The Great Depression
Students will analyze the cause and effects
of the Great Depression and WWII and their
impact on the development of the federal
Key Industries in Trouble
Key industries- like railroads, textiles, steel
barely make profit
• Mining and lumbering- expanded during
war; no longer in high demand
• Coal- especially hard hit due to availability of
new energy sources (electricity)
Boom industries- automobiles, construction,
consumer goods, begin to fail
Housing market- starts to decline as people
can not afford new homes
Election of 1928- Republican Herbert Hoover
is elected in a landslide; very popular
Causes of the Great Depression
1. Distribution of wealth- Wages had not risen with
corporate profits. Over 70% of Americans were living below the
2. Stock Market Speculation- was seen as a get rich quick
scheme. Millions of Americans pour money in expecting to get
a. “Playing the market”- People began guessing on
stock prices this is called speculation.
b. Buying on Margin- allowed people to borrow for
the cost of the stock but only paying 10% of the price.
When the crash occurs people can’t pay back the money
3. Credit Abuse- Consumers over extend themselves while
buying the next new thing, credit crisis develops as people
4. Overproduction- Businesses were producing more consumer
goods then America could purchase, loss money led to low wages
5. Farming Collapse- International demand for U.S. grain declines
after WWI and prices drop by 40%
a. Bad Cycle- Farmers boost production to sell more; prices
b. Collapse- Income from crops declines causing farmers to
default on loans leading to the collapse of rural banks.
c. Price-supports bill- government buys surplus crops,
d. President Hoover- vetoes price-support bill
6. Government policies – No regulation of business, high tariffs
7. Global economic problems – International banking created
linked markets, Europe’s financial troubles after WWI affected the
WHAT THE HELL IS GOING ON
Stock Market Crash – September of 1929 the market
peaks and people begin selling everything.
1. “Black Thursday” – Largest amount of selling
ever, prices plunged, markets closed till Tuesday.
2. October 29, 1929 “Black Tuesday” – Bottom of
market fell out as people were attempting to sell all
3. Margin- people who bought on credit left with
huge debts, banks call for their money, people have
little or no money and are wiped out
Great Depression 1929-1939
Financial Collapse- economy falls, unemployment
Banks Collapse- people panic and withdraw their
money causing banks over 20% of all banks to close
wiping out millions of savings accounts
Gross National Product (GNP)- the value of all goods
and services produced by a nation fell in half in four
years, 104 billion to 50 billion.
Unemployment- 25% of all workers go jobless, those
with jobs get salary and hours cut.
President Hoover Reacts
Reaction- believed it was the responsibility of the state
and local governments to help not the federal
Hawley-Smoot Tariff (1930)- President Hoover signs
into law the highest tariff rates in history against
European goods, in response they do the same. Nobody
can trade and everyone falls into greater depression.
The Depression’s Effects
Soup kitchens- offer free or low-cost food
Bread lines- people line up for food from charities,
public agencies. Americans find this shameful to stand in
lines and reject them.
African Americans, Latinos have higher unemployment,
Shantytowns- settlements consisting of shacks, arise in
cities, people dig through garbage, beg for food and
Hoovervilles and Families
Hoover was blamed primarily for the depression
People who could not pay their mortgage needed alternative
Villages named “Hoovervilles”
Family- some break under the strain of the depression
1. Men- commit suicide and go into depression, use to
taking care of the family most can’t find jobs leave their
2. Women- find jobs sewing, maid service, resented by their
3. Children- poorly fed, schools close, poor health, teenagers
leave home looking for jobs.
DustBowl- area from North Dakota to Texas that is
1. Farmers- in Great Plains exhaust land through
2. Dust Storms- 1930s, drought, windstorms hit; soil
scattered for hundreds of miles
3. Depression in Rural Areas- most can grow their
own food but can’t pay back loans.
