; the great depression
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the great depression


  • pg 1
									The Great Depression
  and the New Deal
• Explain why peace and prosperity were short lived after
• Describe how a global economic depression weakened
  the Western democracies after 1929
• Describe the ways in which Americans suffered during
  the Great Depression
• Explain the causes of the depression
• Describe President Hoover’s plan for recovery and how it
  lead to the election of Roosevelt
• Describe the laws passed by Congress during the
  historic hundred days
• Describe the reform part of Roosevelt’s plan
          Key Terms and People
•   Depression
•   Collective bargaining
•   Deficit spending
•   Hoovervilles
•   Overproduction
•   FDR
•   John Maynard Keynes
•   Federal Works Project
•   Emergency Banking Act
•   Truth in Securities, Federal Emergency Relief Act, Social
               Uneasy Peace
• Peace settlement tried to create nationalism by
  creating new boundaries and new states
• Did not work--- border disputes, Germans
  vowed to revise Treaty of Versailles
     Weak League of Nations
 The organization was not effective in
  maintaining peace
 Main problem was the United States never
  joined ----Senate refused to ratify it which
  automatically weakens the organization
 The members could not agree to use force
  against aggression
             French Demands
• French demand strict enforcement of the Treaty of
  Versailles because of the desire for security
• Began with Reparations----
• April 1921--- Allies determined that Germany owed 33
  Billion in U.S. dollars
• Payable in 2.5 million annual installments
• Germany was able to make the first payment ---- the
  following year announce that can not pay anymore
• France angry and sent troops to occupy Ruhr Valley---
  chose this area because of the industrial and mining
               German Inflation
• Germany adopts passive resistance to French
• Workers went on strike government paid salaries by
  printing more money
• This added to inflation (rise of prices) that began at the
  end of war
• German mark becomes worthless---1914 4.2 marks = 1
  U.S. dollar 1923--- 130 billion marks = 1 dollar
• Workers in wheelbarrows carry home weeks wages
• Both Germany and France try to get a way out
What is the Plan

   August 1924--- Dawes Plan reduced
    reparations and coordinated Germany’s
    annual payments with its ability to pay
   Also granted an initial 200 million dollar loan
    for German recovery
   This opened the door to heavy American
    investments in Europe and the prosperity
    that was gained was soon lost
               Treaty of Locarno
   When prosperity hit Germany and France were able to
    be friends--- this treaty guaranteed Germany’s new
    western borders with France and Belgium
   This was supposed to create a lasting friendship
    between the two
   Germany joins the League of Nations
   Kellogg-Briand pact signed---- 63 nations sign this
   Written by U.S. secretary of state Frank B. Kellogg and
    French foreign minister Briand
   “Renounce war as an instrument of national policy”
   Do the treaty and pact work
 No--- not really because there was no way
  to convince nations to cut back weapons
 Germans of course had no choice but
  others did not trust security enough for
  anyone else to regulate military and
Before the Depression

   Economy was strong
   Less than four percent were unemployed
   One Year later Nine percent of the
    workforce was unemployed
Great Depression
   Depression is period of low economic activity and rising
   2 factors– one was a series of downturns in the economies of
    individual nations--- wheat prices fall because of
    overproduction--- Second-- international financial crisis
    involving U.S. stock market
   U.S. was booming by 1920’s the investors start pulling out
    money from Germany and other European markets this
    weakened Germany banks began to collapse and industrial
    production began to follow and unemployment rose

  1932--- one British worker in every 4 was
  40 percent of German work force out of
  What do governments do---- at first they
   don’t really know what to do try cutting
   costs by lowering wages and raising
   tariffs to exclude foreign products---made
   it worse
  Increased government activity in economy
  Even occur in countries with a laissez-faire
  Renewed interest in Marxism---- belief that
   capitalist system would destroy itself through
   overproduction seemed to be coming true led
   to Communism becoming popular
  Finally led to masses of people following
   political leaders who offer simple solutions in
   return for dictatorial power
Democracy after the war

