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THE GREAT THE GREAT DEPRESSIONDEPRESSION
Unit VIIIBUnit VIIIB
AP U.S. HistoryAP U.S. History
Fundamental QuestionFundamental Question
►Analyze how the Great Depression Analyze how the Great Depression changed America’s political and changed America’s political and economical structures.economical structures.
Past Major American Past Major American RecessionsRecessions► Panic of 1807Panic of 1807
MAJOR CAUSE: Embargo Act of 1807MAJOR CAUSE: Embargo Act of 1807► Panic of 1819Panic of 1819
MAJOR CAUSES: End of War of 1812 and First Bank of U.S. not recharteredMAJOR CAUSES: End of War of 1812 and First Bank of U.S. not rechartered MAJOR LEGACY: Second Bank of U.S. chartered, first example of business cycle MAJOR LEGACY: Second Bank of U.S. chartered, first example of business cycle
contractioncontraction► Panic of 1837Panic of 1837
MAJOR CAUSES: Second Bank of U.S. not rechartered and Specie CircularMAJOR CAUSES: Second Bank of U.S. not rechartered and Specie Circular► Panic of 1873Panic of 1873
MAJOR CAUSES: Land and railroad speculationMAJOR CAUSES: Land and railroad speculation► Panic of 1893Panic of 1893
MAJOR CAUSES: Railroad speculation and Sherman Silver Purchase ActMAJOR CAUSES: Railroad speculation and Sherman Silver Purchase Act MAJOR LEGACY: J.P. Morgan bailed out government with $65 million in gold MAJOR LEGACY: J.P. Morgan bailed out government with $65 million in gold
bullionbullion► Panic of 1907Panic of 1907
MAJOR CAUSES: Stock market speculation and bank runsMAJOR CAUSES: Stock market speculation and bank runs MAJOR LEGACY: Led to Federal Reserve SystemMAJOR LEGACY: Led to Federal Reserve System
► Depression of 1920-1921Depression of 1920-1921 MAJOR CAUSES: War economy to peace economy, influx of laborers, MAJOR CAUSES: War economy to peace economy, influx of laborers,
overproduction in agricultural sectoroverproduction in agricultural sector
Republican Policies of 1920sRepublican Policies of 1920s►Harding-Coolidge-Hoover’s laissez-faire Harding-Coolidge-Hoover’s laissez-faire
policiespolicies Banks and corporations increased questionable Banks and corporations increased questionable
or corrupt financial tacticsor corrupt financial tactics
►Mellon’s Tax BillMellon’s Tax Bill Revenue Acts of 1824, 1826, 1828 decreased Revenue Acts of 1824, 1826, 1828 decreased
tax ratestax rates Inspired massive consumer and investment Inspired massive consumer and investment
spendingspending
►Fordney-McCumber Tariff (1922)Fordney-McCumber Tariff (1922) Heavily favored industries and factoriesHeavily favored industries and factories Farmers suffered with limited foreign marketsFarmers suffered with limited foreign markets
A “Boom” Economy during A “Boom” Economy during 1920s1920s
► Mass ConsumerismMass Consumerism Scientific management and assembly lines spurred productionScientific management and assembly lines spurred production Welfare capitalism led to wage increases and consumer Welfare capitalism led to wage increases and consumer
confidenceconfidence Installment plans led to consumer debtInstallment plans led to consumer debt
► 1920s Socioeconomics1920s Socioeconomics Socioeconomic gap widened further than Gilded AgeSocioeconomic gap widened further than Gilded Age 5% wealthy class owned 33% of income5% wealthy class owned 33% of income Top 1% owned over 35% of the nation’s wealthTop 1% owned over 35% of the nation’s wealth
Bottom 20% owned 4% of the nation’s wealthBottom 20% owned 4% of the nation’s wealth ► Agricultural SectorAgricultural Sector
OverproductionOverproduction Price decreases after World War IPrice decreases after World War I Increased farming resulted in poor environmental conditionsIncreased farming resulted in poor environmental conditions
The Stock Market and the Crash of The Stock Market and the Crash of 19291929
► BackgroundBackground SpeculationSpeculation ““Buying on Buying on
MarginMargin””
► The Crash of 1929The Crash of 1929 381.17 (9/3/29)381.17 (9/3/29) Concern over high Concern over high
stock prices led to stock prices led to massive sell-offmassive sell-off
Thursday, October Thursday, October 2424► 299.50299.50
