U.S. History Chapter 11
Notes
The Great Depression
Begins
An economic crisis grips the nation during the
Great Depression. President Herbert Hoover’s
conservative response to the nation’s problems costs
him many supporters.
Section 1
The Nation’s
Sick Economy
As the prosperity of the 1920s ends,
severe economic problems grip the
nation.
Economic Troubles on the Horizon

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Problems began threatening economic prosperity by the end of
the 1920s
Farm debt - many farmers were forced to sell in the 1920's
Consumer debt - many people were buying goods on credit
More goods then buyers - prices rose faster than wages
Declining Trade - 1920's U.S. raised tariffs other countries
raised tariffs to retaliate
Important industries struggled
Income disparity - Consumers & farmers went steadily deeper
into debt
Industries in Trouble

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Key industries like railroads, textiles, steel barely made profit
Replaced by other forms of transportations
Mining, lumbering expanded during were no longer in high
demand
Coal especially hard-hit due to availability of new energy sources
- Hydroelectricity, fuel oil, & natural gas
Boom industries - automobiles, construction, consumer goods
weakened
Housing starts declined
- Affected many related industries
Farm Troubles

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International demand for U.S. grain declined after war
- prices dropped by 40% or more
Farmers boosted production to sell more
- Caused prices to drop further
Farm income declined & farmers defaulted on loans
Rural banks failed
Congress attempted to pass the McNary- Haugen bill to help
farmers
- Price-supports - government bought surplus crops at
guarantees prices
- President Coolidge vetoed price-support bill
Consumers Problems
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1920s - rich got richer & poor got poorer
Prices rose faster that wages
70% of families earned less than minimum for decent standard
of living
- $2500 annually
Most couldn’t afford flood of products factories produce
Many people had been purchasing goods on credit (buy now,
pay later)
Businesses gave easy credit & consumers piled up large debts
Consumers had trouble paying off debt & cut back on spending
OBJ #1 - Describe the CAUSES and SPARK of the Great Depression. How did Overproduction affect
both farmers and industry? What system collapsed and caused millions to lose their savings?
Explain how buying on Margin created the Spark. How did people lose money because of the
spark?
I. OBJ #1- Cause & Spark of the Depression
A. Causes of the Depression
1. Overproduction, too much stuff (Factories and Farms)
a. Factory Workers begin to get layed-off
- Workers cannot buy goods, even more goods are overproduced
b. Farmers Can’t Survive
-low prices (can’t pay loans / make a living)
c. Supply & Demand- Prices Drop
2. Bank Failures
a. Banks close and loose $$$
b. People default on loans (Can’t pay Back)
c. Banks cannot cover their deposits, because it was lent out to
bad creditors **5,000 banks close between 1929-1932**
d. People loose entire LIFE SAVINGS
1920’s
Problems
Factories making Too
Much, Farms
growing too much
BANKS Have NO $$
PEOPLE LOST
SAVINGS & JOBS
Factories Fire Workers
(Don’t need them)
NO ONE TO HELP!
Farm Prices fall
(Farmers can’t make $$)
Banks Close because
they have no money:
Loans have not been
paid back, can’t give
people their savings
Farmers & Factory Workers
can’t pay back loans to
Banks: DEFAULT!!
People Default
on Loans
+
Banks have
no money to
give people
Banks Close
=
People Loose
savings
The Election of 1928

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Democrat Alfred E. Smith four times governor of New
York
Republican Herbert Hoover
has served as secretary of
commerce under Warren
Harding & Calvin Coolidge
U.S. had experienced
prosperity under Republicans
in 1920s
Hoover won an
overwhelming victory
Dreams of Riches in the Stock Market

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Late 1920s – Some economist warning of weaknesses
in the economy
- Most Americans ignored them
People began investing in stock market
- Looked like an easy way to make money
Dow Jones Industrial Average was used as barometer
of the market’s health
- Measure based on the stock of 30 representative large
firms trading on the New York Stock exchange tracks
state of stock market
Dreams of Riches in the Stock Market


