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Franklin D. Roosevelt and the New Deal

Franklin D. Roosevelt and the New Deal. Redefined Democracy: Political Rights  Economic Security  Social Justice. Essential Question : What were the causes of the Great Depression? Warm-Up Question :

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Franklin D. Roosevelt and the New Deal

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  1. Franklin D. Rooseveltand the New Deal Redefined Democracy: Political Rights  EconomicSecurity  Social Justice

  2. Essential Question: • What were the causes of the Great Depression? • Warm-Up Question: • Think about the changes that took place in America in the 1920s. In what ways were these changes good? Bad?

  3. The Great Depression Era

  4. The Business of America • Calvin Coolidge (President) • fit pro-businessspirit of the 1920s • Famous quote: • “The chief business of the American people is business . . .the man who builds a factory builds a temple – the man who works there worships there” President Calvin Coolidge 1924-1928

  5. American Business Flourishes • President Coolidge (Republican) successor Herbert Hoover • favored governmental policies that kept taxes down and business profits up • Tariffs were high, which helped American manufacturers • Government interference in business was minimal

  6. The Impact of the Auto • Auto • backboneof the American economy • Ford Model T • came only in black • sold for $290 ($3553 in 2011 dollars) • Over 15 million were sold by 1927

  7. How Auto Changed America • Paved roads, traffic lights, motels, billboards • Home design (garages, driveways) • Gas stations, repair shops, shopping centers • Freedom for rural families • Independence for women and young people • By 1920 80% of world’s vehicles in U.S.

  8. Airline Transport Becomes Common • airline industrybegan as a mail carrying service • quickly “took off” • By 1927 Pan American Airways was making transatlantic passenger flights When commercial flights began, all flight attendants were female and white.

  9. American Standard Of Living Soars • 1920-1929 • (prosperity) • Americans owned 40% of the world’s wealth • average annual income rose 35% during the 1920s (for top earners) • discretionary income increased

  10. Electrical Conveniences • electricity transforms the nation • Electric refrigerators • Stoves • Irons • Toasters • Vacuums • washing machines • sewing machines • All available!

  11. Modern Advertising Emerges • Ad agencies no longer sought to merely “inform” the public about their products • Agencies hired psychologists to study how best to appeal to Americans’ desire for youthful, beauty, health and wealth • “Say it with Flowers”slogan doubled sales between 1912-1924

  12. A Superficial Prosperity • Many during the 1920s believed the prosperity would go on forever • Wages • Production • GNP • stock market • all rose significantly But. . . .

  13. Problems on the Horizon? • Businesses expanded recklessly • Iron & railroad industries faded • Farms nationwide suffered losses due to overproduction • Too much was bought on credit including stocks

  14. Causes of the Great Depression • The 1920s were a decade of consumer spending & the economy looked healthy on the surface: • Income did increase in the 1920s, but there were some severe problems with the U.S. economy • In October 1929, the “Roaring Twenties” came to an end & the Great Depression began…why?

  15. The Great Depression 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. -- Herbert Hoover, 1928

  16. Causes of the Great Depression

  17. Causes of the Great Depression Agricultural overproduction bank issue Industrial overproduction Uneven division of wealth Over-extension of credit bank issue International economic situation bank issue Banking catastrophe 3 strikes against the banks You’re Out!

  18. Causes of the Depression • Agricultural overproduction: • The end of WWI led to a decline in demand for agricultural products • Too much food led to a 40% drop in crop prices • Farmers could not pay back loans & many had their farms foreclosed • Some rural banks failed

  19. Causes of the Depression • Industrial overproduction: • Mass-production of consumer goods led to overproduction • People did not need as many appliances & cars bytheendofthedecade (under-consumption) • Railroads, textiles, steel, coalmining,construction were barely profitable

  20. Overproduction of Consumer Goods Too much inventory…Not enough buyers

  21. “Traditional” industries suffered in the 1920s Corporate Profits for Coal and Railroad Industries, 1920-1930 Profits for Railroad Companies Profits for Coal Mining

