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Unit 6 The Great Depression Begins

Unit 6 The Great Depression Begins. Mr. Hughes Anaheim High School United States History. The nation’s Sick Economy. In this section we will look at the end of prosperity of the 1920’s in America and how severe economic problems gripped the nation. THE NATION’S SICK ECONOMY.

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Unit 6 The Great Depression Begins

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  1. Unit 6The Great Depression Begins Mr. Hughes Anaheim High School United States History

  2. The nation’s Sick Economy In this section we will look at the end of prosperity of the 1920’s in America and how severe economic problems gripped the nation.

  3. THE NATION’S SICK ECONOMY As the 1920s advanced, serious problems threatened the economy while Important industries struggled, including: • Agriculture • Railroads • Textiles • Steel • Mining • Lumber • Automobiles • Housing • Consumer goods

  4. FARMERS STRUGGLE • No industry suffered as much as agriculture • During World War I European demand for American crops soared • After the war demand plummeted • Farmers increased production sending prices further downward

  5. CONSUMER SPENDING DOWN • By the late 1920s, American consumers were buying less • Rising prices, stagnant wages and overbuying on credit were to blame • Most people did not have the money to buy the flood of goods factories produced

  6. GAP BETWEEN RICH & POOR • The gap between rich and poor widened • The wealthiest 1% saw their income rise 75% • The rest of the population saw an increase of only 9% • More than 70% of American families earned less than $2500 per year

  7. HOOVER WINS 1928 ELECTION • Republican Herbert Hoover ran against Democrat Alfred E. Smith in the 1928 election • Hoover emphasized years of prosperity under Republican administrations • Hoover won an overwhelming victory

  8. THE STOCK MARKET • By 1929, many Americans were invested in the Stock Market • The Stock Market had become the most visible symbol of a prosperous American economy • The Dow Jones Industrial Average was the barometer of the Stock Market’s worth • The Dow is a measure based on the price of 30 large firms

  9. STOCK PRICES RISE THROUGH THE 1920s • Through most of the 1920s, stock prices rose steadily • The Dow reached a high in 1929 of 381 points • (300 points higher than 1924) • By 1929, 4 million Americans owned stocks

  10. SEEDS OF TROUBLE • By the late 1920s, problems with the economy emerged • Speculation:Too many Americans were engaged in speculation – buying stocks & bonds hoping for a quick profit • Margin:Americans were buying “on margin” – paying a small percentage of a stock’s price as a downpayment and borrowing the rest

  11. THE 1929 CRASH • In September the Stock Market had some unusual up & down movements • On October 24, the market took a plunge . . .the worst was yet to come • On October 29, now known as Black Tuesday, the bottom fell out • 16.4 million shares were sold that day – prices plummeted • People who had bought on margin (credit) were stuck with huge debts http://player.discoveryeducation.com/index.cfm?guidAssetId=28DF7397-D53F-406F-A49F-219125726FE0&blnFromSearch=1&productcode=US

  12. THE GREAT DEPRESSION • The Stock Market crash signaled the beginning of the Great Depression • The Great Depression is generally defined as the period from 1929 – 1940 in which the economy plummeted and unemployment skyrocketed • The crash alone did not cause the Great Depression, but it hastened its arrival

  13. FINANCIAL COLLAPSE • After the crash, many Americans panicked and withdrew their money from banks • Banks had invested in the Stock Market and lost money • In 1929- 600 banks failed • By 1933 – 11,000 of the 25,000 banks nationwide had collapsed

  14. GNP DROPS, UNEMPLOYMENT SOARS • Between 1928-1932, the U.S. Gross National Product (GNP) – the total output of a nation’s goods & services – fell nearly 50% from $104 billion to $59 billion • 90,000 businesses went bankrupt • Unemployment leaped from 3% in 1929 to 25% in 1933

  15. HAWLEY-SMOOT TARIFF • The U.S. was not the only country gripped by the Great Depression • Much of Europe suffered throughout the 1920s • In 1930, Congress passed the toughest tariff in U.S. history called the Hawley-Smoot Tariff • It was meant to protect U.S. industry yet had the opposite effect • Other countries enacted their own tariffs and soon world trade fell 40%

  16. CAUSES OF THE GREAT DEPRESSION • Tariffs & war debt policies • U.S. demand low, despite factories producing more • Farm sector crisis • Easy credit • Unequal distribution of income

  17. Hardships During the Depression In this section, we will look at what Americans had to do during the Great Depression to survive and the problems President Hoover and the government had trying to lead the nation out of this problem.

