CHAPTER 22 1 2 THE GREAT DEPRESSION ECONOMIC

CHAPTER 22. 1. 2 THE GREAT DEPRESSION

ECONOMIC PROBLEMS IN THE NATION • Businesses and farmers began to struggle and go into debt • Industry such as RR, textiles, and steel hadn’t made much money • Mining and lumbering no longer in demand, _____ is over • Housing market is declining when housing declines so does everything else • Farmers had grown crops for war but the surplus was no longer needed, not making profit • Government stepped in with price supports, would take surplus and sell it in the world market

THE CONSUMER • Consumers buying less because if higher prices, living on credit, and cuts in wages • Consumers were buying on _____, to buy things now and pay later • People had a large _____ that they could not pay back, affects businesses as well • In 1920’s rich were getting richer, poor getting poorer • Americans could not equally participate in ______

HOOVER TAKES THE NATION • 1928 Election • Herbert Hoover (Republican) vs. Alfred E. Smith (Democrat) • Nation continuing to ignore what is on the horizon • ______ has an advantage because he has 8 years of republican prosperity behind him

INVESTING IN THE STOCK MARKET • Americans ignored the signs of a weakening economy and were investing in the stock market • Dow Jones Industrial Average was used to monitor the _________ health • Through the 1920’s stock market prices were rising steadily • It was a sign of prosperity that so many were buying ____ • People bought stocks using the method of speculation • Some were also buying on margin (like buying on credit) • Rising in prices were not actually reflecting a companies worth

THE STOCK MARKET CRASH • September 1929 prices rose then fell • People got scared and sold their stocks • October 1929 on __________ the market completely failed and investors tried to sell their shares at low prices

THE GREAT DEPRESSION • The _____________ crash was the beginning of the Great Depression (1929 -1940) • People went to banks to pull out their money • Automobile and RR industries even failed • Other countries were also in a depression trying to recover from ________ ___ • Became hard to import goods and export goods • Hawley Smoot Tariff was the highest protective tariff in American history • Flow of goods couldn’t come in and other countries couldn’t earn America currency to buy American goods • Made unemployment worse

CAUSES OF THE GREAT DEPRESSION 1. Tariffs and war debts cutting down foreign markets for American goods 2. Crisis in the Farm sector 3. Availability of easy credit 4. Unequal distribution of income

Hoover’s Thoughts on the Depression Hoover told Americans to stay positive about the _______ Americans were reassured that a ________ was a regular part of the business cycle He believed that if businesses and labor (not PEOPLE) were having problems the government should step in an find a solution to the problem Rugged individualism was also highly valued as well (people will succeed from their own efforts, NO HELP FROM GOVERNMENT!! You are responsible for your own success. “forces” people to be financially responsible. Hoover refused to provide handouts because it may insult the peoples independence Any ____ people needed should come from charity organizations

Hoovers Fist Steps Brings leaders from key areas of business such as bankers and labor to find a _______ to the depression Ex. Employers asked not to cut wages if possible Creates an _________ to help charities collect things for those in need

The Publics Reaction Americans were extremely frustrated with the ________ They acted out in numerous ways Farmers would throw away their food instead of selling it in the ______ Some would try to ______ the roads to the market hoping to raise prices Other refused to _____ at all and called it a “farm holiday”

Hoovers Second Steps Hoover supports the creation of the Federal Farm Board Created He to _____ crop prices also tries to persuade the largest banks to create the National Credit Corporation Loaned Both ________ to smaller banks to keep them from going _______ of these _____ Federal Home Loan Bank Act was created (Hoover is getting ready for an election) Lowers mortgage rates for homeowners and allowed farmers to refinance their loans to avoid foreclosure The most ambitious action was the Reconstruction Finance Corporation Provided $2 billion to banks, life insurance companies, RR’s and other large businesses Idea was that improvement would spread down to everyone Those who really needed to see the effects cant wait for a spread, they need it now

The Bonus Army WWI veterans marched to Washington D. C. calling themselves the Bonus Expeditionary Force aka _______ They came to support the Patman Bill under debate in Congress Called for a bonus pay to WWI veterans who had not been paid appropriately for their service They were supposed to be paid in 1945, Congressman Wright Patman thought it should be now Hoover called them men with criminal records Allowed them to remain as they had _________ Even provided food The bill fails, and they are called to leave Most do but some stay Fear of violence Hoover send troops to physically disband the army, people were gassed and some shot, other wounded

DEPRESSION IN THE CITIES 22. 2 • People lost their jobs and were evicted out of their homes • Some slept in sewer pipes or parks with newspapers for insulation • Others used scrap metal to make shacks • Shantytowns full of ____ cropped up everywhere, nick named Hoovervilles • Soup kitchens became popular • Breadlines were long • African Americans and Latinos had it really bad

DEPRESSION IN RURAL AREAS • One advantage was the ability for farmers to grow food for their families • Farms were repossessed • Many families turned to __________ • Drought had begun as well creating the Dust Bowl • Kansas, Oklahoma, Texas, New

