Chapter 11 The Great Depression

1
Chapter 11 The Great Depression
2
Section 1 An End to Prosperity
Keep the Good Times Rolling 1. People were
spending more than they were making 2. They
were investing in the stock market and values
kept climbing and climbing
A Boom on Wall Street 1. Many people felt that
purchasing stocks in companies on Wall Street was
the key to instant wealth 2. Millions of
shares were bought and sold every day 3.
Brokers, those who handled the buying and selling
of stocks, were always busy 4. People were
buying stocks on margin, paying for only part of
the stocks value, and then placing the
remaining balance on credit with the broker a.
Stock is worth 100. You pay 10 up front and
90 on margin b. When the stock went up, you
sold the stock, paid the broker the 90 margin
and then pocketed the rest c. While stock
markets continued to rise, it was called a bull
market 5. 3 million out of 120 million Americans
owned stock in 1929 a. 1/6th bought stock on
margin b. Many believed there was no way stock
prices would decline
3
Continue Section 1
The Big Crash 1. Tuesday, October 29th, 1929, a
selling panic began a. Many people has feared
stock prices would begin falling months before,
had begun to sell their stocks b. As selling
increased, stock prices decreased c. People who
had borrowed money to buy stocks on margin had to
repay the money d. Began to face a bear
market, when stock prices continued to fall 2.
On that day, nearly 13,000,000 shares of stock
were sold a lowered values a. Investors had
lost over 15,000,000,000 by mid-November 3.
Banks also ran into troubles a. Investors were
withdrawing money to cover stock losses b.
Others were taking from their savings to pay
mortgages and loans that they owed on
goods c. All this caused banks to run out of
money, more than 5,000 closed between 1929
and 1932 4. Businesses also suffered a. Lack
of customers and money b. Between 1929 and
1932, over 10,000 businesses had to close and
thousands of people that worked there lost
their jobs
4
Continue Section 1
c. In 1929, the number of people that lost jobs
were 1,500,000 to about 12,000,000 in 1932.
Thats 25 of the work force d. Blacks who
moved North to take factory jobs before and
during WW I was the first to be laid off 5.
Because people werent working, they had little
money to spend on food, clothing, and
shelter a. Led to further cuts in business and
layoffs for even more workers 6. 1929 1941 is
called the Great Depression a. Long period of
economic hard times that people experienced b.
Similar conditions were occurring in other
countries, especially Europe 1. They were
looking to the US for loans to rebuild their
war-torn economies 2. As loans and trade
decreased, they also experienced economic
depressions 3. Pictures of worthless
foreign currency

Causes of the Depression 1. No one can agree on
any one specific cause. There were a number of
conditions though that led to the unstable
economy. 2. Many of these conditions were
overlooked because everyone was making money
and having fun in the earlier years.
5
Continue Section 1
3. Overproducing and borrowing a. Factories
were turning out more goods than the public was
buying b. Declining trade also contributed to
overproduction c. Not only were people buying
stocks on margin but they were purchasing
goods with installment loans d. Because the
price of goods rose faster than wage increases,
the only way to buy items was on credit
(businesses encouraged this) e. People were
also taking out mortgages that they couldnt
afford, to buy houses f. People that
borrowed money and the banks that loaned money
were in serious financial trouble even before
the stock market crash
4. Uneven distribution of wealth a. Wages for
workers were generally low 1. Lacked money to
buy goods b. Too much money went into profits
that business leaders then used to expand
their business, pay stockholders and get rich
themselves c. Farmers were worse off than
others 1. They purchased land and equipment on
credit to produce food during WW I after the
war, demand fell, as did farm prices
6
Continue Section 1
2. Blacks and other minorities had very little
purchase power
We Lost Everything 1. Doing without a. The
wealthy had to give up many luxuries like
college educations for their kids b. Many
people lost their homes because they couldnt pay
their mortgages or were thrown out of their
apartments because they couldnt pay their
rent c. Many homeless built shacks out of
wooden crates and scraps of metal 1. Became
known as Hoovervilles 2. Named after Herbert
Hoover, President when the Depression
began 2. Hunger was widespread a. People
stood in line for hours at soup kitchens or
breadlines to receive free food donated by
churches, charities or local governments b. For
some this was extremely humiliating c. A large
number of Americans died from lack of food,
housing and medical care
7
Continue Section 1
3. Families learned to put pride aside and
people did almost anything to survive a. People
lived in boxcars or some (men, women and
children) hopped freight trains looking for
work and food b. Some moved south in the winter
and west in the summer, or from cities to
rural areas, but conditions rarely changed 4.
