Transcript Great Depression Unit - Springfield Public Schools

Great Depression Unit
US History
Paul Dunn
Instructor – Spring ‘05
Economic Troubles
• Excessive use of Credit
– Consumers abused the
idea of “buying on time”
• Playing the market
– Speculation – buy low and
sell high. Speculators did
not look at things like profit
and loss when purchasing
stocks
– Purchasing stocks on credit
(margin buying)
Economic Troubles
• High inventories for business
• Decreased demand for goods as
consumers reached credit limits
• High Tariffs
– Smoot/Hawley Tariff
• Tried to protect American Industry
• European Nations imposed retaliatory tariffs and
stopped importing our goods.
• Everyone loses in this scenario
• All goods became more expensive
Economic Troubles
• Income Gap
– Vast differences between incomes of the
wealthy and incomes of the poor
• Business Cycle
– Cyclical nature of business activity causes
natural declines in profit and income
• The timing of all of these events set the
country up for a big problem
Stock Market Crash
• Black Tuesday
– Panic selling
• Market loses
– 30 billion in one day
– 16 million shares were
sold
The Depression Begins
Hoover’s Slow Response to Crisis
• President Hoover thought that the
economy would fix itself
• Focused government response to the
crisis on aiding business
– Reconstruction Finance Corporation – loaned
money to troubled banks, corporations etc.
• Was highly ineffective and layoffs and plant
closings continued
Hoover’s Slow Response to Crisis
• Opposed direct relief to
citizens
– Encouraged volunteerism
and charity for the poor and
unemployed
– Started modest public
works projects like the
Hoover Dam in Colorado
• Widely criticized for
lack of compassion
for the masses
Effects of the Great Depression on
Society
• Unemployment
– 1929 1.5 million
– 1933 15 million
Photo
Effects of the Great Depression on
Society
• Income
– Incomes fell as more
and more workers
competed for few jobs
– $.10/hr was a common
wage
• Dramatically decreased
purchasing power of
families
Effects of the Great Depression on
Society
• Bank Failures
– Bank runs
• Customers would hear
rumors that a bank was
out of money
• All would then go and try
to withdraw money
• Banks would then run out
of cash and fail
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Lack of Confidence
No Deposits
Default on Loans
No “safety net”
Photo
Effects of the Great Depression on
Society
• Homelessness
– Foreclosure
• Default of home or farm
mortgages caused
families to leave homes
• Lack of affordable
housing and low or nonexistent incomes forced
families to live on the
street
Photo
Effects of the Great Depression on
Society
• Shanty towns
– People used any
means available to
create living space –
often using discarded
lumber or steel to
create makeshift
housing
Effects of the Great Depression on
Society
Effects of the Great Depression on
Society
• Bread lines
– Charitable
organizations tried to
assist the public by
supplying food
– As the depression
wore on, the
government also
helped provide food to
the homeless
Effects of the Great Depression on
Society
• Family Life
– Marriage rate declined
dramatically
– Birth rate declined
– Divorce rate
skyrocketed
Effects of the Great Depression on
Society
• Family Life
– School attendance
declined
– Literacy rates dropped
– Childhood disease
rates increased
– Malnutrition health
problems increased
dramatically
• Osteoporosis
• Starvation
• Ricketts
Effects of the Great Depression on
Society
• Psychological affects
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–
Depression
Suicide rate increase
Abuse
Divorce rate
Sense of helplessness
Effects of the Great Depression
on Society
• http://www.pollever
ywhere.com/my/pol
ls#!/my/polls
Effects of the Great Depression on
Society
• Farm Life
– Poor farming practices
made land vulnerable
to erosion
– Drought and the Dust
Bowl
Effects of the Great Depression on
Society
Farm Life (cont.)
- Low Prices
- Difficulty getting
product to market due
to problems in other
industries
- Foreclosure
- Mass migration to
cities
Election of 1932
• Franklin Delano
Roosevelt wins
election in a landslide
• Offers his New Deal
as an alternative to
current governmental
policy
The New Deal
• Series of programs
that were aimed at
restoring confidence
• Used greatly
expanded executive
power to accomplish
goals
• Some programs later
found to be illegal
The New Deal
• Bank Holidays – Closed
every bank in the nation for a
few days
– Purpose was to stop
massive bank withdrawals
and to stop the panic that
was gripping the nation.
– Tried to explain that bank
holidays were put in place
to protect money…..
Communicated through
fireside chats
The New Deal
• Federal Deposit Insurance Corporation
– Insured each deposit to $2500. (Today – each
deposit is insured to $250,000.)
• Home Owners Loan Corporation
– Created to assist home owners who were
unable to meet mortgage payments
– Saved over 1 million family homes buy
granting low interest, long term mortgages.
The New Deal
• Direct Relief
– Aid or monies that went directly to the 13
million unemployed workers
• Federal Emergency Relief Administration
– $500 million was funneled to state and local
agencies that then passed this on to the
unemployed
– By 1935 $3 billion in direct aid had been
distributed.
