Unit 11 The Great Depression and The New Deal 1929-1941.

transcript

Unit 11The Great Depression

and The New Deal

1929-1941

The Great Depression: 1929-1941

Stock Market Crash October 29, 1929

1930: U.S. enters worst

depression in its history Economic hard times

The Great Depression: 1929-1941 4 Main Causes of the Great Depression

1) Overproduction Farms & factories

Wages did not rise as much as prices, so workers could not afford to buy many goods

As orders slowed, factories closed or laid off workers Jobless had no money for food & no land to grow it

Too many goods, too few buyers Vast amounts of goods produced in 1920’s Produced more than people were buying

Farm foreclosure sales

Unemployed

Unemployed workers marching

Unemployed at a job bureau

The Great Depression: 1929-1941 Causes of the Great Depression

2) Weakness in banking system Borrowers who invested in stock market could not

repay loans Banks could not give depositors their money Banks were forced to close

Depositors lost money

Unemployed workers outside a bank

Police guard outside a bank

3) Economy slid downhill One disaster triggered another

Stock market crash → ruined investors → no money or capital for businesses → businesses could not grow & expand → troubled banks could not make loans → businesses cut back on production → wage cuts & employee layoffs → workers had no money to spend → businesses went bankrupt

Unemployed

4) Worldwide depression European banks failed when U.S. banks

stopped making loans Worldwide economic collapse

Depression spread from nation to nation

Worldwide depression

Soaring unemployment By early 1930s, 1 in every 4 workers were

unemployed

Workers still employed work shortened hours or took pay cuts

Many of the jobless lost their homes

Bankruptcy: financial failure, caused by inability to pay debts

Families in crisis Marriage & birth rates dropped

Some families split up Fathers & older children left home to hunt for

Families in crisis

The homeless People drift from town to town looking for

Some “rode the rails” living in railroad cars & hitching rides on trains

Homeless built shacks out of wooden crates, scrap metal, cardboard, or lived in tents

Poverty

The homeless

Great Depression: 1929-1941 Lowered people’s standard of living

People lost faith in themselves

People felt ashamed

Great Depression: 1929-1941 President Hoover

Predicted better times ahead Did not think government should get directly

involved in helping businesses At first, he was opposed to government relief

programs Relief: giving help to the needy

Called on businesses & private charities to help Americans

Great Depression: 1929-1941 Private charities did what they could

Churches and groups such as the YMCA fed the hungry at soup kitchens

The numbers of needy soon overwhelmed private charities

Unemployed in relief line

Breadlines & soup kitchens

Great Depression: 1929-1941 President Hoover created:

Public works program Government hired workers for projects

Constructed schools & courthouses, build dams, and paved highways

If people earned money → spend wages on goods → demand would increase → businesses would expand → lead to economic recovery

Reconstruction Finance Corporation (RFC) Loaned money to railroads, banks, and insurance

companies to keep them in business Keep workers on their jobs

Great Depression: 1929-1941 President Hoover did more to reverse the

depression than any previous President His efforts had little effect Depression grew worse Many people blamed Hoover for doing too little

Shacks where homeless lived were called Hoovervilles Homeless covered themselves with newspapers to

keep warm, calling them “Hoover blankets”

Hoovervilles are everywhere

Great Depression: 1929-1941 After WWI, Congress had voted to give

veterans a bonus (sum of money) to be paid in 1945

In 1932, >20,000 jobless veterans marched on Washington to demand the bonus right away Some brought wives & children

They were called the Bonus Army

Bonus Army

Great Depression: 1929-1941 Bonus Army camped along Potomac River for 2

months

Senate rejected a bill to pay the bonus to veterans immediately Thought the cost would destroy any hope for country’s

recovery

Many veterans went home, but thousands remained Local police tried to force veterans to leave 4 veterans died in battles with police

Great Depression: 1929-1941

President Hoover ordered Gen. Douglas MacArthur to clear out the veterans

Great Depression: 1929-1941

MacArthur used cavalry, tanks, machine guns, and tear gas, and burned the Bonus Army camp to the ground

Great Depression: 1929-1941 Americans are shocked at Hoover’s action

President Hoover lost what little support he still had

Americans turned to a new leader

Franklin Delano Roosevelt – 32nd President 4 terms: 1933 – 1945 Democratic Party

“The only thing we have to fear is fear itself.”

New Deal End of Prohibition WWII

Franklin Delano Roosevelt – 32nd President

Married his cousin Eleanor Roosevelt, niece of Theodore Roosevelt

Eleanor Roosevelt

FDR, Assistant Secretary of the Navy during WWI

Summer of 1921 struck with polio, left his legs paralyzed Afterward, was able to

walk only with aid of heavy leg braces and crutches

Elected Governor of New York in 1928

Nominated as Democratic candidate for President in election of 1932 “I pledge myself to a

new deal for the American people.”