Lots of emotional suffering a. Many were raised
to believe that the American Dream could be
obtained with hard work, people though began
to lose their confidence because of so few
jobs
President Hoover and the Depression 1. At the
start of the Depression, he tried to restore
confidence in the economy a. Told people that
prosperity was just around the corner b. Hoped
that businesses would hold wages and prices but
they had to reduce both to try and survive 2.
Opposed to the idea that government projects
should be used to help the unemployed but had
to eventually change his mind a. Asked Congress
to lower taxes to have money to spend b. Asked
for millions of dollars to provide jobs building
schools, roads, bridges and dams (the Boulder
Dam which became the Hoover Dam)
8
Continue Section 1
3. Established, by Congress, the Reconstruction
Finance Corporation (RFC) a. Loaned money to
financial institutions, banks, to keep from
closing b. Federal Farm Board, an offshoot, was
to loan money to cooperatives and buy surplus
crops to help try to raise farm prices 4. He was
willing to get the government involved in the
economy but not with direct relief to the
needy a. Felt that handouts to the poor went
against American values like hard work and
self-reliance 5. Although extremely unpopular,
Hoover was renominated by the Republicans to go
up against Franklin Delano Roosevelt, the
Democrats nominee a. Roosevelt promised a new
deal while playing his campaign song Happy
Days are Here Again b. Roosevelt won,
gaining 472 electoral votes to Hoovers 59
Complete Section 1 Review
9
Section 2 Fighting the Depression
Franklin Delano Roosevelt 1. Had been Sec. of
the Navy under President Wilson 2. In 1921, he
was stricken with polio, never to walk again
without steel braces on his legs 3. In 1928,
he returned to politics (urged on by his wife
Eleanor) and was elected Governor of New
York a. New York was the first state to provide
direct relief to victims of the Depression 4.
To calm fearful Americans, he used a series of
radio talks called fireside chats a. He gave
them by the fireplace in the White House b.
Eased the nations fears 5. Used his brain
trust, or small group of intellectual advisors,
for new ideas
Banking and Business 1. Just days after the
inauguration, President Roosevelt called Congress
into special session (known as the Hundred
Days) a. Led to Congress enacting several New
Deal proposals into law
10
Continue Section 2
2. The First New Deal President Roosevelts
initiative to lead the US out of the Great
Depression, March 1933 through the end of
1934 a. Relief 1. Providing jobs for the
unemployed and helping farmers b.
Recovery 1. Aimed at stimulating the
economy c. Reform 1. Covered measures to
prevent another depression d. The goals of
relief and recovery were stressed 3. FDR closed
all banks until laws for government supervision
and aid could be passed, this was called a bank
holiday a. By the end of the month, the
nations strongest banks were reopened while
the weakest were permanently closed b. The FDIC
(Federal Deposit Insurance Corporation) was
established 1. This protected peoples bank
deposits by insuring 2500 originally then
up to 5000. 2. Gave people confidence to
deposit their money in banks again c. An act
was also passed to regulate stock market
practices like buying stocks on margin

11
Continue Section 2
4. The National Recovery Administration
(NRA) a. Sought cooperation between business,
labor and government 1. Companies drew up
codes of fair competition, set price
guidelines and production limits (to prevent
overproduction) 2. They also set maximum
hours and minimum wages for workers and
guarantee them the right to bargain
collectively 3. Codes were hard to enforce
because they were so detailed small
businesses said the codes favored larger
companies 4. Workers argued the minimum
wage was too low b. There was a brief
improvement during the Spring of 1933 but then
went down again c. In 1935, the US Supreme
Court ruled that the President and private
companies didnt have the right to pass the
codes and that the government had no right to
control any industry that was not involved in
interstate commerce (the buying and selling of
products and services across state borders)
12
Continue Section 2
Helping Farmers and Other Workers 1. Major
problem with farmers was overproduction that led
to low farm prices a. The Agricultural
Adjustment Act (1933) paid farmers to take land
out of production in order to grow less
crops b. Money paid to farmers came from a tax
on processors of farm products c. Farmers were
encouraged to destroy existing crops and
livestock at a time when people were dying of
hunger d. Led to a rise in farm income e. The
Farm Security Administration (FSA) gave aid to
some tenant farmers and sharecroppers (less
than 2 of the total)
Relief for the Tennessee Valley 1. Major New
Deal program 2. The Tennessee Valley Authority,
TVA, (see map on page 709) covered 7 states that
was underdeveloped and regularly flooded by the
Tennessee River 3. Plan was to buy, build and
operate flood control dams and generate and sell
electric power a. Helped transform the region
into a prosperous industrial area 4. Improved
navigation of the River and created recreational
areas 5. Brought new economic life to the entire
region
13
Continue Section 2
Direct Relief Programs 1. New Deal provided
direct relief to unemployed Americans 2. The
Federal Emergency Relief Administration
(FERA) a. Created in May 1933, distributed 500
million to state and local governments 1.