  18. HARDSHIPS DURING DEPRESSION • The Great Depression brought hardship, homelessness, and hunger to millions • Across the country, people lost their jobs, and their homes • Some built makeshifts shacks out of scrap material • Before long whole shantytowns (sometimes called Hoovervilles in mock reference to the president) sprung up http://player.discoveryeducation.com/index.cfm?guidAssetId=28DF7397-D53F-406F-A49F-219125726FE0&blnFromSearch=1&productcode=US

  19. SOUP KITCHENS • One of the common features of urban areas during the era were soup kitchens and bread lines • Soup kitchens and bread lines offered free or low-cost food for people

  20. CONDITIONS FOR MINORITIES • Conditions for African Americans and Latinos were especially difficult • Unemployment was the highest among minorities and their pay was the lowest • Increased violence (24 lynchings in 1933 alone)marred the 1930s • Many Mexicans were “encouraged” to return to their homeland

  21. RURAL LIFE DURING THE DEPRESSION • While the Depression was difficult for everyone, farmers did have one advantage; they could grow food for their families • Thousands of farmers, however, lost their land • Many turned to tenant farming and barely scraped out a living

  22. THE DUST BOWL • A severe drought gripped the Great Plains in the early 1930s • Wind scattered the topsoil, exposing sand and grit • The resulting dust traveled hundreds of miles • One storm in 1934 picked up millions of tons of dust from the Plains an carried it to the East Coast http://player.discoveryeducation.com/index.cfm?guidAssetId=BB8594C5-87EA-445D-A672-C311AAAA44BA&blnFromSearch=1&productcode=US

  23. Dust storm approaching Stratford, Texas - 1934

  24. Dust buried cars and wagons in South Dakota in 1936

  25. HARDEST HIT REGIONS • Kansas, Oklahoma, Texas, New Mexico, and Colorado were the hardest hit regions during the Dust Bowl • Many farmers migrated to California and other Pacific Coast states

  26. HOBOES TRAVEL AMERICA • The 1930s created the term “hoboes” to describe poor drifters • 300,000 transients – or hoboes – hitched rides around the country on trains and slept under bridges (thousands were teenagers) • Injuries and death was common on railroad property; over 50,000 people were hurt or killed

  27. EFFECTS OF DEPRESSION • Suicide rate rose more than 30% between 1928-1932 • Alcoholism rose sharply in urban areas • Three times as many people were admitted to state mental hospitals as in normal times • Many people showed great kindness to strangers • Additionally, many people developed habits of savings & thriftiness

  28. HOOVER STRUGGLES WITH THE DEPRESSION • After the stock market crash, President Hoover tried to reassure Americans • He said, “Any lack of confidence in the economic future . . . Is foolish” • He recommended business as usual

  29. HOOVER’S PHILOSOPHY • Hoover was not quick to react to the depression • He believed in “rugged individualism” – the idea that people succeed through their own efforts • People should take care of themselves, not depend on governmental hand-outs • He said people should “pull themselves up by their bootstraps”

  30. HOOVER’S SUCCESSFUL DAM PROJECT • Hoover successfully organized and authorized the construction of the Boulder Dam (Now called the Hoover Dam) • The $700 million project was the world’s tallest dam (726 feet) and the second largest (1,244 feet long) • The dam currently provides electricity, flood control and water for 7 western states

  31. HOOVER TAKES ACTION: TOO LITTLE TOO LATE • Hoover gradually softened his position on government intervention in the economy • He created the Federal Farm Board to help farmers • He also created the National Credit Organization that helped smaller banks • His Federal Home Loan Bank Act and Reconstruction Finance Corp were two measures enacted to protect people’s homes and businesses

  32. BONUS ARMY • A 1932 incident further damaged Hoover’s image • That spring about 15,000 World War I vets arrived in Washington to support a proposed bill • The PatmanBill would have authorized Congress to pay a bonus to WWI vets immediately • The bonus was scheduled to be paid in 1945 --- The Army vets wanted it NOW

