The 1930 ’ s Boom to Bust

1. The 1930’sBoom to Bust

2. Squatter and her Shack

3. Dust Storm 1933

4. Civil Conservation Corps – planting a field

5. The Great Depression

6. The Late 20’s - Pre-Crash • People were secure with the economy and the stock market was very strong. • In 1928 Hoover said: “We in America today are nearer to the final triumph over poverty than ever before in the history of any land. The poorhouse is vanishing from among us.” • “Real wages” - what money could actually buy • The Stock Market: • Speculating in the market i.e. taking a chance. • Buy on margin they paid for a fraction of the price of the stock and borrowed the rest. • Welfare capitalism New York Stock Exchange

7. The Late 20’s - Pre-Crash Signs of trouble: • 1) There were massive business inventories backup • 2) Lack of diversification in American economy – mostly construction and automobile industries. • 3) Poor distribution of purchasing power among consumers • The wealth was concentrated in a few families • Farmers and factory workers were unable to maintain economic growth. • Farm income declined 66% from 1920 to 1929. • There was a myth of prosperity

8. The Late 20’s - Pre-Crash Signs of trouble cont. • 4) Huge credit problems • Steady stream of bank failures in late 1920s as customers (many of them farmers) were unable to pay mortgages. • Buying on credit or installment plans • Buy stock on Margin - like installment buying, you only paid 10-15% of the full price of the stock and borrowed the rest from investors or banks. • 5) Decline in demand for American goods in international trade • Europe recovered - we are still producing at the war rate. • Germany can’t pay reparations • Other european countries cannot pay their debt to us. • High protective tariffs discouraged trade – hurting the farmers even more!

9. The Stock Market Crash • Dow Jones Industrial Av. – was the av. of stock prices of the leading industries. • By October 1929, margin buying had reached $8.5 billion in loans to stock purchasers after this peak prices fell slowly • Black Thursday - October 24, 1929 people were beginning to sell their shares. • Black Tuesday - October 29, 1929 On this day the most shares were sold ever • November the Dow had fallen from 381to 198.7 pts. • December about $40billion in stock had been lost. • Most people lost everything • Banks were hit hard and had to close when people tried to get their savings out at the same time. • Gross National Product (GNP) went from 103 billion to 56 billion

10. The Stock Market Crash Between 1929 and 1933 • 100,000 businesses failed • Corporate profits fell from $10 billion to $1 billon • Over 6000 banks failed with over $9 million lost • 25% of the work force was unemployed • Malnutrition, tuberculosis, typhoid and dysentery increased. • Large numbers of homeless workers roamed the U.S., particularly the Southwest, seeking work

11. The problems of the depression were beyond U.S. control and confidence in the economy was the key to recovery Against gov’t welfare – Hoover thought that it was undermining to character and individualism. Instead he urged Americans to turn to community and church resources Hoover began to use federal agencies to address issues: 1. He met with business and labor leaders to reduce layoffs and strikes 2. Reconstruction Finance Corporation (RFC) 1932 to make loans to stimulate economy John Maynard Keynes – An eng economist said that large govt spending could help a collapsing economy. 3. Financed federal work projects, such as massive dams in the West (Boulder, Hoover, and Grand Coulee) 4. Hawley-Smoot Tariff - Raised tariffs 33% in attempt to keep foreign goods off the U.S. market. Hoover’s Reaction

12. Effects of the Depression • Hoover tried – but was an easy scapegoat • Bonus Army – WWI vets wanted their pensions • Hoovervilles - homeless shanty towns • Humor - Hoover gardens, Hoover flags, Hoover blankets • Dust Bowl – not only did farmers loose their farms but a drought made the Great Plains dusty and uninhabitable. • Increase in racial discrimination - Scottsboro Boys trial • Socialists gained some ground discrimination Bonus Army Hoovervilles

13. 1) ___________ - when you take a chance and invest in the stock market. 2)Buying a stock _________ – when you paid for a fraction of the price of the stock and borrowed the rest. 3) On October ___, _____, also called Black_________, the most shares were sold ever and the stock market crashed. 4) ________________ – An eng economist said that large government spending could help a collapsing economy.

14. 1) Speculating - when you take a chance and invest in the stock market. 2)Buying a stockon margin – when you paid for a fraction of the price of the stock and borrowed the rest. 3) On October29, 1929, also called Black Tuesday, the most shares were sold ever and the stock market crashed. 4) John Maynard Keynes – An eng economist said that large government spending could help a collapsing economy.

15. 1932 Election: Hoover vs. FDR • Republican candidate: Hoover • Refused to accept any responsibility for the economic downturn • Campaign slogans: "The Worst is Past“ and "Prosperity is Just Around the Corner" • Accused FDR of seeking the destruction of capitalism • Hoover said this election was between two ideas of gov’t – he didn’t want the big gov’t that FDR suggested.

16. 1932 Election: Hoover vs. FDR • Democrat candidate: Franklin Delano Roosevelt • FDR had been NY senator, Assistant Sec. of Navy. • Married wife Eleanor who was an amazing politcian and activist in her own right. • 1920 got polio and never walked again unaided • Offered a New Deal for the "forgotten man" and promised a balanced budget along with economic reforms • Campaign slogan: "Happy Days are Here Again" signaled Democratic optimism in face of economic problems • His focus was: Relief – Recovery – Reform • Brain Trust - He surrounded himself with the best, a group of brilliant social, economic and political thinkers who comprised Roosevelt's cabinet.

