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The Great Depression Mr. Giesler American History Slide 2 Do Now: What is an economic depression? What are typical characteristics of a depression or recession? Slide 3 Background Info The Election of 1928 Herbert Hoover; President; Republican Mining Engineer; accumulated a fortune He had never known failure John Maynard Keynes regarding Hoover Exemplified the new era of American capitalism Author American Individualism condemned government regulation as an interference with the economic opportunities of ordinary Americans Slide 4 Slide 5 Warning Signs Southern California and Florida real-estate speculation Banks failing Land remained underdeveloped Mortgages foreclosed High unequal distribution of income reduced purchasing power Sales of consumer goods such as new autos stagnated after 1926 European demand for American goods declined A fall in the bloated stock market was inevitable Slide 6 Black Thursday Oct. 24, 1929 The Stock Market Crash Panic struck Massive amounts of people attempt to sell their stock, but nobody was buying Slide 7 The Initial Impact a passing incident in our national lives Hoover Hoover attempted to assure Americans that the incident would be over in 60 days U.S. Steel stock fell from $262 to $22; GM from $73 to $8 By 1932, Gross National Product had fallen by 1/3 11M or 25% of the labor force could not find work U.S. 1929, 225K f/t workers to none at the end of 1932 Every industrial economy suffered Slide 8 The Aftermath Destroyed investment companies and wiped out thousands of investors Reduced business and consumer confidence 26,000 business failed Germany Defaults Massive layoffs Banks failed as depositors withdrew money Millions of families lost their life savings Slide 9 The Transformation of American Society Bread Line Hundreds of thousands of people took to the road in search of work People lined the streets in bread lines seeking food TTYN: Describe what the picture depicts Slide 10 Hoovervilles TTYN: Describe what the picture depicts Slide 11 The Aftermath Children go barefoot American suicide rate rose to the highest level in the nations history birthrate fell to the lowest Slide 12 TTYN If you were Herbert Hoover, how would you respond ? How would help the citizens of the United States? How should you help the business that were failing? Hoovers Response Hoover believed that economic downturns were a normal part of capitalism Weeded out unproductive firms Encouraged moral virtue among the less fortunate Opposed federal aid to the unemployed Individual belt-tightening as the road to recovery Slide 13 Hoovers Response Associational Action voluntary steps by business to maintain investment and employment Charity organizations should assist need neighbors Raised taxes on imported goods, which reduced international trade 1932 tax increase attempt to balance the federal budget reduced Americans purchasing power even further Slide 14 Hoovers Response 1932 Voluntary action had failed Approved loans to failing banks, railroads, and other businesses Aid to home owners near foreclosure Public works projects roads and bridge construction Would not offer direct relief to the unemployed It would do them a disservice Hoover Slide 15 Refer to your Notes Packet The Great Depression DBQ Slide 16 According to this graph, how did the stock market crash of 1929 affect workers? Analyze the documents and answer the short-answer questions that follow each document in the space provided. Doc. 1 Slide 17 Then, on Black Thursday, the American dream turned into a nightmare as Wall Streets Stock Market Boom turned into The Crash. People were stunned, unbelieving at first. Paper fortunes had vanished, but money was the foundation of American life. Disbelief turned to panic as people besieged [stormed] the banks (this one was in New Jersey) trying to withdraw their lifes savings often too late. The banks began to collapse and industrial production ground to a halt. According to this document, what effect did The Crash have on banks? Doc. 2 Slide 18 Doc. 3 Based on this photograph, what assistance is being offered to the people standing in line? Slide 19 ... In such a spirit on my part and on yours we face our common difficulties. They concern, thank God, only material things. Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment [decrease] of income; the means of exchange [money and credit] are frozen in the currents of trade; the withered leaves [failure] of industrial enterprise [business] lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone.... Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely and courageously. It can be accomplished in part by direct recruiting [hiring] by the Government itself, treating the task as we would treat the emergency of a war, but at the same time, through this employment, accomplishing greatly needed projects to stimulate and reorganize the use of our natural resources.... Doc. 4 According to President Roosevelt, what two problems did Americans face in 1933? Slide 20 Winds of Change Now, my friends, let me make clear in as emphatic words as I can find, the fundamental issue in this campaign. Mr. Hoover believes that farmers and workers must wait for general recovery, until some miracle occurs by which the factory wheels revolve again. No one knows the formula of this miracle. I, on the other hand, am saying over and over that I believe that we can restore prosperity here in this country by re-establishing the purchasing power of half of the people of the country, that when this gigantic market of 50,000,000 people is able to purchase goods, industry will start to turn, and the millions of men and women now walking the streets will be employed. TTYN: Explain the difference in recovery philosophy that Hoover and FDR each had Slide 21 Winds of Change Slide 22 Slide 23 FDR Takes Action "The only thing we have to fear is fear itself The New Deal 1 An unprecedented number of reforms addressing the catastrophic effects of the Great Depression. Unlike Herbert Hoover, who felt that the public should support the government and not the other way around, Roosevelt felt it was the federal governments duty to help the American people weather these bad times. Slide 24 The New Deal 1 From a life of privilege to the symbolic representative of ordinary citizens FDR believed that is was the governments responsibility to guarantee every man a right to make a comfortable living. The New Deal an alternative to socialism on the left, Nazism on the right, and the inaction of upholders of unregulated capitalism Slide 25 Small Group Activity Breaking Down the New Deal Group One will examine New Deal One Group Two will examine New Deal Two Refer to respective handouts Present the important aspects of each whole group setting Slide 26 The New Deal 1: Group One Slide 27 The New Deal 2: Group Two Slide 28 Refer to your Notes Packet The Great Depression DBQ Slide 29 In this cartoon, who does the doctor represent? In this cartoon, what do the bottles on the table represent? Doc. 5 Slide 30 According to this document, which group of people would benefit from Dr. Townsends plan? Based on this document, state one provision of Dr. Townsends plan. Doc. 6 Slide 31 Next Unit: World War II: The End of the Depression