   Wilson claims the war had been fought to “make the
    world safe for democracy”
   Seemed to be true --- women had the right to vote
   1920’s Europe seemed to returning to parliamentary
    regime and growth of individual liberties
   Total war and turmoil made a “return to normalcy”
• William II came to end 1918 and
  democratic state known as Weimar
  Republic created had many problems
• Problem 1= no real outstanding political
• Hindenburg a WWI military leader was
  elected president at the age of 77 he did
  not endorse the republic he had been
  elected to serve
   Problem 2 with the Weimar Republic--- serious
    economic problems --- monthly incomes become
    worthless, life savings disappear this lead to
    middle class going toward political parties that
    were hostile to this republic
   Unemployment hit---- 1930 it had grown to 3
    million people by March and 4.38 million by
   This paved the way for rise of extreme parties
• Suffered financially after the war did not feel full
  effects until 1932 because its economy was
  more balanced
• Politically there was unrest---- 6 different
  cabinets were formed which created chaos
• Popular Front Government ---coalition of leftist
  parties ---Communist, Socialist, Radicals
• French New Deal was created gave workers
  right to collective bargaining
• They failed to solve the problems of depression
• 1938 there was little confidence in their political
             Great Britain
• Britain lost markets for its industrial
  products ---Coal Steel and Textiles
  declined which lead to unemployment
• 1929--- Growing effects of Great
  Depression hit
• Labour Party failed to solve nations
  problems and fell from power
• New Conservative government comes in
  and used the policy of balancing budgets
  and protective tariffs
John Maynard Keynes
   Economist who was largely ignored ---
   He believed that in free economy depressions
    should be left to resolve themselves without
    government interference
   Argued that unemployment came from decline in
    demand which could be increased by putting
    people back to work building highways and
    public buildings this should be financed by
    government even if deficit spending had to occur
    (going into debt)
The Great Depression

   The United States
      The Stock Market Crash
• Shock to Hoover
• Before the economy seemed strong
• Less than 4 percent were unemployed
• In 1929– Radio corporation of America stock
  went from 94.50 to 505.00 a share
• People took their savings out of the bank and
  bought stock
• The price of many stocks was much higher than
  true value
• They were sure they could sell their stocks and
  make a profit
               The Crash
• October 24 1929--- stock prices drop
• More sellers than buyers
• 5 days later on October 29---- it fell apart
• This would began the time of The Great
  Depression in the United States
• It was a time of struggle when businesses
  failed and people lost everything
Stock Market
• Economy seemed strong
• Less than 4 percent were unemployed
• One year later 9 percent unemployed
       American Businesses
• Due to decrease in sales American
  businesses were forced into layoffs
• What is a layoff?
• Layoff typically occurs when a company
  lets workers go because it can not afford
  to pay them
• With Nine percent of the work force out of
  work what do you think happened?
• People were unable to buy things that
  were not a necessity for living such as
• Cars
• Ford Motor Company
  was especially hurt
• Workers were cut by
  44 percent
• Unemployment up to
  sixteen percent
• Eight million people
  could not find work
         President Hoover
• Wanted Americans to wait it out
• Did not want to involve the Federal
• Wanted the state and local governments
  to help the people
• Hoover believed that Americans could
  withstand the hard times
             What happens?
•   Without help from the federal government
•   People lost their farms and homes
•   Slums called “Hoovervilles” were created
•   Hoover Flags also began to make
         Factors that Caused the
• The Stock Market Crash
• Overproduction---- businesses had produced many
  products faster than people could buy them so when the
  production was made to slow down workers were laid off
• Why is this a big deal????
• When economy was good people spent a lot of money---
  Many bought on credit when they lost their jobs could not
  pay debt and Banks that held the loans went out of
• Foreign countries were unable to buy products from
  America because of debt from war ---tariffs placed on
  American goods
Loss of Confidence
   American lost confidence in themselves
    and their country
   Business were afraid to make new
   Workers thought they could loose job at
    any time
   Families soon stood in breadlines for free
Hoover’s Plan

  Agricultural Marketing Act --- 500 Million
   to farmers to buy extra or surplus crops
   from farmers hoped this would stabilize
   farm prices
  Does it work
  No
  Problem was too great and prices
   continued to go down
Hoover’s Plan