1920s - stock prices rose
steadily “Bull Market”
People rushed to buy stocks
& bonds to make a quick
profit
- Many engaged in
speculation - buy on
chance of a quick profit
- Began Buying on margin
- pay small percent of price,
borrow rest
The Stock Market Crashes
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September 1929 stock
prices peaked & then fell
Many investors lost
confidence & began
selling
October 24, 1929 Market took plunge &
many panicked investors
unloaded their shares
The Stock Market Crashes

October 29, 1929 - Stock
market crashed (Black
Tuesday)
- Shareholders sold frantically
- Millions of shares had no
buyers
- People who bought on
credit were left with huge
debts
- Others lose most of their
savings
OBJ #1- Cause & Sparks of Depression
QUICK REVIEW:
Causes: 1. Overproduction
2. Bank Closings
Spark: 1. Stock Market Crash
Results: 1. Unemployment
2. Life Savings Lost
Financial Collapse
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Great Depression - economy plummeted & unemployment
skyrocketed
- lasted from 1929–1940
After crash, people panicked & withdraw money from banks
Banks that invested in stocks failed& people lost their money
1929 to1932 - gross national product was cut nearly in half
- 90,000 businesses went bankrupt
1933 - 25% of workers were unemployed
Those with jobs received cuts in hours & pay
Worldwide Shock Waves

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Great Depression limited U.S. ability to import
European goods
Hawley-Smoot Tariff Act set highest protective tariff
ever in U.S.
Other countries couldn’t earn American currency to
buy U.S. goods
- Many countries retaliated by raising their own tariffs
International trade dropped & unemployment soared
around world
Causes of the Great Depression

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Factors leading to Great Depression:
Declining Trade - Tariffs & war debts cut down the
foreign markets for American goods
Farm problems - Many farmers were forced to sell
Easy credit – Borrowed money to invest in market
Income disparity
Federal government kept interest rates low &
encouraged borrowing
Section 2
Hardship and Suffering
During the Depression
During the Great Depression
Americans do what they have to do to
survive.
The Depression Devastates People’s
Lives
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People lost jobs & were
evicted from homes
Had to live in parks or
sewer pipes
Shantytowns settlements consisting of
shacks, arose in cities
The Depression Devastates People’s
Lives
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People dug through garbage
& begged
- Soup kitchens offered free
or low-cost food
- Bread lines - people lined
up for food from charities &
public agencies
African Americans &
Latinos had higher
unemployment & lower pay
Minorities were also targets
of violence (Lynching or
deportation)
The Depression in Rural Areas
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Most farmers could grow
food for their families
About 400,000 farms
were lost through
foreclosure
- Many became tenant
farmers: worked for large
landowners rather than
themselves
The Dust Bowl
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Farmers in Great Plains
exhausted land through
overproduction
1930s - drought &
windstorms scattered for
hundreds of miles
Dust Bowl - area from
North Dakota to Texas
that was hardest hit
The Dust Bowl

Many farm families
migrated to Pacific Coast
states (Route 66)
- California towns
became overcrowded
- Many people who
moved west were from
Oklahoma (Okies)
OBJ #3 - Describe the natural disaster that affected the U.S. during the Great
Depression. What was the disaster’s nick-name? What caused the disaster?
Where did the people go to try and escape their troubles and how were they treated
(nick-names for these people)?
III. OBJ. #3- Natural Disaster “The DUST BOWL”
A. Great Plains suffers a huge Drought (1931)
1. Causes:
a. Drought . . .no rain
b. New technology, tractors and steel plows tear-up extra sod that
was holding onto soil, drought turns open soil into sand box
2. Huge Dust storms cover ‘Great Plains
B. Results
1. Can’t pay banks- Banks take Farms
2. Many Great Plains farmers move to California,
a. Try to get jobs on large farms
b. Treated poorly in Calif. *‘Oakies’ & ‘Arkies’-Not wanted in West
Effects on the American Family
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Family was source of
strength for most Americans
Believed in traditional values
and emphasized the
importance of family unity
Many families entertained
themselves with board games
& radio
- Monopoly was invented in
1933
Some families broke apart
under strain of making ends
meet
Men in the Streets

