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The Great The Great The Great The Great DepressionDepressionDepressionDepressionThe Great The Great The Great The Great DepressionDepressionDepressionDepression

Black Tuesday & the Great Black Tuesday & the Great Black Tuesday & the Great Black Tuesday & the Great CrashCrashCrashCrash

•bull market bull market bull market bull market –––– rising stock prices rising stock prices rising stock prices rising stock prices (way too fast) (way too fast) (way too fast) (way too fast) ���� plummeted to bear plummeted to bear plummeted to bear plummeted to bear market market market market –––– falling stock pricesfalling stock pricesfalling stock pricesfalling stock prices– business community with big profitsbusiness community with big profitsbusiness community with big profitsbusiness community with big profits

• investors tried to sell their stocks investors tried to sell their stocks investors tried to sell their stocks investors tried to sell their stocks before prices fell any lower before prices fell any lower before prices fell any lower before prices fell any lower ���� too too too too many sellingmany sellingmany sellingmany selling

• stock market collapsed!stock market collapsed!stock market collapsed!stock market collapsed!•Dropped $30 billionDropped $30 billionDropped $30 billionDropped $30 billion

The BankThe BankThe BankThe Bank

• loans busted because of stock loans busted because of stock loans busted because of stock loans busted because of stock investments investments investments investments ���� banks closingbanks closingbanks closingbanks closing

•people panicked & rushed to people panicked & rushed to people panicked & rushed to people panicked & rushed to withdraw their money withdraw their money withdraw their money withdraw their money ���� banks banks banks banks dondondondon’’’’t keep a lot on hand, they t keep a lot on hand, they t keep a lot on hand, they t keep a lot on hand, they ran out of money ran out of money ran out of money ran out of money ���� banks banks banks banks closedclosedclosedclosed

Business FailuresBusiness FailuresBusiness FailuresBusiness Failures

•when banks closed, many when banks closed, many when banks closed, many when banks closed, many businesses lost their corporate businesses lost their corporate businesses lost their corporate businesses lost their corporate savings & operating accounts savings & operating accounts savings & operating accounts savings & operating accounts ���� businesses closed or cutback businesses closed or cutback businesses closed or cutback businesses closed or cutback on production & workforce on production & workforce on production & workforce on production & workforce

•Unemployment increases (rate Unemployment increases (rate Unemployment increases (rate Unemployment increases (rate = 25%)= 25%)= 25%)= 25%)

Causes of the Great Causes of the Great Causes of the Great Causes of the Great DepressionDepressionDepressionDepression

•overproduction overproduction overproduction overproduction –––– production production production production exceeded consumption & exceeded consumption & exceeded consumption & exceeded consumption & surpluses piled upsurpluses piled upsurpluses piled upsurpluses piled up

•global trade problems global trade problems global trade problems global trade problems ––––world trade declined world trade declined world trade declined world trade declined (Europe recovering from (Europe recovering from (Europe recovering from (Europe recovering from WWI) WWI) WWI) WWI) ���� not a lot of aidnot a lot of aidnot a lot of aidnot a lot of aid

• the Dust Bowlthe Dust Bowlthe Dust Bowlthe Dust Bowl

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President HooverPresident HooverPresident HooverPresident Hoover• thought that relief and recovery thought that relief and recovery thought that relief and recovery thought that relief and recovery should come largely through should come largely through should come largely through should come largely through voluntary cooperation rather voluntary cooperation rather voluntary cooperation rather voluntary cooperation rather than federal effortsthan federal effortsthan federal effortsthan federal efforts

• created the RFC (Reconstruction created the RFC (Reconstruction created the RFC (Reconstruction created the RFC (Reconstruction Finance Corporation) Finance Corporation) Finance Corporation) Finance Corporation) –––– direct direct direct direct relief to unemployed; loaned relief to unemployed; loaned relief to unemployed; loaned relief to unemployed; loaned money to railroads and banksmoney to railroads and banksmoney to railroads and banksmoney to railroads and banks

• lowered taxes to stimulate the lowered taxes to stimulate the lowered taxes to stimulate the lowered taxes to stimulate the economyeconomyeconomyeconomy

•did not realize how severe the did not realize how severe the did not realize how severe the did not realize how severe the depression wasdepression wasdepression wasdepression was

FarmersFarmersFarmersFarmers• as prices bottomed out, many as prices bottomed out, many as prices bottomed out, many as prices bottomed out, many farmers could not sell their cropsfarmers could not sell their cropsfarmers could not sell their cropsfarmers could not sell their crops

• without income, they could not without income, they could not without income, they could not without income, they could not repay their house and land loansrepay their house and land loansrepay their house and land loansrepay their house and land loans

• banks foreclosed on their homes & banks foreclosed on their homes & banks foreclosed on their homes & banks foreclosed on their homes & landlandlandland

• If things weren’t bad enough, If things weren’t bad enough, If things weren’t bad enough, If things weren’t bad enough, drought struck!drought struck!drought struck!drought struck!

