Unit 11 – GREAT DEPRESSION
I. The Nation’s Sick Economy (Perfect
Storm)
 The high flying prosperity of the 20’s
is over. Hard times are coming.
1. Key industries such as railroads,
textiles, and steel slowed down. Low
demand in mining (iron/coal). Coal
collapses. Car making is slowing down.
House making is slowing down.
2. Agriculture overproducing. Too
much supply leads to low prices.
Farmers have taken out loans for more
land/tractors. Congress tries to help by
buying surplus food
3. Americans buying less wants. Many
Americans are living beyond their
means. Credit helps increase people’s
personal debt.
4. During the 20s: The rich got richer
and the poor got poorer
5. Many Americans, who could NOT
afford it, were investing in the stock
market. Americans take out loans from
banks to invest (buying on margin).
With too many people buying, stock
prices became over-speculated
(overvalued)
II. The Stock Market Crashes
 1929 – October 29 – Black Tuesday –
The market collapses. Prices
plummets. Frantic selling. Millions
of shares of worthless stock
available w/ no buyers. Banks want
their money back. Borrower can’t
pay it back. Foreclosure. Investors
lose 30 Billion.
 Stock market crash signals the
beginning of the Great Depression.
Unemployment skyrockets.
 People in panic withdraws their
money from their banks. By 1933 ½
of America’s banks close (11,000).
Millions lose their savings.
 USA economy shrinks from
producing 104 Billion a year to 59
Billion a year. 90,000 businesses go
bankrupt.
 Great Depression sends shockwaves
throughout the world. Europe falls
into a Depression too.
 Harley-Smoot Tariff – USA raises
tariffs to an all time high. World
Trade falls by 1/2
III. Depression and the People
 Many people evicted. Many move
into shantytowns (rows of
abandoned box cars, crates, junk
shacks)
 People were dependent on soup
kitchens and bread lines
 City victims have it harder than the
country folk, but many banks
foreclose on farms.
 A terrible drought hits the Midwest
(KS, NE, OK, TX, SD, ND, MT). To
create farms and irrigation
thousands of tractors tear up
grasslands. This creates huge
amounts of dust. The Midwest will
be nicknamed the Dust Bowl.
 Family stayed together to survive.
 Cities filled with unemployed men,
wondering the streets
(Hobo)(300,000). Welfare does not
exist. Charities/Churches try to
help.
 THERE IS NO JOBS
 Malnutrition in children. Many
schools close. Families are
desperate, so kids go to work in a
sweatshop. Many kids hop on
railcars and run away.
 1929-1939 – 24,000 people die in
some sort of railroad incident
(murder, accidents, etc)
 Suicide rates raise 30% and mental
asylums see their numbers grow by
30%. Crime also grows.
 Many young people must delay
marriage plans and college plans
(can’t afford it)
 People begin to value
thriftiness/frugal. “My goal in
life….one thing….was to never be
poor again.”
 President Herbert Hoover faced
with
 A. Government intervening
to help businesses create jobs
 B. Let the economy fix
itself/no government help
 Hoover chooses B. Very unpopular.
Shantytowns are nicknamed
“Hoovervilles.” Hoover believes
that churches should help and if the
government helps it would weaken a
person’s self respect (moral fiber).
 Hoover does order the construction
of the world’s largest dam. This dam
will provide electricity/water control
to CA and Las Vegas (Hoover Dam)
 15,000 WWI veterans march on
Washington. Gov hasn’t paid their
bonus/pensions. Hoover orders
them to disband/sends in troops to
see to it (WWI veterans are
nicknamed the Bonus Army)
IV. The New Deal
 Franklin D. Roosevelt wins the
presidency in 1932. (FDR)
 FDR offers American a “New Deal”
to combat the Great Depression.
Goals:
 1. Immediate help for the
poor.
 2. Economic Recovery
 3. Financial Reform (make
laws to ensure the Great
Depression never happens
again)
 During FDR’s first 100 days in office
HE/Congress pass 15 major pieces of
legislation. Greatly expands the
role of the Fed. Gov in our economy.
o EMERGENCY BANKING
ACT – gave loans to
banks who needed.
