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1. 2 THE STOCK MARKET CRASHES During the 1920s, stock prices rose rapidly. Many people bought stocks...

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  • 2 THE STOCK MARKET CRASHES During the 1920s, stock prices rose rapidly. Many people bought stocks by buying on margin--purchasing stocks on credit, or with borrowed money, hoping to sell them later at a large profit. In 1929 stock prices began to drop. Frightened investors sold stocks to pay off their loans, but there were few buyers. On October 29, known as Black Tuesday, the stock market crashed. Investors lost everything. So many people wanted to sell their stocks, and so few wanted to buy, that stock prices collapsed. Black Tuesday More than 16 million shares were traded on Wall Street on Black Tuesday, a record that stood for 39 years. Just weeks later, roughly one-third of the value of the stock market had disappeared. How are the events of Black Tuesday shown on the chart? $400 $300 $200 $100 $0 Black Tuesday (October 29 March May July Sept. Nov. Jan.
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  • 3 THE ECONOMY COLLAPSES The stock crash caused a banking crisis as banks lost their investments. People tried to withdraw all of their deposits and many banks went out of business. This crisis contributed to losses by businesses, which then needed fewer workers. Normally when businesses produce more than they can sell, they have to cut back production. As people are laid off, the demand for goods drops. This can cause a severe recession called a depression. When the economy bounces back, more people are hired, and demand increases. This pattern of ups and downs in the economy is called a business cycle.
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  • 4 The economy was slow to recover after the crash in 1929. This period, the Great Depression, had several causes. One was overproduction of goods as the market was shrinking. Other factors were the uneven division of wealth and limited world trade. HOOVERS REACTION President Hoover knew that people needed help. He did not believe, however, that it was the role of the federal government to provide direct relief. He did implement some new programs to help banks and other institutions recover. In 1932 the Bonus Army camped in Washington, D.C. They were veterans who wanted early payment of military bonuses. Hoover sent U.S. troops to evict them. When several people were killed, the public was outraged. POLITICAL CARTOON Blame It on Hoover Presidents can affect the economy to some degree through their policies. During the Great Depression, President Hoover was blamed for the financial crisis. Political cartoons like this one gave voice to those Americans who thought Hoover could have prevented the crisis or could have brought it to an end quickly through government programs. ANALYSIS SKILL How does the cartoonist show Hoover reacting to the crisis?
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  • 5 ELECTION OF 1932 The Republican Party nominated Herbert Hoover again in 1932. However, much of the public had lost confidence in him. The Democratic nominee was Franklin D. Roosevelt. As governor, he had worked to provide aid to citizens of New York. In particular, he had provided aid to farmers. Roosevelt promised a new deal for the American people. He won the election in a landslide. When did he live? 18821945 Where did he live? Roosevelt lived much of his life in New York State, where he served in the state senate and as governor. He also lived in Washington, D.C., while he was serving as assistant secretary of the navy and later as president. He had a second home in Warm Springs, Georgia. What did he do? He began the New Deal, a set of government programs designed to help the country survive and recover from the Great Depression. He gave many Americans hope for the future when he spoke to them in his fireside chats. Roosevelt also led the country through World War II. His support for strong ties between the Allied countries helped the Allies achieve victory. The only thing we have to fear is fear itself, nameless, unreasoning, unjustified terror. -Franklin Roosevelt, 1933 inaugural address
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  • 6 BUILDING BACKGROUND When he ran for president in 1932, Franklin D. Roosevelt promised to provide relief to people suffering from the Depression. Even before he took office, Roosevelt began making plans with his Brain Trust, a group of expert advisers. People endured the harsh winter of 19321933, looking forward to Roosevelts inauguration.
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  • 7 THE HUNDRED DAYS Roosevelt told Americans that economic recovery was possible. He called Congress into a special session, known as the Hundred Days. They created the New Deal, programs developed by Roosevelt and Congress to aid economic recovery. One program was the Emergency Banking Relief Act. It was passed to restore confidence in banks. The president told people about it in his first fireside chat, which were radio addresses in which Roosevelt spoke directly to the public. Other programs put people to work on public projects, such as roads, airports, and parks. The Tennessee Valley Authority (TVA) hired people to build dams that provided electricity to poor communities. Frances Perkins, Roosevelts Secretary of Labor, the first female cabinet member, helped pass the National Industry Recovery Act to help businesses.
