THE GREAT
DEPRESSION
BEGINS
Photos by photographer Dorothea Lange
THE NATION’S SICK
ECONOMY
As the 1920s advanced, serious problems threatened
the economy while
Important industries struggled, including:
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Agriculture
Railroads
Textiles
Steel
Mining
Lumber
Automobiles
Housing
Consumer goods
FARMERS STRUGGLE
• No industry suffered as
much as agriculture
• During World War I
European demand for
American crops soared
• After the war demand
plummeted
• Farmers increased
production sending
prices further downward
Photo by Dorothea Lange
CONSUMER SPENDING
DOWN
• By the late 1920s,
American consumers
were buying less
• Rising prices, stagnant
wages and overbuying on
credit were to blame
• Most people did not have
the money to buy the
flood of goods factories
produced
GAP BETWEEN RICH &
POOR
Photo by Dorothea Lange
• The gap between rich
and poor widened –
income disparity
• The wealthiest 1% saw
their income rise 75%
• The rest of the
population saw an
increase of only 9%
• More than 70% of
American families
earned less than $2500
per year
HOOVER WINS
1928 ELECTION
• Republican Herbert
Hoover ran against
Democrat Alfred E.
Smith in the 1928
election
• Hoover emphasized
years of prosperity
under Republican
administrations
• Hoover won an
overwhelming victory
Young Hoover supporter in 1928
THE 1929 CRASH
• In September the Stock Market
had some unusual up & down
movements
• On October 24, the market took
a plunge . . .the worst was yet to
come
• On October 29, now known as
Black Tuesday, the bottom fell
out
• 16.4 million shares were sold
that day – prices plummeted
• People who had bought on
margin (credit) were stuck with
huge debts
THE GREAT DEPRESSION
Alabama family, 1938 Photo by Walter Evans
• The Stock Market crash
signaled the beginning of
the Great Depression
• The Great Depression is
generally defined as the
period from 1929 – 1940
in which the economy
plummeted and
unemployment
skyrocketed
• The crash alone did not
cause the Great
Depression, but it
hastened its arrival
FINANCIAL COLLAPSE
• After the crash, many
Americans panicked and
withdrew their money
from banks
• Banks had invested in
the Stock Market and lost
money
• In 1929- 600 banks fail
• By 1933 – 11,000 of the
25,000 banks nationwide
had collapsed
Bank run 1929, Los Angeles
• The U.S. was not the only
country gripped by the
Great Depression
• Much of Europe suffered
throughout the 1920s
• In 1930, Congress
passed the toughest tariff
in U.S. history called the
Hawley- Smoot Tariff
• It was meant to protect
U.S. industry yet had the
opposite effect
• Other countries enacted
their own tariffs and soon
world trade fell 40%
HAWLEYSMOOT TARIFF
HARDSHIPS DURING
DEPRESSION
• The Great Depression
brought hardship,
homelessness, and
hunger to millions
• Across the country,
people lost their jobs,
and their homes
• Some built makeshifts
shacks out of scrap
material
• Hoovervilles - Before
long whole shantytowns
called Hoovervilles to
mock the president
sprung up
SOUP KITCHENS
Unemployed men wait in line for food
– this particular soup kitchen was
sponsored by Al Capone
• One of the common
features of urban
areas during the era
were soup kitchens
and bread lines
• Soup kitchens and
bread lines offered
free or low-cost food
for people
CONDITIONS
FOR MINORITIES
• Conditions for African
Americans and Latinos
were especially difficult
• Unemployment was the
highest among
minorities and their pay
was the lowest
• Increased violence (24
lynchings in 1933 alone)
marred the 1930s
• Many Mexicans were
“encouraged” to return
to their homeland
As conditions deteriorated,
violence against blacks
increased
RURAL LIFE DURING THE
DEPRESSION
Between 1929-1932 almost ½ million
farmers lost their land
• While the Depression
was difficult for
everyone, farmers did
have one advantage; they
could grow food for their
families
• Thousands of farmers,
however, lost their land
• Many turned to tenant
farming and barely
scraped out a living
THE DUST BOWL
• A severe drought gripped
the Great Plains in the
early 1930s
• Wind scattered the
topsoil, exposing sand
and grit
• The resulting dust
traveled hundreds of
miles
• One storm in 1934 picked
up millions of tons of
dust from the Plains an
carried it to the East
Coast
Kansas Farmer, 1933
Dust storm approaching Stratford, Texas - 1934
Storm approaching Elkhart,
Kansas in 1937
Dust buried cars and wagons in South Dakota
in 1936
Okies
Boy covers his mouth to avoid
dust, 1935
• Kansas, Oklahoma,
Texas, New Mexico,
and Colorado were
the hardest hit
