Warm-Up Stock: Units of ownership in a company.
Companies sell “shares” of stock= ordinary people can pay a
certain amount of money to own a “share” or part of a larger
company
If the company does well, the people make money
If the company does poorly, the people can loose money
Answer in Notebook:
Would YOU buy stock today?? Why or why not?
Do you think the risk is worth it?
The Great DepressionCauses of the Depression
Underlying Problems from the 1920s
Agriculture Struggles
Farmers grew too much and prices dropped
New farm technologies, pesticides and bumper crops
Had produced extra food during the war, no longer
needed
Farmers had expensive equipment
and debts to pay, lived on credit
month to month
Underlying Problems from the 1920s
WWI Debts and Loans
The US loaned lots of
money to European
countries struggling after
the war
Many of these nations
could not pay the US
back anytime soon
Underlying Problems from the 1920s
Easy Credit hides money problems for awhile
Automobiles, appliances, radio and stock were
bought on credit
Installment buying
Every year Americans acquired more debt
Lived beyond their means
Spent money they did not actually have!
Underlying Problems from the 1920s
Unequal wealth distribution
Workers produced more but wages only increased a
little bit
Corporate profits skyrocketed
Rich became MUCH richer, the poor slightly less poor
60% of families made < $2000 every year, but the
24,000 wealthiest families made > $100,000
BUT wealthy families don’t eat 50x more food, cars, radios,
etc, so they kept and held on to extra money
Increase in wealth does NOT lead to more people
buying more things
Underlying Problems from the 1920s
The Stock Market
Buying stock on margins/on
credit
If stock costs $100, pay $10
now and the rest later
Buying and selling stocks to turn
quick profits
Risky gamble
Prosperity Hides Troubles
1928 Election full of
Optimism
Republican Presidents took
credit for prosperous economy
Herbert Hoover (Republican)
won huge victory
Known for running Food
Administration in WWI
Promised prosperity for all
Black TuesdayOctober 29, 1929
Stock Market Crash
16 million shares sold, billions of dollars lost
Peoples’ fortunes gone within hours
Stock cost $100, you paid $10 and would pay more later
Next day, stock cost $50. The stock you bought has less
value and you haven’t even been able to pay for it yet.
You try to sell it before the price goes lower
Everyone does this at the EXACT SAME TIME
From Crash to DepressionStock Market Crashed. Then, Banks collapsed
Bank runs: people ran to banks to withdraw all their $
Banks loan out people’s money to others, so if you have
$2000 in the bank there’s not actually $2000 cash sitting at
the bank
Banks did not have money to pay everyone back
Thousands of banks closed
So people with all their life savings in the bank now had NO
money
https://www.youtube.com/watch?v=iPkJH6BT7dM
From Crash to Depression
Businesses fold, Unemployment rises
People had no money, so they stopped buying
things
When people stopped buying things, workers
who made those products were laid off
People lost their jobs, so people bought less,
which made more people lose their jobs
VICIOUS CYCLE
Depression goes World-Wide
Hawley-Smoot Tariff raises price on
foreign imports
To protect US products but adds to the depression
International trade stopped
Now, US can’t sell things to other countries, and
nobody in the country is buying things
WWI Loans
US can’t loan any more money
Asks for loans to be repaid, so Germany,
France, Britain go broke trying to pay us back
The Great DepressionLife during the Depression
The American People Suffer
Unemployment
All-time unemployment
high in 1933, 25%
unemployment
Those who were still
employed had hours and
wages cut
Men waited in lines to find
jobs, or sold apples on the
street
The American
People Suffer
Hunger
Public soup kitchens and breadlines try to help
Homelessness
People could not afford to pay mortgages, so banks
foreclosed on many homes
Many had to live in shanties (Hoovervilles)
Hoovervilles appear in abandoned lots and parks
Named to insult President Hoover
Humiliation
Suicide Rate increases
Farmers and The Dust Bowl
Prices of crops went down
Many farms foreclosed (1
million btw 1930-1934)
Drought and windy storms
creates the Dust Bowl
On the Great Plains (TX, OK, KS,
NB, CO)
Killed animals, destroyed crops
Many migrate west and east to
escape conditions
Hoover Tries (and Fails)The people looked to their President to help
and he did nothing
Hands-off policy, this was the regular cycle of things
Hoover called for Volunteerism
Asked individuals, businessmen, and the
governments to work together to help everyone
Asked businesses to keep employment, wages, and prices
at current levels
Asked government to reduce taxes
Asked the wealthy to give to charity
Most Americans did what was best for THEM,
not for EVERYONE.
Hoover Tries (and Fails)Creates the Reconstruction
Finance Corporation to give loans
to businesses and banks
Hoped banks would lend to
businesses
Hoped businesses would hire workers
“Trickle-down economics”
But, banks did not lend and
businesses did not hire
Hoover Dam: Employs many in the
Southwest
The Bonus Army
In 1932, WWI vets marched in Washington, DC
A bill had been proposed that would give
soldiers the rest of their pay for the war early
(not supposed to happen until 1945)
Wanted bonuses early because of Depression
Hoover had vetoed this
Government called in US army to
remove the protesting veterans
Using extreme measures and violent tactics
Tear gas and bayonets
What would YOU do, Mr./Madam President?