Many men used to working
& supporting families had
difficulty coping
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Couldn’t find jobs
Many stopped trying
Some men even abandoned
their families
- About 300,000 hoboes
wandered country on railroad
box cars
No federal system of direct
relief - cash or food from
government
Women Struggle to Survive
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Women worked hard to
help their families
survive the adversity
Homemakers budgeted
carefully, canned food, &
sewed clothes
Women worked outside
home & were resented
by unemployed men
Women Struggle to Survive
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Early 1930s – Some
cities refused to hire
married schoolteachers
Many women suffered in
silence & were ashamed
to stand in bread lines
Children Suffer Hardships
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Poor diets & health care led
to serious health problems in
children
Lack of tax revenue led to
shortened school year &
school closings
Teenagers left home & rode
trains in search of work &
adventure
- Many died or were beaten
Social and Psychological Effects
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1928 to 1932 – suicide rate rose over 30%
Admissions to state mental hospitals tripled
People gave up health care, college
Put off marriage & children
Stigma of poverty didn’t disappear & financial security
became goal
Many people showed great kindness to strangers
- Gave food, clothing & a place to stay
People developed habit of saving and thriftiness
Section 3
Hoover Struggles with
the Depression
President Hoover’s conservative response to
the Great Depression draws criticism from
many Americans.
Hoover Tries to Reassure the Nation

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President Herbert Hoover
told Americans the economy
was sound
Many experts believed
depressions were normal part
of business cycle
- Believed that it was best to
do nothing & let the
economy fix itself
Hoover believed
government should foster
cooperation between
competing groups
Hoover Tries to Reassure the Nation
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Many believed that people should succeed through their
own efforts
People should take care of own families & not depend
on government
Hoover opposed any form of federal welfare or direct
relief to the needy
- Believed that hand-outs would weaken people’s self
respect & moral fiber
- Said that charities & local organizations should help
the less fortunate
Hoover Takes Cautious Steps
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Hoover called meeting of business, banking,
labor leaders to solve problems
- Asked them to work to together to solve the
problems
Created organization to help private charities
raise money for poor
Hoover Takes Cautious Steps

Hoover’s authorized the
construction of the
Boulder Dam on
Colorado River w
- later renamed Hoover
Dam
- Provided electricity,
flood control, water to
states on river basin
Democrats Win in 1930 Congressional
Elections
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People began blaming Hoover & Republicans
for the economic problems
Democrats won House of Representatives
Republican Senate majority down to 1 vote
People Grew frustrated with the Depression
Democrats Win in 1930 Congressional
Elections

Farmers tried to create
food shortages to raise
prices
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Burned fields rather than
sell crops at a loss
Some declared a farm
holiday
People began calling
shantytowns
“Hoovervilles”
Hoover Takes Action
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Hoover softened his stance
on no government
intervention in the economy
Hoover negotiates
agreements among private
entities
Backs Federal Farm Board
(organization of farm
cooperatives)
- buy crops, keep off market
until prices rise
Hoover Takes Action
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Got large banks to establish National Credit
Corporation
- Loaned money to smaller banks to prevent
bankruptcy
Late 1931 - Hoover persuaded Congress to pass
measures reform banking, provide mortgage relief, &
funnel federal money into business investment
- Federal Home Loan Bank Act lowered mortgage
rates
Hoover Takes Action
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Reconstruction Finance Corporation –
Authorized emergency funds for businesses
- Hoover believed that the money would trickle
down to average citizens through job growth &
higher wages
- Critics said people couldn’t wait for the money
to trickle down
Hoover’s measures didn’t improve economy
before presidential election
Gassing the Bonus Army
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1932 – Incident with World
War I veterans further
damaged Hoover’s image &
public morale
1924 – Congress agreed to
pay a bonus to WWI vets
who had not been
adequately compensated for
wartime service
- Bonus was to be paid in
1945 in the form of cash & a
life insurance policy
Gassing the Bonus Army

Bonus Army – WWI
veterans went to D.C.
in 1932 to support
Patman Bill:
- called for immediate
payment of bonus to
WWI vets
($500
per soldier)
Gassing the Bonus Army
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Hoover opposed bill
Believed they were
communists
He respected their right to
protest (Provided food &
supplies for shantytown)
June 17, 1932 - Senate voted
down Patman Bill
Most veterans left
Washington
About 2,000 stayed to speak
to Hoover
Gassing the Bonus Army

