The Great Depression

World HistoryChapter 28

The Red Scare

At the end of WWI, fears about communism taking over swept the U.S.

Became known as the “Red Scare” Many government officials houses

were bombed Persecution of immigrants increased

Example: Sacco-Vanzetti Case – 2 Italian immigrants put to death for robbing a store and killing 2. Both were anarchists.

The Ku Klux Klan

After WWI, KKK membership was sold for $10

Had new differences The Klan now hated African

Americans, Jews, Roman Catholics, and amoral individuals

By 1925 = 5 million members Stolen membership $ and the

Indiana killing and raping of a young lady, membership dropped to 9,000

Klan Rally in the 1920’s

Prohibition and Suffrage

18th Amendment: prohibited sale of alcohol Al Capone – famous leading mobster

that gained wealth off selling alcohol and prostitution

Was sent to prison for tax evasion

19th Amendment: gave women the right to vote Only affected white women

Liquor Disposal Capone

The Great Depression

On October, 24 1929 (called Black Tuesday), the stock market crashed

The Great Depression began and this economic downturn would last throughout the 1930s

Causes of the Depression:1. Workers laid off; consumers buying less;

surplus was adding up2. American business unbalanced (no one

was buying cars and houses)

Black Tuesday 16 million shares of stock “dumped” on the market

Great Depression continued…

3. Pay increases not keeping up with the economy

4. Many people were in debt5. All nations of Europe owed U.S. money

from WWI6. In 1930, 9,000 banks were forced to close

because loans were not being paid back7. High unemployment (urban and rural)8. The Dust Bowl hit – little rainfall fell which

led to dust storms making farming impossible

President Herbert Hoover

Hoover tried to restore confidence in the economy

Many blamed Hoover for the economy but Hoover was insensitive to the needs

Created Hoovervilles – shelters outside of towns where people lived when they got evicted

The Depression affected the world – some countries were worse off than the U.S.

Shantytown

A New Deal

Franklin Delano Roosevelt (FDR) defeated Hoover in the 1932 election

Created the “New Deal” – FDR’s plan to get out of the depression

New Deal Legislation:1. Agricultural Adjustment Administration – paid

farmers NOT to produce on ¼ of their land (driving prices up); declared unconstitutional

2. Tennessee Valley Authority – built dams, generate electrical control, establish flood control, and sell fertilizer; brought cheap power to TN

New Deal continued…

3. National Industrial Recovery Act – an act designed to increase wages, lower unemployment, balance consumption and surplus

4. Public Works Administration – publicly funded construction on dams, bridges, roads, and public buildings (to provide jobs)

5. Federal Deposit Insurance Corporation (FDIC) – guaranteed bank deposits up to $2,500 to encourage investing

New Deal continued again…

6. Social Security Act – created to have the government be responsible for people over 65 funded by people currently working

7. Works Progress Administration – similar to the PWA; provided jobs for the unemployed

8. Court-packing Plan – Roosevelt’s solution for the Supreme Court striking down New Deal legislation; allowed him to appoint people to the Supreme Court that supported his New Deal

New Deal Aftermath

The New Deal was very controversial The Social Security Plan led to

modern welfare Farm subsidies became modern

federal involvement in agricultural pricing and production

Despite the New Deal, the only thing that would really get the world and the U.S. out of the Great Depression, was World War II…

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