2. Election of 1928
Prohibition and poverty major campaign
issues
Republicans take credit for prosperity of
’20s
Herbert Hoover, Republican, elected by
landslide
– Promise to keep Prohibition
– Prosperity of ’20s
3. •Stock Market Crash
•Black Tuesday, Oct. 29,
1929
•Hoover was blamed for
not providing “direct
relief” to help Americans?
WHY?
•US Govt. should not
provide “direct relief”
laissez faire
Rugged individualism: Americans are self-sufficient and would work
themselves out this depression through hard work and determination.
Charitable organizations: Churches, volunteers and people helping
one another.
5. The Stock Market
Stock
– Ownership in company
– Sold to raise capital
Improvements, expansion
Stock market
– Where stock is bought and sold
Bull market
– Period of rising stock value
– Caused millions to invest heavily
6. Buying on margin
– Small down payment
– Pay off balance ‘loan’ when stock sold
– Safe as long as stock price rises
Margin call
– Calling in ‘loan’ for repayment
Speculation
– Buying stock at low price
– Hold for short time
– Sell for quick profit
7. Problems with Stock Market
No government regulation
Stock bought not reflect true value
– Prices bid up without looking at company’s
earnings and profits
8. The Crash
Margin calls
– Led to stock sales
Flooded market
– Caused prices to drop
– Panic on Oct 24, 1929
– More & more stock put up for sale
– Stock priced bottomed out
Tuesday, Oct. 29, 1929
– “Black Tuesday”
– Stock market crashed
– Beginning of Great Depression
9. domino effect
Stock values drop from $87 - $19 billion
Steel production drops 80%
Industrial output drops 50%
500,000 homes and farms foreclosed
“Run on the banks”, 5,190 banks failed
9 million people lost their savings
4 million by 1930----12 million by 1932
25,355 businesses fail
Work week cut----3 to 1 and lay offs.
Unemployment 25—40%
10. Collapse of Banking Industry
Banks had invested in stock market
Risky loans
– Could not collect money
People pulled money out
–‘RUN ON BANKS’
Unstable banks closed
11.
12. A Wise Economist
Asks A Question
Bank failures
crushed the
average
American who
put faith in the
banks to save
their money.
When they went
to withdraw their
money, it had
been lent out so
they lost
savings.
22. Other Factors to Consider
Decline of farming industry
Uneven distribution of wealth
International economic policies
Easy credit purchasing
Weak and unregulated banks
23. Farmers and Dust
Decline of the farmer
– Overproduction
Dropin farm prices
Economic devastation
– Loss of farms
– Overuse of land
Fieldsleft bare, exposed to elements
1932 drought
Winds caused blowing sand
Farming poverty contributed to nation’s overall
economic decline
24. Hoover’s Relief Efforts
Public works
– Gov’t financed building projects
Provided jobs lost in private sector
To pay for projects—raise taxes or borrow from banks
Reconstruction Finance Committee
– Provide funding for banks, railroads, and agricultural
institutions
Too cautious with loans to be effective
25. Hoovervilles or shantytowns, were migrant towns of
people who were out of work and on the move to find
work. Usually outside large cities where migrants
were trying to find jobs. Named after President
Hoover because he wouldn’t do anything to help the
people who were in need……. HOOVERVILLES
27. Hoover Cont’d……
BONUS ARMY
– Veteran’s march for bonus
– Promised $1,000 to be paid in 1945
– 1931 legislation, borrow ½ of bonus
– 1932 marched on Washington D.C. for full amount
Congress voted down pmt of bonus
Hooverdid more to expand role of federal gov’t
than any previous president
28. DEBTS
•Bonus Army
March in the
summer of 1932
over 20,000
veterans from
WWI marched on
Washington, DC.
•Demanded their
Bonus promised
to them by the
government for
fighting in WWI.
•They were out of
work and wanted
to feed their
families.
29. •The Dust Bowl was an ecological and human
disaster that took place in the southwestern
Great Plains region, including Oklahoma, in
the 1930's.
•It was caused by misuse of land and years
of sustained drought.
•Millions of hectares of farmland became
useless, and hundreds of thousands of people
were forced to leave their homes----many
migrated to California.
•As the land dried up, great clouds of dust
and sand, carried by the wind, covered
everything and the word "Dust Bowl" was
coined.
39. A Time for Change
Election of 1932
– Hoover, Republican
– Franklin D. Roosevelt, Democrat
Republicans blamed for economic hardships
FDR and his “New Deal” wins
40. •FDR and Hoover at FDR’s inaugural
•Americans believed FDR could get the country out
of the depression and put people back to work……
41. Franklin Delano Roosevelt
• 32nd President
• New Deal
• Fireside Chats
• “The only thing we
have to fear is fear
itself”
• Talent for giving
hope and confidence
to Americans
42. •Democrats
•FDR appealed to the
common man because
he was crippled
•Eleanor became the
eyes and ears for her
husband
•Promised to help the
people through the Great
Depression by direct
governmental
involvement
FDR & ELEANOR
43. Eleanor Roosevelt visits West Virginia Coal Mine, 1933
Eleanor Roosevelt visiting a West Virginia Coal Mine, 1933
(c) Bettmann/Corbis
44. FDR’s Immediate Actions
Restore confidence in banks
– Called national bank holiday
– Congress passed Emergency Banking Relief Act
Glass-Steagall Act (Banking Act of 1933)
Federal examiners survey banks
– Issue licenses to the financially sound
Fireside chat to inform public banks were secure
– Following day—deposits outweighed withdrawals
45. chats
“I pledge to you,
pledge myself to
a NEW DEAL for
the American
People.”
