The Great
Depression
&
The New Deal
1929-1932
&
1932-1941
In the 1928
presidential
race, the
Republican
Party was
confident.
Republicans took credit for the
strong economy of the 20s.
Their presidential candidate,
Herbert Hoover, believed in
voluntary cooperation between
business and labor.
Despite Hoovers confidence, some saw
signs of weakness in the economy.
The agricultural sector
was in trouble. Rural
farmers produced huge
surpluses of food that
depressed prices.
Farmers could
not afford to
buy goods or
repay their
loans.
Credit and installment buying lead people to
purchase goods they can’t pay for.
By 1929, Americans
had more than $6
billion debt >double
the 1921 level.
Rising wages masked an uneven distribution of
wealth.
Factory workers’ wages
rose 8%, factory output
increased by 32%. As a
result, worker incomes
rose modestly, while
rich investor incomes
skyrocketed.
3 Disasters of The Great
Depression
• The Stock Market Crash
• Black Tuesday - October 29, 1929
• Run on Banks
• After the Market Crash
• Causes Bank Failures
• Overproduction/Under-consumption
• Economic issue throughout the 20s
• Most problematic in agriculture sector
The Market Crash - Black Tuesday
Until September 1929, the stock
market continued to rise.
Many people borrowed money to
buy stock, assuming prices would
continue to go up.
Some economists feared that
stocks were over-priced.
October 29th, the stock market went into a free fall as
investors tried to sell at any price.
16 million shares were sold
on “Black Tuesday.”
Billions of dollars were lost
in a few hours.
Many who bought stocks
on margin were wiped out.
Run on Banks
The crash didn’t start the
Great Depression by itself.
Instead, it quickened the
collapse of the U.S. economy.
Run on Banks
 Banking system felt effects of
crash first.
 People feared losing money
so they ran to the bank to
withdraw funds.
 But banks didn’t have enough
cash on hand.
 Bank runs caused banks
to fail.
Overproduction/Underconsumption
• Overproduction - Producing more goods than can
be sold
• Throughout the 1920s production agricultural goods
remained high despite lower demand after war
• Mainly due to the mechanization of farming
• Under-consumption - Buying fewer goods than
are produced
• Created a rural depression - farmers did not feel the roar
of the 1920s
Farmers no longer had cash
to buy consumer goods
 Factories closed, causing
worker layoffs, increased
unemployment
 Lowered demand for goods.
 By 1933, the
unemployment rate in the
U.S. reached 25%.

As international trade falls, a global drop in
business leads to a worldwide depression.
Few Americans
understood
the causes
of the Great
Depression, but
everyone felt
the impact.
For many, the only food
available came from public
soup kitchens or bread lines
run by charitable
organizations.
People sold their
possessions and homes to
buy food.
Between 1921–1929, the
unemployment
rate never rose above
4%. By 1933, however, it
was near 25%.
Those who kept their jobs
had their wages and
hours cut.
Hoovervilles
Between 1930 and
1934, nearly a
million farmers lost
their farms, homes,
and farm equipment
because they could
not pay their
mortgages.
Bankers sold the land
and equipment at
auction. Some farmers
became tenant farmers,
working for bigger
landowners. Others
decided to leave in
search of work
elsewhere in the U.S.
Hoovervilles (shantytowns set
up on empty land named after
the President) appeared in major
cities across the country.
The homeless lived in empty
railroad cars, in cardboard boxes,
or in shacks built on public land
or empty lots.
The Dust Bowl
Millions of tons of
topsoil blown away in
giant dust storms.
 A drought on the Great
Plains destroyed millions
of acres of farmland.
 Farmers removed thick
prairie grasses to plant
wheat which did not
grow in the drought.
 100 mile-per-hour winds
blew dust clouds 8,000
feet tall in Oklahoma,
Texas, New Mexico, and
Colorado.
 Wildlife and farm
animals suffocated in
the choking winds.
Westward Migration
Farmers who
had lost their
land, called
Okies regardless
of where they
were from, were
forced to leave.
Displaced farmers moved west
or to northern cities. 800,000
Okies left Texas, Oklahoma,
Missouri, and Arkansas alone.
Those who could bought
distressed neighbors’ farms at
low prices to build expanded
commercial farms.