THE AMERICAN FAMILY • The idea of the family unit was strengthened • People listened to the radio and played board Games were popular (Monopoly invented in 1933) • The pressure on American men was tremendous • Hoboes became popular and were seen wandering the cities • For families there was not direct relief from the government

WOMEN AND CHILDREN SUFFER • Women worked canning food or sewing cloths • Resentment for women grew, not fair for the men that were _____ and women were working • Children had many health problems because of the lack of food • Child-welfare programs were cut • Schools were closed or shortened • Children began to hop on RR cars traveling the

MENTAL SIDE EFFECTS OF THE DEPRESSION • Many lost their will to _____ • Suicide rate rose to more than 30% • Mental hospitals rose as well • Regular hygiene was forgotten • College dreams were left behind

1932 Presidential Election Republicans had nominated Hoover Democrats nominate Franklin Delano Roosevelt (FDR) FDR Wins election in November and comes to office in March 1933 Marks change in African Americans voting pattern. Now majority voting Democrat and NOT Republican (the party of Lincoln) Why does this change occur? While waiting FDR forms “Brain Trust” A group of advisees including professors, lawyers, and journalists to create new policies for his administration

The New Deal Three goals (the 3 R’s) 1. Relief for the needy 2. Economic Recovery 3. Financial Reform Fireside Chats ( on the ____) During the “ 100 Days” March 6 June 16, FDR passes more then 15 pieces of _________ legislation Expand the governments role in the economy…

Helping the Banks 1 st declares a “Bank Holiday” and ______ all of the banks Passes the Emergency Banking Relief Act Allowed the government to inspect the banks to decide if they could reopen or not Those who were unstable did not _____ Improved Americans faith in the bank system Glass Steagall Act created the FDIC (Federal Deposit Insurance Company) Provides federal insurance for money in the banks Federal Securities Act of 1933 requires corporations to provide all info on stocks, and make the companies liable for misinformation STOP, video

Alphabet Soup: New Deal Plans Agricultural Tennessee Civilian Valley Authority (TVA) Conservation Corps (CCC) National Civil Adjustment Act (AAA) Industrial Recovery Act (NIRA) Works Administration (CWA) National Home Recovery Administration (NRA) Owners Loan Corporation (HOLC) Federal Housing Authority (FHA) Federal Emergency Relief Administration (FERA)

Opposition to the New Deal FDR approved using deficit spending, spending ______ than the government actually has Considered necessary evil in the economic crisis Some felt that the New Deal was ______________ enough to help those struggling Others felt that FDR was doing _____________ to control the economy

Action from the Supreme Court 1935 Supreme Court ruled the NIRA (“blue eagle”) (National Industrial Recovery Act) unconstitutional The federal government had been given too much _______ when enforcing industry codes in the _______ Supreme Court also ruled the AAA (Agricultural Adjustment Act) to be unconstitutional because ___________ was a ______ issue In fear that the Supreme Court would remove more ________________ legislation FDR “Court Packed” FDR wanted to add six new Supreme Court ________ People FDR protested (does not pass) got the chance to appoint 7 new judges because of ______________ (without Court packing)

Three Major Critics Against the New Deal Some of the stronger critics formed a group called American Liberty League Charles Coughlin, Roman Catholic Priest Dr. Francis Townsend Huey Long Social program called “Share Our Wealth” “Every Man a King” He is assassinated Afterwards the opposition against the New Deal

The 2 nd 100 Days Programs to build on programs that were created during the 1 st ___________ Eleanor Roosevelt, FRD’s wife, was also a social reformer and reminded FDR of the social issues people were still going through Election 1 st of 1936 FDR re-elected time AA predominantly vote Republican instead of _________

Helping the Farmers Soil Conservation and Domestic Allotment Act Paid farmers for lowering growing of crops that damage the soil 2 nd Agriculture Adjustment Act (1 st one fails) was passed, removing the tax issue that the ___________________ had ruled unconstitutional Resettlement Administration also created to provide small ________ to farmers Replaced by Farm Security Administration (FSA)

More ABC Soup Works Progress Administration (WPA) Made to create jobs 1935 -1943 they spend $11 billion to give jobs more than 8 million people jobs Built roads, airports, public buildings, sewing groups, etc. National Youth Administration Created specifically to provide education, jobs, counseling, and recreation for the youth Financial aid is provided to high school, college, and graduate students but students must work __________________

Programs Continue Wagner Act: protected the idea of collective bargaining Prohibited unfair labor practices Sets up National Labor Relations Board (NLRB) to hear testimony about _______________ Fair Labor Standards Act is passed Set max hrs of 44 hrs per week Set minimum wage to 25 cents an hour Set rules for 16 and 18 year olds

And More Programs Social Security Act of 1935 1. Old age insurance for retirees 65 or older and their spouses 2. Unemployment compensation system 3. Aid to families with dependent children and the disabled Rural electricity was also expanded and improved Rural Electrification Adminstration

The Truth About the New Deal only helps the burden of the Great Depression It does not actually solve any of the problems WWII is what gets America out of the Depression Domino Effect The country will be in severely in debt