Monday, October 28Monday, October 28► 260.64260.64
Tuesday, October 29Tuesday, October 29► 230.07230.07
41.22 (7/8/32)41.22 (7/8/32)
Causes of the Great DepressionCauses of the Great Depression►Unequal Distribution of WealthUnequal Distribution of Wealth► Industrial OverproductionIndustrial Overproduction►Agricultural CrisisAgricultural Crisis►Overextension of CreditOverextension of Credit►Bank FailuresBank Failures►Stock Market Crash of 1929Stock Market Crash of 1929►High TariffsHigh Tariffs►Dawes Plan and Foreign LoansDawes Plan and Foreign Loans
Hoover and the RepublicansHoover and the Republicans► ““Given the chance to go forward with the policies of the last eight years, we shall soon with the Given the chance to go forward with the policies of the last eight years, we shall soon with the
help of God, be in sight of the day when poverty will be banished from this nation.” - help of God, be in sight of the day when poverty will be banished from this nation.” - Inauguration, March 4, 1929Inauguration, March 4, 1929
► ““There is no cause to worry. The high tide of prosperity will continue.” Sec. Of Treasury Andrew There is no cause to worry. The high tide of prosperity will continue.” Sec. Of Treasury Andrew Mellon, Sept. 1929Mellon, Sept. 1929
► ““While the crash only took place six months ago, I am convinced we have now passed the worst While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover.” Pres. Hoover, May 1, 1930and with continued unity of effort we shall rapidly recover.” Pres. Hoover, May 1, 1930
► ““The worst is over without a doubt.” Sec. Of Labor James Davis, June 29, 1930The worst is over without a doubt.” Sec. Of Labor James Davis, June 29, 1930► Hoover’s Economic PhilosophyHoover’s Economic Philosophy
Promote voluntarism, restraint, and self-reliancePromote voluntarism, restraint, and self-reliance Limited federal government involvement; facilitate with business sector and Limited federal government involvement; facilitate with business sector and
bankingbanking► Hawley-Smoot Tariff (1930)Hawley-Smoot Tariff (1930)
Historical increase in tariff rates to protect domestic industriesHistorical increase in tariff rates to protect domestic industries EPIC FAIL - since foreign nations enacted high tariff rates on U.S. goodsEPIC FAIL - since foreign nations enacted high tariff rates on U.S. goods
► Federal Farm BoardFederal Farm Board Increased power to temporarily hold crop surpluses to curb overproductionIncreased power to temporarily hold crop surpluses to curb overproduction FAIL - since government would not limit productionFAIL - since government would not limit production
► Reconstruction Finance Corporation (RFC)Reconstruction Finance Corporation (RFC) Government-backed private corporation to offer loans to banks, corporations, Government-backed private corporation to offer loans to banks, corporations,
insurance companies, and railroadsinsurance companies, and railroads FAIL - did not offer relief to individual AmericansFAIL - did not offer relief to individual Americans
Depression by NumbersDepression by Numbers► Dow Jones Industrial Dow Jones Industrial
AverageAverage 1929: 381.171929: 381.17 1932: 41.221932: 41.22 The average of stock The average of stock
prices dropped over 90%prices dropped over 90%► Price IndicesPrice Indices
Consumer prices feel Consumer prices feel 25%25%
Wholesale prices fell Wholesale prices fell 32%32%
► UnemploymentUnemployment 1929: 3.2%1929: 3.2% 1933: 24.9%1933: 24.9% Unemployment rates Unemployment rates
higher in specific higher in specific regions, among different regions, among different groupsgroups► Toledo, OH: 90%Toledo, OH: 90%
► GDPGDP 1929: $103.6B1929: $103.6B 1933: $56.4B1933: $56.4B
► Bank FailuresBank Failures 1929: 659 banks ($200,000,000)1929: 659 banks ($200,000,000) 1930: 1,300 banks (853,000,000)1930: 1,300 banks (853,000,000) 1931: 2,294 banks ($1,700,000,000)1931: 2,294 banks ($1,700,000,000)
► IncomeIncome National income fell $80B to $50BNational income fell $80B to $50B Salaries declined 40%Salaries declined 40%
► Manufacturing wages down 60%Manufacturing wages down 60% Farmers’ income declined 55%Farmers’ income declined 55%