Americans looked to President
Herbert Hoover to solve the crisis.
He tried a number of different
approaches, but in the end he
failed to discover the right
formula for stopping the crisis.
At the start of
the economic
downturn,
Hoover took a
hands-off
approach.
Believed that shifts in the
economy were a natural
part of the business
cycle.
Thought strong
businesses would succeed
without government
support.
Hoover realized he must do something:
Asked
businesses to
keep wages,
employment,
and prices at
current levels
Called for
tax cuts,
lower
interest
rates, and
public works
Asked
wealthy to
donate more
money to
charity
But volunteerism failed:
Hoover put his faith
in localism, a policy
whereby problems
are best solved at
the local and state
levels.

Towns and states didn’t
have resources to deal
with the depression.

Did not support direct
federal aid to individuals.
Minor Success
One success was the construction
of Boulder Dam (later renamed
Hoover Dam).
Put thousands to work, provided
power for millions, and irrigation
for acres farm land.
Many grew disillusioned during the Great Depression.
• Some blamed Hoover and some blamed capitalism.
• Some were World War I veterans who wanted a bonus that was promised
to them.
• In 1932, those veterans formed the Bonus Army and marched on
Washington.
20,000 veterans set up
camps and occupied
vacant buildings. In July,
police tried to evict them
and riots erupted.
Hoover ordered General Douglas MacArthur to
remove veterans. He used tear gas, cavalry,
tanks, and troops.
Photos of troops using excessive force
angered the American public.
The eviction of the Bonus
Army doomed Hoover’s bid
for re-election.
Americans were ready for new
leadership and a greater role
for the government in solving
problems.
Hoover’s opponent in the election
was Democrat Franklin D. Roosevelt.
• Harvard graduate
• New York State senator
• Assistant Secretary of the Navy
• 1920 Nominee for Vice President
• Polio survivor
• Governor of New York
Hoover
State & local
governments
and private
agencies
should
provide
relief.
The two
candidates
offered very
different
approaches to
the problems of
the Great
Depression.
Roosevelt
Leadership
should come
from the
federal
government.
Roosevelt
won in a
landslide.
Roosevelt’s Response to The Great Depression
THE NEW DEAL
First 100 Days
Roosevelt moved quickly to carry out his
promise of giving Americans a New Deal.
During his first
100 days in
office, 15 bills
were passed.
Three goals:
Reform, Relief, and Recovery.
 Reform – Fix the banking
system
 Relief – Provide jobs and
resources for farmers and
unemployed Americans
 Recovery – Rebuild the
American economy
FDR took other steps to reform the financial
system.
Federal Deposit
Insurance Corporation
(FDIC)
Insured bank deposits
Securities and
Exchange
Commission (SEC)
Regulated the stock
market
Such measures helped restore confidence in the
economy.
Roosevelt then turned to a series of New
Deal programs to bring relief to the country.
Some programs helped
farmers and those in the
rural South.
• The AAA sought to end
overproduction and raise crop
prices.
• The TVA built dams to control
floods and generate electricity.
Many programs focused on job relief
Civilian Conservation Corps
(CCC)
Put young men to work improving
national parks, forests, and
wilderness areas
Federal Emergency Relief
Agency (FERA)
Granted funds to state and local
agencies to helped the
unemployed
Civil Works Administration
(CWA)
Gave people jobs on public-works
projects
The Public Works Administration (PWA) created
millions of jobs.
• Workers built
bridges, dams,
power plants, and
government
buildings.
• These projects
improved the
nation’s
Roosevelt also took steps to infrastructure.
speed economic
recovery.
National
Recovery
Administration
(NRA)
• Established codes
of fair competition
• Set minimum
wages for workers
and minimum
prices for goods
In 1935, FDR
launched a new
campaign to
help meet the
goals of relief,
recovery, and
reform called
the Second
New Deal
Economists
such as John
Maynard
Keynes
disagreed.
Critics charged that New
Deal programs, and their
high price tags, were
wasteful.
• The government was spending
money it did not have.
• The federal deficit had soared to
$4.4 billion.
• Public-works projects put
money in the hands of
consumers.
• Consumer spending would
stimulate the economy.
• Deficit spending was needed
to end the depression.
