Transcript Unit 6 Great Depression New Deal Cornell Notes 2013

Unit 6: The Great Depression
(1929-1942)
Bellringer---1/8
• Find your seat using the sticky notes
• What do you know about the Great Depression?
Reminders:
Homework/ tests
EOC
Restroom policies
Class expectations
Binders
Part I: The Great Depression Defined
The Great Depression
Key Points
• The Great
Depression
Defined
Notes
• The Great Depression: period from 1929—1940 in
which the economy plummeted and
unemployment skyrocketed.
• Triggered by the Stock Market Crash of 1929
The Great Depression
Key Points
• Underlying
Factors/Causes
of the Great
Depression
Notes
• Speculation -A person or organization makes a
risky investment in hope of making a quick and
larger profit.
• Personal debt-Americans bought more than they
could afford
• Overproduction-Agriculture industry-planted
more crops than needed since demand declined
after WWI
• Mechanization- factories were being built with
new machines that could do the work of many
people and led to increased national
unemployment.
The Great Depression
Key Points
• Underlying
Factors/Causes
of the Great
Depression
Notes
• Unequal distribution of wealth-Richer got richer,
poorer got poorer (70% of Americans barely made
a enough for a decent living); Consumers with
less money to spend
• Domestic and foreign policy-Herbert Hoover
believed in the “trickle down” effect economybenefits big business, tax cuts for wealthy
• Stock market crash and bank failures-no
protections provided by the government
Industries in Trouble
Key Points
• Industries Lost
Business
Notes
• Key industries such as the railroads & coal mining
lost business due to competition with new
markets
▫ Railroads: competing with new transportation
industries (trucks, buses, private automobiles)
▫ Coal mining: competing with new energy
sources (hydroelectric power, fuel oil & natural
gas)
• Less Spending =
Loss of Business
• Most industries began to weaken by the end of the
20’s because more people were trying to save
money instead of spend (to pay off debts)
• Housing market: major indicator of economic
problems
▫ When it falls, so do related industries:
furniture manufacturing & lumbering
Farmers in Trouble
Key Points
• Farmers hardest
hit
Notes
• Many took out several loans during war time to
keep up with production demand; but after war,
demand fell
▫ Difficulty paying off their loans
▫ As farmers couldn’t pay their loans, many rural
banks failed
▫ Many lost their farms
• Solutions cause
more Problems
• Boosted production in hopes of selling more crops
▫ Lowered prices even farther (less demand for
crops)
Farmers in Trouble
Key Points
• Government
Help
Notes
• Government tried to help by using Price-Supports
▫ Gov. bought surplus crops from farmers at
guaranteed prices & sold them on world
market
▫ Coolidge vetoed the bill twice: “Farmers have
never made money. I don’t believe we can do
much about it.”
Consumers with Less Money
Key Points
• Lower Consumer
Spending
Notes
• Americans began to buy less because of:
▫ Rising prices
▫ Stagnant Wages
▫ Unbalanced distribution of income
▫ Overbuying on credit previously
• Lower spending
due to debt
• During the “superficial prosperity” of the 20’s
many consumers lived outside their means &
bought on credit
▫ Made payments on goods with interest
▫ Large consumer debt
 Meant people were not spending as much
b/c they had to pay off their debts
Consumers with Less Money
Key Points
 Uneven
Distribution of
Income
Summary:
Notes
• Only wealthiest 1% of population made a 75%
rise in income
• More than 70% of the nation’s families made
less than $2,500 (minimum income needed for
a decent standard of living)
Part II: The Stock Market and How it Works
The Stock Market
Key Points
• Stock Market
Notes
• Many sought to “get rich quick” via the stock
market
▫ Speculation: buying stocks and bonds on the
chance of a quick profit, while ignoring the risks
▫ Investors: People who buy a share in a company.
▫ Shares/Stock: A portion of a company.