regions during the
Dust Bowl
• Many farmers
migrated to
California and other
Pacific Coast states
Photographer Dorothea Lange captures a family
headed west to escape the dust storms
• The 1930s created the term
“hoboes” to describe poor
drifters
• 300,000 transients – or
hoboes – hitched rides
around the country on
trains and slept under
bridges (thousands were
teenagers)
• Injuries and death was
common on railroad
property; over 50,000
people were hurt or killed
HOBOES
TRAVEL
AMERICA
HOOVER
STRUGGLES WITH
THE DEPRESSION
• After the stock market
crash, President
Hoover tried to
reassure Americans
• He said, “Any lack of
confidence in the
economic future . . . Is
foolish”
• He recommended
business as usual
Herbert
Hoover
HOOVER’S PHILOSOPHY
Hoover believed it was the individuals job to
take care of themselves, not the governments
• Hoover was not quick to
react to the depression
• He believed in “rugged
individualism” – the idea
that people succeed
through their own efforts
• People should take care of
themselves, not depend on
governmental hand-outs
• He said people should
“pull themselves up by
their bootstraps”
HOOVER’S SUCCESSFUL
DAM PROJECT
• Hoover successfully
organized and authorized
the construction of the
Boulder Dam (Now called
the Hoover Dam)
• The $700 million project
was the world’s tallest
dam (726 feet) and the
second largest (1,244 feet
long)
• The dam currently
provides electricity, flood
control and water for 7
western states
Any dam questions?
HOOVER TAKES ACTION:
TOO LITTLE TOO LATE
Hoover’s flurry of activity came
too late to save the economy or
his job
• Hoover gradually softened his
position on government
intervention in the economy
• He created the Federal Farm
Board to help farmers
• He also created the National
Credit Organization that
helped smaller banks
• His Federal Home Loan Bank
Act and Reconstruction
Finance Corp were two
measures enacted to protect
people’s homes and
businesses
Hoover had little chance to be re-elected in 1932
A NEW DEAL FIGHTS THE
DEPRESSION
• The 1932 presidential
election showed that
Americans were clearly
ready for a change
• Republicans renominated Hoover
despite his low approval
rating
• The Democrats
nominated Franklin
Delano Roosevelt
FDR LAUNCHES NEW
DEAL
• FDR promised a “new
deal” for the American
people
• He took office with a
flurry of activity known
as “The Hundred
Days”
• The 100 Days lasted
from March to June
1933
CONGRESS
GETS BUSY
• FDR’s philosophy was to
get people help and work
through “deficit” spending
• During the 100 Days,
Congress passed more
than 15 major pieces of
legislation that significantly
expanded government’s
role in the nation’s
economy and welfare
TO DO LIST: #1HELP BANKS
• First order of business was to get
the banking system in order
• On March 5, one day after taking
office, FDR declared a bank
holiday
• He persuaded Congress to pass
the Emergency Relief Act, which
authorized the Treasury
Department to inspect the
nation’s banks
AMERICANS GAIN
CONFIDENCE IN BANKS
• Next, FDR passed the
Glass-Steagall Act which
established the Federal
Deposit Insurance
Corporation
• The FDIC insured
account holders up to
$5,000 and set strict
standards for banks to
follow (today = $100,000)
MORE 100 DAYS ACTIVITY
• Federal Securities Act:
Required stock info to be
accurate and truthful
• Agricultural Adjustment
Act: (AAA) Raised crop
prices by lowering
production
• Tennessee Valley
Authority: (TVA) Focused
on direct relief to hard hit
area– created ambitious
dam projects
T
V
A
ALPHABET AGENCIES
• CCC – Civilian
Conservation Corps put
young men to work
• Men ages 18 to 25 worked
building roads, parks,
planting trees (200 million
trees in Dust Bowl areas)
• By 1942 three million men
worked for the CCC
ALPHABET
AGENCIES
PWA workers construct a
public building in
• PWA – Public Works
Administration was
part of the NIRA
(National Industrial
Recovery Act)
• The PWA provided
money to states to
construct schools and
community buildings
ALPHABET
AGENCIES
• CWA – Civil Works
Administration built
40,000 schools and
provided salaries for
50,000 teachers in rural
America
• Also built 500,000
miles of roads
CWA School in
ALPHABET
AGENCIES
Repaired business in Childersburg,
• FHA – Federal
Housing
Administration
provided home
loans, home
mortgages and
repairs
ALPHABET AGENCIES
• FERA – Federal
Emergency Relief
Agency provided
$500 million in
direct relief to the
neediest
Americans
Citizens wait outside a
FERA in Calipatria, CA for
SUPREME COURT REACTS
The Supreme Court -1935
• By the mid-1930s, the
