What do you see? 1. List 5 things you see in the picture. 2. Based on her facial expression, what emotion(s) do you think the woman is feeling? 3. Do you think she is wealthy? 4. Do you think she lives in a wealthy country? 5. Why do you think she feels like the emotions listed in question 2? 6. What time period does she live in? (think major US event) The Great Depression The Stock Market Traders on the floor of the stock exchange NY Stock Exchange The Stock Market The stock market is a place where shares of ownership in corporations (stock) are bought and sold. Individual investors, like you, can own part of the greatest public corporations of the day. People were borrowing money to buy stocks: *Americans borrowed to buy stocks driving stock prices up. When stock prices plunged they couldn’t repay loans and lost all their money$. Crash of October 1929 The stock market crashed on Tuesday October 29, 1929. This date is known as “black Tuesday.” Stock prices began to fall as investors tried to sell off their stock. Many investors had bought stock on margin. During the 1920’s when you bought stock on margin you paid 10 percent down and waited for the stock to go up. When the stock price went up, you would sell it in order to make a profit. This only worked if the price continued to go up. If the price goes down, you still owed the stock brokers the original price. During the crash, investors had to sell their stocks at a lower price PLUS they still owed their brokers the original selling price. The effects of the crash Millions of people who had owned valuable stocks were left with worthless paper. Millionaires lost their fortunes overnight. Panic about the overall economy spread throughout the US. Interpreting Graphs 1. How much value did the Dow lose on Black Tuesday? 2. What do you think spurred the short recovery? 3. When did the stock market hit bottom? 4. What event would help stabilize the economy and the market? (It occurred between 1929 and 1954) Failure of Banks: • When banks were not repaid they collapsed. People panicked and took out money$ from the banks causing the banks to collapse. People lost their savings. Causes of the Great Depression Americans had borrowed more money than they could repay. This hurt banks and businesses that were waiting to be repaid. Businesses had to lay-off workers and banks collapsed due to loss of money. Business had overproduced their products and when consumers stopped buying, they had to close or lay-off many more workers and some businesses had to close. Causes of the Great Depression High tariffs – The US and other nations had high tariffs on goods coming into their nations. This prohibited consumers from other countries to buy American to help out American industry. Laissez-faire – The idea that government should play as little role as possible in economic affairs. Due to this policy, the US government was late to react to counter the causes of the depression. Pictures of the Great Depression Men at an Employment Agency Moving through a soup line Pictures of the Great Depression Groups of shacks like this one were called “Hoovervilles” People wandered from town to town looking for work. Pictures of the Great Depression Long lines formed for bread and soup Children in a tent city Living through the depression 1. 1 in 4 Americans were out of work 2. By 1932 unemployment reached 13 million people. 3. Thousands of banks closed. 4. Schools were forced to close due to lack of government funds. 5. Georgians were already in a depression before the Great Depression hit the rest of the US so Georgians didn’t immediately feel the impact of the Great Depression. 6. During the time from 1929 to 1932, an average farmer’s income dropped from $206 per year to $83 per year. The Dust Bowl The Dust Bowl The New Deal “I pledge you, I pledge myself to a new deal for the American people.” – Franklin D. Roosevelt campaigning for President. By the time Roosevelt took office in 1933, the depression was being felt all over the world. What is the plan? Roosevelt had no idea how to tackle the economic problems that faced the country. “Brain Trust” – Roosevelt gathered a group of advisors that put together a plan to fight the depression First Hundred Days Congress passed more legislation in the first one hundred days during the Franklin D Roosevelt administration than any other in history. Roosevelt’s Plan The New Deal’s purpose was to bring about economic recovery, relieve the suffering of the unemployed, and reform defects in the economy. Banks Many banks closed. Customers ran to the banks in panic to remove money. Banks did not have enough cash on hand to cover withdraws. Roosevelt closed all banks by declaring a “Bank Holiday” Only those banks that could cover any withdraw from a customer would be allowed to reopen. National Industrial Recovery Act This program was intended to organize workers into unions, create a high wage for workers and allowing factories to cut back on production. In Georgia and much of the south, unions were not allowed to organize in mills or other factories. When the textile workers in Georgia went on strike, Governor Talmedge called out the National Guard had had many workers arrested. This program was a failure and in 1935 the US Supreme Court ruled it unconstitutional. Civilian Conservation Corps (CCC) Another popular program in Georgia that provided jobs for young single men building trails, roads, planting trees, parks and gov’t facilities. Some of the projects that they worked on include: 1. Schools across the state were built by the CCC. 2. Hospitals in many cities were built by the CCC including much of Grady Hospital in Atlanta. 3. Several airports in Georgia including the Macon Airport. 4. Dalton’s city hall and several city jails were built through this program Agricultural Adjustment Act • Its purpose was to raise the price of staple crops by limiting supply. In GA, farmers were paid subsides to plant less cotton in order to drive the price up. TVA Tennessee Valley Authority The TVA was a much more popular program in Georgia. The Tennessee River Valley was subject to many horrible floods prior to the creation of the TVA. TVA engineers built 40 dams in seven states, created several lakes, deepened river channels for shipping and planted new forests. The dams produced cheap electricity for the region. TVA in GA As a result of the TVA, Georgia now has Blue Ridge Lake, Lake Chatuge and Lake Nottely. Social Security Act • A system of pensions for older people. The money came from payroll taxes. It was the 1st system of unemployment insurance money$ to dependent children and people with disabilities. Warm Springs, GA Franklin Delano Roosevelt built the Little White House in 1932 while governor of New York, prior to being inaugurated as president in 1933. He first came to Warm Springs in 1924 hoping to find a cure for the infantile paralysis (polio) that had struck him in 1921. Swimming in the warm, buoyant spring waters brought him no miracle cure, but it did bring improvement. During FDR’s presidency and the Great Depression, he developed many New Deal Programs (such as the Rural Electrification Administration) based upon his experiences in this small town. Rural Electrification Authority As a result of President Roosevelt’s first stay in Georgia, this program was started. During his stay in Warm Springs, he noticed on that first night that there were no lights from the surrounding farms. When he received his electric bill he was shocked to find out that it was more expensive than the bill for his mansion in NY. He created the REA to help farmers and rural residents to create co-ops to extend their own electrical lines to rural settings. Electricity made farm life much easier with electrical water pumps, milking machines, lights and electrical appliances. Other Programs Federal Deposit Insurance Corporation (FDIC) – this was set up to insure deposits that people made into banks that have been approved by the government. Today, the FDIC will insure $100,000 per account. Social Security Administration – It set up a system of pensions for older people. Payments from employers and employees are collected through payroll taxes. Second it set up the nation’s first system of unemployment insurance and third, it gave states money to support dependent children and people with disabilities Works Project Administration (WPA) – WPA workers were asked to build community projects such as playgrounds, parks, and complete restoration projects. The picture is of WPA workers restoring the Indian Burial Mounds near Macon. The New Deal: Bad or Good? Bad Good Federal Government grew in size and power. Government intruded into people’s lives threatening individual freedoms and private property. The government was spending more than it was taking in. This is the practice of deficit spending Ended the banking crisis Improved farmers lives Created jobs for millions of unemployed. Tried to correct long term flaws in the economic system with FDIC and SSA. You Decide…