1. Chapter 14 – The Great Depression Begins
Section 1
The Nation’s Sick Economy

2. Economic Troubles on the Horizon
Industries in trouble:
Mining and lumbering
Railroads
Radio
Steel
Automobiles
All of these industrial weaknesses signaled a declining economy

3. Agriculture and the Farmers
Prices for crops had been at an all-time high during WWI
Farmers had planted more and taken out more loans to buy more equipment
Government was buying food from the farmers at at a very high rate and cost
After the war prices dropped by over 50%
A lot of farmers were unable to repay their loans and lost their farms

4. Farmers cont…..
Banks begin to fail because farmers couldn’t repay their loans
McNary-Haugen Bill
Attempt by Congress to help farmers
Price-supports – the government would buy surplus crops at guaranteed priced and sell them on the international market
This bill was vetoed twice by President Coolidge

5. Living on Credit
Credit – buy now pay later – usually with high interest rates
Faced with rising debt, many consumers started cutting back on spending (slowed the economy)

6. Uneven Distribution of Income
More than 71% of the population earned less than $2500 per year
The rich were getting richer and the poor were getting poorer

7. Hoover Takes the Nation
Election of 1928
Herbert Hoover v. Alfred E. Smith
Hoover wins the election easily and becomes the 31st president of the United States

8. Stock Market
Americans who could afford it (and some who couldn’t) invested in the market
Dow Jones Industrial Average – most widely used barometer of the stock market’s health
Measure based on the prices of stocks from 20 large companies

9. Stock Market cont…
Speculation – people were buying stocks and bonds on the chance of a quick profit while ignoring risks
Buying on margin – paying a small percentage of a stock’s price as a down payment and borrowing the rest
Both speculation and buying on margin caused stock prices to rise
They caused over-investment because people bought more than they could pay for

10. The Stock Market Crashes
Black Tuesday
October 29, 1929
A record 16.5 million shares were sold
Millions more could not find buyers
People who had bought stock with loans were stuck with huge debt and unable to pay

11. Financial Collapse
The stock market crash was the first sign of the Great Depression
Period between 1929 and 1940 in which the economy plummeted and unemployment skyrocketed
The Great Depression was not just isolated to America – it was felt around the world

12. Bank and Business Failures
Banks also invested in the stock market – and they too lost their money
In 1929 around 600 banks closed – people could not get their money from the bank
By ,000 of the nation’s 25,000 banks had failed and lost their money
Millions of Americans lost all they had

13. Unemployment 1 out of every 4 Americans did not have a job by 1933
Those who did have a job were working for very little money with very little hours

14. Hawley-Smoot Tariff
1930
Established the highest protective tariff in United States history
Designed to protect American farmers and manufacturers from foreign competition
But had the opposite effect…..

15. Hawley Smoot Tariff cont…
By reducing the flow of goods in to the U.S. other countries lost revenue – which they were using to repay their loans to the United States
Also made unemployment higher
World trade declined almost 50%

16. Causes of the Great Depression
Tariffs and war debt policies
Crises in the farm sector
Availability of easy credit
Unequal distribution of income

17. Hardship and Suffering During the Great Depression
Chapter 14 Section 2

18. Depression in the Cities
People lost their jobs
Evicted from their homes
Ended up with nothing, wandering the streets
Shantytowns – little towns consisting of shacks (built out of anything they could throw together for shelter)

19. Depression in the cities cont….
Soup kitchens – offered free or low-cost food
Bread lines – lines of people waiting to receive food
Usually provided by charities or public agencies

20. Minorities during the Depression
Often had it harder than did whites
Suffered higher unemployment
Lower pay
And racial violence

21. Depression in Rural Areas
Had one advantage over living in the city:
Some farmers were able to grow their own food
However, with falling prices, rising debt, and the drought, many farmers lost their land
Between 1929 and 1932 over 400,000 farms were lost through foreclosure

22. The Dust Bowl Regions that were hardest hit: Kansas Oklahoma
New Mexico
Colorado
Texas
Farmers had cultivated so much land that there was nothing to hold the soil down
Exhaustion of the land from overproduction

23. Dust Bowl cont….
Route 66
Route to California followed by many devastated farmers and their families
Became known as Okies
Black blizzards – the most severe dust storms
Often reached all the way to the East Coast cities

25. Direct Relief
Cash payments or food provided by the government to the poor

26. Women and Children during the Depression
Had to manage tight household budgets; encountered opposition in holding jobs outside the home
Children
Suffered from poor diets and inadequate healthcare; many welfare programs and schools were shut down

27. The Legacy of the Depression
The Great Depression shattered many people’s dreams. But in terms of mental health there are two lessons to be drawn from the experience.
It is clear that the suffering of the Great Depression became part of the national legacy. Fears of broken lives and ill health were handed down from parents to children.
The resiliency of a people, who banded together to help each other, with millions of anonymous acts of kindness illuminated an otherwise bleak landscape.

