The Great Depression and the new deal

1. The Great Depression and the new deal 1929-1939

2. The Great Depression Chapter Fourteen

3. The Great depression and New Deal Objective • understand the causes and consequences of the Great Depression • understand the impact of FDR’s New Deal legislations on the American nation

4. Chapters in Brief - Overview The economic boom of the 1920s collapses in 1929 as the United States enters a deep economic depression. Millions of Americans lose their jobs, and President Hoover is unable to end the downslide.

5. The Nation’s sick economy CHAPTER 14 – section 1

6. Chapters in Brief Although the economy of the 1920s boomed, trouble lurked beneath the surface. The textile, steel, and railroad industries were barely profitable. Mining and lumbering were in decline. In the late 1920s, the auto, construction, and consumer goods industries faltered. The biggest problem, though, was in agriculture. Wartime demand for food dropped, and farmers suffered. Unable to make mortgage payments, many lost their land. Congress tried to help farmers by passing laws that would boost food prices, but President Calvin Coolidge vetoed them. Farmers, short on money, bought fewer goods. That trend, combined with the consumer debt load, cut consumer spending. Consumer spending was also hurt by low incomes. These problems were not completely evident in the 1928 presidential election. Republican Herbert Hoover, pointing to years of prosperity under presidents Harding and Coolidge, won the election over Democrat Alfred Smith.

7. Chapters in Brief Meanwhile, the stock market continued its amazing rise. People bought stocks, hoping to become rich. Many bought on margin, borrowing against future profits to pay for stocks today. If prices did not rise, though, there would be trouble. Stock prices began a decline in September of 1929. On October 29, known as Black Tuesday, they plunged sharply. More than 16 million shares of stock were sold that day until no more willing buyers could be found. By mid-November investors had lost more than $30 billion. The Depression spread around the world. The drop in consumer demand in the United States cut European exports, hurting their economies. Also, Congress passed a high tariff to reduce imports. They hoped to protect American industry, but instead cut the demand for American exports. President Hoover tried to reassure Americans that the economy would right itself. Many people, panicking, pulled their money from banks. With so many withdrawals happening so suddenly, many banks were forced to close. When the banks failed, other depositors lost their deposits. Businesses began to close as well, and millions of Americans lost their jobs. Unemployment had been 3 percent in 1929; by 1933, it was 25 percent. Those who kept their jobs suffered pay cuts or reduced hours.

8. Chapters in Brief The great stock market crash signaled the beginning of the Great Depression. It didn’t cause the Depression, but it hurried—and worsened—the economic collapse. The main causes of the Depression were a decrease in demand for American goods overseas, farmers’ problems, the problem of easy credit, and the fact that too few people held too great a share of the nation’s wealth.

9. Economic Troubles on the Horizon • as the 1920s went on, there were serious problems that threatened the prosperity of the decade 1. Industry • roads struggled to compete against new forms of transportation • the coal industry suffered against new forms of energy production • many other industries slowed down as well 2. Agricultural • post WWI, demands for crops went down • farmers boosted production, but this oversupply drove prices down • Congress tried to set price supports, but President Coolidge vetoed it

10. Economic Troubles on the Horizon 3. Consumers Have Less Money To Spend • rising prices • stagnant wages • unbalanced distribution of income • overbuying on credit in previous years 4. Living on Credit • many Americans were living beyond their means • this led to large amounts of debt, and trouble paying those debts 5. Uneven Distribution of Income • rich get richer (+75% income) • poor get poorer (+9% income)

11. Hoover Takes the Nation • President Hoover wins the election of 1928 with his promise of…….. “We in America are nearer to the final triumph over poverty than ever before.”