1932 Election Defeated Hoover in

landslide victory

Inaugurated March 1933

FDR’s Vice Presidents

1933-1941 1941-1945 1945 John N. Garner Henry A. Wallace Harry S. Truman

“Brain Trust” Nickname for FDR’s advisors

Urged his staff to “take a method and try it. If it fails, admit it and try another. But above all try something.”

First challenge – nation’s banking system 2nd day in office, FDR closed every

bank in the country for 8 days

Emergency Banking Act Passed March 9, 1933 Only banks with enough funds to

meet depositors’ demands could reopen

Banking system grew stronger

Fireside chats FDR spoke to Americans in radio

broadcasts Began 1 week after taking

office He spoke from a chair near a

fireplace in the White House Families gathered around

radios to listen

Hundred Days FDR sent many bills to

Congress Congress passed 15

major new laws

New Deal FDR’s programs to

help Americans

3 main goals:

1) Relief for unemployed

2) Plans for economic recovery

3) Reforms to prevent

future depressions

New Deal FDR’s programs to help Americans

CCC (Civilian Conservation Corps) Hired unemployed single men ages 18-25 Worked for $1 a day Planted trees, built bridges, worked on flood control

projects, and developed new parks Conserved natural resources & gave jobs to young

people

FERA (Federal Emergency Relief Admin.) Gave federal money to state & local agencies who

distributed the money to unemployed

WPA (Works Progress Admin.) Created in 1935 by the Emergency Relief

Appropriations Act Put jobless to work building hospitals, schools, parks,

playgrounds, and airports Also hired artists, photographers, actors, writers, and

composers

New Deal FDR’s programs to boost industry & farming Greatly expanded government’s role in economy

NIRA (National Industry Recovery Act) Control production & working conditions, stabilize

prices, keep workers on the job

New Deal

NRA (National Recovery Admin.) Enforced new industrial codes Government encouraged people to do business only

with companies displaying the NRA eagle

PWA (Public Works Admin.) Hired workers for thousands of projects

Built dams, public schools, aircraft carriers Did little to bring about recovery

New Deal

AAA (Agricultural Adjustment Act) Government paid farmers to:

Not grow certain crops Plow surplus crops under the soil Dispose of surplus cows & pigs

Americans outraged when people in cities were going hungry, yet the plan seemed necessary to help farmers

New Deal

REA (Rural Electrification Admin.) Extended electric lines to rural areas Number of farms with electricity rose from 1 in 10 to

1 in 4

TVA (Tennessee Valley Authority) Built 40 dams in 7 states to control flooding &

provide cheap electric power Set up schools & health centers

New Deal

FDIC (Federal Deposit Insurance Corp.) Insured savings accounts in banks approved by the

government If a FDIC-insured bank failed, government would

make sure depositors received their money

SSA (Social Security Act) Set up a system of pensions for the elderly,

unemployed, and people with disabilities

New Deal

Truth-in-Securities Act Regulated stock market & reformed banking system Designed to end the kind of wild speculation that led

to the stock market crash

Supreme Court said some acts of Congress in the New Deal programs were unconstitutional because they gave too much power to the President and federal government

FDR called for raising the number of Justices on the Supreme Court from 9 to 15 He could then appoint 6 new

Justices who supported his programs

FDR was accused of trying to pack the Court by both supporters & critics They saw this as a threat of

separation of powers

FDR withdrew his proposal

Drought and Dust During much of the 1930s, states from Texas

to the Dakotas suffered a severe drought Topsoil dried out High winds carried the soil away in blinding dust

storms

Much of the area of the Great Plains earned a new name – the Dust Bowl

Drought and Dust Dust storms buried farmhouses and forced

drivers to use headlights in daytime

Dust storms were widespread

Winds blew off and on for 10 years 1932-1939, an average of 50 storms each year

“black blizzards”

Drought and Dust

New Deal – ReviewCauses Effects

Great Depression deepens Banking system nears

collapse Millions of people are

jobless Many businesses are

bankrupt FDR becomes President

Congress approves programs for relief, recovery, & reform

Supreme Court strikes down some programs

Social Security and savings insurance continue to the present

Role of government in the economy increases

Opinions on the New Deal Conservatives

Thought it made the government too large and powerful It stifled free enterprise and initiative

Liberals President could have done more to socialize the economy

Supporters Thought FDR did a good job of balancing capitalism and

socialism.

Expanding the National Government The New Deal expanded the power of the

government Government had a more active role in the economy

Put millions of dollars in the economy through: Creating jobs Regulating supply and demand Settling labor disputes Creating agencies Regulating banking and investment

Going into Debt New Deal caused the nation to go deeply into

debt. U.S. debt went as high as $3.3 billion in

New Deal did not end Great Depression. Deficit spending during World War II did.

Deficit Spending Congress encouraged scaling back New Deal

programs This caused a drop in production Increased unemployment

FDR did not like deficit spending Spending more money than the government has

So did the New Deal really work? It did help

It brought hope and gratitude from those receiving services

Also brought anger and criticism

It was really World War II that brought us out of the Great Depression

Unit 11 The Great Depression and The New Deal 1929-1941.

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