1
THE STOCK MARKET CRASHES
During the 1920s, stock prices rose rapidly.
Many people bought stocks by buying on
margin--purchasing stocks on credit, or
with borrowed money, hoping to sell them
later at a large profit. In 1929 stock prices
began to drop. Frightened investors sold
stocks to pay off their loans, but there were
few buyers.
On October 29, known as Black Tuesday,
the stock market crashed. Investors lost
everything. So many people wanted to sell
their stocks, and so few wanted to buy, that
stock prices collapsed.
$400
$300
Black Tuesday
$200
More than 16 million shares were traded
on Wall Street on Black Tuesday, a record
that stood for 39 years. Just weeks later,
roughly one-third of the value of the stock
market had disappeared.
$100
Black Tuesday
(October 29
$0
March May July Sept. Nov. Jan.
How are the events of Black Tuesday
shown on the chart?
2
THE ECONOMY COLLAPSES
The stock crash caused a banking crisis as
banks lost their investments. People tried
to withdraw all of their deposits and many
banks went out of business. This crisis
contributed to losses by businesses, which
then needed fewer workers.
Normally when businesses produce more
than they can sell, they have to cut back
production. As people are laid off, the
demand for goods drops. This can
cause a severe recession called a
depression. When the economy bounces
back, more people are hired, and demand
increases. This pattern of ups and downs
in the economy is called a business cycle.
3
POLITICAL CARTOON
The economy was slow to recover
after the crash in 1929. This period,
the Great Depression, had several
causes. One was overproduction of
goods as the market was shrinking.
Other factors were the uneven division
of wealth and limited world trade.
HOOVER’S REACTION President
Hoover knew that people needed help.
He did not believe, however, that it
was the role of the federal government
to provide direct relief. He did
implement some new programs to
help banks and other institutions
recover. In 1932 the Bonus Army
camped in Washington, D.C. They
were veterans who wanted early
payment of military bonuses. Hoover
sent U.S. troops to evict them. When
several people were killed, the public
was outraged.
“Blame It on Hoover”
Presidents can affect the economy to some degree
through their policies. During the Great Depression,
President Hoover was blamed for the financial
crisis. Political cartoons like this one gave voice to
those Americans who thought Hoover could have
prevented the crisis or could have brought it to an
end quickly through government programs.
ANALYSIS
SKILL
How does the cartoonist show
Hoover reacting to the crisis?
4
ELECTION OF 1932
The Republican Party nominated Herbert
Hoover again in 1932. However, much of
the public had lost confidence in him. The
Democratic nominee was Franklin D.
Roosevelt. As governor, he had worked
to provide aid to citizens of New York. In
particular, he had provided aid to farmers.
Roosevelt promised a “new deal” for the
American people. He won the election in a
landslide.
When did he live? 1882–1945
Where did he live? Roosevelt lived much of his life in New York State,
where he served in the state senate and as governor. He also lived in
“The only thing we
Washington, D.C., while he was serving as assistant secretary of the
navy and later as president. He had a second home in Warm Springs, have to fear
Georgia.
is fear itself,
What did he do? He began the New Deal, a set of
government programs designed to help the country survive
and recover from the Great Depression. He gave many
Americans hope for the future when he spoke to them in his
fireside chats. Roosevelt also led the country through World
War II. His support for strong ties between the Allied
countries helped the Allies achieve victory.
nameless,
unreasoning,
unjustified terror.”
-Franklin Roosevelt, 1933
inaugural5address
BUILDING BACKGROUND
• When he ran for president in 1932, Franklin D.
Roosevelt promised to provide relief to people
suffering from the Depression. Even before he
took office, Roosevelt began making plans with
his Brain Trust, a group of expert advisers.
People endured the harsh winter of 1932–1933,
looking forward to Roosevelt’s inauguration.
6
THE HUNDRED DAYS
Roosevelt told Americans that economic
recovery was possible. He called Congress into
a special session, known as the Hundred Days.
They created the New Deal, programs
developed by Roosevelt and Congress to aid
economic recovery.
One program was the Emergency Banking
Relief Act. It was passed to restore confidence
in banks. The president told people about it in
his first fireside chat, which were radio
addresses in which Roosevelt spoke directly to
the public. Other programs put people to work
on public projects, such as roads, airports, and
parks. The Tennessee Valley Authority (TVA)
hired people to build dams that provided
electricity to poor communities. Frances
Perkins, Roosevelt’s Secretary of Labor, the
first female cabinet member, helped pass the
National Industry Recovery Act to help
businesses.
