causes of the great depression over production under consumption stock market crash easy credit and...

Causes of the Great Depression

• Over Production• Under Consumption• Stock Market Crash• Easy Credit and Loan Happy Banks

Stock Market Crash

• Banks issues loans to people to buy stocks, falsely inflating the market

• People paid for stocks at fractions of full-price, and the irresponsible market allowed it – buying stocks on margin

• October 29, 1929 (Black Tuesday) the stock market crashed– $30 billion in a week

• ?

The Great Depression

• The stock market crash triggered other economic weaknesses

• 80% of US banks shut down• 90,000 businesses declared bankruptcy • Families fell apart, children went

without education and proper nourishment

• Theft & violence were on the rise• ?

Hoovervilles

• Americans found themselves homeless, living in sewer pipes and park benches

• Shantytowns, camps of shacks and tents, came together and were renamed for the president who got the blame

• ?

Unemployment

• When corporate profits fell, businesses had to cut workers

• Unemployment rose from 3% to 25% by 1932

• 300,000 hoboes traveled the countryside in search of work and relief

• ?

Dust Bowl

• In many ways, the folks on farms were better off than those in cities

• However, the extreme drought that carried the Great Plains region from 1933-1936 was truly brutal– Dry conditions & high winds made it

impossible to farm– Over farming of soil led to depletion and

ruined soil– Tenant farmers and sharecroppers were

evicted from their lands, and headed west to California for work

• ?

FDR & The New Deal

• American voters rejected Herbert Hoover and voted in Franklin D. Roosevelt

• Roosevelt delivered his “New Deal” for the American people, to help end the Depression

• He promised Relief, Recovery & Reform• What are three specific problems of the

Depression that FDR must face?

Relief, Recovery, Reform

• FDR’s New Deal did not cure all of America’s economic problems right away

• The “Three R’s” came in waves throughout the 1930s, FDR was constantly trying new things– The First Hundred Days of the New Deal– The Second New Deal– WWII mobilization

• Why would a president’s “first hundred days” matter to people?

Tennessee Valley Authority

• The very large TVA put people to work in 1933 building dozens of dams and power plants along the Tennessee River

• Controlling the environment by preventing disastrous floods

• Bringing electricity to many in rural regions that had not previous had it

• Employing hundreds• What are the three ways in which the

TVA helped?

Wagner Act

• Unions had suffered in the 1920s due to pro-business presidents and Red Scare distaste for them

• The Wagner Act (NLRA, 1935) established the right of unions to bargain collectively and prohibited employers’ abusive tactics

• The old AFL left many unskilled industrial workers out, and so the Congress of Industrial Organizations was formed

• How popular were labor unions in the Gilded Age? Progressive era? Roaring Twenties? 1930s?

Social Security Act

• Passed in 1935 as another important part of the Second New Deal, to create three important programs

– Old-age insurance– Unemployment compensation– Financial aid for the disabled

• Very relevant still today• Does the SSA qualify as relief,

recovery, or reform? why?

FDR’s NEW DEAL

• Tennessee Valley Authority• Wagner Act• Social Security Act• Civilian Conservation Corps• Emergency Banking Relief Act• Works Progress Administration • Federal Deposit Insurance Corporation• Agricultural Adjustment Act• Home Owners Loan Corporation

Eleanor Roosevelt• FDR’s wife Eleanor was the first very

influential, very vocal First Lady• Very interested in humanitarian and social

progress– Involved in FDR’s domestic affairs

• She traveled all over the US and reported directly to FDR on what she saw around the Depressed nation

• Helped encourage FDR to appoint Frances Perkins to cabinet

• Was Eleanor’s role that of a foreign policy advisor, economic advisor, political advisor, or social advisor?

Opposition to the New Deal

• Some conservatives thought FDR made the government too large & too strong

• Some liberals thought FDR had not gone far enough nor done enough

• Huey Long of Louisiana may have been his loudest critic and proposed a program of Share Our Wealth clubs that would guarantee a home, an education, a job, food and clothes for every American

• If there are challengers saying that FDR isn’t doing enough, does that mean the New Deal isn’t working?

Court Packing Scheme

• In 1937, FDR tried to restructure the Supreme Court

• FDR wanted to add supporters to the Court so his New Deal programs would not be in jeopardy

• Congress did not meet FDR’s demands• How would more justices keep FDR’s

programs out of danger?