12. Hoover Takes the Nation • The Dow Jones Industrial Average • those who could afford to invested • the Dow Jones had gone up consistently throughout the 1920s • people wanted in on this “bull market” • Problems in the market: • Speculation: buying stocks and bonds with the chance of a quick profit while ignoring the risks of doing so • Buying on margin: paying a small percentage of a stock’s price and borrowing the rest • those buying tactics could destroy a person financially if stock prices went down

13. The stock market crashes • Stock prices peaked in early September 1929 • prices then began to fall • caused a waver in confidence; some investors pull their money • on October 24th, the market took a plunge

14. The stock market crashes • Black Tuesday • On October 29th, 1929, the bottom fell out on the stock market • people frantically sold stocks before the prices could drop lower • 16.4 MILLION shares were dumped in one day! • people who had bought on margin could not find buyers for their stocks, and were stuck with huge debts • by mid-November, investors had lost $30 billion (the amount it cost to fight WWI)

15. Financial collapse • the stock market crash triggered the beginning of the Great Depression • the crash did not cause the Great Depression, but it did make it more severe

16. Financial collapse • Banks and Business Failures • people panicked and withdrew their money from banks • many banks had lost their money in the stock market, and couldn’t give people their money • there was no government protection for people, so they lost their savings when their bank closed • unemployment went from 3% in 1929 to 25% in 1933

17. Financial Collapse • Worldwide Shock Waves • the Great Depression made it harder to produce American goods to ship abroad • Protective tariffs were created to help U.S. business, but ended up making the situation worse

18. Stock market crash video (10:05) http://www.youtube.com/watch?v=RJpLMvgUXe8

19. **Causes of the great depression • tariffs and war debt policies that cut down the foreign market for American goods • a crisis in the farm sector • the availability of easy credit • an unequal distribution of wealth **

20. Essential question How did the economic trends of the 1920s help cause the Great Depression? Explain. Answer the question in three complete sentences in your summary section.

21. Hardship and suffering during the depression Chapter 14 – Section 2

22. Chapters in Brief The Depression devastated many Americans. With no jobs, millions of people went hungry or homeless. Cities across the country were full of people who had been thrown out of their apartments or homes because they couldn’t meet housing payments. They slept under newspaper or built shantytowns. People stood in line to get food from soup kitchens set up by charities. African Americans and Hispanic Americans living in the cities suffered greatly. Some suffered violence at the hands of angry whites who had lost their jobs. These groups had higher jobless rates; they also were given lower-paying jobs. The Depression hurt people in rural areas, too, although farmers could at least grow food. Still, as food prices continued to fall, more and more farmers lost their farms from failure to meet mortgage payments. From 1929 to 1932, about 400,000 farmers lost their land. To worsen matters, a long drought struck the Great Plains. Parched land could hold no crops. When powerful winds swept the plains, they blew the soil away in vast dust storms. An area known as the Dust Bowl was hardest hit. Many farmers packed up their belongings and moved to California to find work as migrant farm workers.

23. Chapters in Brief The Depression placed heavy pressures on the family. Many men felt ashamed because they had lost their jobs. Some abandoned their families. Women found work if they could, but they generally were paid less than men. Some people, too, argued that employers should hire men rather than women since they were seen as the primary support for a family. Children suffered from poor diets and lack of health care. The number of children suffering illnesses due to lack of vitamins increased. Lacking money to continue, many school boards shut down schools or shortened the school year. Many children went to work to try to help their families survive. Others rode the railways in search of better lives.

24. The depression devastates people’s lives • The Depression in the Cities • people lost their jobs, were evicted, and ended up homeless • some slept in the streets, others • built shantytowns • Shantytowns: towns of shacks made out of whatever people could find – “Hoovervilles” • people went to soup kitchens and bread lines for food • racial tensions increased due to everyone competing for the same rare jobs

25. The depression devastates people’s lives • The Depression in Rural Areas • thousands lost their farms to foreclosure, and thusly could not feed their families • many farmers turned to tenant farming and barely scraped by

26. the depression devastates people’s lives • The Dust Bowl • a drought in the early 1930s wrecked havoc on the Great Plains • due to over farming, there was too much loose soil that could go airborne • when the rain stopped and the winds picked up, massive dust storms formed • Kansas, Oklahoma, Texas, New Mexico, and Colorado were worst hit. • many people fled West and were called “Okies”

27. Hardship and suffering During the great depression March 24, 1935 Dear Family, Did some of you think that you had a dust storm? I’ll tell you what it was. It was us shaking our bedding, carpets, etc. For over a week we have been having troublesome times. The dust is something fierce. Sometimes it lets up enough so we can see around; even the sun may shine for a little time, then we have a frenzied time of cleaning, anticipating the comfort of clean feeling once more.

