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The Great Depression


The Great Depression and The New Deal ... 1929-1939 – PowerPoint PPT presentation

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Title: The Great Depression

The Great Depression The New Deal
  • 1929-1939

Roots of the Great Depression
  • Uneven distribution of income
  • Gains in income were more for wealthy than
    working class
  • Top 2 of population controlled 40 of nations
  • Market Speculation
  • Very wealthy purchase stocks and speculate on
  • Buying stock on the margin
  • Excessive use of credit
  • Installment buying for cars, refrigerators,
  • This prohibited families from buying other items
    such as food, clothing
  • Overproduction
  • Weak farm economy farm prices were highest
    during WWI
  • Farmers unable to payback installment loans on

The Stock Market Crash
  • The exuberant spending of the 1920s caused
    people to buy beyond their means (on the
    margin purchasing a stock for a percentage of
    its value)
  • This was true for consumer goods as well as fr
  • This greatly inflated the price of stocks, far
    beyond actual value
  • When the market crashed it was actually stock
    prices returning to more reasonable levels
  • This left many in debt

How the Crash Caused the Great Depression
  • Bank Closings Increased
  • -banks had to close when farmers couldnt repay
    the loans, and it trickled into the cities
  • -5,000 banks failed with over 5 million in
    American savings
  • Income decreased for industrialists
  • --invested heavily in the stock market lost
    money when it crashed
  • Effect on the world
  • -many European countries had loans in American
  • -banks failing causes insecurity in these

Graph Consumer Debt 1921-1929
Consumer Debt, 1921-1929
Diagram Worldwide Depression
Worldwide Depression
Graph Bank Failures
Bank Failures
(No Transcript)
of Bank Failures by year
Great Depression video
  • http//

Social Impact of the Great Depression
  • -not uncommon for 2 people to share a job, since
    many lost their jobs (25 unemployment rate)
  • Women minorities often 1st to lose jobs
  • Hoovervilles settlements of scrap metal/lumber
    usually located on the outskirts of cities
  • Hobos riding on railroads (unemployed young
  • Dust Bowl by the 1930s, many farms in OK, KS,
    NE, CO, TX were either ruined or abandoned due to
    drought farmer loans
  • People moved to CA for work
  • The Grapes of Wrath by John Steinbeck portrays

An Okie Family Hits the Road in the 1930s to
Escape the Dust Bowl
The Extent of Erosion in the 1930s
  • Note the extensive wind erosion in the western
    Oklahoma panhandle region, which was dubbed the
    Dust Bowl in the 1930s. Mechanized farmers had
    busted the sod of the southern plains so
    thoroughly that they literally broke the back of
    the land. Tons of dust blew out of the Dust Bowl
    in the 1930s and blotted the sun from the skies
    as far away as New York. A Kansas newspaperman
    reported in 1935 that in his dust-darkened town,
    Lady Godiva could ride through streets without
    even the horse seeing her.

Dust Bowl Videohttp//
The Policies of Hoover
  • Hawley-Smoot Tariff (1930) imposed highest
    import tax in history Europe responds with their
    own high tariffs did little to help US economy
  • Voluntarism Hoover encouraged Americans to
    donate as much as they could to charities during
    this time
  • Debt Moratorium 1 year moratorium on WWI debts

The Policies of Hoover cont.
  • 1929 Agriculture Marketing Act created the
    Federal Farm Board created to stabilize prices
    promote sale of agricultural products
  • Reconstruction Finance Corporation (1932)
    federal agency that gave money to banks to loan
    to railroads and businesses
  • This was intended to spur economic growth
  • Bonus Army, Summer of 1932 WWI vets march to
    Washington ask federal govt for bonuses they were
    supposed to get in 1945
  • Hoover urged Senate to deny them the bonus now
  • Hoover ordered them removed and Gen. Douglas
    MacArthur used tear gas to rid them from the
    White House

The Election of 1932
  • One of the worst years of the depression also
    happened to be an election year
  • Roosevelt campaign pledged a New Deal for the
    American public
  • Roosevelt won nearly 60 of the popular vote
  • Both houses of Congress also went to the
    Democrats in the election
  • This would later be important as Roosevelt
    attempted to pass his recovery plan

  • Wealthy
  • Sec. of Navy under Wilson, NY Governor
  • Stricken with polio in 1921
  • Several biographies say this made him more
    sensitive to the people struggling
  • Married Eleanor Roosevelt
  • Very active in NY state politics, especially
    reforms for women

