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The Great Depression The New Deal
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Vocabulary

1. Economy a societys system of money related to
   all business and trade.
2. Consumers people who buy things
3. Credit borrowing money and paying it back with
   interest (the extra amount you pay for borrowing
   the money)
4. The Stock Market Where people buy and sell
   pieces (called shares) of companies.
5. Bread Lines A place were the poor were given
   food during the Great Depression
6. Mortgage Monthly housing payment for the house
   you will someday own.

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What was the Great Depression?

• The Great Depression was a period of time in
  1930s American when the economy was horrible and
  many people became homeless and unemployed.
• The New Deal is the name for the collection of
  President Franklin D. Roosevelts government
  programs that helped end the Great Depression

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How did This Happen?

• In order to understand how the Great depression
  occurred we must take a closer look at the
  roaring 1920s.
• ON THE SURFACE The 1920s was a time of economic
  prosperity.
• BUT BELOW THE SURFACE There were serious
  economic issues that were neglected or not
  properly addresssed.

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Causes of the Great Depression

1. Industries in trouble
2. Farmers in trouble
3. Consumer problems
4. Uneven distribution of income
5. Tariffs and War Debt

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Industries in trouble

• Railroads, textiles, steel and lumber industries
  barely made a profit in the 1920s
• Many industries faced competition from foreign
  countries like China, Japan and India
• Coal mining also decreased as other cleaner
  energy sources became more common

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Farmers in trouble

• After WWI there was less demand for grain
• Farmers income went from 10 billion in 1919 to
  4 billion 1921 and stayed low
• Farmers continued to struggle throughout the 20s
• A Dust Bowl of dry soil from overplanting and
  drought in the mid west also made it harder for
  farmers to survive

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The Dust Bowl
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Consumer Problems

• As farms and industries struggled, they fired
  many of their workers
• Consumers (the workers) had less money to spend
• Consumers were buying less and borrowing more
  money to spend on essentials
• People were using a lot of credit (spending more
  money than they had)

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Uneven income distribution

• Rich people were getting richer and poor people
  were getting poorer
• Eventually there were not enough people to buy
  the stuff that was making the rich people rich
  think about it.

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Tariffs and War Debt

• The Hawley-Smoot Tariff
• Passed Congress and signed into Law by President
  Hoover in 1930
• Raised Taxes on imports to protect American
  Businesses from foreign competition
• Americans did not enough money to buy all of the
  goods the factories were producing so this ended
  up hurting the economy rather than helping.
• Foreign countries owed the U.S. a lot of money
  after WWI and U.S. businessmen started to think
  we would never get it back!

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Quick Quiz

• What is the Stock Market?
• What was the Great Depression?
• What was the New Deal?

Causes of Depression
Fact 1
Fact 2
Fact 3
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Black Tuesday

• On October 29th, 1929 The stock market crashed
• All of the causes mentioned earlier (farmers in
  trouble, industries in trouble, consumer problems
  and uneven wealth distribution) combined to
  create a panic in the stock market and banks.
• Nobody wanted to buy stocks, everybody only
  wanted to sell them
• The value of peoples stocks became almost nothing
  and companies became valueless overnight.
• This became known as Black Tuesday, it was the
  beginning of the Great Depression.

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The Stock Market (1927-1933)
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President Hoovers Response

• President Herbert Hoover was president during
  Black Tuesday
• He felt the economic slump would end by itself
  and did not need government help
• He believed in Rugged Individualism
• People should succeed through their own efforts

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Hoover Takes (some) Action

• The Reconstruction Finance Corporation
• Approved by congress and President Hoover in 1932
• This government agency loaned money to banks,
  insurance companies and other large businesses so
  they would not go out of business
• Hoover believed the money would trickle down
  and eventually help the average citizen
• It was not particularly effective and many
  economists believe it was too little too late

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Effects of the Great Depression

• Many banks closed
• Loss of GDP (national income)
• Super High Unemployment (25)
• Rapid homelessness increase (people could not pay
  mortgages or rents)
• Suicide and depression

• Shantytowns called Hoovervilles popped up
  around cities
• Unemployment was even higher for Blacks and
  Latinos
• Many people relied on soup kitchens and bread
  lines for their food.

