What Caused the Great Depression? /13/2017

Transcription

1 What Caused the Great Depression? 1.Not Enough Buyers 2.Too Much Debt 3.Over-Speculation in Stocks 4.Overproduction & Layoffs 5.Farming Crisis 6.Government Mistakes 1

2 1. Not Enough Buyers 40% of all families lived in poverty before the crash The richest 1% owned 59% of the nation s wealth. The poorest 87% owned only 10% of the nation s wealth. Therefore, demand for many products was low. The market for luxury goods was destroyed by the crash. 2. Too Much Debt People began buying many goods on credit, often more than they could afford 80% of all families had no savings What happened when people couldn t pay back loans? 2

3 3. Over-speculation in Stocks A Get Rich Quick attitude caused many to speculate. People risked everything by buying on the margin. When the market collapsed, these investors lost everything banks collapsed because loans weren't repaid The Great Depression Thursday, October 24, 1929 some stockholders began to pull out of the market afraid of a crash Tuesday, October 29, 1929: - Black Tuesday -the day the stock market crashed -investors panicked and started selling before their stock became worthless -Dow Jones fell to 261 (41 in 1932) -between $6 and $9 billion was lost 3

4 4. Overproduction & Layoffs Industries were producing much more than could be sold. They were forced to lay off workers and lower prices. The cycle gets worse Many waited in unemployment lines hoping for a job. 4

5 5. Farming Crisis Farmers suffered through droughts and low prices. Farmers grew too much after WWI, created a surplus of food and low prices. With low prices, farmers were unable to repay their loans or purchase goods. More banks collapsed. A Farm Foreclosure 6. Government Mistakes The government set low interest rates before the crash and raised them afterward. Stock market speculation was unregulated. Bank deposits were not guaranteed. 5

6 Christmas Day Breadlines in New York City, 1931 Question In your opinion, what was the most immediate cause of the Great Depression? If you were the president, what would you do to end the Great Depression? Explain. The Bonus Army Bonus Army March: - in 1924 Congress approved a bonus payment to all who served during WWI - the money was to be paid in June ,000 veterans marched into Washington D.C., set up camps, and said they wouldn t leave until they received their bonus - Hoover ordered the police to remove the protesters - 2 veterans were killed made Hoover look bad 6

7 Hoovervilles Some families were forced to live in shanty towns A grouping of shacks and tents in vacant lots They were referred to as Hooverville because of President Hoover s lack of help during the depression. Franklin D. Roosevelt Democrat ( ) Cousin of Teddy Roosevelt Became ill with polio in 1921 forced him to use a wheelchair 1 st Pres. to use the radio regularly Fireside Chats explained his plans and programs to the people Roosevelt promised the American people a New Deal. FDR Mini-Bio 7

8 Franklin D. Roosevelt Handled the press well ex: pictures not taken of him in his wheelchair (did not want to appear weak) Famous quote All we have to fear, is fear itself. The Brain Trust was a group of advisors that helped him attorneys, economists, political scientists, etc. Franklin D. Roosevelt Bank Holiday 1 st action as President - closed every bank in U.S. for 4 days - sent people out to determine which ones were strong and those were reopened - almost all were re-opened - trying to restore confidence in banks people began to put their money back in The Dust Bowl Economic and environmental disaster Overproduction, monocrops Plowed up grasses for farms to meet the needs of a booming wheat market Soil exhaustion, soil erosion Drought and winds 1935: Blew winds from CO and NE, blackened the sky across the plains, into the East and Atlantic Ocean 8

9 Migrants: Okies & Arkies Poor whites and sharecroppers Evicted from OK, TX, MI, ARK Going to California Route 66 The Mother Road Brought people west L.A. Police Chief bum blockade Question Why was the Dust Bowl so bad? How did it affect more than just farmers? 9

