Hoover’s damaged image
-Troops turn against veterans
-Eisenhower and MacArthur were some of the troops who kicked out the Bonus Army
-One baby was killed, an 8 year old boy was blinded
-Hoover called the veterans “traitors and communists”
PRACTICE QUESTION
President Hoover was blamed for the Great Depression even though later historians discovered it was not entirely his fault. However there were many impacts on people’s lives due to depression. Which of the following was not an impact?
A. Race Riots B. Hoovervilles C. Bonus Army D. Unemployment
THE DUST BOWL Environmental disaster: Drought, high winds and
poor farming practices cause huge dust storms Great Plains blow away, people and homes covered in
dust “Black Blizzards” cause the “Brown Plague”
Farmers: Losing money, can’t grow food, lose the family farm, failing health
Many move west to California for fertile land to become migrant workers picking fruit, etc. “Okies and Arkies” follow Route 66 to the Promised
Land Many can’t find enough work when they arrive
http://www.youtube.com/watch?v=iLhDSdwob04
PRACTICE QUESTION
What affect did the Dust Bowl have on farmers?
a. It created better soil for the farmer’s crops. b. It destroyed their crops and forced them to
move to the East coast c. Made them use more tractors to plant more
crops. d. It destroyed their crops and forced them to
move to the west coast
ELECTION OF 1932
Hoover is re-nominated by Republicans Most people want him gone, widespread hatred
Democrats nominate Franklin Delano Roosevelt Governor of NY: Providing aid to his people “My plan will do the greatest good for the greatest
number” Wants to correct issues that caused the Depression
FDR wins a landslide victory Congress is Democratic Lame Duck Period: worst of the depression http://www.youtube.com/watch?v=1aXpty_1xo4&sa
fe=active
-Calls his advisors the Brain Trust
-Has Polio which impedes his mobility
-Graduated from Harvard
Teddy Roosevelt’s Nephew
THE NEW DEAL
Plan to “shuffle the cards, give people a new hand in life”, provide aid and relief
RRR: Relief for the needy, Recovery for the economy, Reform finances Greatly expands the role of the government in the
economy Try new things, admit if they don’t work Wife Eleanor Roosevelt is highly active first lady
1st 100 Days: Highly eventful period of FDR’s president, enacts emergency measures Create stability: 15 major pieces of legislation Needs to build trust with the people
THE NEW DEAL: FIRST 100 DAYS
Bank Holiday: Close them for examination and to prevent withdrawals Emergency Banking Relief Act: Provides loans
to banks so they can stabilize and reopen Needs people to put money back in Builds trust with Fireside Chats: President
explains issues in plain terms to the people Successful: Billions re-deposited, ends
banking crisis http://www.youtube.com/watch?v=z9CBpbuV
3ok&safe=active
FDR’S NEW DEAL
1933: Glass-Steagall Banking Reform Act Banks can’t use people’s $ to speculate on the stock
market Federal Deposit Insurance Corporation (FDIC)
Insures your $ in the bank so that you will always get it back
Federal Securities Act: Corporations must provide complete and honest information to their stock holders
Securities and Exchange Commission (SEC) Regulates the Stock Market to prevent unfair deals and
reduce buying on the margin
ROOSEVELT’S NEW DEAL
National Housing Relief Act: Help pay mortgage to avoid foreclosures
Public Works Programs: Provide jobs through government funded projects Plants trees, create park trails and lodges Painting murals, interviewing surviving
former slaves and Civil War vets to record history
Built airports, bridges, schools, roads, etc.
PRACTICE QUESTION
FDR became president because of his ideas for getting the United States out of depression. FDR created many government programs that tried to improve different aspects of people’s lives. Which of the following was the name of FDR’s ideas?
A. Rugged Individualism B. Neutrality C. New Deal D. Normalcy
“Migrant Mother”
Photograph by Dorothea Lange who was paid by a public works program to document the Depression
1933: TENNESSEE VALLEY AUTHORITY TVA: Public work program that helped the
poor rural areas of the Tennessee River Valley Economic Planning and Development Bring hydropower electricity and teach better
use of the land for farming Build or repair 20 dams to use for flood control
and electricity (90% were without it) Build low cost housing, provide clean running
water Plant trees and control forest fires
FRANKLIN ROOSEVELT'S NEW DEAL
FDR is re-elected in 1936, 1940 and 1944 Social Security Act: 1935
Old Age and Disability Pension: safety net for those who can’t work
Half paid by employee, half by employer, over lifetime
Fair Labor Standards Act: 1938 Sets minimum wage (25 cents) 40 hour week Employers and work programs still often
discriminated against African Americans
IMPACT OF THE NEW DEAL
Successful in providing relief with some reform and recovery There is economic improvement but the
nation still has a deficit Government has more control and
provides more social programs/aid to the people
It takes the massive employment and spending during WWII to pull us completely out of the Depression
PRACTICE QUESTION
How did the U.S. government’s role in the economy change as a result of the Great Depression?
A. The federal government had a diminished role in regulating economic activity.
B. The federal government maintained the role it had in economic matters before the Great Depression.
C. The federal government expanded its role in regulating economic activities and promoting economic growth.
D. The federal government transferred its role in economic affairs over to the state governments.