1. Unit 12/13
1930s

2. Causes of Great Depression
Stock Market Crash of 1929 (Black Tuesday)
Economic Boom of 1920s
Overproduction & Underconsumption
Speculation, Shaky Banking, and Inflated Stock Prices
High Tariffs Restricted International Trade

3. Effects of the Stock Market Crash
The stock market crash set off a “chain reaction” in the American economy.
People who lost money on the market could no longer invest of buy as many goods.
Business became nervous about the new economic environment
Businesses went bankrupt and laid off workers, creating mass unemployment.
People lost their savings and could not pay off loans. Banks failed. Prices and
demand for goods fell.
American banks that had given loans to European countries to rebuild their war-torn economies now wanted their money back. The Depression spread to Europe when these loans were recalled

4. Human Experience During the Great Depression
No “Safety Nets” existed – no social security, no unemployment benefits, etc.
People lost their homes, their farms, began begging for food, etc.
Children suffered malnutrition
Men began traveling from town to town looking for work
Shantytowns sprung up full of homeless people
Some people relied on charities to provide food and shelter

5. Herbert Hoover’s Response to the Great Depression
Believed in laissez-faire economics
Increased federal funding for some building projects – Hoover Dam
Rejected direct federal relief for unemployed workers
Established the Reconstruction Finance Corporation (RFC) to give loans to banks & businesses
Federal Reserve System made it worse by contracting the money supply
“Hoovervilles” formed and WWI veterans marched on D.C. for their bonus money

6. Franklin Roosevelt’s Response to the Great Depression
The New Deal – “Relief, Recovery, Reform”
Bank Holiday – Roosevelt closed all banks right after his inauguration
F.D.I.C. would insure bank deposits
S.E.C. would oversee the operation of the stock market
Passed the C.C.C., P.W.A., and C.W.A. to help get the unemployed working again
The T.V.A. helped to modernize the south with electricity and dams for flood control
National Recovery Administration – set product prices, limited production, reduced the work week to 40 hours, established a minimum wage – later declared unconstitutional

7. Franklin Roosevelt’s Response to the Great Depression
The 2nd New Deal – Reform and Security
W.P.A. spent over $11 billion and put 9 million people to work
Social Security Act – most important law during the New Deal – included unemployment insurance, retirement benefits, and disability/orphaned grants
National Labor Relations Act – gave workers the right to unionize
“Court Packing” Plan – fearing the Supreme Court would keep overturning his legislation, Roosevelt proposed replacing any justice over 70 years old
Ultimately, WWII preparations pulled the U.S. from the Great Depression

8. Effects of the New Deal Positive Negative Reduced Unemployment
Increased the national debt
Established “safety nets”
Increased federal taxes
Introduced regulatory agencies
Increased size of federal bureaucracy
Increased power of organized labor
Completed valuable public works

9. Reactions to the New Deal
The New Deal was supported by many Americans and created a new Democratic coalition: workers, the poor, minority groups, and the “Solid South”
Some critics thought the New Deal was not enough – Huey Long wanted to tax the rich and provide guaranteed family income
Biggest New Deal threat was the Supreme Court which ruled many New Deal policies and programs as unconstitutional
The New Deal did aid the economy, but only World War II ended the Great Depression

10. Cultural Impact of the Great Depression
John Steinbeck wrote about the “Okies”
Dorothea Lange – photographed people suffering in poverty
Langston Hughes – wrote poetry on African-American hardships
Walker Evans – photographed poor tenant farmers in Alabama
Margaret Bourke White – Depression photographs were published in Life magazine
*****To temporarily escape their problems, people went to “talkies” or went to dance halls or read comic strips or listened to the radio shows****