4. Loss of Farms- over 400,000 lose their farms
and become tenant farmers, some leave and migrate
to the Pacific Coast
Psychological Effects of the
1928–1932, suicide rate rises over 30%
Admissions to state mental hospitals triple
People give up health care, college, put off marriage,
Stigma of poverty doesn’t disappear; financial security
Many show great kindness to strangers
Develop habit of saving and thriftiness
Veterans want their money
Bonus March- jobless veterans from WWI want the money promised
them (1945) now.
1. Patman Bill- called for the payment of bonuses, Hoover
and the Senate oppose the bill and its struck down.
2. March joined- thousands of veterans bring their families
to the shacks near the capitol.
3. Death- 2 veterans are killed in a fight with police, Hoover
gets scared and orders them removed.
4. Overreaction- The army uses tear gas and tanks on the
veterans to drive them out.
5. Public Outcry- Americans are stunned to see Hoover
as heartless and uncaring if he’s willing to do this to
ELECTION OF 1932
President Hoover (Republicans)- never fully
appreciated the problems of the Depression and
believed it was only a temporary downturn, this led
many people to resent him.
1. Hoover warning- says a Democratic victory
will only lead worse economic crisis.
Franklin Delano Roosevelt F.D.R. (Democrats)-
Governor of New York promises the American people
a “New Deal”
1. Repeal Prohibition
2. Aid for the Unemployed
3. Cuts in government spending
Results of the Election- Roosevelt wins over 60% of
FDR AND THE NEW
Three R’s – Relief, Recovery, Reform
Relief – for people out of work
Recovery – for business and the economy as a whole
Reform – of American economic institutions
“The only thing we have to fear is fear itself”- F.D.R.
Bank holiday – banks were closed to allow them to be
reorganized by government
Repeal of Prohibition – Legalized sale of beer and wine,
increases tax revenue
Fireside chats – FDR assured people that banks were
safe, people put their money back
THE FIRST HUNDRED
Hundred Days- Roosevelt with Congress pass
over 15 major New Deal laws to help the country.
1. Bank Holiday- Roosevelt orders all banks
closed until the government can reorganize
them and make them stable.
2. Repeal of Prohibition- 21st Amendment is
passed and the tax money is used by
Congress to provide programs.
Hundred Days cont’d..
1. Emergency Banking Relief Act- reopened banks that were
financially sound, people’s confidence restored they deposit
2. Federal Deposit Insurance Corporation (FDIC)- insures
individual bank accounts and regulates banking practices
3. Home Owners Loan Corporation (HOLC)- refinancing of
small homes to prevent foreclosures
4. Farm Credit Administration- low interests loans to farms in
order to prevent foreclosures
5. Securities and Exchange Commission (SEC)-
regulates the stock market
RELIEF Programs for Unemployed-
1. Federal Emergency Relief Administration-
offered federal money to state and local
government run soup kitchens and breadlines
2. Public Works Administration (PWA)- gave money
to state and local governments to build roads,
bridges, dams, and other public works.
3. Civilian Conservation Corps (CCC)- public works
jobs to employ men
4. Tennessee Valley Authority- hired thousands of men
into the Tennessee Valley to build dams, build electric
power plants, control flooding and erosion. Sold
electricity cheaply to areas that previously couldn’t
1. Agricultural Adjustment Administration-
encouraged farmers to produce less to boost prices,
government will subsidy farmers for every acre
they don’t farm.
Critics of the NEW DEAL,
Liberals- felt that the New Deal was doing too much to
help business and not enough to help the poor and
Conservatives- New Deal was controlling business, pro-
union and regulations.
Deficit Spending- government was spending more
money than it makes on the New Deal programs causing
people to get upset.
THREE BIG MOUTHS TAKE
Father Coughlin- popular priest uses radio to demand a
nationalization of all banks and guaranteed income-
Catholic Church yanks support after he becomes ant-
Semitic and Fascist
Dr. Francis Townsend- he wants a pension plan for the
elderly guaranteeing them monthly income.