  22. Causes of the Depression • Uneven Division of Wealth • Despite rising wages, the gap between the rich & poor grew wider in the 1920s • 70% of Americans were considered “poor” • Most of the spending in the 1920s was done by 30% of the population

  23. Distribution of Wealth in the 1920s * An income of $2,500 per year was considered the minimum amount needed for a decent standard of living

  24. Causes of the Depression • Credit: • Many Americans used easy credit to live beyond their means • By “buying now & paying later,” Americans generated large debts • As a result, Americans cut back on spending by the end of the decade

  25. Americans bought goods on credit & did not have much in savings accounts

  26. Easy credit created a stock market bubble

  27. Causes of the Depression • The Stock Market: • In the 1920s, the stock market soared & people speculated with stocks • bull market – upward trend in stock market • Many people borrowed money to pay for stocks, called buying on margin

  28. Buying Stocks on Margin

  29. Causes of the Depression • The Stock Market: • There was no regulation of the market & some companies altered stock values to raise profits • bear market – downward trend in stock market

  30. Causes of the Depression • The Stock Market: • On October 29, 1929 (Black Tuesday) the stock market crashed • People rushed to sell, prices plummeted, & investors lost $30 billion • Speculators who bought on the margin, could not pay off their debts • Many lost their savings The stock market crash in October 1929 marked the beginning of the “Great Depression”

  31. Causes of the Depression • The Stock Market: • Speculators who bought on the margin, could not pay off their debts • Many lost their savings “Wall Street Lays An Egg”-Daily Variety (Oct. 30, 1929)

  32. The U.S. stock market had only about 3 million active buyers & sellers but the spillover into the greater economy led to the Great Depression

  33. Causes of the Depression • International Economic Situation: • France / England borrowed $$$ to finance WWI • Reparations from Germany / Austria used to make payments • Overtime, G and A could not make the reparation payments • 1927 – 1928 F and E borrowed more $ to pay debts

  34. Causes of the Depression • International Economic Situation: • Post-war debts in Europe & high protective tariffs in America limited international trade • The Great Depression led to a global depression in Europe, Asia, & Latin America • World trade fell by 40% • exacerbated banking crisis

  35. A Global Depression

  36. Causes of the Depression • Bank Failures: • After the crash, people tried to withdraw their money from banks • In 1929, 600 banks failed due to lack of funds & the inability to recoup loans • The failure of the banks left many Americans without their life savings

  37. Bank & Business Failures, 1928-1933

  38. Effects of the Great Depression • The Great Depression led to a collapse of the U.S. financial system • 9,000 banks & 90,000 businesses failed by 1933 • Gross National Product (GNP) total value of all goods and services produced in a given year • 1929 -- GNP = $103 Billion • 1933 -- GNP = $56 Billion • 15% unemployment throughout the 30s, sometimes reaching as high as 25%

  39. Effects of the Great Depression • Consumer Confidence: • Millions of Americans lost their jobs or took pay cuts to keep jobs • The lack of confidence in the future kept people from spending money • The lack of spending made the depressiondrag onuntil the 1940s

  40. Unemployment & Consumer Spending, 1928-1933

  41. Depression Life • Shantytowns or (“Hoovervilles”) • with no money for mortgages, many forced onto streets • selling an apple • America had record poverty & suicide rates; Fathers abandoned families; Healthcare declined • Private charities created soup kitchens & breadlines to help • breadlines and soup kitchens synonymous with the Great Depression

  42. Soup Kitchens & Breadlines

  43. Mortgage Foreclosures

  44. Poverty in America

  45. The Dust Bowl • The effects of the depression were made worse by the Dust Bowl: • Heavy droughts & over-farming in the West destroyed the Plains • In the early 1930s, windstorms swept away loose soil • Farmers in the Plains left their farms & searched for work or better land in West coast states

  46. Dust Bowl • Farmers in crisis • drought creates setting for (Harvest Gypsies)

  47. The Dust Bowl (1931-1939) worsened the effects of the Depression Areas Affected by the Dust Bowl drought “Okies” & “Arkies”

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