Governments used the funds to provide money, food
and clothing to millions of Americans 3. The
Public Works Administration (PWA) a. Created in
1933, helped create 34,000 projects at a cost of
5 billion 1. Created jobs in construction,
provided cheap electricity, aided flood
control and provided irrigation 4. The Civilian
Conservation Corps (CCC) a. Provided jobs for
young men between 18 and 25 b. Cut brush,
cleared trails, planted trees, built small dams,
and performed other conservation tasks in
national parks and recreational areas c. Men
lived in camps and earned 30 a month d.
2,000,000 young men took part in the CCC
14
Continue Section 2
5. Civil Works Administration (CWA) a. Created
in 1933 b. Provided jobs by placing people
directly on federal payrolls c. Repaired roads,
painted schools, built playgrounds and raked
leaves in public parks d. Employed 4,000,000
men and women by January of 1934
Critics 1. Claimed that many projects (like
raking leaves) were make work that was
unnecessary and demoralized workers 2.
Private power companies claimed the TVA was
unfair because part of the costs of the program
was paid for by the federal government 3. Many
claimed that the New Deal interfered with private
enterprise and gave government too much
power 4. The Supreme Court ruled 11 New Deal
measures unconstitutional
Plot to Overthrow FDR 1. Plotted by very well
know and wealthy individuals in the US 2. Chose
General Smedley Butler (winner of the
Congressional Medal of Honor, twice) to lead a
military coup to overthrow the president of the
United States 3. How far reaching and even how
far it was planned it debatable
Complete Section 2 Review
15
Section 3 Roosevelt and Reform
First New Deal concentrated on relief and
recovery Second New Deal emphasized reform
included programs for making long lasting
economic and social changing
Angry Voices for Reform 1. Some reforms were for
people who complained that the First New Deal
didnt go far enough 2. Father Charles
Coughlin radio preacher a. Wanted the
government to take control of banks and issue
large quantities of paper money and
silver b. Proposed a pension money paid to a
retired person, of 200 for everyone over the
age of 60 from the government 1. Must be spent
within 30 days 3. Huey Long senator from
Louisiana, the Kingfish (Had a crazy brother who
also became governor of Louisiana) a. Turned
against FDR b. Wanted each family to have a
5000 home, an annual income of 2500, a car
and a radio
16
Continue Section 3
c. Every young person should get a free college
education d. Proposed paying for all this by
seizing all fortunes over 5 million and
levying a 100 tax on all incomes over 1
million e. Ended with his assassination in 1935
in the Louisiana State Capital by Dr. Carl
Weiss (who was shot 62 times in return)
The Second New Deal 1. Because the Democrats won
a lot of the Congressional elections in 1934,
President Roosevelt was able to get a lot of
support for reform legislation 2. The Works
Progress Administration (WPA) was created in
1935 a. Spent almost 5 billion on public-works
programs b. Goal was to provide jobs for both
skilled and unskilled workers 1. Included
writers, artists, musicians, actors and
teachers 2. Providing workers with money led
to factories reopening and the economy to be
stimulated 3. People kept their dignity since
they were getting money from the government
by working for it
17
Continue Section 3
1. The 2nd Agricultural Adjustment Act (AAA)
passed in 1938 a. 1st one was ruled
unconstitutional in 1936 on the grounds that
government had no right to tax one group for
the benefit of another b. 2nd paid farmers
to plant less acreage and to begin soil
conservation which was very important to the
Great Plains, which became the Dust Bowl
during the 1930s 1. Huge dust storms because
year after year there was a drought and the
misuse of land 2. Blew from Texas to the
Dakotas (see map on page 711) 3. Farmers who
remained on the land got federal money and were
encouraged to plant soil-conserving crops
like clover c. Also, established subsidies a
system of government payments to farmers to
supplement their incomes in years when farm
prices are low d. Helped change farming into a
business where only the larger, efficient
farms would do well.