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  • 8 Primary Source RADIO BROADCAST Fireside Chats An American family sits around the radio listening to President Roosevelt answer his critics in his first fireside chat. There is an element in... our financial system more important than currency [money], more important than gold, and that is the confidence of the people. Confidence and courage are the essentials of success in carrying out our plan. You people must have faith; you must not be stampeded by rumors or guesses. Let us unite in banishing [driving away] fear. We have provided the machinery to restore our financial system; it is up to you to support and make it work. It is your problem no less than it is mine. Together we cannot fail. ANALYSIS SKILL According to Roosevelt, how should the American people help the government deal with the banking crisis?
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  • 9 THE NEW DEAL CONTINUES The Second New Deal was introduced in 1934. The Works Progress Administration (WPA) employed more than 8.5 million people. Eleanor Roosevelt, the first Lady in Roosevelt administration who supported New Deal supported National Youth Administration programs for young people. Congress passed the Social Security Act to help children and the elderly, disabled, and unemployed who could not provide for themselves. The New Deal included new labor laws. The Congress of Industrial Organizations (CIO) was a union with many skilled and unskilled workers. It welcomed women, immigrants, and minority groups. The CIO used a sit-down strike to keep General Motors from replacing strikers. A sit-down strike was a strategy in which striking workers remained inside the workplace This success helped the unions grow stronger.
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  • 10 Selected New Deal Programs Program Purpose Emergency Banking Relief Act Gave the executive branch the right to regulate banks Farm Credit Act (FCA) Refinanced loans to keep farmers from losing their land Civilian Conservation Corps (CCC) Created jobs for single, unemployed young men Agricultural Adjustment Act (AAA) Paid farmers to grow less (declared unconstitutional) Tennessee Valley Authority (TVA) Built dams and power plants in the Tennessee Valley Federal Deposit Insurance Corporation (FDIC) Guaranteed deposits in individual bank accounts National Industrial Recovery Act (NIRA) Established fair competition laws (declared unconstitutional) Civil Works Administration (CWA) Provided jobs for the unemployed Works Progress Administration (WPA) Created jobs in construction, research, and the arts National Youth Administration (NYA) Provided part-time jobs to students National Labor Relations Act (Wagner Act) Recognized unions right to bargain collectively Social Security Act Provided government aid to the retired and unemployed
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  • 11 CLASHES WITH THE COURT Roosevelt decided to propose a plan for reorganizing the federal judiciary that was soon to be labeled the court-packing bill. This bill would allow the president to appoint a new Supreme Court justice for every justice who was 70 years old or older. Roosevelt would be able to appoint six new justices immediately. Roosevelts judiciary plan drew harsh criticism from Congress and the public. Critics charged that Roosevelt was trying to change the balance of power so carefully defined in the U.S. Constitution. After a heated debate, Congress rejected the bill. The Supreme Court, however, did not overturn any more New Deal legislation. Roosevelt eventually had the opportunity to nominate nine new Supreme Court justices to replace those who had retired or died.
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  • 12 Primary Source Historians on the left have denounced the New Deal as a conservative phenomenon that let slip the opportunity to radically reform capitalism. Since the 1960s, "New Left" historians have been among the New Deal's harsh critics. New Left historian Barton J. Bernstein, in a 1968 essay, compiled a chronicle of missed opportunities and inadequate responses to problems. The New Deal may have saved capitalism from itself, Bernstein charged, but it had failed to helpand in many cases actually harmedthose groups most in need of assistance. POLITICAL CARTOON Blame It on Hoover FDR already has too much power & demands more. ANALYSIS SKILL According to the cartoon, what do members in Congress feel about FDR?
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  • 13 THE DUST BOWL American farmers were already having hard times before the Great Depression. Then the situation got worse. In the early 1930s, a severe drought hit the Gr
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