Restores confidence in
banks. Loans
o FDIC – Insures people
savings
o FEDERAL SECURITIES
ACT – Requires
businesses to provide
complete info on how
they are performing.
Liable if they lied. SEC
is established
o PROHIBITION REPEALED
o AGRICULTURE
ADJUSTMENT ACT
(AAA) – pays farmers
NOT to grow food.
Raise price of food.
o TENNESSEE VALLEY
AUTHORITY (TVA) –
feds pay people to build
darns. Creates jobs
o CIVILIAN
CONSERVATION CORPS
(CCC) – men 18-25
builds roads, plants
trees, erosion control.
Tries to prevent
another Dust Bowl.
o NATIONAL INDUSTRIAL
RECOVERY ACT (NIRA) –
money to construct
schools and create
standard prices on
industrial goods.
o THE HOME OWNERS
LOAN CORPORATION –
loans so people
wouldn’t lose their
homes.
 The USA , while recovering, is still
locked in the Great Depression. Still
have high unemployment and low
production.
V. A Second New Deal
 FDR re-elected in 1936
 Institutes another list of fed gov
programs to combat the depression.
o WORKS PROGESS
ADMINISTRATION
(WPA) – gov created
jobs: women make
clothes for the poor,
men build runways
o WAGNER ACT – gov
openly sides with labor
unions. Protects labor
union members from
being fired unfairly.
Establishes a 40 hr work
week and minimum
wage. Age limits on
hiring.
o SOCIAL SECURITY ACT –
gave old age pensions
for retirees/spouses. ½
is invested by the
worker. ½ by the
employers.
 New Deal brings electricity to rural
settings (country)
 40% of farms have
electricity in 1945
 90% of farms have
electricity in 1949.
VI. New Opportunities for Minorities
 New Deal brings women into
government jobs. Francis Perkins
becomes our nation’s first female
cabinet member (Labor). Women
are STILL paid less
 100 African Americans get gov. jobs,
BUT, FDR was not committed to Civil
Rights (refuses sign anti-lynching
laws & poll tax). Most New Deal
programs dealt with hiring poor
whites.
 Latinos stay to work on farms.
Wages fall to 9 cents an hour.
 FDR hires John Collier to head Dept
of Indian Affairs. The American
policy for Indians has been
assimilation (1820s). Collier changes
that policy to autonomy (Indians
govern themselves)
o 1. Reservation lands
belong to entire tribe so
they are never taken
away
o 2. Children on
reservations can be
schooled wherever
o 3. Indians elect their
own people to run the
reservation
 FDR is careful to maintain the
Democratic Party’s image of
“friends with labor.” Labor union
membership skyrockets
 In Chicago, 1937, workers organize a
sit down strike. Here come the
strikebreakers (CPD), 10 people
killed / 84 wounded (Memorial Day
Massacre)
 FDR re-elected again (3rd term)
VII. Culture of the 1930s
 Celebrity love
 65% of people went to the movies.
By 1940 there are 28 million radios
in American homes (90%)
o Gone With the Wind
o Marx Brothers
o Snow White
o Wizard of Oz
o Cagney, Flynn, Gable,
Dietrich (sex symbols)
o Orson Welles (radio)
o Soap Operas
o The Lone Ranger
 To promote the arts (painting) the
FED will pay for artists to go to art
school.
 Woodie Guthrie (possible origins of
country music) sings about people’s
struggles
 John Steinbeck (Grapes of Wrath/Of
Mice and Men)
VIII Impact of the New Deal
 By 1939 FDR scales back the New
Deal (cutting some of its
programs)(lasted 7 years). The
effectiveness of the New Deal is still
argued today.
o “Is Government too
big?”
o “Does Government do
enough?”
o “What is the balance
between capitalism and
socialism?” Too rich or
too poor
 Government presence in the
economy is here to stay (SEC). It
mediates disputes between workers
and employers. Social Security.
New Deal also gave large rural areas
electricity. Build a lot of
roads/bridges/trees/trails, etc
DONE