3The Great DepressionThe Stock Market Crash in October 1929 would trigger an world wide depression.The creation of the Smoot-Hawley Tariff caused other nations to make their own retaliatory tariffs.Banks had invested peoples savings and lost large sums of money in the crashThe World had created the perfect situation for economic stagnation, better known as the Great Depression
4Economics: Speculation Boom The stock market crash was devastation to everyone, as almost everyone “played the market”This was possibly because people could “buy on margin”Buying on Margin means a person only needs a pay for a percentage of a stocks value (margin) and BORROWS the rest of the money.In theory when the stock value goes up you pay the loan off from your profits. If the stocks were to crash you not only lose your investment, but you have a loan you can’t pay back.
5Economics: Overproduction The Roaring Twenties had created a consumer culture in the USAfter the crash product was still being produced, but people had no money to spend.The nation was experiencing under consumptionTariffs made it next to impossible to send the goods overseasOverproduction would cause massive layoffs, and unemployment skyrocketed
6The Government Response The immediate Government Response to the crash & rise in unemployment was nothing.Many economists said that the depression was part of the normal business cycle of the country.It was only a matter of time until Social Darwinism, Self-Reliance, & Rugged Individualism kicked in and the economy/country fixed itself.President Hoover believe in this theory
7HoovervillesHoover accepted the Republican nomination to run for re-election in 1932Originally he thought he would easily be re-elected based on his record from the 1920sHowever as the depression for worse he started to worry.Unemployment was so bad in the 1930s that many people lost their homes, and small shanty communities began to appear in public parks and open fields. They called them Hoovervilles
8Franklin Delano Roosevelt (FDR) The Democrats nominated the Governor of New York, Franklin Roosevelt for the Presidency in 1932Roosevelt called for a New Deal, and said he would do whatever needed to be done to help the country“It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.” ~FDR
10Roosevelt’s First Hundred Days Roosevelt wins in the largest landslide victory in Presidential history (To that Point)In Roosevelt’s First Hundred Days he will have a record number of bills passed, all of which attempt to fix the Great DepressionThese bills create dozens of agencies which will become known for their acronyms, and are historically known as the Alphabet Agencies
11New Deal Agencies: Alphabet Agencies Agricultural Adjustment Act (AAA)Civilian Conservation Corps (CCC)Federal Deposit Insurance Corporation (FDIC)National Recovery Act (NRA)Tennessee Valley Authority (TVA)Works Progress Administration (WPA)From at least 40 different agencies were created.
12Affects of the Great Depression on the Country Women had a hard time getting a job if their husbands had a decent jobThose who did own houses and land saw property values drop as cities started to waste awayMalnutrition became a problem as many could not afford food (especially in the poorer regions of the US. Coal Mining Areas = 90%)Many depended on soup-kitchens and breadlines in order to feed their families
13Great Depression for Farmers In the 1920s many farmers produced the same thing, but international markets bought the surplus (so the overproduction went unnoticed)Tariffs closed that market, and the high supply of goods in US markets cause prices to drop drastically (caused under consumption)Farmers were unable to pay loans on their farm equipment, and many lost their farmsThen there was the Dust BowlGreat Depression for Farmers
14Dust Bowl The overproduction of land ruined the soil In addition parts of the mid-west experienced extreme droughtThe combination led to desertificationCombine desertification with nasty Midwestern storms (the ones that make tornados) and you get dust storms.Many farmers fled their land in search of jobs and safety.
15Flint Sit-Down Strikes In 1935 United Auto Workers formed a union at a General Motors plant in Flint, MichiganThe leaders realized that small unions were unsuccessful, and that a larger union across all the plants was needed for successThe Union went on strike December 30th 1936.Instead of picketing outside the workers staged a Sit-Down Strike, where workers lived in the factory preventing the owners from hiring scabs.The Union would ultimately win, and United Auto Workers gained instant credibility as a union