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Quick Quiz

1. What are FOUR facts about black Tuesday?
2. Why do you think it is called black Tuesday?
3. Who was President during black Tuesday?
4. What was his response to this event? WHY?
5. What were SEVEN effects of the Great Depression?

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Roosevelt to the Rescue

• Franklin D. Roosevelt became President in March
  of 1933 (Elected in 1932)
• The American people hoped that he would do more
  to help them than Herbert Hoover had done
• The New Deal was Roosevelts name for all of the
  ways he hoped to end the Great Depression.
• Roosevelt called for a Hundred Days Congress -
  congress would work for one hundred days to pass
  laws to help people in need

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Major Parts of the New Deal

1. Fireside Chats
2. Reforming Banking and Finance
3. Assisting Farmers
4. Providing Work Projects
5. Helping People with Housing
6. Assisting the Elderly
7. Improving Labor Conditions

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Fireside Chats

• After his inauguration, President Roosevelt
  broadcast a message on the radio to calm peoples
  fears
• This was such a success he continued to
  communicate important messages to the American
  people
• These broadcasts became known as fireside chats
  and were used to let people know what the
  government was doing to help them

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Reforming Banking Finance

• Roosevelt closed all banks while government
  officials inspected them
• Only quality banks were allowed to Reopen
• Congress passed the Glass-Steagall Act creating
  the Federal Insurance Deposit Corporation (FDIC)
  If a bank goes out of business people do not
  lose their money

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Assisting Farmers

• The Agricultural Adjustment Act (AAA)
• This law helped raise crop prices by regulating
  reducing the amount of land crops were grown on.
• Therefore it reduced the supply of crops which
  raised prices

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Providing Work Projects

• The Civilian Conservation Corps (CCC) was an
  organization started by Pres. Roosevelt
• The CCC put young men to work building bridges
  and roads,
• Other work programs started by Roosevelt included
  the Federal Emergency Relief Administration
  (FERA) the Works Progress Administration (WPA)

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Helping People with Housing

• Many people became homeless because they couldnt
  afford their rent or mortgage
• The Home Owners Loan Corporation (HOLC) was part
  of the New Deal
• It helped people pay mortgages so they wouldnt
  become homeless or provided cheaper housing for
  the poor

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Assisting the Elderly

• Social Security Act
• Passed by Congress in 1935
• This is one of the longest lasting New Deal
  programs
• It still exists today
• It pays retired individuals (over age 65) a
  monthly check.
• When youre young and working your paycheck is
  taxed so when you retire you can have a check
  monthly.

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Improving Labor Conditions

• The Wagner Act
• Passed by congress in 1935
• It made it so workers were better protected by
  the government when they were trying to form
  union.
• Fair Labor Standards Act
• Passed in 1938
• Set maximum hours of work per week at 44 hours.
• Set minimum wage at 25 cents and hour.

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In Conclusion

• The Great Depression was a sad time in U.S.
  History. It began to get a little better because
  of programs from the New Deal, HOWEVER
• The Great Depression REALLY started to wind down
  in 1939 when the United States began trading
  military supplies (weapons, food, medical
  supplies) to Europe for WORLD WAR II
• This put even more people back to work building,
  shipping and farming and was great for the U.S.
  Economy!

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Quick Quiz

• Who became President after Herbert Hoover?
• (In two words) What was this mans plan for
  helping end the Great Depression?
• Explain THREE facts about each of the following
  parts of Roosevelts Plan for ending the
  Depression
• Fireside Chats
• Reforming Banking and Finance
• Assisting Farmers
• Providing Work Projects
• Helping People with Housing
• Assisting the Elderly
• Improving Labor Conditions
• When did the Great Depression begin ending? WHY?