18
Continue Section 3
The Elderly, Unemployed and Needy 1. The most
important reform act was the Social Security
Act a. People over 65 were the fastest growing
portion of US population b. Only a few had
pensions and most were poverty-stricken c. Had
3 major parts 1. Provided small monthly
pensions for people who retired from work
after the age of 65 2. Created a program of
unemployment insurance a. People who lost
their jobs could collect insurance payments
for a certain number of weeks b. Came from a
payroll tax on employers and was
administrated by the states 3. Provided
federal grants to the states to help the blind,
the physically handicapped, the needy elderly
and widows with dependent children a.
States had to match the federal grants
2. Conservatives complained that Social Security
went against the American tradition of
self-help a. Others claimed payments were too
low and excluded some groups b. Still around
today although Medicare is looking at insolvency
around 2024 and Social Security around 2033
19
Continue Section 3
A New Deal for Labor 1. National Labor Relations
Act, known as the Wagner Act (named after Senator
Robert Wagner of New York, its chief
sponsor) a. Protected the rights of workers to
join unions and bargain collectively b.
Established the National Labor Relations Board
(NLRB) to look into labor disputes c.
Revitalized the labor movement and permanently
changed labor- management relations
2. As a result of the Wagner Act, the American
Federation of Labor (AFL) and other industrial
unions grew a. Industrial unions an
organization of all workers in a single industry,
such as mining b. John L. Lewis, who led
the United Mine Workers since 1919, by 1935 he
headed the Committee for Industrial
Organization within the AFL 1. The AFL kicked
out the CIO because they were opposed to
organizing workers in industry 2. Lewis
stayed on as the head of the CIO but changed the
name of the organization to the Congress of
Industrial Organization
20
Continue Section 3
c. By the late 1930s, he succeeded in
unionizing the automobile and steel
industries 1. Didnt come easily 2.
Industries fought back against them the entire
way 3. Workers went on strike and many times
the strikes became violent and deaths
occurred 4. The CIO grew to about 5 million
workers by the end of the 1930s a. Also made
up of blacks and women who made up a large
part of the unskilled work force
Section 3 Review
21
Section 4 Life Under the New Deal
Bleak Times for Black Americans 1.
22
Placeholder
Blank slide between old and new
23
Continue Section 4
A Bigger Role for Government 1. To meet the
needs for the war, President Wilson and Congress
create almost 5,000 new federal agencies a.
Most powerful was the War Industries Board 1.
Goal to run industry as a single factory
dominated by one management 2. Told
manufacturers what they could and could not
make 3. Allotted raw materials and fixed
prices on finished goods 4. Succeeded in
organizing US industry behind the war
effort b. The Food Administration 1. Headed
by Herbert Hoover (future president) 2. Goal
to supply the food needed by troops
overseas 3. Encouraged farmers to increase
production a. Offered high prices for their
crops 4. Encouraged Americans to plant
Victory Gardens a. Have meatless and
wheatless days c. The Fuel Administration 1.
Headed by Harold Garfield 2. Introduced
daylights-saving time and rationed coal and
oil 4. Set days people couldnt drive, shut
down non-essential factories one day a week
to save coal
24
Continue Section 4
Labor in the War 1. Unions and government worked
together (govt getting the most out of it) a.
