Unit Goal: To understand the causes of the Great Depression and its effects on the United States and

its people.

The Great Depression

Black TuesdayStock Market Crash- Overall lose? $30 billion in 2 weeksContributing Factors:

Speculation- investing in high risk stocks in hopes of gaining a huge profit.

Buying on Margin-Investors were able to purchase stock for a fraction of its price (10-15%) and borrow the rest.

Overproduction of goods Increase in Personal Debt (buying on credit)Low WagesFarmers had over extended. Many farmers were unable to

repay their debts for land and machinery. Farmers could not repay their bank loans and as a result 6,000

rural banks failed/closed during the 1920s.

October 29, 1929

Investors lose money

Banks lose money

Banks Fail

People lose savings

Businesses cut production

Unemployment rises

Small businesses

close

Farm Prices Drop/ Less demand for

food

Farmers go broke

Homeless increase

Few jobs/ discrimination

increases

Hoovervilles

Ripple Affect on Society (p.510)

U.S. production plummets

U.S. investors don’t have

money to invest

U.S. investments in

Germany decline

German war payments to Allies fall.

Europeans cannot afford

American goods

Allies cannot pay debts to the

U.S.

Ripple Affect on World

HoovervillesShanty towns of the poor (shacks of tar paper,

cardboard or scrap metal)Mocked President Hoover who people blamed

for not resolving the crisis.

Social Effects of the Depression

Dust BowlEnvironmental CrisisBetween 1931 and 1940, so much soil blew out

of the central and southern Great Plains that the region became known as the Dust Bowl.

Contributing Factors? Drought and farming practices.

60% of Dust Bowl families lost their farms.Relief did not come until the 1940s, when rain

finally arrived and World War II drove farm prices up.

Homeless Population Explodes (15,000 just in N.Y.C)

Public Health Declines- Starvation, children suffered the most

Men’s Self Esteem Suffers.Women had to take low paying jobs (if there

was any available).Discrimination still strong against African

Americans and immigrants.Unemployment exceeds 25%

Impact on Society

Dorothea Lange An influential American photographer who was

best known for her Depression-era work for the Farm Security Administration. Lange’s photographs humanized the consequences of the Great Depression and influenced the development of documentary photography.

Americans Pulling TogetherPenny Auctions- When a farmer was unable to

pay the mortgage on his farm, the bank would foreclose on the property and then sell it at an auction. In some farm communities, local farmers met secretly and agreed to keep bids low during the auction. Farmers would big mere pennies on land and machines auctioned and then return the farms and machinery to their original owner.

Surviving the Depression

Riding the Rails-In the mid 1930s, roughly 250,000 teenagers

were living on the road, illegally riding the rails of freight trains to find work.

These young people (Hobos) witnessed the Depression in all parts of the country firsthand.

President from 1929-1932June 1929- Agricultural Marketing Act- Relief to

farmers by creating a Federal Farm Board, which was designed to stabilize the prices of farm crops.Failure- Lost over $150 million and sent farm prices

on a downward spiral.Construction on Boulder Dam (Hoover Dam)

started in 1930.Hawley-Smoot Tariff was passed in 1930 to protect

domestic industries from foreign imports. In response, European countries raised their own tariffs, bringing a slowdown to international trade.Highest import tax in history

President Hoover during the Depression

In 1932, Hoover set up the Reconstruction Finance Corporation, which gave government credit to a number of institutions. The act also lent money to banks so that they could extend loans. Banks continued to FAIL

Veterans March on Washington- In 1932, 20,000 jobless WWI veterans and their families encamped in Washington D.C. The Bonus Army, as they called themselves, wanted immediate payment of a pension bonus that had been promised for 1945. The situation grew violent.

President Hoover during the Depression

In a Nutshell:Hoover believed the economy, controlled by

business would recover on its own without government interference.

Government did little to assist the nation, but did give some loans to big business. This government approach, along with higher tariffs both FAILED.

President Hoover during the Depression

FDR Promises “The New Deal.”Ready to experiment with government roles.Genuinely compassionate for ordinary peopleHandicapped/ polioAs Governor of New York, he worked vigorously for Depression relief.

The Election of 1932

“So first of all let me assert my firm belief that the only thing we have to fear is fear itself.”

-Franklin D. Roosevelt

Huge WIN for Franklin D. Roosevelt

Radically Expanded the Federal GovernmentInstituted Programs to

Stabilize banks and restore public interests in banksEstablished the FDIC (insures deposits)

Public Work ProgramsCivil Works Administration- Project to create

construction-related jobs which improved buildings or bridges.

Civilian Conservation Corps- Public work relief program for unmarried men between the ages of 18-25.It provided unskilled manual labor jobs related to the conservation and development of natural resources.

The New Deal

Public Work Programs (Continued) Tennessee Valley Authority and Rural Electric

Administration- Provided cheap electrical power and a means of flood control and system of navigation in Tennessee Valley.

National Recovery Act- Regulated wages and controlled working conditions, production, and prices. Established a minimum wage at 25 ¢/ hour.

Federal Housing Administration improved housing by setting standards, insuring mortgages and stabilizing the mortgage market.

National Labor Relations Board- Protected unions and allowed the federal government to regulate labor disputes.

Social Security Act- 1935, provided financial security in the form of regular payments, to people who could not support themselves.

Securities and Exchange Commission- Regulated the stock market and protected investors from dishonest trading practices.

Page 543- List of New Deal Agencies

FDR regulated the economy

Government Works to Curb Violence21st Amendment in 1933 repeals the 18th

Amendment/ProhibitionFBI Cracks Down on Crime

Resolutions to the Depression

Rich– said increased tax rates were unfairMinimum wage- people said it was too lowFair Labor Laws only covered 25% of workersFair Labor Laws allowed lower pay for womenFederal Government began “deficit spending” and

incurring debt.Some programs unconstitutional and socialist (AAA

& NIRA)Some felt Federal government is getting too

powerfulHuey P. Long pushed for redistribution of wealth and

work/social reforms.

Critics of Government Efforts to Reverse Depression

World War IIMilitary build up before the U.S. entered.

Supplying British, Russians and Chinese with weapons

U.S. preparing itself too in case we had to enter war

Once in war, Dec. 7, 1941, industry grew VERY rapidly.

End of Great Depression