Presentation Transcript

1. The Great Depression

   What were the long term & immediate causes? What was the government’s response?
2. An Economy in Trouble… Remember the prosperity of the “Roaring 20s” Gov’t easing business legislation Business boom thanks to auto industry Ripple effect Installment buying Buying on margin & the success of the bull market Not everyone was prosperous, however
3. An Economy in Trouble…(2) Signs of an economic slow down Farmers having a hard time after WW I Production high from war demand Drove prices lower Hoover established Federal Farm Board Helped farmers sell goods & stabilize $$ Farmers didn’t ↓production Prices stayed ↓
4. An Economy in Trouble…(3) Construction was ↓ Heavy machinery sales ↓ Consumer buying ↓ Stock Market nervous In 8/1929 investors starting to sell & trend continued Investors buying on margin asked to pay broker $ still owed Caused prices to drop If investors couldn’t pay, they had to sell their stock Caused prices to drop further
5. An Economy in Trouble…(4) The Crash Tuesday, 10/29/1929 “Black Tuesday” NYSE bombarded w/sales Prices ↓ because there were no buyers Stocks became worthless paper Economy slid into depression
6. Causes of the Great Depression… Too many goods, too few buyers Over production by farms & factories Wages didn’t rise as much as prices Farm families couldn’t participate in the economy Factories closed or laid workers off
7. Causes of the Great Depression…(2) Problems in the banking system Banks loaned $ to investors of the stock market w/crash, couldn’t repay loans Banks couldn’t repay those who had deposited with them Forced to close
8. Causes of the Great Depression…(3) Cycle of Disaster After crash, economy ↓ Caused a domino effect within the economy Crash → ruined investors → no investing → no new businesses/or expansion → no loans from banks → business cut production → workers unemployed → spent less → demand ↓ → led to businesses going bankrupt, etc…
9. Life During the Depression… Life was hard! Unemployment ↑ ¼ of working force unemployed People lost homes, businesses, etc Families split up Fathers & adolescents left to find work Children searched garbage dumps for food
10. Unemployment Line
11. Homeless Family
12. Christmas Dinner
13. Life During the Depression…(2) Homeless drifted from town to town looking for work Homeless often moved to the edges of towns & set up shacks “Hoovervilles” “Shantytown” Standard of living ↓
14. Squatter in Shack
15. Mother w/ 3 of 7 children
16. How did the Gov’t respond to the Depression? Pres. H. Hoover Believed gov’t shouldn’t get directly involved w/business At first, opposed relief programs Called on private charities to help the needy Churches, YMCA, etc.
17. Private charities
18. Private charities
19. Private charities
20. How did the Gov’t respond to the Depression? (2) Eventually set up public works programs Gov’t hired workers to build schools, courthouses, pave highways Workers earned $$ Supposed to use that to purchase goods which would fuel economy
21. How did the Gov’t respond to the Depression? (3) Reconstruction Finance Corporation (RFC) Loaned $$ to railroads, banks, & insurance companies Keep them in business & keep the employees Hoover’s programs had little success—too little, too late Depression grew worse Many blamed Hoover
22. How did the Gov’t respond to the Depression? (4) FDR-Franklin Delano Roosevelt Elected president in 1932 Promise: “I pledge myself to a new deal for the American people.” Vowed to help the jobless, poor, farmers, and the elderly Sought expert help for university professors of economics The Brain Trust
23. FDR
24. How did the Gov’t respond to the Depression? (5) 1st hundred days in office were busy Passed many pieces of legislation to help the economy Wanted to restore faith in the banking system Believed that strong banks were needed to help the economy recover
25. How did the Gov’t respond to the Depression? (6) Passed the Emergency Banking Relief Act while banks had a “holiday” for 8 days Act provided that only banks w/enough funds to meet their depositors’ demands could reopen—others had to stay closed Attempted to restore American’s faith in banks Fireside chats
26. How did the Gov’t respond to the Depression? (7) Passed new legislation geared towards job relief & economic recovery New Deal 3 main goals: Relief for the unemployed Plans for recovery Reforms to prevent another depression “Alphabet Soup”
27. How did the Gov’t respond to the Depression? (8) Relief for the unemployed CCC Civilian Conservation Corps Provided jobs to young single men Planted trees, built bridges & parks Served a dual purpose Employment & conservation
28. CCC
29. How did the Gov’t respond to the Depression? (9) FERA Federal Emergency Relief Administration Gave federal $$ to state & local agencies for the unemployed WPA Workers Progress Administration Jobless built hospitals, schools, playgrounds, etc. Also employed artist, writers muralists
30. How did the Gov’t respond to the Depression? (10) Programs to Promote Recovery Needed to boost industry & farming in order to have economic recovery Planned to control production, stabilize prices, & keep workers on the job
31. How did the Gov’t respond to the Depression? (11) NIRA National Industrial Recovery Act Each industry had to write codes for production, wages, prices, & working conditions Created the NRA-Nat’l Recovery Admin Enforce the new codes written by the industries
32. How did the Gov’t respond to the Depression? (12) PWA Public Works Admin. Promoted recovery for public works projects Built ports, schools, etc Limited success AAA Agricultural Adjustment Admin Paid farmers not to grow certain crops Destroyed surplus food & livestock Hoped to drive prices ↑
33. AAA
34. How did the Gov’t respond to the Depression? (13) REA Rural Electrification Admin Loaned gov’t $$ to get rural areas electricity
35. How did the Gov’t respond to the Depression? (14) Reforms for the long term—prevention Truth in Securities Act End wild speculation that led to market crash Banking Act of 1933 FDIC-Federal Deposit Insurance Corporation Insured savings accounts in banks approved by the gov’t
36. How did the Gov’t respond to the Depression? (15) TVA Tennessee Valley Authority Remake the Tennessee River Valley Poor area Destroyed by floods ½ of families receiving relief aid Built 40 dams Hydroelectric power Deepened river channels Planted new trees
37. How did the Gov’t respond to the Depression? (16) Labor Reforms Wagner Act Protected American workers from unfair management practices Guaranteed right of collective bargaining Pro union Fair Labor Standards Act Set minimum wage Children under 16 couldn’t work
38. How did the Gov’t respond to the Depression? (17) Help for the elderly, jobless, poor Social Security Act Set up a system of pensions for the elderly Retire, collect payments, spend to fuel economy Provided unemployment insurance Gave states $$ to support dependent children & people w/disabilities