Imagine that you are the President of the United States in 1929-
1930 as the economy and society begin a downward spiral.
What would you do?
What legislation would you propose to improve life for
Americans?
What message would you send to citizens to reassure them?
Respond in 3-5 sentences. You must address all three questions!
The Great DepressionThe 1932 Election and First Hundred Days
Franklin D. Roosevelt
Democratic Governor of NY
Born rich
Diagnosed with Polio in 1921,
paralyzed from the waist down
Covered the severity of it
Teddy Roosevelt’s 5th Cousin
Married to Eleanor Roosevelt,
Teddy Roosevelt’s Niece
The 1932 Election People incredibly unhappy with Hoover for his lack of response
During election, unemployment increased by 7 million and poor areas had 50%
of the population unemployed
Roosevelt wins in landslide victory
The New Deal
Roosevelt’s big idea that he ran the election on
Roosevelt supported a strong federal government who
would play an active role in fighting the Depression
Hoover had done nothing
Roosevelt wanted to use the government to fix the problem
Put together a “Brain Trust”
Group of professionals who advised FDR on what to do
The First Hundred DaysDuring his first 100 days in office, Roosevelt proposed
and Congress passed 15 bills
Three main goals
Relief from immediate
hardship
Recovery for the economy
Reform to prevent future
depressions
Roosevelt’s First Inaugural Address
https://www.americanrhetoric.com/s
peeches/fdrfirstinaugural.html
What is the tone of this speech?
What is the overall message
Roosevelt is trying to send?
The Great DepressionThe New Deal
The New Deal
Relief
Provide jobs for the unemployed
Protect farmers from foreclosure
Recovery
Get the economy back on its feet
Reform
Regulate banks and economy to prevent
future problems
Relief and Recovery ProgramsRural Aid
Agricultural Adjustment Act (AAA)
Paid farmers subsidies to not plant as much
Tennessee Valley Authority (TVA)
Built dams in Tennessee to control flooding
and bring electricity
Created jobs, benefitted the area
Relief and Recovery ProgramsJobs and Labor
Civilian Conservation Corps (CCC)
Jobs for young men
Planting forests, making trails, digging ditches,
firefighting
Public Works Administration (PWA)
Building bridges, dams, power plants, and
government buildings
National Recovery Administration (NRA)
Set minimum wages and prices to help labor
Later ruled unconstitutional by Supreme Court
Reform ProgramsFinancial Reform
Restoring confidence in the economy
Federal Deposit Insurance Corporation (FDIC)
Insured bank deposits
Money you have in the bank, you’re guaranteed (up to a certain amount)
Securities and Exchange Commission (SEC)
Regulation of the stock market
Social and Economic Reform
Works Progress Administration (WPA):
Solutions to ongoing problems
Built/improved highways, promoted soil
and water conservation, helped artists
Social Security Act
Pensions for retirees
Unemployment and injury insurance
Aid to mothers, children, and disabled
Originally did not apply to domestic or
farm workers (many African Americans)
Is the Government Overstepping?
People complained the government was too powerful
Democratic party founded on idea of limited government, this was the
opposite
Party realignment
Supreme Court started ruling New Deal programs
unconstitutional
Court Packing
FDR wanted to add 6 new justices to the 9 on the Supreme Court
Justices were “elderly and overworked”
Court then began to rule in his favor, 5-4
Some justices retired, allowing FDR to nominate new Justices who
accepted his plans
Women and Minorities Women
More active in politics but still treated unequally
Eleanor Roosevelt
1st female cabinet member, Francis Perkins
African Americans
Hit harder by Depression
Black Cabinet (unofficial advisors to FDR)
No new civil rights reform, as FDR was scared to lose support from southern
Democrats
Native Americans
Indian New Deal: Economic assistance, encourage traditions
Effects of the New Deal Did not end the Depression, but provided relief and reform
Changed how the government works
New Democratic coalition (people supporting the party)
Southern whites, northern workers, poor Midwestern farmers, African
Americans
Expanding role of government
End of “hands off” government
Environmental and Conservation efforts
Welfare state: government takes responsibility for the welfare of children, elderly, disabled, poor, and unemployed
Executive power grew (President more influential)
Roosevelt elected for 3rd and 4th terms, only to do so but provided stability
1930s Culture
Escapism: Americans tried to forget about
the Depression through entertainment
Movies took people’s minds off things
(Wizard of Oz, musicals)
Golden age of radio, 9/10 Americans had
one
Swing music
WPA’s Federal Art Program sponsored artists,
photographers and actors
Literature featured working class heroes
Fireside Chats
Series of Informal radio speeches given by FDR
Allowed the President to communicate directly to the
American people
Example: There was a bank run (everyone tried to go
take their money out of the banks).
FDR went on the radio to explain to Americans why not to rush
to banks to get their money out immediately
Americans listened!