Transcript The Great Depression Begins 1929

The Great Depression Begins
1929 - 1941
Americans
wait in
soup and
bread lines
in cities in
order to eat
and feed
their
families.
The Great Depression Begins
1929 - 1941
CAUSES of The Great Depression
1. Too many people were buying items on credit - not saving $
2. Companies producing too many goods - piled up in
warehouses – included building too many houses
3. Farmers were growing surplus crops - drove prices down
4. Industrialization/Technology caused people to lose jobs
5. There was a large gap between the wealthy and the poor
6. Stock-based economy
American were buying
too much on credit and
not saving their money.
Overproduction of Goods
- America producing more
than it could consume.
A high tariff (HawleySmoot Tariff) reduced
international trade to a
trickle as other countries
followed suit and passed
high tariffs.
Over production of crops
drove prices down.
Use of new technology led to
higher unemployment.
Machines doing jobs
previously performed by
humans.
Causes of the Great Depression
Stock prices extremely inflated.
Risky practices being used:
Stock Speculation and Buying on Margin
Prices did not accurately reflect value of
the stock/company
DJIA – Dow Jones Industrial Average
What is the Dow and how is its value
determined?
Stock Market Prices Inflated
Name
Coca Cola
General Electric
US Steel
Price 1929
128.38
222.00
174.00
Price 2013
39.31
23.62
20.74
Stock Prices 10/29/1929 and 2013
$1 in 1929 was worth about $10 in 2011 dollars.
Stock prices did not accurately reflect the profit of the company. Prices
driven up by speculating (demand).
President Herbert Hoover - 1929-1933 - Republican
Hoover
Blankets
Hoover
Flags
Hoover reluctant to interfere in the economy.
Takes cautious first steps.
Strong supporter of laissez-faire (let the
market be) economics.
When he finally decides to take action, it is
too little too late. He is a one-term president
Hoovervilles – lean to
housing some made
from wood others
from cardboard.
BROTHER, CAN YOU SPARE A DIME? (1931)
Once I built a railroad, I made it run
I made it race against time
Once I built a railroad, now it's done
Brother, can you spare a dime?
Once I built a tower, up to the sun
Bricks and mortar and lime
Once I built a tower, now it's done
Brother, can you spare a dime?
Once in Khaki suits, gee we looked swell
Full of that Yankee-Doodly-dum
Half a million boots went slogging through Hell
And I was the kid with the drum
Say, don't you remember, you called me"Al"
It was "Al" all the time
Say don't you remember, I was your pal
Brother, can you spare a dime?
http://www.youtube.com/watch?v=eih67rlGNhU
Hoover’s Handling of Bonus Army
Destroyed His Political Career
WWI veterans (17,000) descend on Washington D.C. to ask for an
early payment of war bonuses in Spring and Summer 1932.
Congress had voted to pay these in 1945.
Congress voted no.
Hoover asked Gen. MacArthur to disperse the marchers. He used force. Americans
very upset. A boy was blinded and a baby died after tear gas was used.
No way Hoover would be re-elected.
Unemployment Rates During Great Depression
Unemployment Rate During the Great Depression
Year
1923-29
1930
1931
1932
1933
Rate
3.3%
8.9%
15.9%
23.6%
24.9%
1934
1935
21.7%
20.1%
1936
1937
17.0%
14.3%
1938
1939
1940
1941
19.0%
17.2%
14.6%
9.9%
1942
4.7%
Additional Information
Too much production occurring
Hoover’s presidency
Hoover’s presidency
Election Year – FDR wins in landslide
FDR – 1st New Deal
(Hitler comes to power)
2nd New Deal Begins
(Japan threatens Manchuria and China)
Election Year
Congress pressures FDR to end New
Deal programs
War begins in Europe on Sept. 3, 1939 when Poland is invaded
Election Year
Japan bombs Pearl Harbor on Dec. 7,
1941 – U.S. industries begin producing war products
War year
FYI – Highest Average Unemployment Rate of Great Recession of 2008 was about 11-12%
The Election of 1932
Franklin D. Roosevelt (D) v. Hoover (R)
Franklin Delano Roosevelt – Democrat
(1932-1945) – Elected 4 Times
Let me assert my firm belief that the only thing
we have to fear is fear itself.
FDR- First Inaugural Address
http://www.youtube.com/watch?v=amNpxQANk0M
The Importance of
First Lady Eleanor Roosevelt
FDR was disabled from Polio
and was confined to a
wheelchair.