▫ Margin: paying a small down payment and
borrowing the rest to buy stock
• The problem
• As the stock market dipped & values of stocks
declined, less people were able to pay off their
loans
• During the 20’s the stock market was doing well
so people were investing heavily to make a profit
▫ Less people invested as they had to pay off
debts, however
The Stock Market
Key Points
• Depression
Notes
• Economic depression—dramatic reduced
economic activity characterized by high
unemployment; slow down in buying/selling of
goods
▫ Why?? People don’t have money to spend because
they have no job because people are not spending
money therefore not pumping money into the
economy
• The Business
Cycle
• Business cycle:
The Stock Market
Key Points
• Selling causes
Panic
Notes
• Stock values increase but the market became
saturated (everyone who bought stock bought it
and most bought it on margin)
• Investors start selling the stock causing prices to
fall so more people sold their stock so they
wouldn’t lose too much money.
• Brokers and banks called in their “margins” but
people could not pay up. Stock sold to get money
back cause market to drop and PANIC
The Crash
Key Points
• First Crash
Oct. 24th 1929
Notes
• “Black Thursday”
▫ People begin to stop investing. Selling
increases; market goes down.
▫ As the market drops people panic & try to sell
all stocks as quickly as possible
 Lowers the stock market even farther so that
no one makes any profit and most go into
debt
• Efforts to stop it:
 Top Bankers & Rockefellers
 Both invested large amounts even though
the market was crashing, but it still failed
 12.9 million shares traded
The Crash
Key Points
 Second Crash
Oct 29th 1929
Notes
• “Black Tuesday”
• 16. 4 million shares dumped in one day
• Great Stock Market Crash-$30 billion lost
• Great Depression Begins
• Other causes: overproduction, low wages, high
tariffs and unemployment
Summary: What happened to cause the Great Depression?
Part III: Cause and Effects of the Great
Depression
Causes and Effects
Key Points
• Causes and
Effects
Notes
Causes
• Stock market
crashed
Effects
• Unemployment
rate skyrockets 30%
• Banks demand
repayment of loans
• Business go
bankrupt
• Farms failed and
factories closed
• Citizens lost faith in
capitalism and
democracy
• Reduce foreign trade
to protect economy
• Bank failures
• Collapse of banking
system
• Nations turn to
authoritarian
leaders
Great Depression Effects
Key Points
• Effects on Cities
Notes
• Cities: lost jobs, evictions, homelessness
▫ Shantytowns/Hoovervilles: “towns” of shacks
(made of boxes, crates, scrap metal, etc.) set up
in parks
▫ Soup kitchens: offered free or low-cost food
▫ Bread lines: lines of people waiting to receive
food provided by charitable organizations or
public agencies
▫ Unemployment among African Americans &
Latinos was the highest
 Increased racial violence from unemployed
whites competing for jobs
Great Depression Effects
Key Points
• Effects on Men
• Effects on
Women
Notes
• Men: hard to cope b/c they were used to
providing for their families
▫ Had to search for jobs every day
▫ Mental breakdowns and suicides increased
dramatically
▫ Some abandoned their families: hobos
 300,000 during the Depression
• Women: did everything for themselves to save
money
▫ Canned food, sewed clothes, etc.
▫ Worked outside the home (targets for
resentment b/c married women were seen as
having no right to work when there were
unemployed men)
Great Depression Effects
Key Points
• Effects on
Children
Notes
• Children: malnutrition & health problems due to
lack of money for food & health care
▫ Falling tax revenues forced many schools to
close (2,600 by 1933 left more than 300,000
children out of school)
▫ Most went back to work instead to help their
families
▫ Teens: hopped RR lines in search of work,
adventure & escape
 Faced RR “bulls” (armed freight yard
patrolmen) beat & jailed the teens
 Faced criminals & injuries
Great Depression Effects
Key Points
 Effects on Rural
Areas
Notes
• Rural areas:
▫ One advantage: Farmers could grow their own
food for their families
▫ Thousands (400,000 between 1929 & 1932)
lost their land when they could not repay their
debts
▫ Dust Bowl: forced many to lose their farms &
migrate west in search of work
▫ Many turned to tenant farming to scrape by
Summary: What were the significant causes and effects of the Great Depression?
