Bell Ringer • What helped to cause the Great Depression? • What is a Hooverville? • What is the Dust Bowl?
The Great Depression • The Stock Market Crash in October 1929 would trigger an world wide depression. • The creation of the Smoot-Hawley Tariff caused other nations to make their own retaliatory tariffs. • Banks had invested peoples savings and lost large sums of money in the crash • The World had created the perfect situation for economic stagnation, better known as the Great Depression
Economics: Speculation Boom • The stock market crash was devastation to everyone, as almost everyone “played the market” • This was possibly because people could “buy on margin” • Buying on Margin means a person only needs a pay for a percentage of a stocks value (margin) and BORROWS the rest of the money. • In theory when the stock value goes up you pay the loan off from your profits. If the stocks were to crash you not only lose your investment, but you have a loan you can’t pay back.
Economics: Overproduction • The Roaring Twenties had created a consumer culture in the US • After the crash product was still being produced, but people had no money to spend. • The nation was experiencing under consumption • Tariffs made it next to impossible to send the goods overseas • Overproduction would cause massive layoffs, and unemployment skyrocketed
The Government Response • The immediate Government Response to the crash & rise in unemployment was nothing. • Many economists said that the depression was part of the normal business cycle of the country. • It was only a matter of time until Social Darwinism, Self-Reliance, & Rugged Individualism kicked in and the economy/country fixed itself. • President Hoover believe in this theory
Hoovervilles • Hoover accepted the Republican nomination to run for re-election in 1932 • Originally he thought he would easily be re-elected based on his record from the 1920s • However as the depression for worse he started to worry. • Unemployment was so bad in the 1930s that many people lost their homes, and small shanty communities began to appear in public parks and open fields. They called them Hoovervilles
Franklin Delano Roosevelt (FDR) • The Democrats nominated the Governor of New York, Franklin Roosevelt for the Presidency in 1932 • Roosevelt called for a New Deal, and said he would do whatever needed to be done to help the country • “It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.” ~FDR
Roosevelt’s First Hundred Days • Roosevelt wins in the largest landslide victory in Presidential history (To that Point) • In Roosevelt’s First Hundred Days he will have a record number of bills passed, all of which attempt to fix the Great Depression • These bills create dozens of agencies which will become known for their acronyms, and are historically known as the Alphabet Agencies
New Deal Agencies: Alphabet Agencies • Agricultural Adjustment Act (AAA) • Civilian Conservation Corps (CCC) • Federal Deposit Insurance Corporation (FDIC) • National Recovery Act (NRA) • Tennessee Valley Authority (TVA) • Works Progress Administration (WPA) • From 1933-1939 at least 40 different agencies were created.
Affects of the Great Depression on the Country • Women had a hard time getting a job if their husbands had a decent job • Those who did own houses and land saw property values drop as cities started to waste away • Malnutrition became a problem as many could not afford food (especially in the poorer regions of the US. Coal Mining Areas = 90%) • Many depended on soup-kitchens and breadlines in order to feed their families
Great Depression for Farmers • In the 1920s many farmers produced the same thing, but international markets bought the surplus (so the overproduction went unnoticed) • Tariffs closed that market, and the high supply of goods in US markets cause prices to drop drastically (caused under consumption) • Farmers were unable to pay loans on their farm equipment, and many lost their farms • Then there was the Dust Bowl
Dust Bowl • The overproduction of land ruined the soil • In addition parts of the mid-west experienced extreme drought • The combination led to desertification • Combine desertification with nasty Midwestern storms (the ones that make tornados) and you get dust storms. • Many farmers fled their land in search of jobs and safety.
Flint Sit-Down Strikes • In 1935 United Auto Workers formed a union at a General Motors plant in Flint, Michigan • The leaders realized that small unions were unsuccessful, and that a larger union across all the plants was needed for success • The Union went on strike December 30th 1936. • Instead of picketing outside the workers staged a Sit-Down Strike, where workers lived in the factory preventing the owners from hiring scabs. • The Union would ultimately win, and United Auto Workers gained instant credibility as a union