Presentation on theme: "The Great Depression 1929-1941. The Stock Market 1920’s a bull market (long period of risking stock prices) lead to many Americans to invest heavily in."— Presentation transcript:
The Stock Market 1920’s a bull market (long period of risking stock prices) lead to many Americans to invest heavily in stocks. Investors began buying stocks on margin - meaning they made only a small cash down payment.
Buyers engaged in speculation- buying stocks and hoping to make a fortune over night. Investors were very sensitive to any fall in stock prices which lead to investors demanding repayment of the loan at once (Margin Call) when stocks dropped. Speculation and Margin
Black Tuesday October 29, 1929 The Stock Market Crashed; Wall Street stocks lost $10 to $15 billion in value.
Possible Causes of the Great Depression Overproduction Purchased on credit and instalments Low consumption of goods Laying off of employees
Life During the Great Depression Many went hungry; living on streets joining bread lines or soup kitchens for free handouts. Families lost their homes; Homeless people put up shacks on unused or public lands, forming communities called shantytowns.
Blaming President Hoover, for their plight, people referred to such places (shantytowns) as Hooverville's. Homeless people known as “hobos” began wandering around the country, walking, hitchhiking, or most often riding the rails looking for a better life. The Homeless
The Dust Bowl Engulfed the Dakotas to Texas (Great Plains), dust storms ravaged America’s pastures and wheat fields became a vast desert. Causes: Drought, uprooting of wild grass, and planting of vast wheat fields drained the top soil of its moisture. Effect: Families lost their farms packed up and headed west towards California in search for jobs.
Escaping the Depression Americans escaped through entertainment. (Movies, or listened to radio programs.) Walt Disney produced first feature-length animated film Snow White and the Seven Dwarfs; MGM produced The Wizard of Oz. Gone With the Wind topped the Depression-era epics.
Radio melodramas were sponsored by makers of laundry soaps, nicknamed “soap operas”. The homeless and unemployed became the subject of pictures and stories as artists and writers tried to portray life around them. Novelists such as John Steinbeck evoked both sympathy for their characters and indignation at social justice.
Hoovers Response Government didn’t want to pay for public works because the government would have to raise taxes. Government couldn’t borrow money from banks. Feared deficit spending thinking it delay an economic recovery.
Harley-Smoot Tariff Act Aimed to protect American manufacturers from foreign competition. Raised tariffs to the highest level in American history. Damaged trade between American and foreign countries.
Mexican Reparations Act 2 Million Mexicans were forced to move back to Mexico to free up jobs in America for Americans.
National Credit Corporation (NCC) created a pool of money to rescue troubled banks so they could continue lending money in their communities. Reconstruction Finance Corporation (RFC) failed because it didn’t increase its loans in sufficient amounts to meet the need, and the economy continued to decline. Hoover opposed the federal government’s participation in relief because he believed only state and city govt. should dole out relief. Hoover’s Programs
Farmers and the Bonus Army After WWI farmers had heavy mortgages when prices sank they couldn’t even earn their expenses back. Farmers tried raising crop prices by destroying their crops and produce. The “Bonus Army” WWI veterans marched on Washington to claim their bonuses promised from the war; they were cleared out by tear gas, fire, tanks, and bayonets.
Franklin D. Roosevelt Takes Office “New Deal” Roosevelt’s policies for ending the Depression. (Relief, Recovery, Reform) Roosevelt’s Inaugural Address “the only thing we have to fear is fear itself.” Believed he could make things better offered an energy and optimism that gave people hope.
Relief Relief: for persons in need by providing money for loans and jobs. Banks - (Bank Holiday) stop bank runs and restore confidence in banking system. Home and Farm owners - (Federal Housing Administration) Insures loans made by banks and other private lenders for home building. Unemployed - (Federal Emergency Relief Act, Civilian Conservation Corps, Public Works Administration, Works Progress Administration.) Provide simple jobs for unemployed.
Reform Reform: Programs to ensure another depression doesn’t happen. Federal Deposit Insurance Corporation - insures bank accounts to a certain amount. (Still active today) Tennessee Valley Authority- build dams to control floods and provide electricity. Securities and Exchange Commission- monitor stock market prevent fraud. Social Security Act - support retirees.
Social Security Act 1935 One of the most important pieces of legislation in American history, purpose was to provide some security for the elderly and for unemployed workers. Offered money for early retirement to citizens over age of 65 to free up jobs. Extended support to the elderly citizens.
Recovery Recovery: for nation by passing legislation to assist businesses, labor, and agriculture. Agricultural Adjustment Act - regulated the production of farmers. National Recovery Administration - eliminate "cut-throat competition" by bringing industry, labor and government together to create codes of "fair practices" and set prices. 21
Reaction to New Deal Liberty League: Some felt the government interfered too much in peoples lives. Francis Townsend: Give everyone over 65 a pension $200 a month that must be spent in that month. Huey Long: Give each American family an income of $5,000 a year by taxing the rich. Father Coughlin: Wanted nationalization of the banks.
FDR and the Supreme Court Ruled some New Deal Programs were unconstitutional. Ex) NIRA and AAA. Roosevelt developed a “Court Packing” Scheme to add Supreme Court justices to pass his legislation. It didn’t work but the Supreme Court backed down from declaring New Deal organization illegal. (Checks and Balances and Separation of Powers.)
National Industrial Recovery Act (NIRA) provided industry with a set of rules that were known as codes of fair competition. Federal Emergency Relief Administration (FERA) channeled a half- billion dollars to state and local agencies to fund their relief project. Civil Works Administration employed four million people in the winter of 1933-1934, 300,000 of them women. Agricultural Adjustment Act regulated the production of farmers. Civilian Conservations Corps (CCC) offered unemployed young men 18 to 25 years old jobs planting trees, fighting forest fires, and building reservoirs. Other New Deal Legislation
The Second New Deal: 1935-1938 Works Progress Administration (WPA) the spending of $11 billion and employment of 8.5 million workers on public works. Federal Number One Program offered work to artists, musicians, theater people, and writers who created many new works. National Labor Relations Board (NLRB) Organized factory elections by secret ballot to determine whether workers wanted a union; also set up a process of binding arbitration.
Roosevelt's New Deals gave Americans a much needed sense of security and stability as Roosevelt shifted his eyes towards the militaristic governments gaining power in Europe and in Asia.