THE GREAT DEPRESSION

CAUSES

• OVERPRODUCTION/UNDERCONSUMPTION• HIGH TARIFFS RESTRICTED INTERNATIONAL

TRADE• SPRECULATION, SHAKY BANKING AND

INFLATED STOCK PRICES• CRASH OF 1929 TRIGGERS A CHAIN REACTION• DEPRESSION BECOMES WORLDWIDE

OVERPRODUCTION/UNDERCONSUMPTION

• NEW PRODUCTS LIKE CARS, RADIOS, REFRIGERATORS IN THE 20S LED TO ECONOMIC EXPANSION

• BY THE END OF THE 20S MOST PEOPLE HAD THESE PRODUCTS• WAGES WERE STILL LOW SO PEOPLE COULDN’T PURCHASE MORE GOODS

OR IMPROVED GOOD• INVENTORY BEGAN TO PILE UP AND MANUFACTURES BEGAN CUTTING

PRODUCTION AND LAYING OFF WORKERS CAUSING UNEMPLOYMENT TO RISE

HIGH TARIFFS RESTRICTED INTERNATIONAL TRADE

• HIGH TARIFFS WERE IN PLACE TO PROTECT AMERICAN BUSINESSES. OTHER COUNTRIES DID THE SAME, THIS LED TO A RESTRICTION ON ALL INTERNATIONAL TRADE

• SMOOT-HAWLEY TARIFF-1930, JUST AFTER STOCK MARKET CRASH, RAISED TARIFFS AGAIN

• THE INVENTORY PILED UP, NOBODY HERE COULD BUY IT BECAUSE THEY ALREADY HAD IT OR COULDN’T AFFORD IT AND NOBODY FAR AWAY COULD BUY IT BECAUSE OF THE TARIFFS

SPECULATION, SHAKY BANKING AND INFLATED STOCK PRICES

• SPECULATION-BUYING TO SELL LATER AT A PROFIT

• 20’S NO REGULATION, SPECULATION GREW• BANKERS PUT PEOPLES’ INVESTMENTS IN RISKY

STOCKS/BUSINESSES• PEOPLE BOUGHT STOCKS ON MARGIN-PAYING

ONLY 10% FOR IT AND BORROWING 90%• EVERYBODY WAS BORROWING AND BUYING

1929 CRASH TRIGGERS CHAIN REACTION

• HERBERT HOOVER ELECTED IN 1928, REPUBLICAN=PROSPERITY THROUGH LAISSEZ FARE.

• AS LONG AS PEOPLE KEPT BUYING GOODS AND STOCKS EVERYTHING WILL BE FINE

• BUT IN 1929 PEOPLE BAGAN TO STOP, STOCK PRICES WERE TOO HIGH, THEY RAN OUT OF MONEY, THEY REALIZED THEY BOUGHT TOO MUCH ON CREDIT

• AS LESS AND LESS PEOPLE BOUGHT, THE PRICES OF THINGS DROPPED • IN THREE WEEKS STOCKS LOST HALF OF THEIR VALUE $30 BILLION

DISAPPEARED, MORE THAN WHAT THE US SPENT ON WWI• THE CRASH SCARED EVERYONE, NOBODY WANTED TO LEND MONEY

ANYMORE OR BUY THINGS. PEOPLE WHO LOST MONEY COULD NOT REPAY THEIR LOAN. BANKS BEGAN TO CLOSE, MANY PEOPLE LOST THEIR SAVINGS. MANY BUSINESSES CLOSED

DEPRESSION BECOMES WORLDWIDE

• AMERICAN BANKS INVESTED IN THE REBUILDING OF EUROPE. LOANED A LOT OF MONEY

• AFTER THE CRASH THE BANKS NEEDED MONEY THAT THE LOST IN THE STOCK MARKET. THEY STOPPED LENDING AND STARTED ASKING FOR ALL THEIR MONEY BACK.