28. Hoover Struggles with the Depression
Chapter 14 Section 3

29. Herbert Hoover Elected president in 1928
His beliefs for the government:
Laissez faire
Foster cooperation between business and labor
Individuals, charities, and private organizations should help the poor and suffering out (not direct relief from the government)

30. Hoover’s Cautious Steps
Asked employers not to cut wages
Asked employers not to lay off workers
Asked workers not to go on strike
In the end, none of these steps were working

31. Boulder Dam Later renamed Hoover Dam
Started in 1930 – completed in 1936
30 miles from Las Vegas
Provided jobs & water/electricity to SW

32. “Hoovervilles”
Americans started calling all the shantytowns that had popped up “Hoovervilles”
Directed at the president for not doing enough for the poor during the depression

33. Federal Home Loan Bank Act
Law enacted in 1931
Lowered home mortgage rates
Allowed farmers to refinance their loans and avoid foreclosures

34. Reconstruction Finance Corporation (RFC)
Agency established in 1932
Provided emergency financing to banks, life insurance companies, railroads, and other large businesses

35. Bonus Army Between 10,000 and 20,000 WWI veterans (1932)
Gathered in Washington to demand their pay promised to them and their families for time served in WWI
Most dispersed in peace
The ones that stayed are gassed and pushed away with force
This incident made Americans dislike Hoover even more

36. Section 1 A New Deal Fights the Depression
Chapter 15 The New Deal
Section 1
A New Deal Fights the Depression

37. Franklin Delano Roosevelt
Elected president in 1932
Served longest term of all the presidents (12 years)
5th Cousin of Teddy Roosevelt

38. Roosevelt’s New Deal New Deal policies focused on three general goals:
Relief (for the needy) – the immediate effort to help the one-third of the population that was hardest hit by the depression
Economic recovery – the effort in numerous programs to restore the economy to normal health
Financial reform – government intervention to stabilize the economy, and to balance the interests of farmers, business and labor

39. The First 100 Days March 4th – June 16th
Roosevelt and Congress passed more than 15 major pieces of New Deal legislation

40. The “Bank Holiday” Roosevelt closed all the banks on March 5th
Passed the Emergency Banking Act
Banks could only be re-opened under the Treasury Departments supervision
Federal loans were handed out as needed
Helped restore the publics confidence in the nation’s banking system

41. Regulating Banking and Finance
Glass-Steagall Act (1933)
Established the Federal Deposit Insurance Corporation (FDIC)
Provided federal insurance on each bank account
Restored confidence to the customers with the banks

42. Federal Securities Act (1933)
Required corporations to provide complete information on all stock offerings
Created the Securities and Exchange Commission to regulate stock market

43. Help for the Farmers Agricultural Adjustment Act (AAA)
Sought to raise crop prices by lowering production
The government paid farmers to leave some of their land fallow (unseeded)
This lowered production which in turn raised crop prices

44. New Deal Projects Civilian Conservation Corps (CCC)
Put young unemployed men to work building roads, developing parks, planting trees, and helping in soil-erosion and flood-control projects

45. National Industrial Recovery Act (NIRA)
Established codes of fair practice for Industries and to promote industrial growth
Example:
Public Works Administration (PWA) - Provided money to states to create jobs chiefly in the construction of schools and other community buildings

46. Food Clothing and Shelter
Home Owners Loan Corporation (HOLC)
Provided government loans to homeowners who faced foreclosures
Federal Housing Administration (FHA)
Furnishes loans for home mortgages and repairs
Federal Emergency Relief Administration (FERA)
Provided direct relief for the needy

47. Deficit Spending
Spending more money than the government receives in revenue
FDR regarded deficit spending as a “necessary evil” to bring the United States out of the depression

48. The Supreme Court Reacts
1935 found the NIRA to be unconstitutional
1936 found the AAA to be unconstitutional and struck it down

49. FDR vs. Supreme Court
Supreme Court in the early 1930’s was more conservative (did not favor New Deal) & declared many programs unconstitutional
In 1937 FDR proposed a Congressional bill to reorganize the Supreme Court calling for 6 new justices (And by law, he gets to appoint those justices!!!)
Congress and press were outraged at his “Court-Packing” Bill – Why?
Eventually he gets his way as several justices over the next 4 years retire

50. The Second New Deal Takes Hold
Ch. 15 Section 2

51. The Second Hundred Days
Economy had improved during FDR’s first 2 years as president
He still wanted more improvement
Unemployment rates remained high
Production still lagged behind 1920’s levels
Roosevelt decided to launch a Second New Deal - another burst of activity aimed at providing more help for farmers and workers

52. Eleanor Roosevelt The First Lady (FDR’s wife)
Helped her husband out every chance she got – very important part of the second new deal