Bethune
Made traveling the country
difficult for him.
Eleanor traveled around and
brought information to the
president about how the
American people were doing.
She was his eyes and ears.
She pushed him on a number
of issues including women’s
rights and Civil Rights for
African Americans.
As a result, Frances Perkins became the first female
cabinet member – Secretary of Labor, and Mary
McCloud Bethune was the first Director of Negro
Affairs in the National Youth Administration.
FDR’s Brain Trust
A group of experts in their fields that advised
FDR on a variety of matters including the
economy.
FDR’s First 100 Days
• Honeymoon period at the beginning of his
presidency.
• Congress passed every piece of requested
legislation!
• WPA, AAA, CCC, NRA, etc.
• Called for a bank holiday so banks could be
examined.
• “I think it’s time for a drink.” Repeal of
Prohibition – 21st Amendment – 1933
• Fireside Chats
FDR’s First and 2nd New Deal – The 3 Rs
FDR’s Critics
Father Charles Coughlin –
Catholic Priest
Huey Long – LA Governor
and Later U.S. Senator
Program: Every Man a King
– Share Our Wealth –
Socialist
Assassinated in the LA
Capitol Building 9/8/1935
FDR said one of the most
dangerous men in
America.
Early supporter – turned
critic.
Felt FDR did not really help
the “little” man – didn’t
come through with his
promises.
Became so radical the
Catholic Church stopped his
weekly radio broadcasts
Dr. Francis Townsend –
Townsend Plan
Most people had not saved any
money for retirement.
He proposed the old-age
pension plan funded by a 2%
national sales tax so every
retired person over 60 would
receive $200 per month.
The Social Security Act is
passed later in the New Deal
Era. People receive social
security numbers for the first
time.
FDR and the Court Reorganization Plan
Court-Packing Deal:
Who: Supreme Court
Why: Were not upholding the
constitutionality of his New Deal
programs
What: Change the number of justices
from 9 to 15
Reaction: Republicans and Democrats
both outraged – called him a dictator.
FDR quickly backed down.
A Resurgence of Labor Unions
AFL (Samuel Gompers) v. CIO (John Lewis)
Had different goals and broke away from each other.
AFL dominated by skilled white male workers.
CIO wanted all industrial workers regardless of race or
sex or skill level to be able to join a union.
New Deal Act: Wagner Act (National Labor Relations
Act) passed to guarantee collective bargaining and
prohibit unfair labor practices such as blacklists.
New Ideas in Economics
There was a recession in 1937-38
caused mostly by passage of the
SSA – took money out of
circulation at a time when
consumer spending was needed.
FDR was influenced by the teachings of
economist John Maynard Keynes.
He taught that governments should spend
their way out of recessions/
depressions.
Stock market reformSecurities and Exchange
Commission
Established to police the NYSE
First chairman was Joseph P.
Kennedy)- practice of buying on
margin was regulated
T o put more money in circulation,
FDR issued an Executive Order to
take the U.S. off the GOLD
STANDARD
The government could now print
more money than Fort Knox gold
reserves could backup.
More money in circulation caused
inflation causing value of dollar to
lower.
LASTING LEGACIES OF THE NEW DEAL
• TENNESSEE VALLEY AUTHORITY (TVA) - used to
promote hydroelectric power, control flooding –
regulated by Federal government.
LASTING LEGACIES OF THE NEW DEAL
• Social Security Program
LASTING LEGACY
The Federal Debt Soared During FDR’s Presidency
1933
US National Debt $22.5 billion
1945
US National Debt $258.5 billion
This is the result of Keynesian Economic ideas.
FDR drastically increased government intervention in the economy.
Other presidents will follow suit.
Life During the Depression
The New Deal and Minorities
Farmers
Dust Bowl and Drought on
the Great Plains.
The Grapes of Wrath by John
Steinbeck – about the
hardships farmers faced.
Women who chose to
work were accused of
taking jobs men could be
working. 
African Americans –
usually last hired,
first fired.
Higher
unemployment rate
than among whites.
Racial tensions
increased.
FDR feared losing
votes if openly
supported Civil
Mexican
Americans – no
real help for these
Americans
Native Americans
Indian
Reorganization Act
of 1934 passed
Tribal lands returned
to them.
WWII - End of the New Deal
War declared in Europe – September 1939
Great Britain and France declare war on Germany after
Germany invaded Poland.