Supreme Court struck
down the NIRA as
unconstitutional (citing too
much government control
over industry)
• The Court also struck
down the AAA on the
grounds that agricultural
was a local matter -- not a
federal matter
FDR REGAINS CONTROL OVER
SUPREME COURT
• From the mid to late
1930s, FDR was able
to appoint 7 new
judges to the
Supreme Court, thus
assuring that his
programs would
carry on unabated
THE SECOND NEW DEAL
• Although the economy
had improved during
FDR’s first term (19321936), the gains were
not as great as
expected
• Unemployment
remained high and
production still lagged
THE SECOND
HUNDRED DAYS
• FDR launches the “Second New Deal”
also called the “Second Hundred Days”
• First priority was the farmers – FDR reinvigorated the
AAA which provided aid for migrants, sharecroppers,
and poor farmers
• FDR authorized more than $1 billion to help tenant
farmers become landowners
Arkansas
Tenant
Farmers,193
6
WORKS PROGRESS
ADMINISTRATION
• Helping urban workers was
critical to the success of the
Second Hundred Days
• The WPA set out to create as
many jobs as possible as
quickly as possible
• Between 1935-1943, the WPA
spent $11 billion to give jobs to
8 million workers
WPA BUILDS AMERICA
The Davis Street School Extension in Atlanta under
construction as part of the Works Progress
Administration Program, November 2, 1936
• WPA
workers
built 850 airports,
651,000 miles of
roads and streets,
and 125,000 public
buildings
• The WPA also hired
artists, writers and
photographers to
create art
NATIONAL YOUTH
ADMINISTRATION
• The National Youth
Administration (NYA) was
created to provide
education, jobs and
recreation for young
people
• Getting young people off
the streets and into
schools and jobs was a
high priority for the NYA
IMPROVING LABOR
RELATIONS
The NLRA was also called
the Wagner Act
• In the Second New Deal
FDR helped pass the
National Labor
Relations Act (NLRA)
• This legislation
protected workers,
ensured collective
bargaining, and
preserved the right to
unionize
CONGRESS PROTECTS
WORKERS
• In 1938, Congress
passed the Fair
Labor Standards
Act which set
maximum hours at
44 per week and
minimum wage at
25 cents per hour
SOCIAL SECURITY
ACT
• One of the most important
achievements of the New
Deal era was the creation of
the Social Security System
• The Social Security Act,
passed in 1935, had 3 parts:
 Old-Age Pension
 Unemployment
compensation
 Aid to families with
dependent children &
disabled (welfare)
NEW DEAL AFFECTS
MANY GROUPS
• First Lady Eleanor
Roosevelt helped women
gain higher political
positions during the New
Deal
• Eleanor was influential in
her role as advisor to the
president
• Frances Perkins became
America’s first female
cabinet member (Labor)
Eleano
r&
Frankli
n
AFRICAN AMERICANS
DURING THE NEW DEAL
• The 1930s
witnessed a
growth of activism for
black Americans
• A. Philip Randolph
became head of the
nation’s first all-black
union – the Brotherhood
of Sleeping Car Porters
AFRICAN AMERICANS GAIN
POLITICAL POSITIONS
FDR appointed
over 100 African Americans
to positions within the
government
• Mary McLeod Bethune
headed the division of
Negro Affairs of the NYA
• Despite these gains, FDR
was never fully committed
to Civil Rights
Bethun
NATIVE AMERICANS MAKE
GAINS
• Native Americans made
advances during the 1920s
& 1930s
• Full citizenship granted in
1924
• The Reorganization Act of
1934 gave Natives more
ownership of reservations
• Policy was moving away
from assimilation towards
autonomy
Current locations of
Native American
reservations
FDR WINS IN 1936
. . . AGAIN
• FDR had wide appeal in
the United States,
especially in urban
areas
• African Americans,
Jews, Catholics and
immigrants all
supported the popular
president
FDR & Eleanor
ROOSEVELT (RED) VS. LANDON (BLUE) 1936 ELECTION
ROOSEVELT’S
FIRESIDE CHATS
• FDR communicated
to Americans via
radio
• His frequent
“Fireside Chats” kept
Americans abreast of
the government’s
efforts during the
Depression
THE IMPACT OF THE NEW
DEAL
• Over time, opinions about
the merits of the New Deal
and FDR have ranged from
harsh criticism to high praise
– usually along partisan lines
• Conservatives felt FDR made
government too large and
too powerful
• Liberals countered that FDR
socialized the economy
because Americans needed
help
LEGACIES OF THE NEW
DEAL
• FDIC – banking insurance
critical to sound economy
• Deficit spending has
became a normal feature
of government
• Social Security is a key
legacy of the New Deal in
that the Feds have
assumed a greater
responsibility for the
social welfare of citizens
since 1935