• THE DAWES PLAN WAS FAILING, COUNTRIES COULDN’T PAY BACK THEIR LOANS AND THE DEPRESSION BECAME INTERNATIONAL

HUMAN EXPERIENCE OF THE DEPRESSION

• MORE THAN TEN MILLION OUT OF WORK, HALF A MILLION FARMERS LOST THEIR FARMS, THOUSANDS OF BUSINESSES CLOSED

• THERE WAS NO “SAFETY NET”-NO UNEMPLOYMENT, RETIREMENT BENEFITS, BANK DEPOSIT INSURANCE

• MILLIONS OF MEN CALLED “HOBOES” JUMPED ON RAILROAD FREIGHT CARS LOOKING, WANDERED FROM CITY TO CITY LOOKING FOR WORK

• MILLIONS DEPENDED ON SOUP KITCHENS AND BREADLINES PROVIDED BY LOCAL CHARITIES

HOOVER FAILS TO HALT THE DEPRESSION

• LAISSEZ-FAIRE IN THE DEPRESSION- THE MARKET NEEDED TIME, WHEN PRICES GET LOW ENOUGH, PEOPLE WILL BUY AGAIN, WHEN PEOPLE BUY AGAIN, BUSINESSES WILL START PRODUCING AGAIN, AND THEN THEY WILL HIRE PEOPLE BACK

• BUT IN TIME THE ECONOMY GOT WORSE AND WORSE

• BEOFORE THE CRASH, HE RAN ON “RUGGED INDIVIDUALISM”, BUT HE TRIED TO FIGHT THE ECONOMIC DOWNTURN

EARLY STEPS

• HE INCREASED SPENDING ON PUBLIC WORKD PROJECTS (HOOVER DAM)

• NO WAR DEBT PAYMENTS FOR 1 YEAR TO SLOW DOWN INTERNATIONAL CRISIS

• MADE GOVERNMENT BUY FARM CROPS

NOT ENOUGH• REJECTED UNEMPLOYMENT PROGRAM, THOUGHT IT WOULD

LEAD TO REDUCE INCENTIVE TO WORK• IN WWI HE HEADED THE FOOD ADMINISTRATION AND STARTED

RELIEF PROGRAMS FOR BELGIUM BUT HE DIDN’T DO IT FOR AMERICANS NOW AND PEOPLE BEGAN TO GET ANGRY

• ONE METHOD HOOVER USED IN THE DEPRESSION WAS THE “TRICKLE DOWN” ECONOMICS-HE STARTED THE RFC (RECONSTRUCTION FINANCE CORPORATION THAT GAVE LOANS TO BUSINESSES THAT WOULD SAVE THEM FROM CLOSING AND THEN THEY WILL HIRE WORKERS TO EXPAND. THE BENEFITS WOULD THEN TRICKLE DOWN TO THE AVERAGE AMERICAN. BUT HOOVER LENT ONLY $2 BILLION, THE STOCK MARKET LOSS $40 BILLION

• HOOVERVILLES-SHANTYTOWNS THAT SPANG UP IN AND AROUND CITIES WERE PEOPLE WHO LOST EVERYTHING LIVED

• IN THE SUMMER OF 1932 40 THOUSAND UNEMPLOYED VETERANS OF WWI PROTESTED IN D.C HOPING TO GET THEIR BONUS THAT WAS PROMISED TO THEM, THEY WERE CALLED THE “BONUS EXPEDITIONARY FORCE” OF BONUS ARMY. HOOVER USED THE ARMY TO DESTROY THE PROTEST

• PEOPLE WERE SHOCKED THAT THIS HAPPENED, AND IN THE ELECTION OF 1932-FRANKLIN D ROOSEVELT BEAT HOOVER IN A LANDSLIDE. HE PROMISED A “NEW DEAL”

DUST BOWL

• FARMERS HAD TO DEAL WITH THE DEPRESSION AS WELL AS A ENVIRONMENTAL DISASTER

• OVER-FARMING USING NEW TECHNOLOGY HAD REMOVED TOUGH GRASS THAT PROTECTED THE SOIL

• IN THE 30S THERE WAS A SERIES OF DROUGHTS, DRIED UP CROPS, AND STRONG WINDS CARRIED DUST.

