The Great Depressionand the New Deal AP Chapter 24
Florence Leona Christi • "I did not ask her name or her history. She told me her age, that she was 32. • She said that they had been living on frozen vegetables from the surrounding fields and birds that the children killed. • Dorthea Lange--Photographer
I. The Great Crash • October 29,1929 • “Black Tuesday” • Within 3 weeks… • Over time…
A. Causes of the Crash 1. Stock Market Speculation 2. Mistakes by the Federal Reserve Board 3. An Ill-Advised Tariff 4. A Maldistribution of Wealth
1. Stock Market Speculation • Money poured into the stock market • Many investors bought on 10% “margin” • Investor put in only 10% and borrowed from banks, brokers • Rampant speculation and risky ventures • Confidence in future earnings fell and banks, brokers demanded loan repayment
2. Mistakes by the Federal Reserve Board • 1930-1931, Federal Reserve curtailed the amount of money in circulation and raised interest rates • Credit became more difficult for the public to obtain • Policy was disastrous when the crash occurred • U.S. needed easier credit once Depression began
3. An Ill-Advised Tariff • Hawley-Smoot Tariff (1930) • Raised tariffs on agricultural and manufactured goods • Other countries retaliate by raising tariffs on American goods
4. A Maldistribution of Wealth • Huge gap between wealthy and poor • Wealthiest families’ incomes rose the most • Coolidge Administration mistakes: • Lowered taxes on the wealthy • Slowed consumer consumption
B. Effects of the Crash 1. Gross National Product… 2. 25%..
C. Hoover’s Response • Unable to effectively communicate with the common man… • Tries the “trickle down” method… • Debt moratorium…
1. Hoover’s Program • Associationalism • Glass-Steagall Act (1932) • Reconstruction Finance Corporation (RFC) • Hoover uncomfortable with deficit spending, Especially spending that directly gave money to the poor • Livestock feed over food for farm families • Bank bail out over salaries for teachers and city workers
D. Mounting Discontent and Protest 1. Bonus Expeditionary Force (Bonus Army) • 20,000 staged a march on Washington, D.C. • About 2000 make “camp” • House agrees, Senate refuses • Douglas MacArthur and George Patton called in • Make shift city burned and veterans dispersed
D. Mounting Discontent and Protest 2. “Hooverville’s” *Make shift cities, like in Central Park, where jobless people lived. *Suicide rates skyrocket
E. The Dust Bowl • Tons of topsoil blown off barren fields --storm clouds for hundreds of miles. • CO, KS, TX, OK; eventually entire country was affected. • 1932, 14 dust storms • By 1934, 100 million acres of farmland had lost all or most of the topsoil to the winds.
Black SundayApril 14, 1935 • April 1935 -- weeks of dust storms, • Cloud appeared on the horizon • Winds were clocked at 60 mph. Then it hit.
The Hobos • Migratory • Homeless • Poor/penniless • Indigent workers • Sometimes supporting others • Unlike tramps, vagabonds who did not want to work
The Emergence of Roosevelt1933 - 1945 • Franklin Roosevelt • born to wealth and privilege • 1921--crippled by polio • 1928--elected governor of New York • talented politician • 1932--defeats Hoover with farmer- worker-immigrant-Catholic coalition
Roosevelt • Bulldog determination to succeed • Talent for surrounding himself with capable people and getting most out of them (the Brain Trust) • Instill hope and courage in the people “We have nothing to fear but fear itself“ http://www.youtube.com/watch?v=3tyvvjWtc-