“The only thing
we have to
fear…is fear
itself.”
•President Roosevelt began the “fireside chats” on a weekly basis as
a way to reassure the American people.
•His comforting voice, calming words, confidence in the country and
the American people helped restore faith of the American people in
democracy.
46. Roosevelt’s 100 days was
very successful….FDR
and Congress went to
work providing for direct
relief, recovery and
reform.
From March of 1933 to
June of 1933, Roosevelt
sent 15 proposals to
Congress and all 15 were
adopted
Congress and President
tried anything reasonable
to overcome the Great
100 days
Depression.
47. NEW DEAL CARTOON
Govt. programs which provided direct
relief to suffering Americans through
govt. spending………
Renew democracy
Restore confidence in the banking
Stimulate economy
Social Engineers
Put people back to work. Brain Trust
Restore self confidence
How? FDR’s 3 R’s
Relief: ease suffering of the needy
Recovery: begin economic growth
Reform: help prevent future
economic crises
49. alphabet
RELIEF: Ease Suffering of the Needy
FERA / 1933
Federal Emergency Relief
Act
Distributed $500 million of
direct aid to unemployed
workers such as food, clothing
and grants of money to cities.
50. alphabet
RELIEF: Ease Suffering of the Needy
WPA / 1933 to
1943
Works Progress
Administration
Employed 8.5 million
workers in construction
and other jobs, but more
importantly provided
work in arts, theater,
and literary projects.
51. wpa
•Works Progress
Administration (WPA),
the New Deals main
relief agency.
•People employed by
the WPA at its peak
was more than 3 million
•2,500 hospitals
•5,900 schools
•13,000 playgrounds
•125,000 public
buildings
52. RECOVERY: Begin Economic Growth
TVA / 1933
Tennessee Valley
Authority
•Federal government built a series
of dams to prevent flooding and
sold electricity.
•First public competition with
private power industries.
alphabet
53. TVA
•Develop a poor section of
the Southeast U.S.
•Stimulate the economy and
produce cheap electricity.
•Control floods, planting new
forests.
•Bring this section into the
20th century.
94 percent of property owners and 98 percent of
tenants did not have electricity.
30 percent of property owners and 41 percent of
tenants had no toilet facilities whatsoever
54. REFORM: Prevent Another Depression
FDIC / 1933
Federal Deposit Insurance Corporation
Created federally insured
bank deposits ($2500 per
investor at first) to prevent
bank failures.
alphabet
55. REFORM: Prevent Another Depression
SEC / 1934
Securities and Exchange
Commission
Regulated stock
market and restricted
margin buying, and
frauds.
alphabet
56. REFORM: Prevent Another Depression
SSA / 1935
Social
Security Act
It provided
retirement pensions,
unemployment
insurance, aid to
blind, deaf, disabled,
and dependent
children.
alphabet
57. •One of the most important
features of the New Deal.
•Established a retirement for
persons over 65 funded by a
tax on wages paid equally by
employee and employer.
•Old age insurance
•Protect Americans who were
unable to support themselves.
•Unemployment compensation
•Compensation to disabled
workers and assistance to
widows and children
58. •Created in April 1933.
•Within 4 months, 1300 CCC
camps were in operation.
•300,000 men in 1933
between ages 18 and 25
•Signed up for 6 months and
made $30.00 a month.
•1933 and 1941 over
3,000,000 men served in the
CCC .
•Goal: Keep teenage young
men off the street and away
from the job market.
•Develop job skills and
improve environment
59. Planted trees, built public parks,
drained swamps to fight malaria,
restocked rivers with fish, worked on
flood control projects and a range of
other work that helped to conserve
the environment.
60.
61. Agricultural Adjustment Administration
AAA
Relief for farmers
Paid to limit crop and livestock production
Created limited supply
– Caused prices to increase
Helped some; caused hardship for tenant farmers
62. Criticisms of New Deal
US government and President too
powerful
Violated laissez faire
Supreme Court declared NIRA and
AAA unconstitutional
Deficit spending: Govt. spends $$$ to
stimulate the economy and help people
even if it means US Govt. goes into
debt.
Welfare state----Created a population
of Americans who relied on the US
Govt. to live 100 days
65. Successes of New Deal
AMERICANS IN 1939 WHO WANTED THE NEW
DEAL TO CONTINUE WAS 55%….. 37%
REGARDED IT AS A BAD INFLUENCE AND
WANTED A NEW PRESIDENT…………...
Stimulated the economy
Put people back to work….
Improved morale and self-confidence of the people
US Govt’s. role changes and became directly involved in helping
people
WWII ended the Great Depression not FDR’s New Deal
100 days
66. •Economic system based on
cooperation rather than
competition
• Believes in government
ownership of business and capital
•Government controls production
and distribution of goods.
•Opposite of laissez faire and
capitalism
67. •Supreme Court was striking
down New Deal legislation.
•Roosevelt proposed a bill to
allow the president to name
a new federal judge for each
who did not retire by age 70
and 1/2.
•6 justices over age limit.
•Would have increased the
number of justices from 9 to
15, giving FDR a majority of
his own appointees on the
court.
•The court-packing bill was
not passed by Congress.
68.
69. The End of An Era
Democratic Party members shifted from mainly white
Southerners to include African Americans, farmers,
laborers, new immigrants, & women
Roosevelt 2nd term has limited successes
– Congress begins to block New Deal legislation
– Caused economic downturn by cutting gov’t spending
– Era ended 1939
– Gave Americans stronger sense of security and stability
– Cut gov’t spending which caused economic downturn