53. Reelecting FDR 1936 presidential election Overwhelming victory by FDR
FDR (democrat) vs. Alfred Landon (republican)
Overwhelming victory by FDR

54. Helping Farmers Soil Conservation and Domestic Allotment Act
Paid farmers for cutting production
1938 – Second Agricultural Adjustment Act
Did not include a previous processing tax to pay for farm subsidies

55. Works Progress Administration (WPA)
Designed to help the nation’s youth, professionals, and other workers
Headed by Harry Hopkins
Provided the unemployed with jobs in construction, garment making, teaching, arts, and other fields

56. National Youth Administration (NYA)
Created to provide education, jobs, counseling, and recreation for young people
Also provided financial aid for high school, college, and graduate school

57. Wagner Act Reestablished the NIRA provision of collective bargaining
Protected the rights of workers
Allowed them to join unions without pressure from management

58. Social Security Act 1935 3 major parts:
Old-age insurance for retirees 65 or older and their spouses
Unemployment compensation system
Aid to families with dependent children and the disabled

59. The New Deal Affects Many Groups
Chapter 15 Section 3

60. New Opportunities Several Women appointed to government positions
Frances Perkins first female Cabinet Member (Secretary of Labor)

61. African-American Activism
1930’s saw growth of activism for African Americans
Laid groundwork for Civil Rights Movement (1950’s-60’s)
“Black Cabinet” – Group of influential African Americans to advise Roosevelt on racial issues.

62. President Fails to Support Civil Rights
Roosevelt never committed to full civil rights for African Americans
Did not want to upset Southern voters
NRA, CCC and TVA discriminated against African Americans
Lower Wages
Few Jobs

63. Powell v. Alabama 1932 Supreme Court Case
9 African American men were put on trial for raping two white women
8 of the 9 men were found guilty and sentenced to death in short 1 day trials
The men didn’t have adequate legal counsel (a lawyer)
Alabama ruled cases were legal
Supreme Court disagreed, said that states must provide lawyers in capitol cases (death penalty)

64. Culture in the 1930’s
Chapter 15
Section 4

65. Motion Pictures and Radio
Very profitable during the 1930’s
By % of Americans were attending the movies at least once a week
90% of American households owned a radio

66. “Gone With The Wind” 1939 One of the most popular films of all time
Dealt with the life of plantation owners in the south
Acted as a “get-a-way” from the everyday hardships of the Great Depression

67. Fireside Chats
Families usually spent several hours a day together listening to the radio
Allowed FDR to speak directly to the people.
Spoke to them as if he were a friend, not the President.
Comforted the common man

68. Orson Welles Actor, director, producer, and writer
Created “War of the Worlds” (1938)

69. Grant Wood American painter Painted “American Gothic” – 1930
FDR appointed writers and artists to paint murals to cheer up Americans

70. The Grapes of Wrath 1939 Written by John Steinbeck
Also received assistance from the Federal Writer’s Project
About the lives of a group of people from Oklahoma and their hardships during the Dust Bowl

71. The Impact of the New Deal
Chapter 15 Section 5

72. New Deal Reforms
During 2nd Term in office FDR sought to create a Third New Deal
FDR did not favor deficit spending
Economy had slightly recovered, and Congress pressured FDR to scale back the New Deal
Caused more unemployment
By 1939, FDR more concerned with Europe (Hitler’s Rise in Germany)

73. Critics of New Deal Critics – Typically Conservatives
New Deal Made Federal Government too large
Government stifled free enterprise and individual initiative
Liberal Critics claimed that Roosevelt did not go far enough

74. Supporters of the New Deal
Supporters – Typically Liberals
FDR Struck a reasonable balance between two extremes (unregulated capitalism and overregulated socialism)
Helped Country recover from economic difficulties

75. Deep Debt
Federal Government had to go deeply into debt to provide jobs and help Americans
Federal Deficit
1934- $2.9 Billion
$100 Million
$2.9 Billion

76. Lasting Effects Workers Rights Banks and Finance
National Labor Relations Board
Acts as a mediator in labor disputes between Unions and Workers
Still Around today
Banks and Finance
FDIC – Banking regulations and protection
SEC – Monitors stock market

77. Lasting Effects Social Security Rural Scene
One of the most important legacies of New Deal
Old Age insurance and unemployment continues to help families.
Impacted millions of Americans since 1935
Rural Scene
AAA – Helped farmers keep farms.
Rural Electrification Administration (REA) – Provided electricity to people in rural areas.

78. Lasting Effects Environment
Tennessee Valley Authority (TVA) – Provided jobs to thousands of workers in the region
Prevented floods in the Tennessee Valley
Provided cheap electricity to the region

79. New Deal Legacy
Brought hope and gratitude to some people for the benefits and protections
Also brought criticism from those who believed it took too much of their money in taxes.
United States does not fully recover until after World War II