Hoover feared violence
& called on U.S. Army to
disband Bonus Army
- Led by General
Douglass Macarthur &
Major Dwight
Eisenhower
Gassing the Bonus Army
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Infantry tear gassed over
1,000 people, including
children
Many people were
injured (11 month old
baby died)
Public was stunned &
outraged by
government’s actions
OBJ #2 -Describe how the Great Depression affected people.
Who was the president when
it started, and what did he do to help? Who tried to help the poor and what problems did
they have? How did people try to escape the Great Depression?
II. OBJ. #2 – Affects of the Depression
A. Jobless / Homeless
1. 1930-1932 – Jobless goes from 4 to 12 million
2. Houses are lost, people become homeless
3. People are Desperate!!!!
B. Hatred for President Hoover
1. Say’s it is NOT Government’s job to fix the Poor
a. Say Churches and other groups should help
b. PROBLEM: People too poor to help churches so churches
can’t help as much!!!
2. People name Poor Places after Hoover
a.*Hooverville- Shanty towns / Hoovermobile- cars pulled by mules
b. HOBOS- look for jobs*Hooverblankets- newspapers used as
traveling the rails blankets by homeless
OBJ #2- Affects of the Great Depression
Wizard
C. Escaping the Depression
1. Radio- Comedies, Soap Operas
of
2. Movies- Shirley Temple, Child Actors
a. Snow White (first full-length animation)
b. Wizard of OZ
OZ
*Small girl escaping the Dust Bowl
3. Literature
a. Steinbeck, Grapes of Wrath
*About a family of ‘Okies’ escaping the Dust Bowl and how
horribly they were treated
U.S. History Chapter 13
Notes
The New Deal
President Franklin D. Roosevelt’s New Deal
programs stimulate the economy and the arts. The
New Deal leaves a lasting, yet controversial mark on
American government.
Section 1
A New Deal Fights
the Depression
After becoming president, Franklin Delano
Roosevelt uses government programs to
combat the Depression.
Election of 1932
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Democrats nominated
NY governor Franklin
Delano Roosevelt
- reform-minded;
projected friendliness &
confidence
Democrats
overwhelmingly won
presidency, Senate, &
House
Election of 1932
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Roosevelt had to wait 4 months to
take over
20th Amendment wasn’t rarified
until 1933 (Move inauguration to
January)
FDR worked with advisors
known as “Brain Trust,” to
formulate policies to alleviate
problems
New Deal – FDR’s program to
alleviate the problems of the Great
Depression focused on 3 Rs
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Relief for needy
Economic recovery
Financial reform
The Hundred Days
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March 9 to June 16, 1933
- FDR took office &
launched Hundred Days
Congress passed over 15
major New Deal laws
that expanded the federal
government’s role in the
nation’s economy
Bank Holiday
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March 5, 1933 – one day after taking office FDR
declared a bank holiday & closed all banks to prevent
further withdrawals
Emergency Banking Relief Act - Permitted
Treasury Dept. to inspect banks
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Sound banks were allowed to reopen
Banks that needed help received loans
Insolvent ones remained closed (unable to pay bills)
Bank Holiday revived public confidence in banks
- Believed that the banks remained open were in good
shape
An Important Fireside Chat
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FDR gave fireside chats
- radio talks explaining
New Deal measures
March 12, 1933 – FDR
gave 1st fireside chat the
day before the banks
reopened after holiday
- Discussed need for
public support of
government, banks
Regulating Banking and Finance
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Congress took another step
to reorganize the banking
system
Glass-Steagall Act Established Federal Deposit
Insurance Corporation
(FDIC)
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insured individual bank
accounts up to $5000
Regulates banking practices (
forced them to act cautiously
with money)
Regulating Banking and Finance
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Federal Securities Act – Required companies
must give all information on stocks
Securities and Exchange Commission (SEC)
created to regulate stock market
FDR got law allowing production of some
alcoholic beverages
21st Amendment repealed prohibition by end
of 1933
Helping the American People


Roosevelt administration
implemented programs
aimed at helping farmers &
other workers to stimulate
economy
Agricultural Adjustment
Act (AAA) raised food prices
by lowering supply
- Government paid farmers
not to plant crops
Helping the American People

Tennessee Valley
Authority - Created
jobs renovating &
building dams
- Also provided flood
control & hydroelectric
power to region
Helping the American People