10 Roosevelt and the New Deal Programs to address the Depression Relief, Recovery, Reform Known as the 100 Days Many programs passed Debt spending The New Deal Consume our way out of the depression Role of government The Three R s Relief - Immediate action taken to halt the economies deterioration. Recovery - "Pump - Priming" Temporary programs to restart the flow of consumer demand. Reform - Permanent programs to avoid another depression and insure citizens against economic disasters. Question Do you believe the Three R s were a good or bad idea? Why? Which of the Three R s was the most important? Which was the least? 10

11 New Deal Programs The New Deal was FDR s response to the Great Depression Created new agencies to help the people Dozens of new agencies and programs started, some successful, some not - Nicknamed alphabet soup or alphabet agencies because of all the abbreviations that were used New Deal Programs Federal Deposit Insurance Corp. (FDIC): 1933 Insured bank deposits up to $5,000 Prevented people from losing their money when their bank closed Reform New Deal Programs Civilian Conservation Corps (CCC): 1933 Offered outdoor work to unemployed single men Recruited young men (18-25) from the cities Set up camps - planted trees, fought forest fires, built dams, etc. (environmental work) Relief 11

12 New Deal Programs Works Progress Administration (WPA): 1935 Biggest agency 1935 employed 8 million and $2 billion fund Bridges, reservoirs, irrigation, sewage, schools, playgrounds, education, training Work Programs paid minimum wages, pulled them off charity and soup lines Also employed writers, teachers, librarians, actors, musicians, and artists Relief WPA At Work New Deal Programs Social Security Act (SSA): 1935 Required a social security tax to be taken out of every workers paycheck Gave money to those who were disabled or to old to work Safety net for all Americans Based on shorter life-span Intended to supplement (not replace) income Less inclined to retire Relief 12

13 Question Why was Social Security such a radical program? Is Social Security still a good program or should it be replaced? Explain. Public Art and Culture Federal Writers Project Federal Theater Project Oral histories of slavery, folk lore, Indian stories, Mexican Revolution, cowboys, frontier life, etc. National cultural resources and heritage Federal Arts Program Relief New Deal Programs National Industrial Recovery Act (NIRA): Controlled business practices Set minimum wage levels (usually.30 to.40 cents an hour depending on job) Shortened workers hours to create new jobs Created the National Recovery Adm. (NRA) to enforce these new codes Relief Symbol was the American Eagle New NFL team named for the NRA Philadelphia Eagles 13

14 The Sick Chicken Case A.L.A. Schechter Poultry Co. v. U.S. (1935) Supreme Court unanimously struck down the NIRA Decided that Congress had given the president too much lawmaking power Also ruled that NIRA violated the Constitution s commerce clause Supreme Court Chief Justice Charles Evans Hughes The Nine Old Men Supreme Court dominated by conservatives FDR unable to make appointments to Court Court declared several New Deal programs unconstitutional FDR believed that the Court was hampering needed relief and reform FDR s Court-Packing Plan FDR determined to preserve New Deal reforms Introduced legislation for revamping the judiciary Law would allow him to appoint one new judge for every Supreme Court member over age 70½ Would increase Supreme Court to a maximum of 15 members Plan soundly defeated; FDR lost political support Court-packing battle ended as a draw 14

15 Question Why did FDR s court-packing plan fail? Was it good or bad that it failed? Why? Impact of the New Deal Increased the power of the Pres. Conservation gains dams built, trees planted, etc. Created new federal social programs social security, welfare Deficit spending the government spends more money than it brings in from taxes Problems with the New Deal Relief based on race: Tucson scaled payments based on race Favored large industries and business Hurt some small farmers Local agencies administered relief and ran programs 15

16 End of the Depression Federal spending on an unprecedented level failed to stop it The largest entrance of the federal government into the American economy Made the federal government into a broker state between labor and capital Social programs and safety net Brought federal government into the lives of nearly all Americans WWII ended the Depression Question Did the New Deal end the Great Depression? What parts of the New Deal were successful? Why? What parts of the New Deal were a failure? Why? 16