Warm-Up Update your Table of Contents DateSession # ActivityPage # 2/26 8 The Great Depression & The New Deal 10

From BOOM to BUST

The Roaring 20’s The new concept of “credit” – economic boom People were buying: –Automobiles –Appliances –Clothes Fun times reigned –Dancing –Flappers –Drinking

Why was this bad? Credit system –People didn’t really have the money they were spending WWI –The U.S. was a major credit loaner to other nations in need –Many of these nations could not pay us back

The Stock Market People bought stocks on margins –If a stock is $100 you can pay $10 now and the rest later when the stock rose Stocks fall –Now the person has less than $100 and no money to pay back

And then…. With people panicking about their money investors tried to sell their stocks –This leads to a huge decline in stocks –Stocks were worthless now People who bought on “margins” now could not pay Investors were average people that were now broke

Herbert Hoover was president at the start Philosophy: We’ll make it! Prosperity is right around the corner! What He Did: very little The poor were looking for help and no ideas on how to correct or help were coming

Farmers were already feeling the effects –Prices of crops went down –Many farms foreclosed People could not afford luxuries –Factories shut down –Businesses went out Banks could not pay out money People could not pay their taxes –Schools shut down due to lack of funds Many families became homeless and had to live in shanties or shacks

“Hoovervilles” Some families were forced to live in shanty towns –A grouping of shacks and tents in vacant lots They were referred to as “Hooverville” because of President Hoover’s lack of help during the depression.

A drought in the Southern Midwest lead to dust storms that destroyed crops. “The Dust Bowl”

Effects of the “Dust Bowl” Crops turned to dust=No food to be sent out Homes buried Fields blown away State of emergency – one of the biggest crises of the 20 th century

Those in areas most greatly affected by the Dust Bowl, Oklahoma, Texas & Great Plains areas, migrated to the West Coast in search of work.

Images of the Great Depression Take a short gallery walk through the Great Depression Choose 1 image that has the most impact on you – why is it the most powerful in your opinion?

1932 Election Democrat Franklin Delano Roosevelt wins by a landslide against Republican Herbert Hoover

FDR Restored Confidence In his inaugural address, he said “The only thing we have to fear is fear itself….” Unemployment rates soared -poor sections (like Harlem) had 50% unemployed Banking system had collapsed

FDR – Strong Leadership He was a practical politician who practiced the art of the possible. He was a charismatic person who exhibited a warmth and understanding of people. He knew how to handle press by focusing attention on Washington. He provided dynamic leadership in a time of crisis. He was willing to experiment – comes up with “New Deal”

Sources of New Deal Ideas Brains Trust: specialists and experts, mostly college professors, idea men New Economists: government spending, deficit spending and public works, government should pump the economy Roosevelt Cabinet: included conservatives, liberals, Democrats, Republicans, inflationists, anti-inflationists -- often conflicting, compromising, blending ideas

The New Deal(s) With your group members, use the textbook pages listed to analyze the components of the New Deal

Purposes of the New Deal Relief: for the hungry and jobless Recovery: for agriculture, industry Reform: To regulate the economy - banks, to abolish child labor, and to conserve farm lands Overall objective: to save capitalism

First New Deal ( ) Emphasis: reform Political Position: conservative Primary aim: economic recovery Philosophy: economic nationalism and economic scarcity (i.e., raise prices by creating the illusion of scarcity) Objectives: higher prices for agriculture and business Beneficiaries: big business and agricultural business

Second New Deal ( ) Emphasis: reform Political Position: liberal Primary aim: permanent reform Philosophy: international economic cooperation and economic abundance Objectives: increased purchasing power and social security for public Beneficiaries: small farmers and labor