7
Primary Source
RADIO BROADCAST
Fireside Chats
An American family sits around the radio
listening to President Roosevelt answer his
critics in his first fireside chat.
“There is an element in . . . our financial
system more important than currency
[money], more important than gold, and that
is the confidence of the people. Confidence
and courage are the essentials of success in
carrying out our plan. You people must have
faith; you must not be stampeded by rumors
or guesses. Let us unite in banishing [driving
away] fear. We have provided the machinery
to restore our financial system; it is up to you
to support and make it work. It is your
problem no less than it is mine. Together we
cannot fail.”
ANALYSIS
SKILL
According to Roosevelt, how should the
American people help the government
deal with the banking crisis?
8
THE NEW DEAL CONTINUES
The Second New Deal was introduced in
1934. The Works Progress Administration
(WPA) employed more than 8.5 million
people. Eleanor Roosevelt, the first Lady
in Roosevelt administration who supported
New Deal supported National Youth
Administration programs for young people.
Congress passed the Social Security Act
to help children and the elderly, disabled,
and unemployed who could not provide for
themselves.
The New Deal included new labor laws.
The Congress of Industrial
Organizations (CIO) was a union with
many skilled and unskilled workers. It
welcomed women, immigrants, and
minority groups. The CIO used a sit-down
strike to keep General Motors from
replacing strikers. A sit-down strike was a
strategy in which striking workers remained
inside the workplace This success helped
the unions grow stronger.
9
Selected New Deal Programs
Program Purpose
Emergency Banking Relief Act Gave the executive branch the right to regulate banks
Farm Credit Act (FCA) Refinanced loans to keep farmers from losing their land
Civilian Conservation Corps (CCC) Created jobs for single, unemployed young men
Agricultural Adjustment Act (AAA) Paid farmers to grow less (declared unconstitutional)
Tennessee Valley Authority (TVA) Built dams and power plants in the Tennessee Valley
Federal Deposit Insurance Corporation (FDIC) Guaranteed deposits in individual bank
accounts
National Industrial Recovery Act (NIRA) Established fair competition laws (declared
unconstitutional)
Civil Works Administration (CWA) Provided jobs for the unemployed
Works Progress Administration (WPA) Created jobs in construction, research, and the arts
National Youth Administration (NYA) Provided part-time jobs to students
National Labor Relations Act (Wagner Act) Recognized unions’ right to bargain collectively
Social Security Act Provided government aid to the retired and unemployed
10
CLASHES WITH THE COURT
Roosevelt decided to propose a plan for
reorganizing the federal judiciary that was
soon to be labeled the “court-packing”
bill. This bill would allow the president to
appoint a new Supreme Court justice for
every justice who was 70 years old or
older. Roosevelt would be able to appoint
six new justices immediately.
Roosevelt’s judiciary plan drew harsh
criticism from Congress and the public.
Critics charged that Roosevelt was trying
to change the balance of power so
carefully defined in the U.S. Constitution.
After a heated debate, Congress rejected
the bill. The Supreme Court, however, did
not overturn any more New Deal
legislation. Roosevelt eventually had the
opportunity to nominate nine new Supreme
Court justices to replace those who had
retired or died.
11
Primary Source
POLITICAL CARTOON
“Blame It on Hoover”
Historians on the left have denounced
the New Deal as a conservative
phenomenon that let slip the opportunity
to radically reform capitalism. Since the
1960s, "New Left" historians have been
among the New Deal's harsh critics. New
Left historian Barton J. Bernstein, in a
1968 essay, compiled a chronicle of
missed opportunities and inadequate
responses to problems. The New Deal
may have saved capitalism from itself,
Bernstein charged, but it had failed to
help—and in many cases actually
harmed—those groups most in need of
assistance.
FDR already has too much power & demands more.
ANALYSIS
SKILL
According to the cartoon, what do members in
Congress feel about FDR?
12
THE DUST BOWL
American farmers were already having hard times
before the Great Depression. Then the situation
got worse. In the early 1930s, a severe drought hit
the Great Plains. In the Dust Bowl region, topsoil
blew away in the Great Plains causing extreme
drought and dust storms. Farmers could not grow
crops; many could not pay their mortgages and
lost their farms. Although several New Deal
programs tried to help farmers, they came too late
for most. About 2.5 million people left the Great
Plains. Many of them drove to California to look for
jobs. They often found that there were already too
many workers.