Part IV: Response to the Great
Depression
President Herbert Hoover 1929-1933
Key Points
• Hoover’s
Response
Notes
• Hoover’s response to the Depression
▫ Gov. should encourage cooperation between
competitors
▫ Gov. should mediate with the economy and not
intervene
▫ Believed that gov. should not provide direct
relief any type of welfare b/c handouts would
weaken people’s self respect and the nation’s
morals
▫ Individuals and private organizations should
help care for the less fortunate---not the gov!!
President Herbert Hoover 1929-1933
Key Points
• Hoover’s Success
Notes
• Hoover Dam
▫ Boulder Dam approved in the 1920s but started
building in 1929
▫ Project produced electricity, flood control and
hundreds of jobs for men
President Herbert Hoover 1929-1933
Key Points
• Problems Hoover
faced
Notes
• The Gross National Income (what everyone in the
country makes in one year added together) was
cut in half
• Democrats took control in Congress
• Farmers began to protest low crop prices
• Hoovervilles - Shantytowns nicknamed after
Hoover---Americans felt he was heartless
• Bonus Army 1932-10,000 WWI vets marched to
Washington for a bonus that was due to them
President Herbert Hoover 1929-1933
Key Points
• Hoover
Responds
Notes
• Federal Farm Board-bought crops to get of the
market to raise prices
• National Credit Corporation-lent money to
smaller banks
• Federal Home Loan Bank Act-lowered mortgage
rates to prevent foreclosure
• Reconstruction Finance Corporation-2 billion in
relief to business hoping for a trickle down effect
Election of 1932
Key Points
• Franklin Delano
Roosevelt elected
new Pres.
Notes
• New Deal Coalition:
 "I pledge you, I pledge myself, to a new deal
for the American people.” –Franklin D.
Roosevelt
• 40 years of Republican leadership ends
• Inauguration: March 1933
• First 100 Days: 3 R’s—Relief, Recovery, Reform
(15 major acts)
Hoover to Roosevelt
Key Points
Notes
Summary: How did Hoover respond to the Great Depression?
Part V: Life During the Great
Depression
Life During the Great Depression
Key Points
• 21st Amendment
Notes
• Repealed the 18th Amendment on Dec. 5, 1933
• Why did Prohibition fail?
▫ Lack of public support
▫ Hurt business/economy
▫ Too costly to enforce
Life During the Great Depression
Key Points
• Bank Runs &
Failures
Notes
• By 1933, over 9,000 banks failed
• FDR Declares Bank Holiday (March 6-10, 1933)
to prevent further withdrawals
• Held fireside chat to urge citizens to keep their
money in the banks
Life During the Great Depression
Key Points
• Unemployment
Notes
• From 1929-1932 Unemployment rate went from
3.2% to 24.9%
▫ ¼ Nation Unemployed
Life During the Great Depression
Key Points
• Hoovervilles
Notes
• Thousands left homes
▫ Forced to live in shanty- towns known as
“hoovervilles”
▫ Hoover refuses aid to the unemployed
Life During the Great Depression
Key Points
• Hobos
Notes
• 2 million homeless
▫ Railroads attracted many poor/homeless who
now had nothing better to do than wander from
place to place
▫ Mostly boys & young men
Life During the Great Depression
Key Points
• Dust Bowl
Notes
• Severe Drought
▫ Farmers weakened the soil by removing prairie
grasses & exhausting the land
▫ Kansas, Oklahoma, Texas, New Mexico,
Nebraska, N. & S. Dakota & Colorado
▫ Homesteaders most affected
▫ 3-4 Inches of topsoil lost
▫ “Okies” & Migration: farmers had to turn their
farms over to the bank and head west in search of
jobs
Life During the Great Depression
Key Points
• Hawley-Smoot
Tariff Act
Notes
• June 1930
▫ Raised the average tariff rate to the highest
level in American History
▫ Aimed to protect farmers & manufacturers
from foreign competition
▫ Decline in American goods sold overseas
Summary:
What was life like during the Great Depression?