28. Hardship and suffering During the great depression We keep the doors and windows shut tight, with wet papers on the sills. The tiny particles of dirt sift right through the walls. Two different times it has been an inch thick on my kitchen floor. Our faces look like coal miners’, our hair is gray and stiff with dirt and we grind dirt in our teeth. We have to wash everything before we eat it and make it as snappy as possible. Sometimes there is a fog all through the house and all we can do about it is sit on our dusty chairs and see that fog settle slowly and silently over everything. When we open the door, swirling whirlwinds of soil beat against us unmercifully, and we are glad to go back inside and sit choking in the dirt. We couldn’t see the streetlight just in front of the house.

29. Hardship and suffering During the great depression One early morning, I went out during a lull, and when I started to return I couldn’t see the house. I knew the direction, so I kept on coming, and was quite close before I could even see the outline. It sure made me feel funny. There has not been much school this week. It let up a little yesterday and Fred went with the janitor and they carried dirt out of the church by the scoopful. Four of them worked all afternoon. We were able to have church this morning, but I think many stayed home to clean. A lot of dirt is blowing now, but it’s not dangerous to be out in it. The dirt is all loose, any little wind will stir it, and there will be no relief until we get rain. If it doesn’t come soon there will be lots of suffering. If we spit or blow our noses we get mud. We have quite a little trouble with our chests. I understand a good many have pneumonia.

30. Hardship and suffering During the great depression As for gardens, we had ours plowed, but now we do not know whether we have more or less soil. It’s useless to plant anything. Grace

31. Dust bowl (5:56) http://www.youtube.com/watch?v=guTek7ipD4U

32. Effects on the american family • family unity played an important part in getting through tough times • many men had to leave their families in search of work, became known as “hoboes” • there was next to no direct relief from the government for families • women kept the family together • some women worked, but this created resentment from men • children faced serious health problems due to a poor diet • many children also left school and went to work • many teenagers left home and hopped on the rails to find work elsewhere

33. Social and psychological effects • the suicide rate rose by more than 30% between 1928 - 1932 • three times as many people were admitted to mental hospitals • adults stopped going to doctor or dentist • students stopped going to college • others put off getting married, raising large families, or having kids • the Depression put financial security on people’s minds (their minds on their money and their money on their minds) • many families and communities were strengthened • many people developed habits of savings and thriftiness

34. Essential question Explain how the Depression affected men, women, and children. Answer the question in three complete sentences in your summary section.

35. Hoover Struggles with the great depression Chapter 14 – section 3

36. Chapters in Brief Economic slowdowns happen with some frequency. President Hoover at first believed that the Depression was simply another slowdown that would end. Officials in his administration thought it best to do nothing and let the economy heal itself. Hoover believed government should take action, but be careful not to take too much power. Hoover thought that the government’s role should be to help different groups work together to improve the economy. He also believed that the government should encourage private groups to provide benefits—food and shelter—to the needy and jobless. He did not think that the government should provide direct aid to people, however. Hoover met with bankers, business leaders, and labor leaders. He urged them to work together to revive the economy. Despite these efforts, the economic situation simply got worse. People expressed their frustration at the situation. Farmers destroyed some food or refused to work. People without homes began to call their shantytowns “Hoovervilles.” Hoover did not change his principles and offer direct aid to the jobless and hungry. He did take steps to have a more active government role in the economy, however. He began a program of major public works, including building roads, bridges, and dams, to provide jobs. He launched a program to try to raise food prices and urged bankers to join a credit organization that would shore up ailing smaller banks.

37. Chapters in Brief By 1932, the economy had still not improved. Congress passed a law to lower the rates for home mortgages, hoping to spur the construction industry. Hoover created the Reconstruction Finance Corporation, aimed at funding projects that would create jobs. The RFC was a major change in policy, but it came too late to help. Hoover’s popularity plummeted even further in 1932 when World War I veterans came to Washington. They demanded early payment of the bonuses they had been promised. This Bonus Army began to live in tents near the Capitol building. Hoover helped them, but after Congress voted down the bill they had requested, he told the veterans to leave. About 2,000 stayed, and Hoover ordered the army to remove them. The sight of U.S. army troops gassing American citizens—including children—outraged many people. Hoover faced the 1932 presidential campaign more unpopular than ever.