Civilian Conservation
Corps (CCC) - public
works jobs for young
men 18 to 25
- Built road, planted trees
& helped in soils erosion
& flood control projects
- Men sent $25 out of
$30 home to family each
month
NIRA
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National Industrial
Recovery Act established codes of fair
practice for industries
Created National
Recovery
Administration (NRA)

NRA sets standards,
prices, limits production
NIRA

1933 - Public Works
Administration (PWA)
was established as part
of the NIRA
– It provided money to
states to create jobs
chiefly in the
construction of schools
& other community
buildings
Food, Clothing, and Shelter

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Home Owners Loan
Corporation gave loans
to prevent foreclosures
Federal Housing
Administration gives
loans for mortgages &
repairs (FHA)
Food, Clothing, and Shelter

Federal Emergency
Relief Administration direct relief to needy
The New Deal Comes Under Attack

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Deficit spending - spending more money than
government takes in
- funded New Deal
Opposition rose when the New Deal didn’t
stop the Depression
Liberals didn’t think New Deal did enough to
help poor, & fix economy
Conservatives believed Roosevelt used the New
Deal to control business & socialize economy
The Supreme Court Reacts

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Supreme Court struck down NIRA & AAA as
unconstitutional
FDR proposed “Court-packing bill”
Change the Supreme Court from 9 to 15 justices
 Would enable FDR to appoint 6 new justices

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Congress & press protested
Starting in 1937 - justices retire & FDR
appointed seven new ones
Huey Long Attacked the New Deal

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
Governor of Louisiana "King
Fish"
Built schools and hospitals
Ruled Louisiana like a dictator
Wanted to be president
Decided to challenge FDR
Offered new deal
"Share our
wealth"
- Called for every family to get
yearly income money to buy food
and housing
- Taxed the rich heavily
Made enemies in his attempt to
become president
- Shot and killed in 1935
Section 2
The Second New Deal
Takes Hold
The Second New Deal includes new
programs to extend federal aid and stimulate
the nation’s economy.
The Second Hundred Days

By 1935, economic recovery not as great as
FDR had expected
Unemployment remained high
 Work programs & productions still behind 1920s
levels

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
FDR launched second phase
Provided more relief for farmers, workers
The Second Hundred Days

First Lady Eleanor
Roosevelt a social
reformer prodded
president


She traveled the country
observing the social
conditions & reminding
FDR about the suffering
She also pushed for him
to appoint women to
government positions
Election of 1936




1936 - Democrats won
presidency & large majorities
in both houses
First time most African
Americans voted Democratic
First time labor unions
supported presidential
candidate
Election was a vote of
confidence in FDR & the
New Deal
Helping Farmers




1936 - Soil Conservation and Domestic Allotment
Act replaced AAA
- Rewarded farmers for practicing soil conservation
New Agricultural Adjustment Act avoided
unconstitutional provision
Resettlement Administration gave loans to small
farmers to buy land
Farm Security Administration - loaned to tenant
farmers to buy land
- FSA hires photographers to shoot pictures of rural
towns & farms
Roosevelt Extends Relief


2nd New Deal established a series
of programs to help youths,
professionals & other workers
Works Progress Administration
(WPA)
- WPA workers built airports,
roads, public buildings
- Women workers sewed clothes
for the needy
- WPA employed professional
writers, artists, performers
- Gave aid to students in exchange
for part-time work
Roosevelt Extends Relief

National Youth
Administration (NYA)
- provided education,
jobs, counseling &
recreation to young
people
Improving Labor and Other Reforms


Wagner Act - replaced NIRA
- Protected right to join unions & collective bargaining
- Prohibited unfair labor practices (threatening workers
or firing union members)
- Established National Labor Relations Board that
heard testimony about labor practices
- Held elections to determine if workers wanted unions
1938 - Fair Labor Standards Act sets maximum hours
& minimum wage
- 44 hrs per week decreasing to 40 in two years & 25
cents per hr.
Social Security Act




1935 - Social Security
Act created Social
Security system
Provided insurance for
retirees 65 or older
Unemployment
compensation
Aid to disabled &
families with children
Expanding and Regulating Utilities


