Unit 8: Boom to Bust 1920 - 1939
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Study Guide
Impact of radio/mass media?
Shaped mass culture, communication, spread fads,
various items from our presentations
Change in role of mass media from 20’s to 30’s?
People used radio, movies as an escape from
problems of the depression. Also, FDR used radio
to communicate with Americans via Fireside Chats
Jazz , ragtime, music from Harlem Renaissance,
became popular in cities
Scopes Monkey Trial (1925), about teaching
Darwin’s theory of Evolution in schools
Young “modern” women of the 20’s , challenged
traditional gender roles by wearing shocking
clothes (short dresses), dancing, smoking and
drinking, and going out at night
Against open immigration, against the general
changes in society, and (still) against AfricanAmericans. The KKK had a big renewal in this time
Made it illegal to sell or manufacture alcohol. The
Progressive reformers thought Prohibition would
“clean up society” and get rid of problems. The
18th Amendment outlawed alcohol.
New music?
Public court challenge to traditional religion?
Flappers
Intolerance in the 20’s
Prohibition
Did it work?
The economy in the 20’s
Major causes of the stock market crash on Black
Tuesday, Oct 29th, 1929
So, your SOLs separate out the causes of the crash from
the causes of the depression, which I think is
strange…especially since the causes here go past the
crash…I will NOT expect you to separate them. Just
know the whole story. Read the HW reading.
Overspeculation: too much confidence in the
stock market, leading to unwise investing, either
with your own money (I’ll invest my life savings!),
or with borrowed money
Consequences of the stock market crash
Not really –People still drank at speak-easies (private
bars) or private parties. Even worse, crime grew in the
cities as the alcohol business was controlled by
gangsters and bootleggers (criminals who made and
sold alcohol).
Prosperity, Optimism (too much), consumer spending
fueled by advertising and credit, over-speculation in the
stock market, big gap between rich (a very few) and
poor (very many), most people did not have much
savings, not a big middle class
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Business was booming, but investments were made
with borrowed money (overspeculation).
There was excessive expansion of credit.
Business failures led to bankruptcies.
Bank deposits were invested in the market.
When the market collapsed, the banks ran out of
money.
Buying on margin: Buying stocks with borrowed
money.
Clients panicked, attempting to withdraw their money
from the banks, but there was nothing to give them.
(Because all the bank’s customers had panicked and
come to get their money, and/or the bank had invested
some of their money in the stock market.)
Banks failed, and closed, and businesses failed, because
there were no new investments.
Major Causes of the Great Depression
Impacts of Great Depression
Why didn’t Hoover do more?
What was FDR’s philosophy?
How did FDR communicate?
FDR’s plan? Three R’s?
SSA: Social Security Act of 1935
Relief : direct payment to people for immediate
help (Works Progress Administration—WPA)
Recovery: designed to bring the nation out of the
depression over time (Agricultural Adjustment
Administration—AAA) and TVA.
Reform : corrected unsound banking and
investment practices (Federal Deposit Insurance
Corporation—FDIC) and SEC
Legacy of New Deal?
1. The stock market crash of 1929 and collapse of stock
prices (obvious)
2. Federal Reserve’s failure to prevent widespread
collapse of the nation’s banking system in the late
1920s and early 1930s, leading to severe contraction
in the nation’s supply of money in circulation (the
“heart” did not pump more $$ into the economy)
3. High protective tariffs that produced retaliatory
tariffs in other countries, strangling world trade
(Tariff Act of 1930, popularly called the HawleySmoot Act – dumb)
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Unemployment and homelessness
Collapse of the financial system (bank closings)
Decline in demand for goods
Farm foreclosures and migration West
 Political unrest (growing militancy of labor
unions)
Didn’t think it was an appropriate role for the
Fed gov’t. Thought it was business’s job to take
care of boom/bust cycles in the economy (which
were pretty common). He was a laissez-faire
kind of Republican, pretty standard for his day..
 He thought the government should have a more
active role in solving problems.
Fireside Chats. Radio addresses. Roosevelt
rallied a frightened nation in which one in four
workers 25% was unemployed. (“We have
nothing to fear, but fear itself.”)
New Deal: Relief, Recovery, Reform
 Social Security Act offered safeguards for workers.
 Safety Net social insurance, workers and empoyers
pay into it, then when you’re too old or sick to work,
you can get payments.
WPA provided all kinds of jobs, construction,arts,
teaching, etc.
Also, CCC – Civilian Conservation Corps – for
young men , jobs outdoors.
AAA – tried to regulate the farming industry
Federal Deposit Insurance Corp – insures deposits, so
if your bank goes out of business (or burns down, or
the owner runs off with all the money), you won’t
lose all your money. The gov’t insures it.
The legacy of the New Deal influenced the public’s
belief in the responsibility of government to deliver
public services, to intervene in the economy, and to
act in ways that promote the general welfare.
Some programs are still around today.
STUDY FOR FREE RESPONSE (no big surprises here):
KNOW YOUR CAUSES OF THE CRASH/DEPRESSION
KNOW YOUR RESPONSES TO THE DEPRESSION (HOOVER AND FDR -- alphabet soup)