The Great Depression Begins1929 - 1941

Americans wait in soup and bread lines in cities in order to eat and feed their families.

CAUSES of The Great Depression

1. Too many people were buying items on credit - not saving $2. Companies producing too many goods - piled up in warehouses – included building too many houses3. Farmers were growing surplus crops - drove prices down4. Industrialization/Technology caused people to lose jobs5. There was a large gap between the wealthy and the poor6. Stock-based economy

The Great Depression Begins1929 - 1941

Overproduction of Goods - America producing more than it could consume.

A high tariff (Hawley-Smoot Tariff) reduced international trade to a trickle as other countries followed suit and passed high tariffs.

American were buying too much on credit and not saving their money.

Over production of crops drove prices down.

Use of new technology led to higher unemployment.Machines doing jobs previously performed by humans.

Causes of the Great Depression

Stock prices extremely inflated.Risky practices being used: Stock Speculation and Buying on MarginPrices did not accurately reflect value of the stock/company

DJIA – Dow Jones Industrial Average

What is the Dow and how is its value determined?

Stock Market Prices Inflated

Name Price 1929 Price 2013Coca Cola 128.38 39.31 General Electric 222.00 23.62 US Steel 174.00 20.74

Stock Prices 10/29/1929 and 2013$1 in 1929 was worth about $10 in 2011 dollars.

Stock prices did not accurately reflect the profit of the company. Prices driven up by speculating (demand).

President Herbert Hoover - 1929-1933 - Republican

Hoovervilles – lean to housing some made from wood others from cardboard.

Hoover reluctant to interfere in the economy. Takes cautious first steps.

Strong supporter of laissez-faire (let the market be) economics.

When he finally decides to take action, it is too little too late. He is a one-term president

Hoover Flags

HooverBlankets

BROTHER, CAN YOU SPARE A DIME? (1931)

Once I built a railroad, I made it runI made it race against timeOnce I built a railroad, now it's doneBrother, can you spare a dime?

Once I built a tower, up to the sunBricks and mortar and limeOnce I built a tower, now it's doneBrother, can you spare a dime?Once in Khaki suits, gee we looked swellFull of that Yankee-Doodly-dumHalf a million boots went slogging through HellAnd I was the kid with the drum

Say, don't you remember, you called me"Al"It was "Al" all the timeSay don't you remember, I was your palBrother, can you spare a dime?

http://www.youtube.com/watch?v=eih67rlGNhU

Hoover’s Handling of Bonus ArmyDestroyed His Political Career

WWI veterans (17,000) descend on Washington D.C. to ask for an early payment of war bonuses in Spring and Summer 1932. Congress had voted to pay these in 1945.

Congress voted no.Hoover asked Gen. MacArthur to disperse the marchers. He used force. Americans very upset. A boy was blinded and a baby died after tear gas was used.No way Hoover would be re-elected.

Unemployment Rates During Great Depression

Unemployment Rate During the Great Depression Year Rate Additional Information1923-29 3.3% Too much production occurring1930 8.9% Hoover’s presidency1931 15.9%Hoover’s presidency1932 23.6%Election Year – FDR wins in landslide1933 24.9%FDR – 1st New Deal

(Hitler comes to power)1934 21.7%1935 20.1%2nd New Deal Begins

(Japan threatens Manchuria and China)1936 17.0%Election Year1937 14.3%Congress pressures FDR to end New

Deal programs1938 19.0%1939 17.2%War begins in Europe on Sept. 3, 1939 when Poland is invaded1940 14.6%Election Year1941 9.9% Japan bombs Pearl Harbor on Dec. 7,

1941 – U.S. industries begin producing war products1942 4.7% War year FYI – Highest Average Unemployment Rate of Great Recession of 2008 was about 11-12%

The Election of 1932Franklin D. Roosevelt (D) v. Hoover (R)

Franklin Delano Roosevelt – Democrat(1932-1945) – Elected 4 Times

Let me assert my firm belief that the only thing we have to fear is fear itself.

FDR- First Inaugural Address

http://www.youtube.com/watch?v=amNpxQANk0M

The Importance of First Lady Eleanor Roosevelt

FDR was disabled from Polio and was confined to a wheelchair.

Made traveling the country difficult for him.

Eleanor traveled around and brought information to the president about how the American people were doing.She was his eyes and ears.