The Social Security Act created a
pension system for retirees.
It also provided:
• unemployment insurance
• insurance for work-related accidents
• aid for poverty-stricken mothers and
children, the blind, and the disabled
Such benefits helped
reduce poverty
among the nation’s
elderly.
The government also funded irrigation systems,
dams, and other water projects in the West.
Construction of a
Dam, a mural by
WPA artist
William Gropper,
was a tribute to
workers on
western dams.
Roosevelt believed
that improving the
standard of living for
industrial workers
would benefit the
entire economy.
Wagner Act
• Recognized the right of
workers to join labor
unions
Fair Labor Standards Act
• Gave workers the right to
collective bargaining
Setbacks and limitations
After the economy had begun to improve in 1935 and
1936, FDR cut back on government spending to reduce
the deficit. At the same time, interest rates rose.
The combination caused the
economy to sink again, and
unemployment soared.
With his support wavering,
FDR did not try to push
further reforms through
Congress.
Eleanor Roosevelt inspired many women in
her leadership role during the New Deal.
• Transformed the role of
First Lady from ceremonial
to political activist
• Traveled widely
• Campaigned for FDR
• Offered policy advice
• Wrote a newspaper column
Other women also played important roles in the
administration, such as Secretary of Labor
Frances Perkins, the first female Cabinet
member.
•The WPA and other
However, the New
agencies made an effort
Deal did not fight
to employ men first.
to end gender
discrimination in
•Women could not work
the workplace.
for the CCC.
The New Deal’s Commissioner of Indian
Affairs, John Collier, tried to improve
living conditions for Native Americans.
The Bureau of
Indian Affairs
encouraged native
religions,
languages, and
customs.
The Indian New Deal:
• Provided funds to
build schools and
hospitals
• Created an Indian
Civilian Conservation
Corps
The Indian Reorganization Act of 1934 was
considered the centerpiece of the Indian New Deal.
This law restored tribal control over native lands.
With the New Deal, FDR broke from the
tradition of laissez-faire and greatly
expanded the role of government.
New Deal
measures
strengthened
capitalism and
encouraged the
post-WWII
economic
boom.
• Restored trust in the
banks and the stock
market
• Increased homeownership
• Protected workers
• Helped modernize rural
America
At the same time, the New Deal led to the rise of
the welfare state.
In a major policy change, the New Deal established
the principle that the federal government was
responsible for the welfare of all Americans.
FDR also favored federal
action to protect the
environment.
The government
established 12 million acres
of new national parks.
The CCC restored forests
and preserved the
environment.
Finally, FDR and the New Deal changed the nature
of the presidency itself.
Cultural Changes of the 30s
How did the men and women of the depression
find relief from their hardships in the popular
culture?
Entertainment helped Americans struggling to survive
the depression escape their worries—at least for a time.
Federal support for the arts added to the
era’s rich cultural heritage.
During the New Deal, the federal government
provided funding for the arts for the first time in
history.
The Federal Art Project, Federal Writers’ Project, and
Federal Theater Project were all funded by the WPA.
• WPA writers created a series
of state guidebooks that
recorded the nation’s history
and folklore.
• Artists painted giant murals
in public buildings across the
nation.
• Photographers like Dorothea
Lange created powerful
images of impoverished
farmers and migrant workers.
Entertainment was
big business during
the 1930s.
Movies, radio, and music
reflected the mood of the
country.
Americans saw movies to escape their worries.
Films like The Wizard of Oz, Snow White and the Seven
Dwarfs, and Frankenstein were all very popular when
released.
Radio was also a vital part of everyday life.
People listened to comedy, drama, news, and FDR’s
fireside chats.
Music also provided a happy diversion and a
serious outlet for social concerns.
“Swing” music
played by “big
bands” topped the
charts.
The folk singer
Leadbelly described
the harsh lives of
African Americans.
Latin music and
dances like the
rumba and the
samba were popular.
Woodie Guthrie
wrote ballads
about the Dust
Bowl and the
Okies.
Depression-era writers reflected the concerns of
Americans from all walks of life.
Comic strips and comic books also became popular
•Flash Gordon Science Fiction
•Dick Tracy Detective Story
•Superman The first great comic Superhero
POW!