  33. BONUS ARMY TURNED DOWN • Hoover called the Bonus marchers, “Communists and criminals” • On June 17, 1932 the Senate voted down the PatnamBill

  34. BONUS MARCHERS CLASH WITH SOLDIERS • Hoover told the Bonus marchers to go home– most did • 2,000 refused to leave • Hoover sent a force of 1,000 soldiers under the command of General Douglas MacArthur and his aide Dwight Eisenhower

  35. AMERICANS SHOCKED AT TREATMENT OF WWI VETS • MacArthur’s 12th infantry gassed more than 1,000 marchers, including an 11-month old baby, who died • Two vets were shot and scores injured • Americans were outraged and once again, Hoover’s image suffered http://player.discoveryeducation.com/index.cfm?guidAssetId=3BE613D9-F338-4C12-BD16-10280DDE017B&blnFromSearch=1&productcode=US

  36. New Deal Fights the depression This section will look at how President Franklin D. Roosevelt used government programs to fight the depression.

  37. A NEW DEAL FIGHTS THE DEPRESSION • The 1932 presidential election showed that Americans were clearly ready for a change • Republicans re-nominated Hoover despite his low approval rating • The Democrats nominated Franklin Delano Roosevelt http://player.discoveryeducation.com/index.cfm?guidAssetId=831435aa-4bf5-49f0-9e24-7abc0e76b02a&blnFromSearch=1&productcode=HUB

  38. ROOSEVELT WINS OVERWHELMING VICTORY • Democrat Roosevelt, known popularly as FDR, was a 2-term governor of New York • FDR was a distant cousin of Teddy Roosevelt • The Democrats also won huge victories in the house and senate • Greatest Democratic victory in 80 years FDR easily won the 1932 election

  39. FDR LAUNCHES NEW DEAL • FDR promised a “new deal” for the American people • He took office with a flurry of activity known as “The Hundred Days” • The 100 Days lasted from March to June 1933 • He also called his group of advisors or “Brain Trust” together.

  40. CONGRESS GETS BUSY • FDR’s philosophy was to get people help and work through “deficit” spending • During the 100 Days, Congress passed more than 15 major pieces of legislation that significantly expanded government’s role in the nation’s economy and welfare • The Federal Emergency Relief Administration focused on helping the unemployed, the elderly, and ill

  41. TO DO LIST: #1- HELP BANKS • First order of business was to get the banking system in order • On March 5, one day after taking office, FDR declared a bank holiday • He persuaded Congress to pass the Emergency Relief Act, which authorized the Treasury Department to inspect the nation’s banks

  42. AMERICANS GAIN CONFIDENCE IN BANKS • Next, FDR passed the Glass-Steagall Act which established the Federal Deposit Insurance Corporation • The FDIC insured account holders up to $5,000 and set strict standards for banks to follow (today = $100,000)

  43. MORE 100 DAYS ACTIVITY • Federal Securities Act: Required stock info to be accurate and truthful • Agricultural Adjustment Act: (AAA) Raised crop prices by lowering production • Tennessee Valley Authority: (TVA) Focused on direct relief to hard hit area– created ambitious dam projects

  44. TVA

  45. ALPHABET AGENCIES • CCC – Civilian Conservation Corps put young men to work • Men ages 18 to 25 worked building roads, parks, planting trees (200 million trees in Dust Bowl areas) • By 1942 three million men worked for the CCC

  46. ALPHABET AGENCIES • PWA – Public Works Administration was part of the NIRA (National Industrial Recovery Act) • The NIRA promoted financial recovery by stopping wage cuts, falling prices, and layoffs. • The PWA provided money to states to construct schools and community buildings PWA workers construct a public building in Hartford, Connecticut

  47. ALPHABET AGENCIES • CWA – Civil Works Administration built 40,000 schools and provided salaries for 50,000 teachers in rural America • Also built 500,000 miles of roads CWA School in Woodville, CA

  48. ALPHABET AGENCIES • FHA – Federal Housing Administration provided home loans, home mortgages and repairs Repaired business in Childersburg, Alabama

  49. ALPHABET AGENCIES • FERA – Federal Emergency Relief Agency provided $500 million in direct relief to the neediest Americans Citizens wait outside a FERA in Calipatria, CA for relief checks

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