the great depression -...

The Great Depression1929-‐1940

What is the Great Depression?•During the 1920s, the United States economy was roaring due to new technology, inventions, mass production, lack of government intervention, and weak foreign competition. •As President Herbert Hoover took over in 1929, he announced that there would be “chicken in every pot and a car in every garage.”•Although there had been warning signs, most believed Hoover and that the 1930s would see continued success.•Over the next decade, America suffered through its worst economic period in history. How did this happen…?

Causes of the Great Depression

•Overextension of CreditBanks felt invincible due to the economic success of the 1920s, so they began giving out loans to more businesses and people. The banks believed that the more loans they gave out, the more they would make. However, many of these people had a high percentage chance of not being able to pay these loans back.


•Overproduction of goods• As consumers bought loads of the brand new products created in the 1920s, business owners became overconfident. •Using mass production, they made far more products than they could possibly sell. Many factories had to buy warehouses to store their unsold products, yet they continued to produce new items at a rapid rate. • It was only a matter of time before many businesses collapsed.


• Laissez-‐faire policies•Under Presidents Harding and Calvin Coolidge, the government had relaxed Progressive restrictions on businesses. • This allowed banks and businesses to make unwise decisions. •Because of a lack of oversight, they could also “cook the books,” or lie to investors about how their business was doing. This led many people to loan money into failing banks and businesses. . .


•Buying stock on margin•Because Americans believed that the stock market rise would continue for a long time, they took out loans from brokers to purchase more stock. • This practice of speculation meant that many Americans owed money they never had after the stock market crashed in 1929.


• Excessive Consumerism•Americans loved the products of the 1920s. Unfortunately, they loved them so much that they purchased them even when they could not afford them. •80% of Americans had no savings in 1929, and the majority of consumer products were bought with Credit.


•Crash of the Stock market: • Finally, on October 29, 1929, a day that became known as Black Tuesday, the stock market crashed. • The true value of many banks and businesses was revealed, and investors lost their money. •Money no longer came flooding into prop up failing banks and businesses forcing many of them to close.


•Rising Unemployment•As banks and businesses across the country collapsed, workers were laid off.•At the lowest point of the Great Depression, the national unemployment reached 25%.


•High Tariffs• In an attempt to protect American businesses from foreign competition, Hoover raised tariffs. •He believed this would cause Americans to only spend money on US goods. • The plan backfired, however, as European nations responded by raising their tariffs, hurting US sales around the world.

The Dust Bowl•One group had it worse than all others: Farmers. • Their struggles had begun during the 1920s as post-‐war prices dropped once European nations recovered. • In the 1930s, they suffered due to the combination of overfarming and Drought. •Overfarming not only ruined prices, but also ruined the soil. When rain did not arrive, the once fertile Great Plains became the Dust Bowl.•As farmers could not pay their debts, banks repossessed their land, forcing farmers to migrate from the Great Plains to new areas.

Hoover’s Reaction to the Great Depression

•Hoover was afraid of spending governmentmoney to solve the nation’s problems.•No president in American history had attempted to spend money to solve an economic crisis, and Hoover did not want to be the first president to make a depression worse. •Here are three things he did in reaction to the Great Depression.

Hoover’s Reactions

•He provided relief (food and money) to families who could not find employment. •However, since Hoover did not want to spend more than necessary, many families did not meet the strict guidelines and were denied relief.


•He created several public works programs, which hired citizens to build government buildings and infrastructure. • The most famous of these works was the HooverDam. •Unfortunately, not enough programs were created to help the majority of struggling families.


•He created the Reconstruction Finance Corporation (RFC) which handed out a loans to trustworthy businesses. •While he hoped this would help boost the economy, not enough businesses received loans.

Two Major Mistakes Made by Hoover

•He told the nation that American “rugged individualism” had always pulled them out of hard times. •Hoover was convinced that if Americans worked harder to find jobs then the US would recover. •His attitude upset Americans, which led to shanty-‐towns being called “Hoovervilles.”

Two Major Mistakes Made by Hoover

•After WWI veterans had been promised a $1,000 bonus.• Years into the Great Depression, the government had yet to pay this bonus. • Thousands of jobless veterans marched on Washington, D.C. After being denied their bonus, many chose to stay. •Hoover responded by sending the military to force them out of the capital. •American disdain for Hoover grew dramatically after his attack on the “Bonus Army”

The New DealRoosevelt Takes Action

Roosevelt Wins 1932 Election• In 1932 with the economy struggling and the people frustrated with Hoover, Franklin Delano Roosevelt ran for president for the Democratic Party.•Roosevelt promised action and experimentation. He would do anything and everything to try to get America out of the Depression.•He won the election in a landslide.

The New Deal Begins

•Once Roosevelt became president, he began his economic program called the New Deal.

• Through the New Deal, he attempted to help nearly every section of American society through legislation.

• In the first Hundred Days, he passed legislation faster than any other president.

Federal Deposit Insurance Corporation•Roosevelt knew one of the biggest problems was the people’s lack of trust in banks.•He created FDIC to give people confidence in the banking system. • Funds give to the bank would be insured up to $2500.

Works Progress Administration• The WPA was the largest program passed by Roosevelt and created public works projects.

•At its peak, over 3 million people would be employed at the same time by WPA projects.

• It also proved to be the most expensive plan, costing around $13.4 billion!!!

Federal Number One•One part of the plan created jobs for artists and writers.

• They would use their skills to create public programs, writings, poster, and many other projects.

Social Security

•Social Security attempted to help those who needed help but could not do it themselves.

•These included orphans, widows, severely injured, and most popularly the elderly.

Civilian Conservation Corps

• The Civilian Conservation Corps provided jobs for unemployed, unmarried men ages 18-‐23.• The workers came from families who required relief from the government.• They would provide unskilled labor for conservation projects across the United States, the most famous being the Shelter Belt.

Shelter Belt: The Windbreaker

National Recovery Administration

•Attempted to help the nation recover by regulating the economy, providing jobs, and encouraged unions.•Despite the intent of the act, it lost favor among businessmen and Americans.• The Supreme Court deemed the NRA unconstitutional, upsetting FDR.

Tennessee Valley Authority

• The Tennessee Valley Authority created dams and provided energy to the area around the Tennessee River. • It provided energy, flood control, and jobs to an area that had been hit hard by the Depression.• The TVA is still one of the leading energy providers in the region.

Agricultural Adjustment Act

• The Agricultural Adjustment Act attempted to lower the amount of cash crops being produced.• Farmer were rewarded for sections of their land that were not used for growing cotton, tobacco, wheat, or any other cash crop. • This evened out the prices on the market, thus helping the agricultural economy recover.

Fair Labor Standards Act

•The Fair Labor Standards Act helped workers around the nation by. . .•Creating a 40 hourworkday•Time and a half pay for Overtime•Established a minimum wage•Eliminated many forms of child labor

Securities and Exchange Commission• The Securities and Exchange Commission was created to regulate the stock market.

• The government hoped that by keeping an eye on the exchange of stocks, they could avoid another stock market crash like in 1929.

Cumberland Homesteads

•Created during the New Deal as an attempt to show the cooperation between farmers, miners, and factory workers.•Government pulled support of cooperative projects in 1940, but the Cumberland Homestead community survived.

Eleanor Roosevelt Visits in 1935!

Great Smoky Mountain National Park

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