► Industrial productionIndustrial production Down 26% in 1930; 51% by 1932Down 26% in 1930; 51% by 1932
► InvestmentsInvestments $10B in 1929; $1B in 1932$10B in 1929; $1B in 1932
► Fertility RatesFertility Rates 1928: 93.81928: 93.8 1933: 76.31933: 76.3
► Suicide RatesSuicide Rates 1920-1928: 12.11920-1928: 12.1 1929: 18.11929: 18.1 1930-1940: 15.41930-1940: 15.4
HoovervillesHoovervilles
Displaced Americansset up shanty townsCame to be known as“Hoovervilles”
Public Reaction to Public Reaction to DepressionDepression
► Blame and NeedsBlame and Needs Hoover and Republicans Hoover and Republicans
suffer public backlashsuffer public backlash Public demands direct Public demands direct
government action and government action and interventionintervention
► Bonus MarchBonus March WWI veterans marched on WWI veterans marched on
D.C. demanding early D.C. demanding early payments of pensionspayments of pensions
Federal troops sent in to Federal troops sent in to break up Hoovervillesbreak up Hoovervilles► Burned down shacks and Burned down shacks and
displaced veterans and displaced veterans and familiesfamilies
Public backlash on Hoover Public backlash on Hoover increased due to perceived increased due to perceived apathy by Hooverapathy by Hoover
Depression through PicturesDepression through Pictures
The Dust BowlThe Dust Bowl (1930-1936) (1930-1936)► CausesCauses
OvergrazingOvergrazing Improper Improper
farming farming techniquestechniques
Increased Increased cultivationcultivation
Drought in Drought in 19341934
► EffectsEffects Dust stormsDust storms Black Sunday - Black Sunday -
April 14, 1935April 14, 1935► 300 million 300 million
tons of topsoil tons of topsoil blown across blown across southern southern Plains regionPlains region
Plight for Plight for farmersfarmers
Migration westMigration west► ““Okies”Okies”
Dust Turns Day Into NightDust Turns Day Into Night
Election of 1932Election of 1932► RepublicansRepublicans
Herbert HooverHerbert Hoover Blamed and Blamed and
criticized for causing criticized for causing and exacerbating and exacerbating DepressionDepression
► DemocratsDemocrats Franklin Delano Franklin Delano
Roosevelt (FDR)Roosevelt (FDR)► Campaign promise Campaign promise
of a “new deal” and of a “new deal” and help for the help for the “forgotten man”“forgotten man”
► Repeal ProhibitionRepeal Prohibition► Cut government Cut government
spending and spending and provide direct provide direct assistance for assistance for unemployed rather unemployed rather than businessesthan businesses
Legacy of Election of 1932Legacy of Election of 1932► Realignment election Realignment election
leading to the Fifth leading to the Fifth Party SystemParty System
► Twentieth Twentieth Amendment (1933)Amendment (1933) Lame-duck Lame-duck
amendmentamendment
► FDR expanded FDR expanded intervention and intervention and influence of the influence of the executive branchexecutive branch
► Eleanor Roosevelt Eleanor Roosevelt exemplified First Lady exemplified First Lady as more than just a as more than just a hostesshostess
Fifth Party System (1932-Fifth Party System (1932-1968)1968)
► DemocratsDemocrats New Deal CoalitionNew Deal Coalition
► CatholicsCatholics► JewsJews► BlacksBlacks► Progressive IntellectualsProgressive Intellectuals► Urban MachinesUrban Machines► Populist FarmersPopulist Farmers► White SouthernersWhite Southerners► Labor UnionsLabor Unions► Low-IncomeLow-Income► ImmigrantsImmigrants
Dominated Congress and American Dominated Congress and American public for the next 36 yearspublic for the next 36 years
Increased government Increased government involvement in economy and involvement in economy and societysociety► New DealNew Deal► Great SocietyGreat Society► Civil RightsCivil Rights
► RepublicansRepublicans Pro-businessPro-business NortheastNortheast ConservativesConservatives
►EconomicEconomic►SocialSocial
John Maynard KeynesJohn Maynard Keynes► Before the New DealBefore the New Deal
Classical economics Classical economics ► Supply and demand, laissez-Supply and demand, laissez-
fairefaire► Economies will naturally Economies will naturally
recover in the long-runrecover in the long-run Say’s LawSay’s Law