13
HARD TIMES
During the Great Depression, many
families had to split up as people looked for
work in different places. Children dropped
out of school to help support their families.
The Great Depression was especially hard
on minority groups. Many faced
discrimination and lost jobs to unemployed
white workers. But some found jobs
through relief programs. Several
African American leaders, including Mary
McLeod Bethune, advised the president.
They became known as the Black Cabinet.
Eleanor Roosevelt was a strong advocate
of equal rights. She resigned from the
Daughters of the American Revolution
when they refused to rent a hall to African
American singer Marian Anderson.
14
Primary Source
Primary Source
PERSONAL ACCOUNT
PHOTOGRAPH
The Dust Bowl
Migrant Mother
Lawrence Svobida was a Kansas wheat farmer
who saw his life’s work destroyed in the 1930s.
“When I knew that my crop was irrevocably [forever] gone
I experienced a deathly feeling which, I hope, can affect a
man only once in a lifetime. My dreams and ambitions . . .
and my shattered ideals seemed gone forever. The very
desire to make a success of my life was gone, the spirit and
urge to strive were dead within me. Fate had dealt me a
cruel blow above which I felt utterly unable to rise.
ANALYSIS
SKILL
How did Svobida feel after his crop was
destroyed?
”
Photographer Dorothea Lange gained fame in the
1930s for documenting the conditions of the poor during
the Depression. Lange took this famous photograph of
a widowed migrant worker and two of her seven
children. The woman worked in the pea fields of
Nipomo, California. Her family survived by eating frozen
peas and birds the children caught. The woman had just
sold her car’s tires for money to buy food.
ANALYSIS
SKILL
How would you describe the expression on the
face of the woman in the photograph?
15
DEPRESSION-ERA CULTURE
In 1935 the Works Progress Administration put
many artists, writers, and actors to work.
Musicians went to rural areas to record
traditional music. They preserved culture that
might have been lost. Writers interviewed
Americans from many different backgrounds.
They kept a record of their lives and memories.
John Steinbeck was deeply affected by the
hardships of the Depression. He wrote novels
about depression life. Folksinger Woody
Guthrie crossed the country, writing and
singing songs of loss and struggle. At the same
time, swing music became popular because it
helped people forget about their troubles.
Movies were yet another form of escape.
Woody
Guthrie
16
EFFECTS OF THE NEW DEAL
Today, people still disagree about the effects of the New Deal. Critics argue that
recovery did not occur until the U.S. entered World War II. Supporters say
it gave Americans hope in a time of crisis. The New Deal did expand the role of the
federal government. Some of its programs, such as Social Security and the Federal
Deposit Insurance Corporation, are still important today.
Causes and Effects
of the New Deal
Causes
• Stock market crash
• Banking crisis
• Soaring
unemployment
• Farmers’ troubles
• Widespread poverty
Effects
• Expanded role of federal
government
• Created major programs
such as Social Security
and the FDIC
• Provided hope and relief
to many Americans but
did not end the Great
Depression
17
National Youth
Administration
A New Deal program called the
National Youth Administration
(NYA) helped thousands of young
people continue their education
while working to support their
families. Eleanor Roosevelt was a
strong supporter of the program,
which aimed to teach young
people the skills they would need
to remain part of the workforce.
How did the NYA demonstrate
the ideals of the New Deal?
How did the NYA
demonstrate
the ideals of the New
Deal?
18
MAIN IDEAS OF THE GREAT DEPRESSION
1. The U.S. stock market crashed in 1929.
2. The economy collapsed after the stock market crash.
3. Many Americans were dissatisfied with Hoover’s reaction to economic conditions.
4. Roosevelt defeated Hoover in the election of 1932.
5. Congress approved many new programs during the Hundred Days.
6. Critics expressed concerns about the New Deal.
7. New Deal programs continued through Roosevelt’s first term in what became
known as the Second New Deal.
8. Roosevelt clashed with the Supreme Court over the New Deal.
9. Parts of the Great Plains came to be known as the Dust Bowl as severe drought
destroyed farms there.
10. Families all over the United States faced hard times.
11. Depression-era culture helped lift people’s spirits.
12. The New Deal had lasting effects on American society.
19
20