Huey Long- A senator and former governor of Louisiana he
was immensely popular in his home state.
1. “Share Our Wealth”- program that promised a
minimum annual income of 5k for every American
family to be paid by taxing the wealthy
2. New Leadership- Long challenges Roosevelt for
leadership of the Democratic Party by announcing
his run for the presidency in 1935.
3. Killed- Long is assassinated in 1935 and his
popularity and ideas die with him
Supreme Court- strikes down several New Deal laws
such as the AAA, NRA as unconstitutional
“Court-packing bill”- Roosevelt proposes that the
president be allowed to appoint a new justice for each
member over 70.5.
1. Reaction- Congress and the Press are
outraged at Roosevelt for trying to tamper with the
system of checks and balances. (Dictator)
2. Aftermath- most of the older justices were
retiring by 1937 and he was able to appoint 7
new justices to support his New Deal laws.
ELEANOR ROOSEVELT –
LEADER IN HER OWN RIGHT
Most active first lady in history – wrote
newspaper column, gave speeches, traveled the
Served as the president’s social conscience
Influenced him to support minorities
and the less fortunate
United Nations- Universal Declaration
of Human Rights
Women’s Activism – League of Women
Voters, Women’s Democratic News
(author), Chair of women’s delegation
to Democratic National Convention
WOMEN AND MINORITIES PART OF THE
Frances Perkins- Secretary of Labor, is the first female cabinet
1. FDR- appoints several women but America still
discriminates against them, hires after all men.
African-Americans- FDR appoints more than 100 African
Americans to government, Mrs. Roosevelt plays key role.
1. Mary McLeod Bethune- appointed to head the division
of Negro Affairs. Eleanor Roosevelt’s close friend she will
organize the “Black Cabinet” during Roosevelt’s
2. Marian Anderson- famed African-American opera
singer she is not allowed to sing in Constitution Hall by the
Daughters of the American Constitution, in Washington D.C.
a. Eleanor Roosevelt- resigns from the (DAR)
and arranges for Anderson to sing on the
steps of the Lincoln Memorial, heard
SECOND NEW DEAL
New Deal Coalition- Women, Working Class,
Minorities, Labor Unions, Middle Class,
Works Progress Administration (WPA)- creates jobs
building airports, roads, public buildings
Social Security Act – Federal insurance program
based on collection of taxes throughout working
Retirees collect monthly over the age of 65
Other benefits paid to: unemployed, blind,
disabled, dependent children and their
I just want to forget my
Movies- over 65% of the population goes, escape from
reality; shows romance, fun, wealth.
1. Gone with the Wind- the most popular movie of
the 1930’s and all time.
2. Gangster movies, comedies, musicals all very
popular ways to forget your troubles.
Radio- 90% of all households have a radio and are the
center of all families.
1. Orson Wells- “War of the Worlds”
2. Dramas and variety shows at night
3. Soap Operas during the day
4. Children shows during after school hours
Artists and the Great Depression
Support- great time for artists so to speak,
federal aid pays for art classes to be taught, hire
artists and writers
1. Richard Wright- Native Son, about the
African- American experience
2. John Steinbeck- Grapes of Wrath, about
Dust Bowl migrants
End of the New Deal
1933-1937: the economy shows signs of life,
banks are stable, unemployment down to 15%,
corporations are beginning to make money
1. Americans- begin to have hope and see
the need to end the New Deal programs,
so does Congress.
2. The end- The New Deal ends in 1939 as
attention is changed to the aggressive rise
of Nazi Germany.
Impact of the New Deal
Finance and Banking: Labor and Unions:
1. FDIC- protects 1. National Labor Relations
individual investors Board- still mediates problems
against bank failures between unions and companies
2. SEC- still monitors Environment
the Stock Market 1. Tennessee Valley Authority-
still provides electricity
Social Security- still provides 2. Soil Conservation- maintain
help for the elderly and needy soil to prevent another Dust