• THE DUST RUINED ALL THE FARMS. FARMERS LEFT. MANY WERE FROM OKLAHOMA, THEY MOVED TO CALIFORNIA IN SEARCH FOR WORK. THEY WERE CALLED “OKIES”. BECAUSE OF THEIR DIFFICULT SITUATION MANY WERE MISTREATED AND TAKEN ADVANTAGE OF IN CALIFORNIA

NEW DEAL

• PROBLEMS FACING THE NATION IN 1933• PRESIDENT AND HIS ADVISERS• NEW DEAL LEGISLATION/ FIRST NEW DEAL• SECOND NEW DEAL• REACTIONS TO THE NEW DEAL• “COURT PACKING” PLAN• NEW DEAL COMES TO AN END

PROBLEMS FACING THE NATION IN 1933

• WIDESPREAD UNEMPLOYMENT• COLLAPSE OF THE BANKING SYSTEM• DECREASED PRODUCTION• MORTGAGE FORECLOSURES• THE “DUST BOWL”

PRESIDENT AND HIS ADVISERS

• FDR AND HIS WIFE WERE RELATED TO THEODORE ROOSEVELT, BUT THEY WERE PART OF DIFFERENT PARTIES

• 1921 FDR GETS POLIO AND IS ALMOST COMPLETELY PARALYZED, WILL NEVER WALK ON HIS OWN

• WHEN DEPRESSION STARTED HE WAS GOVERNOR OF NY AND STARTED RELIEF PROGRAMS FOR HIS STATE, LED TO POPULARITY TO RUN FOR PRES

• FDR APPOINTED FRANCES PERKINS-FIRST WOMAN TO A CABINET POST, SECRETARY OF LABOR

• 1932 SLOGAN “HAPPY DAYS ARE HERE AGAIN” AND “THE ONLY THING WE HAVE TO FEAR IS FEAR ITSELF”

• FIRESIDE CHATS-INFORMAL RADIO ADDRESSES FDR GAVE

NEW DEAL LEGISLATION “RELIEF, RECOVERY, REFORM”

• DEMOCRATS CONTROLLED CONGRESS AND THE PRESIDENCY AND THEY WERE ABLE TO PASS WHATEVER PROGRESSIVE LAW THEY WANTED. EVERYTHING ANTI LAISSEZ FARE

• RELIEF PROGRAMS-GOVERNMENT PUTS MONEY INTO PEOPLES’ HANDS. PEOPLE WILL SPEND THE MONEY, INCREASING DEMAND FOR PRODUCTS, INCREASING PRODUCTION, INCREASING PRIVATE EMPLOYMENT

FIRST NEW DEAL (BANKS)

• “BANK HOLIDAY”-EVERY BANK CLOSED AND INSPECTED, THEN REOPENED

• FDIC-FEDERAL DEPOSIT INSURANCE CORPORATION 1933-INSURED DEPOSITS SO THAT PEOPLE WOULDN’T WORRY ABOUT LOSING THEIR MONEY IF THE BANK FAILED

• SEC-SECURITIES AND EXCHANGE COMMISSION 1934-OVERSEE OPERATIONS IN THE STOCK MARKET

FIRST NEW DEAL (UNEMPLOYED)

• WORK RELIEF: CCC,PWA,CWA• FEDERAL EMERGENCY RELIEF ACT 1933-GAVE MONEY TO

STATE AND LOCAL GOVERNMENTS- “MAKE WORK” PROJECTS

• CCC-CIVILIAN CONSEVATION CORPS 1933-GAVE JOBS TO MEN, PLANINTING TREES DRAINING SWAMPS. YOUNG MEN LIVE IN CAMPS AND RECEIVED UNIFORMS AND FOOD, REQUIRED TO SEND MOST PAY HOME TO FAMILIES

• PWA-PUBLIC WORKS ADMINISTRATION 1933 AND CWA-CIVIL WORKS ADMINISTRATION-BUILT HIGHWAYS, BRIDGES, HOSPITALS, AIRPORTS

FIRST NEW DEAL (HOMEOWNERS)

• RELIEF TO HOME AND FARM OWNER• HOMEOWNERS LOAN CORPORATION 1933-

GAVE EMRGENCY LOANS TO PEOPLE ABOUT TO LOSE THEIR HOME

• AGRICULTURE ADJUSTMENT ACT-1933 PROVIDED LOANS TO FARM OWNERS

FIRST NEW DEAL TVA

• TENNESSEE VALLEY AUTHORITY 1933-SOUTH HIT HARDEST BY DEPRESSION, MANY AREAS DID NOT HAVE ELECTRICITY, RUNNING WATER OR ANY INDUSTRY