► ““products are paid for by products are paid for by products”products”
► Keynesian EconomicsKeynesian Economics ““In the long-run we are all In the long-run we are all
dead.”dead.”► Criticized Say’s Law: “supply Criticized Say’s Law: “supply
creates its own demand”creates its own demand” Strong aggregate demand Strong aggregate demand
drives economiesdrives economies Mixed EconomiesMixed Economies
► Some intervention from public Some intervention from public sector to stimulate economysector to stimulate economy
► Fiscal policy Fiscal policy Government spending/deficit Government spending/deficit
spendingspending► Monetary policyMonetary policy
Fed increasing or decreasing Fed increasing or decreasing the money supplythe money supply
FDR’s Message of HopeFDR’s Message of Hope► FDR had no specific plan for FDR had no specific plan for
the Depressionthe Depression► Calming the nationCalming the nation
“… “… the only thing we have the only thing we have to fear is fear itself.”to fear is fear itself.”
Fireside chatsFireside chats► The Three R’sThe Three R’s
ReliefRelief RecoveryRecovery ReformReform
► Brain TrustBrain Trust Capable advisers ordered Capable advisers ordered
to experiment, be to experiment, be pragmaticpragmatic
““Do something.”Do something.”
First New DealFirst New Deal - Alphabet - Alphabet SoupSoup
► First Hundred First Hundred Days*Days*
►Bank Holiday*Bank Holiday*► Emergency Emergency
Banking Relief Banking Relief Act*Act*
►Gold Reserve ActGold Reserve Act► 21st 21st
Amendment Amendment (1933)(1933) 18th 18th
Amendment and Amendment and Prohibition Prohibition repealedrepealed
► Civilian Conservation Corps (CCC)*Civilian Conservation Corps (CCC)*► Agricultural Adjustment Act (AAA)*Agricultural Adjustment Act (AAA)*► Federal Emergency Relief Act (FERA)*Federal Emergency Relief Act (FERA)*
Civil Works Administration (CWA)Civil Works Administration (CWA)► Tennessee Valley Authority (TVA)*Tennessee Valley Authority (TVA)*► Farm Credit Administration (FCA)Farm Credit Administration (FCA)► Home Owners Loan Corporation (HOLC)*Home Owners Loan Corporation (HOLC)*► National Industrial Recovery Act National Industrial Recovery Act
(NIRA)*(NIRA)* National Recovery Administration National Recovery Administration
(NRA)(NRA) Public Works Administration (PWA)Public Works Administration (PWA)
► Federal Deposit Insurance Federal Deposit Insurance Corporation (FDIC)Corporation (FDIC) Glass-Steagall ActGlass-Steagall Act
► Securities Exchange Commission Securities Exchange Commission (SEC)(SEC)
► Federal Housing Administration Federal Housing Administration (FHA)(FHA)
The Second New Deal (1935-The Second New Deal (1935-1938)1938)
► Resettlement Administration (RA)/Farm Security Resettlement Administration (RA)/Farm Security Administration (FSA)Administration (FSA) Resettled poor farmers; economic and Resettled poor farmers; economic and
educational programs for farmerseducational programs for farmers► Revenue Act of 1935Revenue Act of 1935
Increased tax rates on wealthy, capital gains, Increased tax rates on wealthy, capital gains, gifts, inheritancegifts, inheritance
► Works Progress Administration/Works Works Progress Administration/Works Projects Administration (WPA)Projects Administration (WPA) National labor project for infrastructure and National labor project for infrastructure and
humanitieshumanities National Youth Administration (NYA)National Youth Administration (NYA)
► Rural Electrification Administration (REA)Rural Electrification Administration (REA) Public-private effort to electrify farms and Public-private effort to electrify farms and
rural areasrural areas► Social Security Act (1935)Social Security Act (1935)
Tax on employee income to be used for Tax on employee income to be used for retired persons, disabled, dependents, retired persons, disabled, dependents, unemployedunemployed
► Wagner Act (1935)Wagner Act (1935) National Labor Relations BoardNational Labor Relations Board Right to collectively bargainRight to collectively bargain
► Fair Labor Standards Act (1938)Fair Labor Standards Act (1938) Established national minimum wageEstablished national minimum wage Maximum 40 hour workweek and overtimeMaximum 40 hour workweek and overtime Child labor under 16Child labor under 16