  Reconstruction Finance Corporation---
   loaned emergency money to banks,
   railroads, and insurance companies
  A federal works program---- 750 million
   went to create jobs ----building dams,
   highways, and buildings
  A moratorium was put on payments of
   war debts to the United States ---puts off
   payments until later
Hoover’s Plan
    Was not enough to help American people
    Americans will get a new man in the White
     House who will change the face of America
    Who is this person?????
    Franklin Delano Roosevelt
    Promises a “new deal for the American
     people” he promised to quickly put America
     back on its feet
    He stated crisis would not destroy the nation
     he states with confidence that “the only thing
     we have to fear is fear itself”
     Franklin Delano Roosevelt
• Willing to try different
  methods to end the
• Calls Congress into
  special session on March
• Next 100 days Congress
  will pass more important
  laws than any other
  Congress in American
• It is called the Hundred
• Promised Relief,
  Recovery, and Reform
The Hundred Days
• National Banking Holiday----
  prohibited people from rushing to
  banks and taking all of their money
• Emergency Banking Act--- made
  federal loans available to banks
• The Federal Emergency Banking Act-
  -- loaned millions of dollars to state
  agencies for families who needed
  food, clothing, and shelter
The Hundred Days
 The Civilian Conservation Corps (CCC) hired people
  ages eighteen to twenty-five to plant trees, build roads,
  and work on flood control in rural areas
 Agricultural Adjustment Act--- (AAA) paid farmers for
  crops they destroyed. Created a shortage of products
  would raise prices
 The National Recovery Administration--- (NRA) was
  established to help businesses recover…. Reduced work
  week, established a minimum wage and ended child
 Truth in Securities Act– controlled selling stocks and
 Tennessee Valley Authority---- (TVA) employed
  thousands of people to work on problems such as
  flooding and erosion on Tennessee River basin
           The Hundred Days
• Americans were hopeful
  that a new cooperation
  between business, labor,
  and the government
  would bring the Great
  Depression to an end
• The Blue Eagle, the
  symbol for the NRA
  appeared in windows of
  businesses in support of
New Deal
 First stage government focused on
 Helps put nation on the road to
  economic recovery
 Second Stage---- Second New Deal---
  -- tried to make economic reforms
 These would change the role of
  government in lives of Americans
Second New Deal
 Works Progress Administration--- 4.8 billion jobs program
 Harry Hopkins----head or program wanted to put every
    unemployed person to work
   Built schools, hospitals, playgrounds, museums, and airports
   Actors were hired to put on plays, Musicians gave concerts,
    Artists painted murals on walls of government buildings
   8 million were employed by WPA
   Restoration of workforce helped ease depression----more stores
    opened and factories began to hire
WPA Baseball Field
Workers lived in Barracks
Social Security Act

   This act stated that the government would
    take care of the elderly, the unemployed, or
    the disabled
Who pays for this?

   For the elderly--- 2 new taxes that helped
    pay for this. One came from an employee
    tax and one came from employer
   Unemployed--- Employer paid an additional
    tax to unemployed workers until they found
   Payments were made to disabled or blind
The Depression and New Deal
   The great depression changed the face of
    America forever. Homelessness and starvation
    plagued the United States for many years.
   President Roosevelt was able to curtail some of
    the suffering with the New Deal which changed
    the way government was ran forever. How did
    the “New Deal change the way government was
    seen through the eyes of Americans”
• Described the way Americans suffered during
  the Great Depression
• Explained the causes of the great depression
• Described President Hoover’s plan for improving
  the economy and why it ultimately lead to the
  election of Roosevelt
• Described laws passed during the hundred days
• Describe the reform part of Roosevelt’s new deal
          Key Terms and People
•   Depression
•   Collective bargaining
•   Deficit spending
•   Hoovervilles
•   Overproduction
•   FDR
•   John Maynard Keynes
•   Federal Works Project
•   Emergency Banking Act
•   Truth in Securities, Federal Emergency Relief Act, Social
   Do you Remember?

• What was President Hoover’s
  policy for helping the unemployed?
• At first he did not want to do
  anything then he started the
  Agricultural Marketing Act
  Reconstruction Finance Corps
  Federal Works Project
    Do you Remember

• What were some signs that people
  were suffering from bad economy?
• Hoovervilles, Bread lines
   Do you Remember?

• What did Roosevelt promise the
  American people when he was
  elected President?
• A New Deal for the American
• Name the three areas Roosevelt
  promised to cover
• Relief, Recovery, Reform
   Do you Remember ?

• What was the goal of the head of
  the Works Progress Administration
  and who was the head of it?
• Harry Hopkins

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