FDR video
  • http//

The New Deal
  • Roosevelt used his first 100 days in office to
    implement a his new ideas
  • Did something similar in NY it was successful
  • The New Deal centered around 3 key ideas
  • Relief the concept of helping people immediately
    to get out of the misery of the Depression
  • Recovery aimed at helping the business community
    and restarting the economy
  • Reform trying to change the country so that a
    depression could never again have significant
    effects on the country

New Deal video
  • http//

New Deal Keynesian Economics
  • Until this time, Economists believed the markets
    would adjust themselves (but they didntGreat
  • John Maynard Keynes
  • Economist
  • Demand-side/Keynesian Economics

The First 100 Days
  • Passed several programs to stimulate the economy
    provide relief/jobs (Obama Administration)
  • The Bank Holiday FDR orders all banks closed, US
    Treasury must OK bank reopening (part of the
    Emergency Banking Act, March 1933)
  • ¾ of banks belonging to the Federal Reserve
    System opened 3 days later
  • Repeal of Prohibition
  • National Recovery Adm., declared unconstitutional
  • Farm Controls
  • Agric. Adj. Adm. (AAA) offered subsidies to
    encourage production, also declared
  • Paid farmers NOT to produce certain crops and

FDRs 1st 100 days cont.
  • Tennessee Valley Authority (TVA) Authorized
    construction of a series of damns to provide
    electricity/flood control to those living in
    Tennessee River Valley
  • Financial Recovery
  • FDIC insures bank deposits (today, up to
    150,000), Home Owners Loan Corp., Farm Credit
  • Federal Emergency Relief Adminstration
    (unemployment relief)
  • Public Works Administration (PWA) Schools,
    highways, hospitals were built

TVA Area
  • More than twenty dams were constructed on the
    rivers tributaries as part of a massive project
    to control flooding, generate hydroelectric
    power, and revitalize the Tennessee Valley
    region, while also creating jobs for the
    unemployed. The shaded area represents the area
    served by TVA electric power.

(No Transcript)
Occupied Households with Electric Service
  • The Tennessee Valley Authority contributed to
    making electricity available to almost all
    Americans by 1960. African American leader Andrew
    Young later claimed that the TVA created the
    economic underpinnings of the civil rights
    movement It was the presence of the cheap
    electricity, lower interest rates, water
    projects, that laid the foundation for the New

Mary McLeod Bethune (18751955)
  • The daughter of ex-slaves and founder of a
    college in Florida, Bethune became the
    highest-ranking African American in the Roosevelt
    administration when she was appointed director of
    the Office of Minority Affairs in the National
    Youth Administration (NYA). From this base she
    organized the Black Cabinet to make sure blacks
    benefited from the New Deal programs along with
    whites. Here she is picketing against segregated
    hiring practices at the Peoples Drug Store chain,
    one of the earliest targets of the black civil
    rights movement.

1st 100 days cont.
  • Civilian Conservation Corp (CCC) work in forest
    /conservation programs
  • Fireside chats
  • Radio addresses to explain the immediate problems
    facing the country
  • Felt as though he was in your living speaking to
  • Roosevelts brain trust cabinet
  • National Industrial Recovery Act (NIRA)
    attempted to stop prices from falling
  • More involved unions collective bargaining
  • National Recovery Administration (NRA) President
    sets minimum wage, working hours
  • Declared unconstitutional in Schechter vs. US
  • Congress can not give the power to legislate to
    the President

Grand Coulee Dam Under Construction on the
Columbia River, 1939
  • Located in central Washington State, the Grand
    Coulee Dam was one of the most ambitious projects
    of the New Deals Public Works Administration. It
    is the largest concrete structure in the United
    States and the central facility in the Columbia
    Basin Project, which generates electricity for
    the Pacific Northwest and provides irrigation for
    half a million acres of Columbia Valley
    farmlandservices that have transformed the life
    of the region.

The Second New Deal (1935)
  • The first part of the New Deal was aimed largely
    at relief
  • Wealthy did not support New Deal programs
  • Resettlement Administration many farms were
    still being foreclosed
  • This offered loans to small farmers who faced
  • Helps migrant farmers find work
  • Workers Progress Administration (WPA) people
    benefitting from FERA employed them 30-35 hours
    per week
  • -approximately 2,000,000 per month employed by
  • -unemployed artists, musicians, actors
  • Wagner Act gave workers the right to
    organize/form unions
  • National Labor Relations Board reported unfair
    working conditions here

Labor Triumphant
  • After generations of struggle, organized labor
    made dramatic gains in membership and bargaining
    power during the New Deal years.

WPA Mural, by Victor Arnautoff 1934
  • The Pedestrian Scene, painted on a wall of Coit
    Tower in San Francisco, was one of a series of
    murals commissioned by the federal government to
    employ artists during the Great Depression.