Rural Electrification
Administration (REA)
brought electricity to
farms
- Rose from 12.6 % in
1935 to 48% in 1945 to
90% in 1949
Public Utility Holding
Company Act aims to
stop financial corruption
Section 3
The New Deal Affects
Many Groups
New Deal policies and actions affect
various social and ethnic groups.
The New Deal Brings New
Opportunities for Women




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Several women were named to important government positions
Frances Perkins became first female cabinet member
(Secretary of Labor)
- FDR also appointed 2 women as diplomats & 1 as a federal
judge
Women still faced discrimination in workplace from male
workers
National Recovery Administration (NRA) set some lower
minimum wages for women
Federal work programs hired far fewer women than men
African-American Activism




FDR appointed more than
100 African Americans to
government
Educator Mary McLeod
Bethune headed Division of
Negro Affairs of NYA
Helped organize “Black
Cabinet”
Group of influential AfricanAmerican who advised FDR
on racial issues
The President Fails to Support Civil
Rights




FDR was afraid of upsetting white Southern
Democratic voters
Refused to approve antilynching law & end to poll tax
New Deal agencies discriminated against African
Americans
- pay them lower wages & favored whites
African- Americans generally supported Roosevelt
administration & New Deal
- Saw them as the best hope for the future
FDR Wins in 1936



New Deal Coalition - different groups that support
Democratic Party
- Helped the democratic party dominate national
politics throughout the 1930s & 1940s
Political organizations in large Northern cities
supported FDR
Urban, religious, & ethnic groups also supported FDR
- FDR appoints officials of urban-immigrant
background
Indian New Deal

Indian New Deal: gave Native Americans
economic assistance and greater control over
their own affairs
Section 4
Culture in the 1930s
Motion pictures, radio, art, and
literature blossom during the New
Deal.
The Lure of Motion Pictures and Radio

About 65% of
population went to
movies once a week
- Movies were still
affordable
- People watched them
to escape real life
- Grapes of Wrath
- Gone With the Wind
- The Wizard of OZ
The Lure of Motion Pictures and Radio



90% of households had a radio
Families listened together every
day
Dramas, variety shows played in
evening
- Soap operas for homemakers
broadcast in middle of day
- Children’s shows after school
hours
- Immediate news coverage became
customary
-
The Lure of Motion Pictures and Radio

Orson Welles - actor,
director, producer, &
writer
The Arts in Depression America





Federal Art Project paid
artists to make art, & teach in
schools
Aim to promote art
appreciation & positive
image of America
Murals typically portrayed
dignity of ordinary people at
work
Federal Theater Project
hired actors & artists
Singer, songwriter Woody
Guthrie sung songs about
the of plight of poor
Diverse Writers Depict American Life


Federal Writers’ Project
supported many who
become major writers
Richard Wright - AfricanAmerican author who wrote
Native Son

John Steinbeck wrote The
Grapes of Wrath about
Dust Bowl migrants
Section 5
The Impact of the
New Deal
The New Deal affects American
society not only in the 1930s but also
in the decades that follow.
The New Deal Ends



By 1937, economic improvement convinced
many that Depression was ending
Congress wanted to cut back programs
By 1939 - New Deal was over
Supporters and Critics of the New Deal



Supporters Believed the New Deal helped
country recover from economic difficulties
Conservatives though FDR made federal
government too large
- stifled free enterprise & individual initiative
Liberals thought New Deal didn’t do enough to
socialize economy* end inequalities
Effects of the New Deal






Expanded power of federal government & president
Social Security Act - Federal government takes responsibility
for citizens’ welfare
- Provided aid for aged, disabled & needy
FDIC still protects individual investors in case of bank failure
SEC still monitors stock market, enforces laws on stock, bond
sales
New Deal laws set standards for wages & hours
- banned child labor
- Permitted unions
Civilian Conservation Corps (CCC ) - planted trees, built
hiking trails, & fire lookout towers
Effects of the New Deal





Soil Conservation Service taught farmers how to preserve soil
- Contour plowing, terraces, & crop rotation
1934 - Taylor Grazing Act reduced grazing on public lands
- Grazing had contributed to erosion that caused the dust bowl
Tennessee Valley Authority (TVA) created electricity, &
prevented floods
New Deal reduced suffering & gave people hope
- Provided jobs, food & money
New Deal didn't end depression WWII did