Part VI:
New Deal (Alphabet Soup)
New Deal
Key Points
• Idea behind the
New Deal
Notes
• The Brain Trust: Professional Advisers to
Roosevelt
▫ “The country needs bold, persistent
experimentation…Above all, try something.”—
Franklin D. Roosevelt
▫ Government Involvement: business, industry,
workforce, economy
• 100 Days
• The Hundred Days: March 9—June 16, 1933
 Congress passed 15 major acts to meet the
crisis
New Deal
Key Points
• Three R’s
• Alphabet Soup
Notes
• The focus of the “New Deal” would be on the “3
R’s” :
1. Relief: immediate govt action to help the
unemployed & poor
2. Recovery: temporary govt programs to
restart demand for industry & agriculture
3. Reform: long-term govt programs to avoid
future economic problems & depressions
• Each program had acronyms like
▫ CCC
▫ WPA
New Deal Relief
New Deal Relief
Key Points
• CCC
Notes
• Civilian Conservation Corps
▫ Government organization which employed
millions of men planting trees and building
trails and facilities at national parks
 Natural Resource Conservation
 2.5 million young men employed
 physically fit, unmarried, 18-25 yrs old
 $30 per week/$25 of it had to go to family
New Deal Relief
Key Points
• CWA
Notes
• Civil Works Administration
▫ Employment directly by the government
▫ Employed 4 million people (300,000 were
women)
▫ Public service jobs: airports, schools, parks &
roads
New Deal Relief
Key Points
• TVA
Notes
• Tennessee Valley Authority
▫ Built hydroelectric plants and dams
▫ Aimed at improving & attracting industry to
the south
▫ Built 20 dams—employed up to 40,000
workers at a time
▫ Strung thousands of miles of wire for electricity
New Deal Relief
Key Points
• FCC
Notes
• Federal Communications Commission
▫ June 1934
▫ Oversaw communication, regulated rates &
brought services to rural areas
• REA
• Rural Electric Administration
▫ Brought electricity to rural areas
▫ 25% rural homes had electricity by 1939
New Deal Relief
Key Points
• WPA
Notes
• Works Progress Administration
▫ Combated unemployment; created jobs
(including jobs for professionals)
▫ Gov. paid people to build highways, public
buildings, parks, bridges & airports.
▫ Cost $11 billion
▫ Employed 8.5 million workers
▫ “Federal Number One”—Professional Projects
Division
 Artists, musicians, actors, writers
 Murals on public buildings, city symphonies,
Federal Theater project, historians
interviewing former slaves
New Deal Recovery
New Deal Recovery
Key Points
• NRA
Notes
• National Recovery Administration
▫ Goal: Restore employment & regenerate
industry
▫ Codes of Fair Competition—controlled
production & prices
 Set prices, minimum wage and maximum
weekly hours
• AAA
• The Agricultural Adjustment Administration
▫ The (AAA) was founded to pay farmers for
acres of land or livestock they purposely did
not use.
▫ The (AAA) forced the price of farm products up
which helped all farmers in the long run.
New Deal Reform
New Deal Reform
Key Points
• SEC
Notes
• Securities & Exchange Commission
▫ Government organization given authority to
regulate stock market transactions and given
authority over public utilities and investment
companies
▫ Commercial banks could no longer use
investors’ money in the stock market
New Deal Reform
Key Points
• NLRB
Notes
• National Labor Relations Board
 Organized secret ballot factory elections
 Certified unions
▫ Under the Wagner Act (July 1935)
 Guaranteed workers :
 Right to organize unions without
interference of employers
 Right to collective bargaining
 Right to binding arbitration
New Deal Reform
Key Points
• Social Security
Notes
• Social Security Act—August 1935
▫ A federally administered system of retirement
payments to national workers from the payroll
tax
▫ Unemployment: supplied a temporary income
for workers looking for employment
▫ Retirement: Monthly income for people who
stopped working at 65
▫ Welfare: small payments to needy (poor
families & disabled).