17. 1932 Election: Hoover vs. FDR • FDR won 57% of the popular vote and Democrats took control of both the House and Senate • The FDR inaugural address: “The only thing we have to fear is fear itself.” Blue = Hoover Red = FDR Inauguration – 3/4/1933

18. The New Deal • Second Bonus March • First hundred days • Bank holiday • Took us off the gold standard • Federal Deposit Insurance Corporation FDIC • First Fireside Chat – these explained to the public what we was doing. He became like a father figure. The 1st chat explained the bank holiday and banking to the public Eleanor Roosevelt Fireside Chat

19. The New Deal • Federal Emergency Relief AdministrationFERA - • Led by Harry Hopkins - this agency sent funds to depleting local relief agencies. • Civil Works Administration CWA • Jobs in building or improving roads, park, airports, etc. 4 million workers. • Civilian Conservation Corps CCC • Environmental program and put 2.5 million unmarried men to work maintaining and restoring forests, beaches, and parks. • Indian Reorganization Act of 1934 • This act ended the sale of tribal lands and restored ownership of unallocated lands to Native American groups. FERA CWA - library CCC Camp IRA

20. The New Deal • Nation Industrial Recovery Act NIRA • Formed to boost the declining prices by helping businesses and workers: regulating wages, working conditions, production, and prices. It also set a minimum wage. Declared unconstitutional later. • Public Works Administration PWA • Started projects like dams, causeways, and bridges (A part of the NIRA) • Agricultural Adjustment Administration AAA • Formed to help farmers • Home Owners Loan Corporation (HOLC) to refinance mortgages • Paid farmers not to raise specific crops and animals to lower production to increase prices. Declared unconstitutional later PWA AAA

21. The New Deal • Tennessee Valley AuthorityTVA • Helped the Tennessee River valley by reactivating a hydroelectric power plant for cheap electric power, flood control, and recreational opportunities. • Securities and Exchange CommissionSEC • Regulated the stock market • full disclosure of information on stocks being sold. • Passage of the 21st Amendment created jobs in the brewing industry and used of excess grain. • The New Deal was good, but it did not do enough and people criticized it or making the govt to big and interfering. • The Supreme Court also found the NIRA and AAA unconstitutional b/c it gave the president law making powers.

22. The Second New Deal • Works Progress AdministrationWPA • Improved schools, hospitals, playgrounds etc. Work for 8 million Americans • Farm Security Administration FSA • Loaned more than $1 billion to farmers and set up camps for migrant workers. • Wagner Act • Replaced the NIRA helping unions • It legalized collective bargaining and outlawed spying on unions and blacklisting. • Set up the National Labor Relations Board (NLRB) to enforce its provisions

23. The Second New Deal • Fair Labor Standards Act of 1938 • This banned child labor and set a minimum wage • Social Security Act • Provided old-age pensions for workers, survivor’s benefits for victims of industrial accidents, unemployment insurance, and aid for defendant mothers and children, the blind and physically disabled. • Court Packing • Supreme Court had frustrated FDR calling laws unconstitutional. • FDR proposed a reform bill to raise number of justices in the Supreme Court • FDR claimed he wanted to lessen the work load for the old justices by adding 6 new ones (bring it to 15) Supreme Court 1937

24. The Dust Bowl • After WWI dropping grain prices caused farmers to farm more land. After the crash most lost their land, leaving it barren. • At the same time, a seven-year drought began in 193. Many of the farms literally dried up and blew away creating what became known as the "Dust Bowl." • Many moved west to California where they hoped to find work. • Dust Bowl migrants were called "Okies" Well on the Great Plains Dust Storm

25. The Dust Bowl • Why California? • Long growing season • There had been a need for workers before the depression • “Route 66” • So many went to California, it was really hard to find a job. • Federal camps opened to help the migrants Arvin Migratory Labor Camp was the first federally operated camp opened by the FSA in 1937

26. 1936 Election • Republican candidate: Alfred Landon a Kansas Governor. • Democrat candidate: FDR • FDR carried every state except Maine and Vermont. Blue – Landon Red - FDR

27. Reactions to the New Deal & Programs • Women: New Deal sort of helped but men and boys got preference in relief programs • Eleanor Roosevelt – as a first lady she was tireless worker for social causes including women’s rights and civil rights for African Americans • Frances Perkins – Sec. of Labor 1933-1945 under FDR - first woman cabinet member Eleanor Roosevelt & Frances Perkins

28. Reactions to the New Deal & Programs • Minorities & AfAm: • Still lots of discrimination- Southern federal relief programs often reinforced segregation. The AFAms didn’t get the higher paying jobs, and were kept from skilled jobs. • Mary McLeod Bethune - African American educator, New Deal worker, founded Bethune Cookman College, and advised the National Youth Administration for FDR • Father Divine- AfAm minister -Harlem soup kitchens Father Divine Mary Bethune

29. Reactions to the New Deal & Programs • political right – conservative – They thought some of the programs were socialists, limited freedom, and FDR gave more taxes. • political left – radicals – Needed more changes • Demagogues - this means a charismatic leader who can manipulate people w/ truths, lies and promises and scare tactics. • Father Charles Coughlin- “Radio Priest” who used the radio to spread his views. Attacked the New Deal • Senator Huey Long • Louisiana politician in 1930s also called the Kingfish • “Share or wealth” SOW - take large personal fortunes and redistribute them – very socialist – assassinated in 1935. Father Coughlin Huey Long

30. Legacy of the New Deal • Raised the public’s expectations of the president • Increased gov't spending and the national debt • Effect on unions • Entertainment: • Radio became the main source for entertainment. • Gracie Allen and George Burns • Soap Operas • Walt Disney George Burns Walt Disney

31. Legacy of the New Deal • Famous books: • The Good Earth – by Buck • The Grapes of Wrath by Steinbeck • Gone with the Wind by Mitchell • Their Eyes Were Watching God by Zora Neale Hurston