Election of 1936Election of 1936►DemocratsDemocrats
Popularity of Popularity of New DealNew Deal
New Deal New Deal CoalitionCoalition
► RepublicansRepublicans Alfred Alfred
Landon, Landon, Governor of Governor of KansasKansas
Pro-business Pro-business and and conservative conservative criticism of criticism of New DealNew Deal
Federal government used posters, songs, advertisements, literature to promote and support FDR’s New Deal programs among the American public
New Deal ReactionsNew Deal Reactions► Majority of Americans Majority of Americans
approved of FDR’s approved of FDR’s programsprograms
► Business leaders and Business leaders and corporations called him corporations called him traitor or fascist or traitor or fascist or communistcommunist
► BoondogglesBoondoggles► American Liberty LeagueAmerican Liberty League► Father Charles CoughlinFather Charles Coughlin
Radio broadcasts attacking Radio broadcasts attacking FDRFDR
Pro-fascist and anti-Semitic Pro-fascist and anti-Semitic remarksremarks
► Huey Long – “Kingfish”Huey Long – “Kingfish” Share the WealthShare the Wealth
► $5000 for every family, $5000 for every family, $2,000 annually$2,000 annually
Heavily tax wealthyHeavily tax wealthy
FDR and FDR and Court PackingCourt Packing► Supreme Court reversed Supreme Court reversed
several New Deal programsseveral New Deal programs Schechter Poultry Corp. v. Schechter Poultry Corp. v.
United StatesUnited States (1935) (1935)► NIRA unconstitutional as NIRA unconstitutional as
violation of delegation of violation of delegation of powers and commerce powers and commerce powerpower
United States v. Butler United States v. Butler (1936)(1936)► AAA unconstitutional as AAA unconstitutional as
violation of Tenth violation of Tenth AmendmentAmendment
► Justice Reorganization BillJustice Reorganization Bill Appoint new justices for every Appoint new justices for every
justice over 70justice over 70► 6 additional justices6 additional justices
Most of Congress defeated billMost of Congress defeated bill Designed to pressure Supreme Designed to pressure Supreme
Court to approve New Deal Court to approve New Deal programsprograms
► Compared FDR to fascists in Compared FDR to fascists in EuropeEurope
New Deal and LaborNew Deal and Labor► AFL strengthened by union-AFL strengthened by union-
backed New Deal legislationbacked New Deal legislation National Labor Relations National Labor Relations
Act/Wagner ActAct/Wagner Act Fair Labor Standards ActFair Labor Standards Act
► Congress of Industrial Congress of Industrial Organizations (CIO)Organizations (CIO) Organize unskilled laborers in Organize unskilled laborers in
major industriesmajor industries Industrial unionismIndustrial unionism
► StrikesStrikes Auto industry recognized Auto industry recognized
United Auto Workers due to United Auto Workers due to sit-down strikessit-down strikes
Republic Steel violent strike Republic Steel violent strike helped recognize CIOhelped recognize CIO
End of the New DealEnd of the New Deal► Roosevelt Recession (1937-1938)Roosevelt Recession (1937-1938)
Contractionary monetary policy in Contractionary monetary policy in lieu of economic expansionlieu of economic expansion
FDR blamed big businessFDR blamed big business► Midterm Election of 1938Midterm Election of 1938
GOP gained seats in House and GOP gained seats in House and Senate; Democratic majority Senate; Democratic majority preservedpreserved► Recession of 1937-1938Recession of 1937-1938► FDR’s controversial court-packingFDR’s controversial court-packing
Congress began to limit or Congress began to limit or eliminate spending for New Deal eliminate spending for New Deal programsprograms
Hatch Act of 1939Hatch Act of 1939► Limited politicians and Limited politicians and
campaign contributionscampaign contributions► People who received federal People who received federal
assistance could not use assistance could not use money for campaign money for campaign contributionscontributions
► International ConcernsInternational Concerns Totalitarian governments spawned Totalitarian governments spawned
