The Stock Market Crash of 1929 Great Depression

The Stock Market Crash of 1929, Great Depression, Dust Bowl, Franklin Roosevelt and the New Deal SS 5 H 5: The Student will explain how the Great Depression and New Deal affected the lives of many Americans. A. Discuss the Stock Market Crash of 1929, Herbert Hoover Franklin Roosevelt, the Dust Bowl and Soup Kitchens. B. Analyze the main features of the New Deal; include the significance of the CCC, WPA and TVA.

The Stock Market Crash of 1929 • The decades leading up to 1929 were very exciting and prosperous. They were called the Roaring Twenties. • Women took new roles and gained the right to vote with the 19 th Amendment. • African Americans received praise for works of art, literature, music, and contributions to society. These movements were called the Jazz Age and Harlem Renaissance. • Most of the US economy was strong, except for farmers who suffered from falling agriculture prices!

The Stock Market Crash of 1929 In 1929, the Stock Market Crashed!! • The stock of a business represents the original money paid into or invested in the business by its founders. • So… the stock represents how much money was originally invested in a business by the people who started the business. • When someone starts a business, they divide the business into parts called shares. • When people buy shares of a company, they are making an investment in that business.

• Investment - is putting money into something with the hope of profit • Many people bought stock expecting companies to make money. • But when the stock prices fell, many investors or, people who bought stocks, lost everything!

The Stock Market Crash of 1929 People were BUYING, BUYING stocks in businesses that were not worth the amounts they were paying for them and the banks were loaning out more money then what peoples’ investments were worth. • The crash caused others to panic and sell the stock they had. Banks were recalling loans. This meant they made people pay back loans early. But, many people could NOT pay!

The Stock Market Crash of 1929 • People could NOT pay, so banks ended up closing. • People who put their money in the bank lost their life savings. The Stock Market Crash of 1929 marked the start of the Great Depression!

Why did it become the GREAT Depression ? “The Domino Effect…” • People lost their jobs after the stock market crashed. Therefore, many needed to spend their savings. • Savings – the money an individual sets aside for emergencies or special events • When large numbers of people tried to take money out of the banks, many banks went out of business because they did not have the people’s money! • Because people had so little money, they bought few goods.

Why did it become the GREAT Depression ? “The Domino Effect” Continued… • The producers could not sell what they made so they did NOT make a profit! • Without a profit, factories could not pay their employees so the factory workers lost their jobs. • When workers lost their jobs, they could not pay what they owed to banks or businesses. • So more banks and more businesses began to fail.

The Great Depression It was the worst economic crisis in US history. • People had to rely on soup kitchens, which gave out free food to the poor, because they could not survive without this.

The Great Depression Herbert Hoover was the president when The Great Depression started. Most citizens blamed Hoover for the crisis. During the depression many people lost their homes and had nowhere to live; so they built shacks out of scrap pieces of wood and metal. These soon became communities where poor homeless people lived. They were called “Hoovervilles” after Herbert Hoover.

The Dust Bowl • The Dust Bowl was an area in the Midwest that suffered from drought during the 1930’s and the Great Depression • Kansas, Colorado, Oklahoma, Texas, and New Mexico

Factors contributing to the Dust Bowl ü 1 -A terrible drought caused the soil to turn so dry it turned to dust ü 2 -Much of the region had been plowed up by farmers to grow wheat or to graze cattle ü Wheat did not help anchor soil or hold moisture ü 3 -Farmers didn’t understand the idea of crop rotations at the time

Dust Bowl cont… Dust Storms Black Sunday v With so much soil turned to dust, huge dust storms occurred v Made it hard for people to breath v Piled up to the point where houses were buried v Capable of carrying dust all the way to the East Coast pf the United States Ø Giant dust storms were called “black blizzards” Ø Sunday April 14, 1935 -entire cities were engulfed due to high winds and great walls of dust

Black Sunday cont…

The Dust Bowl

Dust Bowl cont…. What about the Farmers? Okies • Farmers were faced with several major problems at making life tough during these time • Rough times caused people to look for new opportunities • Poor farmers that moved from the Dust Bowl to California in search of work were called “Okies” – Dust got everywhere – Crops could not grow – Livestock often choked to death from the dust – Short for people from Oklahoma but used to refer to any poor person from the Dust Bowl looking for work

Dust Bowl cont… Government Aid Programs Important Facts • The federal government implemented programs to help the farmers: • Around 60% of the population left the region during the Dust Bowl • Between 1934 and 1942, the federal government planted some 220 million trees from Canada to Texas to create a windbreak – Taught farmers proper farming practices to help preserve the soil – The federal government purchased some land to let it regenerate to help prevent future storms – Helped fight evaporation and erosion

Franklin Delano Roosevelt Served 1933 -1945 Democrat Wife= Eleanor Roosevelt President during the Great Depression and during WWII • Roosevelt was elected to president for four terms (2 more than any other president) • •

Franklin Roosevelt and The New Deal • He introduced the New Deal, which is a government program that relied on deficit spending. – Deficit spending is when the government goes into debt by spending borrowed money, in hopes that its programs would get people back to work and the economy headed in the right direction.

