The Great Depression & the New Deal. 1. What were the causes of the Great Depression?. Stock Speculation Weak Banking System Economic Policies Overproduction of Goods Decline in the Farming Industry.
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Weak Banking System
Overproduction of Goods
Decline in the Farming Industry
a. Stock Speculation: People over speculated on stocks, using borrowed money (bought on margin) that they could not repay when stock prices crashed, and the banks demanded payment.
b. Weak Banking System: The Federal Reserve Board failed to prevent the collapse of the banking system. - Many people had bought on credit for consumer goods and on margin for stock purchases. These loans could not be repaid.
In one of the largest pea camps in California. February, 1936.
c. Economic Policies: When President Hoover enacted tariffs on European goods, these same nations enacted retaliatory tariffs on the goods from the United States. -High tariffs strangled and discouraged international trade. -In addition, President Hoover believed it was not the role of the government to control the economy, and he called on local charities and local governments to help the needy.
d. Overproduction of Goods: Farmers and factories had been producing a surplus for the war. -Prices for farm products fell so low that it cost farmers more to grow crops than they could make selling them. -Also, the markets were flooded with consumer goods that Americans could no longer afford.
e. Decline in the Farming Industry: Farmers could no longer repay loans because overproduction caused the prices for farm products to fall. In addition, farming techniques no longer supported farming in much of the southern Great Plains.
Squatter's Camp, Route 70, Arkansas, October, 1935.
Brother can you spare a dime?
Once I built a tower, up to the sun,brick and rivet and lime.Once I built a tower, now it's done --Brother, can you spare a dime?
Once in khaki suits, gee, we looked swellFull of that Yankee Doodle-de-dum.Half a million boots went slogging through hell,And I was the kid with the drum.
Say, don't you remember they called me Al,It was Al all the time.Why don't you remember, I'm your pal --Say, buddy, can you spare a dime?
They used to tell me I was building a dreamAnd so I followed the mob.When there was earth to plow or guns to bear,I was always there, right on the job.They used to tell me I was building a dreamWith peace and glory ahead --Why should I be standing in line, just waiting for bread?
Once I built a railroad, I made it run,
Made it race against time.Once I built a railroad, now it's done --Brother, can you spare a dime?
World War I veterans block the steps of the Capital during the Bonus March, July 5, 1932seeking early payment of a bonus scheduled for 1945 assembled in Washington to pressure Congress and the White House.
Hoover resisted the demand for an early bonus. Veterans benefits took up 25% of the 1932 federal budget.
Even so, as the Bonus Expeditionary Force swelled to 60,000 men, the president secretly ordered that its members be given tents, cots, army rations and medical care.
Handpainted sign on Bonus Army truck states: "We Done a Good Job in France, Now You Do a Good Job in America"
* The brutal treatment of the Bonus Army lowered Hoover’s popularity even further. The nation was poised for a new leader to lead them out of the depression.
The United States Army burned this and similar camps to the ground after routing the many thousands of protestors that were camped out in the national capital with tanks, tear gas, and troops of armed soldiers. (July 28, 1932)
Most people resorted to building residences out of box wood, cardboard, and any scraps of metal they could find. Some individuals even lived in sewer mains.
All Graphs from: www.digitalhistory.uh.edu/historyonline/us34.cfm
1. What does this chart tell you about stock prices before and after the stock market crashed?
2. What does this chart tell you about workers?
3. What does this chart tell you about the number of banks (and businesses) that failed?
4. What does this chart tell you about people’s lives up until 1940?
5. What does this chart tell you about families?
a “New Deal ”.
“New Deal Rhythm” –Political Propaganda
President Roosevelt won in a landslide election. -He used government programs to help the nation recover from the Great Depression in his "New Deal for Americans".
1933 - "We're in the Money"
We never see a headline 'Bout breadline, today, And when we see the landlord,We can look that guy right in the eye.Look that guy right in the eye-Look that guy right in the eye-We're in the money Come on, my honey Let's spend it, lend it, send it-Let's spend it, lend it, send itRolling, rolling-Rolling around! Additional VerseGone are my blues,And gone are my tears;I've got good newsTo shout in your ears.The silver dollar has returned to the fold,With silver you can turn your dreams to gold!
We're in the money,We're in the money;We've got a lot of what it takes to get along!We're in the money,The sky is sunny;Old Man Depression, you are through,You done us wrong! We never see a headline 'Bout breadline, today, And when we see the landlord,We can look that guy right in the eye .We're in the money Come on, my honey Let's spend it, lend it, Send it rolling around! All: We're in the money,We're in the money;We've got a lot of what it takes to get along!We're in the money,The sky is sunny;Old Man Depression, you are through,You done us wrong!
Hoover eventually set up public works programs, where the government hired people to construct schools, dams and highways.
Civilian Conservation Corps
Provided jobs for young men to plant trees and build bridges.
schools, bridges, dams, and
The Hoover Dam
to grow crops.
NRA: National Recovery Act
for production, prices, and wages.
people with disabilities.
3. What are “import tariffs” and why would high tariffs discourage international trade?
4. What happened to many banks and businesses when the stock market crashed?
5. What percentage of American workers could not find a job during the Great Depression?