38. Hoover tries to reassure the nation • “Any lack of confidence in the economic future… is foolish” • Hoover believed that Americans should remain optimistic and continue business as usual • saw the Depression as part of the business cycle • believed that government could play a limited role in helping to solve problems

39. Hoover’s philosophy • put great faith in the power of reason • believed that government’s job was to foster cooperation between cooperating groups and interests in society • valued “rugged individualism”- Americans should succeed through their own efforts • did not support federal welfare • individuals, charities, and local organizations should help the poor • Hoover’s beliefs about helping the poor shocked and frustrated suffering Americans

40. Hoover takes cautious steps • brought together key leaders from business banking and labor and tried to have them find solutions to the Depression • asked employers not to cut wages lay off workers • asked labor leaders not to demand higher wages or strike • none of the steps taken did much good • authorized the construction of the Boulder (Hoover) Dam • provided water to cities on the West Coast • allowed California’s agricultural economy to grow

41. Blame shifts towards hooverand the republicans • Democrats take advantage of anti-Hoover sentiments • take control of the House • knock Republican control of Senate down to one vote • Uprising by Farmers • burn crops and dump milk on roads instead of selling at a loss • farmers declare a “farm holiday” and refuse to work • block roads to keep crops from getting to market • Poking Fun at Hoover • Shantytowns become “Hoovervilles” • newspapers used as blankets became “Hoover Blankets” • empty pockets pulled out became “Hoover Flags” • even in the face of all this, Hoover held to his principles

42. Hoover takes action • Backed cooperatives • Federal Farm Board • National Credit Corporation • Direct Intervention • Federal Home Loan Bank Act: Lowered mortgage rates for homeowners and allowed farmers to refinance their homes at a lower rate • Reconstruction Finance Corporation: authorized up to two billion dollars for emergency financing for banks, life insurance, railroads and other large businesses • showed Hoover’s softening stance on his position of government intervention in the economy

43. Dealing with the bonus army • in the spring of 1932, between 10 and 20 thousand WWI vets went to D.C. in hopes of helping to pass a bill that would have given them a bonus • the Patman Bill was supposed to pay the soldiers in 1945… they wanted their money in 1932 • Hoover saw them as communists and criminals, but initially did allow them to protest • the Senate rejects the payout in June, and Hoover asked them to leave • on July 28th, the people who refused to leave were gassed by the Army, which led to the death of a baby and the blindness of an eight year old. • most Americans are shocked by the treatment of veterans

44. Essential question Explain some of Hoover’s beliefs / philosophy about government. Answer the question in three complete sentences in your summary section.

45. The New DealChapter Fifteen

46. Chapters in Brief - Overview President Roosevelt launches a program aiming to end the Depression. The Depression and his New Deal have profound effects.

47. A New Deal Fights the Great Depression Chapter 15 – section 1

48. Chapters in Brief In the 1932 election, Franklin Delano Roosevelt—or FDR—won a landslide victory, and Democrats took control of the House and Senate. His policies were called the New Deal. The first step was to reform banking: many were closing, causing panic. The new president tried to end the crisis by temporarily closing banks and passing a number of new laws. He reassured the nation in a radio “fireside chat” that explained his policies. Roosevelt acted to help farmers and other workers. The Agricultural Adjustment Act raised food prices. Other agencies hired jobless workers for conservation or building projects. An agency was created to help the needy. The National Industrial Recovery Act (NIRA) promoted industrial growth. The Tennessee Valley Authority brought flood control and electricity to a poor region. The president’s actions were attacked by liberals as not enough and by conservatives as too radical. When the Supreme Court overturned the NIRA and another New Deal law, Roosevelt proposed a plan to add his own justices to the Court. It failed. Eventually the Court backed the New Deal, but the court scheme cost him support.

49. Chapters in Brief Three critics of Roosevelt rose to prominence. Father Charles Coughlin blasted the president on his popular radio show. Dr. Francis Townsend proposed a national pension for the elderly. Huey Long, a politician from Louisiana, proclaimed a plan called “Share Our Wealth.”

50. Americans get a new deal • The Presidential Election of 1932 • Republicans run Hoover knowing he has little shot at winning. • Democrats run Franklin Delano Roosevelt • Roosevelt won an overwhelming victory • 23 million votes to Hoover’s 16 million • Democrats claimed a nearly two thirds majority in the Senate • Democrats also controlled almost three-fourths of the House • the election showed Americans were ready for a change!