Frances Perkins at the Site of the Golden Gate
Bridge Project, 1935
  • The first woman cabinet member, Perkins served as
    secretary of labor under Roosevelt. She was
    subjected to much undeserved criticism from male
    businessmen, laborites, and politicians. They
    sneered that FDR kept her in labor for many

Social Security Act (1935)
  • Creation of a retirement plan for those over 65
  • Workers employers pay into
  • Included unemployment insurance funded by payroll
    tax (employers with more than 8 employees)
  • AFDC
  • Disabled
  • Officially called OASDI

Goal of New Deal Programs
  • It is now the job of the federal government to
    take care of those who could not take care of

Presidential Election of 1936
  • Campaign speeches rallied against business
  • He said they opposed his policies so they could
    continue to get rich
  • Ran against Governor Alfred Landon of KS
  • Landslide victory of 523 to 8 (ME VT) Electoral
    College votes

New Deal Coalition Political Party Shift
  • Dems major party in America throughout the rest
    of 1930s-1980s (Reagan)
  • White urban dwellers support Democrats
  • Whites in south had largely voted Dem. Since the
  • Now labor unions/blacks/farmers join coalition
  • DRAMATIC shift as most blacks had voted
    Republican since Emancipation)

FDR New Deal Opponents
  • People called him a socialist/communist
  • Wealthy thought he was a traitor
  • People felt neither party was trying to help
    average Americans
  • American Liberty League wealthy Americans
    including prominent members of the DuPont family
  • Disliked 1935 Revenue Act which raised the income
    tax rate for those making over 50,000
  • Referred to it as Bolshevism

More Opponents
  • Old Age Revolving Pension Plan
  • National sales tax would pay for a pension of
    200 per month for all retired Americans
  • Created by Francis Townsend of CA (who ran for
    governor of CA in 1934 against Upston Sinclair

More opponents
  • Dr. Charles Coughlin
  • On Coughlins radio show, referred to Roosevelt
    as a liar and betrayer
  • Very anti-semitic feelings/statements, praised
  • Church pulled him off the air during WWII
  • LA Sen. Huey Long
  • Share the Wealth program allowed no Americans
    to make over 1,000,000/per year (anything over
    would be payment to the govt in taxes)
  • From this tax , give every American family
    5,000 immediately
  • Wanted to run against FDR in 1936 but was
    assassinated in 1935

Last Years of New Deal
  • 1937 Justice Reorganization Bill
  • US Supreme Court had said several New Deal
    programs were unconstitutional
  • Would have allowed FDR to appoint a new justice
    for every justice over 70 years of age
  • Nothing in constitution saying only 9 justices
  • Could pack the court with 6 new justices
  • Said to help older justices with their workload
  • Democrats Republicans said trying to push his
  • Did not pass
  • Several justices retired in few years after bill
    and Roosevelt still packed the court

Last Years of New Deal cont.
  • Large recession hit mid-1937
  • Factories had major layoffs
  • New Deal critics blamed Roosevelt program for

Effects of the New Deal
  • Wagner Act permanently legitimizes labor unions
  • Sit-down strikes Dec. 1936, GM plant in Flint,
    MI most famous
  • By Feb. 1937 management had to give in to demands
  • Congress of Industrial Organizations (CIO) lead
    by John L. Lewis, represent unskilled
    factory/textile workers
  • By 1938 represented 4 million workers

General Motors Sit-down Strikers, Flint,
Michigan, 1937
  • Strikers like these sometimes kept their spirits
    up with the song Sit Down
  • When the boss wont talk
  • Dont take a walk
  • Sit down, sit down.

  • Women forced to work meager jobs to make ends
  • Blacks often first fired from jobs
  • Relief programs in south often excluded blacks
  • Lynchings
  • Scottsboro Trial 9 black men were accused of
    raping 2 young white women on a train
  • Got help from Communist Party, in end, some
    convictions were overturned
  • Blacks supported FDR as they felt he was
    responsive to their needs

New Deal Culture
  • Zora Neale Hurston wrote Their Eyes Were Watching
    God (about growing up black in a small southern
  • Studs Lonigen by James T. Farrell shows lives of
    Irish in Chicago
  • Erskine Caldwells Tobacco Road about suffering
    of sharecroppers in GA

New Deal Culture cont.
  • Gone with the Wind by Margaret Mitchell a
    romanticized tale from Civil War period
  • 1930s radio offers soap operas, comedies, dramas,
    symphonic music/operas
  • 70 of all adults went to the movies once a week
  • Mr. Smith Goes to Washington
  • Shirley Temple movies
  • Theaters designed to look like palaces, air
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