AFL president enlisted workers support for the
war b. Goal was to get reforms for labor in
return for the support c. President Wilson
responded with important reforms 1. 8 hour
work day in war related industries, improved
wages and working conditions 2. Created a
War Labor Board standardized wages and hours,
protected the rights of labor to organize and
bargain collectively
Women and Minorities in the War 1. Women started
working in factories and drove streetcars,
delivered mail, were traffic cops, and worked
in the war effort making weapons and planes a.
Treatment varied but in most places they were
paid the same as men b. When the men returned
from war, they lost the jobs and gains they
made 2. Lots of Blacks headed north during the
war to work in factories a. Most were young and
single and worked in factories, steel mills and
coal mines, while black women worked in stores
and restaurants b. Led to race riots in 1917
and 1919 3. Many Mexicans came to work on farms,
ranches, railroads and mines, some in factories
in the North from 1917 to 1920, 100,000
immigrated to Texas, Arizona, New Mexico and
California
25
Section 5 The End of the New Deal
Wilsons Fourteen Points 1. Even before the war
ended, President Wilson was outlining a peace
proposal, known as the Fourteen Points a.
They were farsighted and generous but failed to
meet the needs of some countries 1. Britain
and France wanted Germany to lose its military,
be completely disarmed and have its colonies
seized, to never be able to war again. 2.
Meant to establish a just and lasting peace 3.
First 5 Points a. End to secret treaties b.
Freedom of the seas c. Free trade among
nations d. Arms reductions e. New ways of
settling disputes over colonies 4. Next 8
Points a. Redrawing the map of Europe this
would lead to self-determination people of
Europe would have the right to their own
countries and governments 5. Final Point a.
Set up a League of Nations association of
nations established to guarantee the
political independence of all nations great and
small
26
Continue Section 5
Peace at Paris 1. President Wilson went to the
peace conference 2. January 19, 1919 a. Held
at the Palace of Versailles b. 27 nations
represented c. Big Four dominated, they were
the US (Wilson), Britain (Prime Minister David
Lloyd George, Italy (Prime Minister Victorio
Orlando) and France (Prime Minister Georges
Clemenceau) 1. Britain, Italy and France
pushed for a weakened Germany and harsh
penalties 2. President Wilsons ideas of the
Fourteen Points were being torn apart
The Treaty of Versailles 1. June 28, 1919 a.
Germans were forced to sign the treaty b.
Germany had to pay reparations war damages, to
the nations that it invaded c. Germany had
to give up territory to France, to Poland and
give up all its overseas colonies
27
Continue Section 5
2. President Wilson had the Allies apply the
principle of self-determination a. Created
several new nations/countries formerly held by
Germany, Austria- Hungary and Russia b. Map
on page 667 3. The League of Nations was one of
the Fourteen Points that did get done a. To be
an assembly of 42 Allied and neutral nations, and
a Council controlled by the Big Four and
Japan b. Also a League Court of International
Justice 1. All Nation member disputes would be
referred to the League 2. Pledged to protect
each others independence
Debate over the treaty 1. President Wilson
presented the treaty to the Senate which was met
with opposition from Republicans a. 14 were
totally against the treaty b. 23 would only
accept the treaty with major changes c. 12
would accept the treaty with minor changes 2.
Democrats urged the President to compromise with
the Republicans but he refused say Anyone who
opposes meIll crush 3. Constant lobbying and
trying to get support for the treaty had a
physical effect on the President. On October
2, 1919, President Wilson had a stroke at the
White House and was found by his wife, Edith
28
Continue Section 5
Rejection by the Senate 1. Wasnt enough in the
treaty to protect the interests of the US 2.
Henry Cabot Lodge, R-Mass, brought up the
Fourteen Reservations a. Added to the Fourteen
Points 3. The treaty failed by a 39 to 55 vote
on November 19, 1919. It included the Lodge
reservations which the Democrats wouldnt vote
for 4. The constant push for passing the treaty
would cause the Democrats the 1920 election
when Warren G. Harding won a. At first, Wilson
thought of running for a 3rd term but decided
against it b. Americans were looking for a
change
Section 5 Review Chapter 5 Study Guide Chapter
5 Test