First New Deal • The “New Deal” refers to a number of U. S. government programs put into law to help the country recover from the Great Depression • The “First New Deal” refers to the programs passed during the first two years of his presidency

First New Deal cont… First Hundred Days Banking Reform • Issued several executive • President Roosevelt closed orders and helped get many the banks calling it a “bank laws passed through holiday” congress • Congress passes the – Executive order- a rule or Emergency Banking Act order issued by the president to an executive branch of the government and having the force of law. – Allowed for banks to reopen under the supervision of the Federal Treasury – Helped stabilize the banks and to bring back confidence in the banking system

First New Deal cont. . Stock Market Repealing Prohibition • The Securities Act of 1933 • 21 st Amendment would repeal prohibition – Passed to help prevent another stock market crash – Required publicly traded companies to provide accurate information to the public including profits, losses, and corporate officers of the company – This was very popular among the people and allowed for new tax revenue due to legal alcohol sales

First New Deal cont. . Public Works Farm Programs • Public Works Administration (PWA)- the program built things like roads, bridges, schools, hospitals, and dams across the country • The Civilian Conservation Corps (CCC)- created jobs for many men like environmental projects. (National Parks) • Agricultural Adjustment Administration (AAA)- helped to improve farming practices, reduced farm production to raise prices, and gave a voice to farmers in the government

CCC

First New Deal cont. . Housing Emergency Relief • Home Owners’ Loan Corporation (HOLC)- formed to help finance mortgages and to help people keep their homes • Federal Housing Administration (FHA)- put government standards on the construction of homes to make sure they were safe and to also insure mortgages • Federal Emergency Relief Administration- provided for the unemployed – Built soup kitchens – Educated people for jobs – Food for school

First New Deal cont… TVA-Tennessee Valley Authority 1933 • Purpose was to enable the • Provided thousands of jobs during depression Federal government to develop and distribute cheap hydroelectric power into rural areas not serviced by private companies • Modernizes the regions infrastructure by dam building projects

TVA

Roosevelt’s Second New Deal • All though the First New Deal brought many new changes, the Depression continued • Laws passed between 1935 -1938 are referred to as the Second New Deal

Second New Deal Social Security • Social Security Act 1935– Made to assist the elderly in retirement • Provided a pension to retired people, cared for orphans and the disabled, and set up a system of unemployment insurance

Second New Deal Works Progress • Works Progress Administration (WPA)– Help with unemployment • Hired over 8 million workers • WPA hired unemployed workers to build different public projects such as: – Airports, schools, roads, parks, and bridges

WPA

Second New Deal Labor Relations • National Labor Relations Act 1935 - guarantees unions and workers certain rights • Helped establish a federal board that would help both sides come to wage agreements • Fair Labor Standards Act 1938 - protected workers with – a maximum work week (44 hours) – A minimum wage (25 cents per hour) – Outlawed child labor

Second New Deal Housing • United States Housing Authority 1937 - tore down slums and built new, better housing for the homeless

Franklin Roosevelt and The New Deal Another New Deal program Roosevelt pushed Congress to create was the Tennessee Valley Authority (TVA) in 1933. • TVA built hydroelectric dams. These dams turned water into electricity by suing the rushing water’s power to run a generator and supply power. • It created jobs and supplied cheap electricity to parts of the South that had never had electric power before. • The southern Appalachians were one of the poorest areas in the nation and prospered. – The Hoover dam was also built during the New Deal and supplied electricity to Southern California and Arizona which helped these areas grow.

Franklin Roosevelt and The New Deal • Another New Deal program that Congress established in 1935 is the Works Progress Administration (WPA). • This was a part of a second group of New Deal programs, sometimes called the Second New Deal. • It provided jobs for unskilled workers. • The WPA hired people to build government buildings, roads and other public projects. It also provided money for writers and artists to take photographs or write, draw, and paint about life during the Great Depression.

Franklin Roosevelt and The New Deal did NOT end the Depression. • It wasn’t until WWII that the US economy greatly improved. • The New Deal DID supply some relief to help get people through one of the darkest economic times in US history.