defensive preparationsdefensive preparations
Women and DepressionWomen and Depression► Men left their families in Men left their families in
search of work or worked search of work or worked more than one jobmore than one job
► Limited income and Limited income and absence of fathers placed absence of fathers placed intense pressures on intense pressures on mothersmothers
► Female labor force Female labor force increased for female-increased for female-based jobsbased jobs
► Wages remained low Wages remained low compared to mencompared to men
► Suffered backlash as a Suffered backlash as a competitive workforcecompetitive workforce
Minorities and the Minorities and the DepressionDepression► BlacksBlacks
Suffered extreme poverty compared to other groups due to racism and Suffered extreme poverty compared to other groups due to racism and worsening conditionsworsening conditions► ““No jobs for niggers until every white man has a job!” – rally cry in SouthNo jobs for niggers until every white man has a job!” – rally cry in South
FDR and New DealFDR and New Deal► Lower wages in NRA; AAA evicted thousands of blacks from tenant farmsLower wages in NRA; AAA evicted thousands of blacks from tenant farms► WPA hired 1 million blacks in construction and educational projectsWPA hired 1 million blacks in construction and educational projects► Mary McLeod Bethune in NYAMary McLeod Bethune in NYA
Scottsboro Boys Trial (1931)Scottsboro Boys Trial (1931)► Nine blacks youths accused of raping two white girls on a train in AlabamaNine blacks youths accused of raping two white girls on a train in Alabama► Appeals showed lack of fair trial, impartial jury, fair sentencing, effective counselAppeals showed lack of fair trial, impartial jury, fair sentencing, effective counsel
► NativesNatives Indian Reorganization Act (1934)Indian Reorganization Act (1934)
► Repeal of Dawes Act (1887) eliminating assimilation programs, return of native Repeal of Dawes Act (1887) eliminating assimilation programs, return of native sovereignty, preservation of native culturessovereignty, preservation of native cultures
► ImmigrantsImmigrants Immigration was reduced by restrictive policies of 1920sImmigration was reduced by restrictive policies of 1920s Suffered discrimination and prejudice with worsening economic conditionsSuffered discrimination and prejudice with worsening economic conditions Mexican RepatriationMexican Repatriation
► With farming jobs limited, white Americans migrated west and policies With farming jobs limited, white Americans migrated west and policies established to push out Mexican immigrantsestablished to push out Mexican immigrants
Federal OneFederal One► Part of the WPAPart of the WPA► Federal Writers ProjectFederal Writers Project► Federal Theatre ProjectFederal Theatre Project
Negro Theatre ProjectNegro Theatre Project► Federal Music ProjectFederal Music Project► Federal Art ProjectFederal Art Project► Historical Records Historical Records
SurveySurvey
EscapismEscapismGreat Depression in Arts and Great Depression in Arts and
EntertainmentEntertainment► LiteratureLiterature
John SteinbeckJohn Steinbeck► The Grapes of WrathThe Grapes of Wrath► Of Mice and MenOf Mice and Men
► PhotographyPhotography Dorothea LangeDorothea Lange
► MusicMusic Brother, Can You Spare a Dime?Brother, Can You Spare a Dime? Woody GuthrieWoody Guthrie
► RadioRadio ComediesComedies Soap operasSoap operas
► MoviesMovies The Wizard of OzThe Wizard of Oz Shirley TempleShirley Temple Snow White and the Seven DwarvesSnow White and the Seven Dwarves Marx BrothersMarx Brothers
EscapismEscapismGreat Depression in Sports and Great Depression in Sports and
RecreationRecreation► SportsSports
WPAWPA► Athletic facilitiesAthletic facilities► Athletic educational Athletic educational
programsprograms Innovation, consolidation, Innovation, consolidation,
and sacrifice of and sacrifice of professional and college professional and college sportssports► College bowl gamesCollege bowl games► NFL playoffsNFL playoffs
► RecreationRecreation Games and MonopolyGames and Monopoly GamblingGambling RodeosRodeos Dance halls and jazzDance halls and jazz