The New Deal
• The Civilian
Conservation Corps
– Employed 250,000
young men ages 1825 in 1933
– Worked in National
Parks and Forests
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Plant trees
Fight Fires
Cleared underbrush
Built trails
Cleared beaches, etc.
The New Deal
• CCC (cont.)
– Workers earned $1 a
day for their labor –
and were provided
with room and board
– 2.5 million people
were employed during
the 10 year existence
of the program
The New Deal
• Industry
– National Industrial Recovery Act
• Tried to stimulate the economy through government
spending and federal loans
– Public Works Administration
» Built roads, public buildings, other public works projects
like dams, bridges etc.
– National Recovery Administration
» Encouraged business to draw up “codes of fair
competition”
» Set wages, prices, production levels, hours
» Suspended anti-trust laws and allowed workers to organize
in unions
The New Deal
• Agricultural
Adjustment
Administration
– Paid farmers to limit
output of corn, cotton,
dairy products, hogs,
rice, tobacco, wheat
and other commodities
– Money came from
taxes on food
processors
The New Deal
• Tennessee Valley
Authority
– Tried to revitalize
Tennessee River
Valley
– Flooding,
Deforestation, Poverty,
Illiteracy etc.
• Built a series of dams to
provide power and
provide jobs
• Improve schools and
provide health care
FDR’s Second Term
• Even though there
were many critics of
the FDR’s policies –
he was elected to a
second term in 1936
• The Democrats won a
series of seats in the
congressional
elections in 1934 that
solidified FDR’s
power.
2nd New Deal
• Second wave of
programs that tried to
“jump-start” the
economy
– Responded to
criticisms of the New
Deal
– Tried to reach more
people faster
2nd New Deal
• Works Progress Administration
– $5 billion in job creation programs
– Employed 8.5 million people
– Focused on national infrastructure
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Built or rebuilt 350 airports
100,000 public buildings
78,000 bridges – Old Cass Ave. Bridge
500,000 miles of roads
Research projects
Teaching Jobs
2nd New Deal
• National Youth
Administration
– Provided high school
and college-aged kids
with part-time work
that allowed them to
stay in school
• Employed 500,000
people
• Was a secondary
branch of the WPA
2nd New Deal
• Social Security Act
– 3 parts
• 1. Provided
unemployment insurance
to workers who lost their
jobs
– $ for this came from a
payroll tax on
businesses
• 2. Provided pensions to
retired workers over the
age of 65
– $ come from payroll tax
on employers and a tax
on employee wages
2nd New Deal
• Social Security (cont)
• 3. Provide payments to
people with disabilities,
the elderly, and the wives
and children of male
workers who have died
– This program really aided
the folks hit hardest by the
depression
– Is still a program that is
controversial and very
expensive today
2nd New Deal
• Rural Electrification Administration
– Attempted to bring electricity to rural America
• Allowed Gov’t to regulate the price of electricity to
keep costs low.
• In 1930 10% of rural residences had electricity
• In 1940 50%+ had electricity
• Agriculture Adjustment Act (II)
– Continued process started by the 1st AAA
• Linked soil conservation program to it to prevent
problems in the Supreme Court
Roosevelt and the Supreme Court
• Roosevelt became
disgusted with the court
as it kept declaring his
programs unconstitutional
– Attempted to “pad” the
court by adding 1 justice for
every justice over the age
of 70.
– Congress failed to pass the
measure and Roosevelt
was forced to pass
“constitution friendly”
programs.
Life in the New Deal Era
• Hardship
• Rise of Radical
Movements
• Destitution
• Anger
• The Search for Hope
People
• Crime was on the rise
– Kidnapping
– Robbery
– Murder
• Laws were relaxed to
give cops more
freedom to track
down criminals
• Public outcry over
crime
Sports and Games
• Card Games
• Puzzles
• Gambling
– Bingo
– Slot Machines
– Horse Racing
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Movies
Pinball Machines
Baseball – Sat. Day off
Olympics – 1936 Berlin
Science and Technology
• Transportation
– Commercial Air Travel
– Trains
– Autos
• Aided by road construction
projects
• Skyscrapers
– Empire State Building
– Mega Structures –
Tunnels/Bridges
• Dams
– Colorado River/ Tennessee
River Valley
Entertainment
• Radio
– Amos and Andy
– 1 in 3 owned a radio
• Reading
– Corner news stand
– Cheap magazines
– Comics
• Movies
– Larger than life movie stars
– “Feel Good” Shows
Depression Ends
• The economy and the country did not fully
recover throughout the 1930s.
– The only thing that truly erases the effects of the
Great Depression is WWII.
• Massive production requirements from America's factories
during the war was the only thing that could put America
back to work and fully restore confidence in the economy.
– The Great Depressions legacy continues with us
today in the form of many continuing government
programs that provide a “safety net for citizens, “just
in case.”