The Great Depression

Brian McDonald

Center on Poverty, Work, & Opportunity UNC School of Law

Trends of the 1920s

• Economic prosperity for much of the country

• Improvements and setbacks for both women and minorities

• Significant technological changes in society

• Republican domination of the American Presidency

• Laissez-faire approach from the federal government

America in the 1920s

Election of 1928

Herbert Hoover (Red) – Republican

Alfred Smith (Blue) - Democrat

Wall Street Crash

• October 24th, 1929: Black Thursday – The market lost 11% of its value

(many investors decided to sell) – Major bankers/investors pumped

money in to prevent a larger drop and try to stop the fall

• October 29th, 1929: Black Tuesday – Market lost an additional 12%; many

investors sold, economic depression

Herbert Hoover • Much debate exists as to Hoover’s

effectiveness when the market crashed

• In lieu of federal involvement, he left much of the decision-making to the states (laissez-faire)

• Hoover blamed for economic problems of the country

– Homeless communities emerge; media calls them “Hoovervilles”

Causes of the Great Depression

• Stock Market Crash buying on the margin and stock speculation

• Continued crop failure in the dust bowl • Rest of the world (global economic

issues) • Excessive goods (overproduction) • Weak farm economy (and agricultural

issues) • Excessive use of credit • Direction of government and monetary

policies

Photographic Essay

Photographic Essay

Photographic Essay

Photographic Essay

Photographic Essay

Photographic Essay

Election of 1932

Franklin D. Roosevelt (Democrat) - Blue

Herbert Hoover (Republican) - Red

Franklin Roosevelt

After Roosevelt overwhelmingly wins the election, he tells the nation:

“I pledge you, I pledge myself, to a new deal for the American people.”

The resulting New Deal is his comprehensive set of programs to put people back to work motivating relief, recovery, and reform for the country.

Significant New Deal Programs

• Civilian Conservation Corp

• Public Works Administration

• Securities & Exchange Commission

• Tennessee Valley Authority

• Agricultural Adjustment Administration

• National Labor Relations Act

• Social Security Act • Emergency

Banking Act • Civil Works

Administration • Federal Deposit

Insurance Corporation

• Reconstruction Finance Corp

New Deal Programs

Civilian Conservation Corp

Construction

Public Works Administration Project

(Mississippi River)

Consequences of the Great Depression

• Job loss, increased unemployment (25% in 1932); recession from 1937-39

• Homelessness and increases in economic inequality; limited resources

• Culture of poverty (including psychological problems and substance abuse)

Questions 1. What were the strengths and

weaknesses of Hoover and Roosevelt’s responses to the Great Depression?

2. How successful was the New Deal? Did that, or World War II, get the nation out of the Great Depression?

3. What role should the federal government play in the economic success of our country?