• TENNESSEE VALLEEY COVERED 7 STATES, THE TVA BUILT 21 DAMS TO CONTROLL FLOODING AND PRODUCE HYDRO ELECTRICITY

• GOVERNMENT OWNERSHIP OF ELECTRICITY ANGERED OTHER PRIVATE ELECTRICAL COMPANIES

FIRST NEW DEAL NRA/AAA

• NATIONAL RECOVERY ADMINISTRATION 1933-CREATED BY THE NATIONAL INDUSTRIAL RECOVERY ACT- ALL COMPANIES IN THE SAME INDUSTRY HAD TO DRAW UP A CODE OF FAIR PRACTICES, SET PRICES, STANDARD WORK WEEK OF 40 HOURS AND MINIMUM WAGE, RIGHT TO UNIONIZE

• AGRICULTURAL ADJUSTMENT ACT 1933/1938- 1933 PAID FARMERS TO PLAN LESS, LESS SURPLUS INCREASES DEMAND, RAISES PRICES. 1938- GOVERNMENT STORES CROPS UNTIL PRICES REMAINED NORMAL

SECOND NEW DEAL WPA

• WPA-WORKS PROGRESS ADMINISTRATION 1935-NEW PUBLIC WORKS PROJECTS, $11 BILLION SPENT ON 9 MILLION JOBS INCLUDING ARTIST, ARCHITECTS, WRITERS, AND MUSICIANS

SECOND NEW DEAL SSA

• SSA-SOCIAL SECURITY ACT 1935- THE MOST IMPORTANT LAW PASSED BY THE NEW DEAL. ONE OF THE PROGRAMS STILL USED TODAY. GAVE AMERICANS A “SAFETY NET” IN CASE OF UNEMPLOYMENT, ILLNESS, DEATH OF A FAMILY MEMBER

• UNEMPLOYMENT INSURANCE• RETIREMENT BENEFITS• THE DISABLES AND ORPHANED GET SPECIAL

GRANTS

SECOND NEW DEAL NLRA

• NLRA-NATIONAL LABOR RELATIONS ACT 1935 (WAGNER ACT)-GAVE RIGHT TO UNIONIZE (REPLACING THE NIRA THAT WAS DEEMED UNCONSTITUTIONAL

• IN 1936 GENERAL MOTORS WORKERS HELD A “SIT DOWN” STRIKE PREVENTING OWNERS FROM USING THE PLANT, FDR REFUSED TO INTERVENE, LATER GM AGREED TO RECOGNIZE UNION

• FAIR LABOR STANDARDS ACT 1938-SET MAXIMUM HOURS AND A MINIMUM WAGE (25 CENTS/HR) AND NO CHILD LABOR

REACTIONS TO THE NEW DEAL

• ROOSEVELT HELPING AFRICAN AMERICANS LED TO A CHANGE IN THEIR VIEWS AND THEY BEGAN VOTING DEMOCRATIC

• HUEY LONG-THIRD PARTY CANDIDATE THAT WANTED TO GIVE ALL FAMILIES $5000 A YEAR BY TAKING IT FROM THE RICH

• HE WAS NOT ALONE, THE DEPRESSION CAUSED DEMOCRACY TO FAIL ALL OVER EUROPE AND DICTATORSHIP STARTED TO RISE. PEOPLE WELCOMED STRONG LEADERSHIP. THE PROGRAMS IN THE NEW DEAL WERE UNCAPITALISTIC BUT CAPITALISM WASN’T WORKING.

COURT PACKING

• SUPREME COURT SAID NRA AND AAA WERE UNCONSTITUTIONAL. FDR WAS SCARED THAT THEY WOULD MAKE OTHER PROGRAMS UNCONSTITUTIONAL

• SUPREME COURT JUSTICES ARE APPOINTED FOR LIFE, FDR PROPOSED THAT JUSTICES HAVE TO RETIRE BY 70. IF THE LAW PASSED HE WOULD BE ABLE TO REPLACE 6 OF THE 9.

• THE BILL DID NOT PASS BUT IT PERSUADED THE JUSTICES NOT TO VOTE NEW DEAL PROGRAMS UNCONSTITUTIONAL

POPULAR CULTURE

• JOHN STEINBECK-TOLD THE STORIES OF THE OKIES IN “THE GRAPES OF WRATH”

• DOROTHEA LANGE-PHOTOGRAPHED PEOPLE OF THE DEPRESSION, FAMOUS FOR “MIGRANT MOTHER”

• WIZARD OF OZ-KANSAS DUST BOWL• WPA HIRED ARTIST, HISTORIANS, WRITERS,

ACTORS