• Dust Bowl Dust Bowl Dust Bowl Dust Bowl –––– dust storms on the Great dust storms on the Great dust storms on the Great dust storms on the Great PlainsPlainsPlainsPlains

• families migrated west for a new lifefamilies migrated west for a new lifefamilies migrated west for a new lifefamilies migrated west for a new life

Family LifeFamily LifeFamily LifeFamily Life

•divorce rates increase, divorce rates increase, divorce rates increase, divorce rates increase, marriage & birth rates marriage & birth rates marriage & birth rates marriage & birth rates decreaseddecreaseddecreaseddecreased

•men left their families (some men left their families (some men left their families (some men left their families (some in search of jobs)in search of jobs)in search of jobs)in search of jobs)

• children dropped out of children dropped out of children dropped out of children dropped out of school to help make moneyschool to help make moneyschool to help make moneyschool to help make money

• food lines (food lines (food lines (food lines (a.k.aa.k.aa.k.aa.k.a soup soup soup soup kitchens) kitchens) kitchens) kitchens) –––– fed the poorfed the poorfed the poorfed the poor

Election of 1932Election of 1932Election of 1932Election of 1932

• FDR (NY governor/D) FDR (NY governor/D) FDR (NY governor/D) FDR (NY governor/D) vs. Hoover (U.S. vs. Hoover (U.S. vs. Hoover (U.S. vs. Hoover (U.S. President/R) President/R) President/R) President/R) ���� FDR FDR FDR FDR wonwonwonwon

• Roosevelt promised Roosevelt promised Roosevelt promised Roosevelt promised relief, recovery, and relief, recovery, and relief, recovery, and relief, recovery, and reformreformreformreform

• A new deal for the A new deal for the A new deal for the A new deal for the American people American people American people American people with federal helpwith federal helpwith federal helpwith federal help

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The New DealThe New DealThe New DealThe New Deal

• federal govt. approved and federal govt. approved and federal govt. approved and federal govt. approved and financed programs that financed programs that financed programs that financed programs that battled the depressionbattled the depressionbattled the depressionbattled the depression

•How did they afford this? How did they afford this? How did they afford this? How did they afford this? – Raise taxesRaise taxesRaise taxesRaise taxes– InflationInflationInflationInflation

Social Security• set up to help the elderly, disabled,

children, and unemployed

•1. created a pension for retired

workers (65+)

•2. offered unemployed short-term

benefits while they looked for

work

•3. provided payments to women

with dependent children or to

disabled people

Frances Perkins

• Secretary of Labor

• 1st woman ever

appointed to the Cabinet

• believed in strong govt.

involvement in the

economy

• created labor reforms

and government agencies

to aid unemployment &

workers

The WPA

•Works Project Administration –

largest employer of the country

•purpose: create organizations that

give jobs & wages to people

currently unemployed

–Ex. building roads, libraries, parks,

airports, etc.

Civilian Conservation

Corps

• designed to tackle the

problem of

unemployed young

men (18-25)

• gave environmental

jobs to men: plant

trees, built public

parks, restocked

rivers with fish, etc.

• 3 million men served

in the CCC

The Federal Housing

Administration

• insured mortgages of lower-income

Americans (helping these people

afford homes)

• provided loans to local govts. for

public housing projects

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Eleanor Roosevelt

• political

“helpmate”

(compared to

Hillary Clinton)

• she became FDR’s

eyes & ears

(especially during

ill times)

• strong 1st lady

behind the man

Arizona & the Depression

• Route 66 – population increase

(migrant farmers from the Dust Bowl)

• JOBS! Copper, cotton, farming, and

mining flourished during this time

• copper & cotton prices drop

Indian New Deal

•hopped on the bandwagon

•used federal funding to create

jobs for Indians on reservations

(built schools, hospitals, gave

food aid)

• Indian Reorganization Act – self-

governing reservations

Congress of Industrial

Organization

• federation of unions that organized

industrial workers

• sit-down strike – remained in the

factories but refused to work

–to prevent owners from replacing

them with new employees

The Supreme Court

• Supreme Ct. worried that President Roosevelt was taking more power than the Constitution

• The Court had ruled against some New Deal programs, so…

• “Court Packing bill” – allowed the President to appoint up to 6 new justices; rejected; but established power of the Presidency

Why haven’t we had another

Depression?

•govt. set up programs to prevent

another Depression

– i.e. Social Security & Federal Deposit

Insurance Corporation