She pushed him on a number of issues including women’s rights and Civil Rights for African Americans.

As a result, Frances Perkins became the first female cabinet member – Secretary of Labor, and Mary McCloud Bethune was the first Director of Negro Affairs in the National Youth Administration.

Bethune

FDR’s Brain Trust

A group of experts in their fields that advised FDR on a variety of matters including the economy.

FDR’s First 100 Days• Honeymoon period at the beginning of his

presidency.• Congress passed every piece of requested

legislation!• WPA, AAA, CCC, NRA, etc.• Called for a bank holiday so banks could be

examined.• “I think it’s time for a drink.” Repeal of Prohibition

– 21st Amendment – 1933• Fireside Chats

FDR’s First and 2nd New Deal – The 3 Rs

RELIEF AND RECOVERY

REFORMEBRA, CCC, PWA, CWA, WPA, NYA, AAA, FDIC,

HOLC, FHA, and FERA

SSA, FLSA, NLRA (Wagner Act), SEC, FHA,

TVA, and REA

FDR’s Critics

Huey Long – LA Governor and Later U.S. Senator

Program: Every Man a King – Share Our Wealth – Socialist

Assassinated in the LA Capitol Building 9/8/1935

FDR said one of the most dangerous men in America.

Father Charles Coughlin – Catholic Priest

Early supporter – turned critic.

Felt FDR did not really help the “little” man – didn’t come through with his promises.

Became so radical the Catholic Church stopped his weekly radio broadcasts

Dr. Francis Townsend – Townsend Plan

Most people had not saved any money for retirement.He proposed the old-age pension plan funded by a 2% national sales tax so every retired person over 60 would receive $200 per month.

The Social Security Act is passed later in the New Deal Era. People receive social security numbers for the first time.

FDR and the Court Reorganization Plan

Court-Packing Deal:

Who: Supreme Court

Why: Were not upholding the constitutionality of his New Deal programs

What: Change the number of justices from 9 to 15

Reaction: Republicans and Democrats both outraged – called him a dictator.

FDR quickly backed down.

A Resurgence of Labor Unions

AFL (Samuel Gompers) v. CIO (John Lewis)

Had different goals and broke away from each other. AFL dominated by skilled white male workers.

CIO wanted all industrial workers regardless of race or sex or skill level to be able to join a union.

New Deal Act: Wagner Act (National Labor Relations Act) passed to guarantee collective bargaining and prohibit unfair labor practices such as blacklists.

New Ideas in Economics

FDR was influenced by the teachings of economist John Maynard Keynes.

He taught that governments should spend their way out of recessions/depressions.

There was a recession in 1937-38 caused mostly by passage of the SSA – took money out of circulation at a time when consumer spending was needed.

Stock market reform-

Securities and Exchange Commission

Established to police the NYSE

First chairman was Joseph P. Kennedy)- practice of buying on margin was regulated

T o put more money in circulation, FDR issued an Executive Order to take the U.S. off the GOLD STANDARD

The government could now print more money than Fort Knox gold reserves could backup.

More money in circulation caused inflation causing value of dollar to lower.

• TENNESSEE VALLEY AUTHORITY (TVA) - used to promote hydroelectric power, control flooding – regulated by Federal government.

LASTING LEGACIES OF THE NEW DEAL

• Social Security Program

LASTING LEGACIES OF THE NEW DEAL

The Federal Debt Soared During FDR’s Presidency

1933 US National Debt $22.5 billion

1945 US National Debt $258.5 billion

This is the result of Keynesian Economic ideas.

FDR drastically increased government intervention in the economy. Other presidents will follow suit.

LASTING LEGACY

Life During the DepressionThe New Deal and MinoritiesFarmers

Dust Bowl and Drought on the Great Plains.The Grapes of Wrath by John Steinbeck – about the hardships farmers faced.

Women who chose to work were accused of taking jobs men could be working.

African Americans – usually last hired, first fired.

Higher unemployment rate than among whites.

Racial tensions increased.

FDR feared losing votes if openly supported Civil Rights.

Mexican Americans – no real help for these Americans

Native Americans

Indian Reorganization Act of 1934 passed

Tribal lands returned to them.

WWII - End of the New Deal

War declared in Europe – September 1939

Great Britain and France declare war on Germany after Germany invaded Poland.