▫ Funded by payroll taxes
New Deal Reform
Key Points
• Fair Labor
Standards Act
Notes
• Fair Labor Standards Act
▫ 1938—more protection for workers
▫ Abolished child labor
▫ Established 40 hour work week
▫ Established National Minimum Wage
Summary:
What was the New Deal? How did it help Americans?
Part VII New Deal Ends
Criticism
Key Points
• Critics of the
New Deal
Notes
1. Conservatives angry at “deficit spending”
(spending more than the govt takes in taxes)
and “big government involvement in the
economy
▫ these people wanted govt to remain “laissez faire”
2. Ultra-liberals/radicals felt it didn’t go far
enough in involving the govt in fixing the
economic problems:
▫ “Father Coughlin” – a popular priest & radio host
who wanted a complete take-over of the banks by
the govt
▫ Huey Long – Louisiana Senator who wanted a
“Share The Wealth” program:
 A govt-guaranteed income for all Americans, paid
for w/ a 100% tax on all income over $1 million.
End of the New Deal
Key Points
• NRA
Unconstitutional
Notes
• In 1936, the Supreme Court declared the NRA
unconstitutional.
• FDR reelected
• FDR was the reelected to a second term in the
Election of 1936.
▫ FDR won with a huge portion of 65% of the
popular vote
End of the New Deal
Key Points
• FDR tries to
change the
courts
Notes
• FDR was upset with the Supreme Court and tried
to use his popularity from his reelection to
propose the Court-Packing Bill to Congress.
▫ If passed, it would give FDR the power to
appoint someone to the Supreme Court any
time a Justice reached the age of 70 and didn’t
retire.
▫ At the time when it was proposed, FDR could
have appointed 7 justices to the Supreme Court
making 16 total.
▫ Even with all of FDR’s Democratic support in
Congress, the Court-Packing Bill failed.
End of the New Deal
Key Points
• End of New Deal
Notes
• Congressmen knew that FDR had gone too far
with the Court-Packing Bill.
• After 1938, no more major New Deal legislation
was passed.
Summary:
Summarize the two sides’ arguments around the New Deal.
Part VIII: The End of the Great
Depression
Legacy of the New Deal
Key Points
• New Deal
Coalition
Notes
• A major political legacy was the Democratic
party’s “New Deal Coalition” after the 1936
election:
▫ The grouping of Southern “White” Democrats
w/ immigrants, union members, & AfricanAmericans all voting Democratic which lasted
until the 1990’s.
• Argument for
Success
• Some people believe the New Deal was successful
because it:
▫ Raised the incomes of farmers and workers
▫ Provided assistance for the elderly through
Social Security
▫ Helped out the less fortunate and gave many
hope
Legacy of the New Deal
Key Points
• Argument
Against Success
Notes
• Some people believe the New Deal hurt our
nation in the long run and/or was not that
successful because it:
▫ Raised the national debt
▫ Greatly expanded the role of the federal gov’t
▫ Made many people dependent on the gov’t
▫ Did not solve the unemployment problem
 7.5 million people were still unemployed in
1940 a rate of 15% (still very bad)
Legacy of the New Deal
Key Points
 WWII Ends
Great Depression
Notes
• Most people would argue that the New Deal did
not end the Great Depression but instead World
War II did in 1942-43.
▫ The gov’t needed millions of soldiers and
millions of factory workers to help win the
war.
▫ The war effort was so massive that anyone
who wanted a job could pretty much find one
after 1942.
 Americans got back to work (war industries)
Summary:
Summarize the arguments for and against the impact of the New Deal