The Causes of the Great
Depression
What caused the most severe
economic crisis in American
history?
Shaky Stock Market
Triggers a Banking Crisis
• Speculative boom leads to a spectacular
crash
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–
–
–
–
“Black Tuesday”
Bull Market
Bear Market
Buying on Margin
Speculative Bubble
• Banking crisis wipes out people’s savings
– Interest
– Bank Runs
Too Much for Sale, Too
Little to Spend
• Overproduction puts too many goods
in stores
• Widening wealth gap leads to rising
• Underconsumption causes farm
failures, bankruptcies, & layoffs
Government Actions Make a
Bad Situation Worse
• Tight money supply hobbles the
economy
– Federal Reserve System
– Discount Rate
• Tariffs cause trade troubles
– Hawley-Smoot Tariff Act
The Response to the
Economic Collapse
How did the federal government
respond to the economic
collapse that began in 1929?
Ideological Responses to the
Economic Crises
• Conservative Response: Let the economy
stabilize
– Status Quo
– Business Cycle
• Liberal Response: Government must help
– Public Works
– Social Welfare
• Radical Response: Capitalism must go
Hoover’s Conservative
Response to Hard Times
• Cautious Approach: Limited government
intervention
– Hoovervilles
– Reconstruction Finance Corporation (RFC)
– Trickle-Down Theory
• Hoover battles the Bonus Army
• Roosevelt calls for a New Deal: The
election of 1932
• FDR launches the New Deal’s First Hundard
Days
The Human Impact of the
Great Depression
How did ordinary Americans
endure the hardships of the
Great Depression?
A Country in Economic
Distress
• Rising unemployment affects millions
of Americans
– Living Wage
• Farmers lose their farms
– Foreclosure
• Financial woes stress American
families
“Ill-Housed, Ill-Clad, IllNourished”
• Evictions force people out of their
homes
• Millions face hunger and starvation
– Soup Kitchens
– Breadlines
Natural Disasters Intensify
the Suffering
• Black blizzards plague the Great Plains
– Dust Bowl
• Natural Impact of the Drought:
Desertification
• Human Impact of the Drought:
Depopulation
• From Drought to Deluge: The Great Flood
of 1936
Coping With Hard Times
• Struggling to get by
• Looking for help
– Public Assistance
The New Deal and Its
Legacy
How did the expansion of
government during the New Deal
affect the nation?
The First New Deal
• Restructuring the financial sector
• Shoring up the free enterprise system
– National Industrial Recovery Act (NIRA)
• Paying farmers not to plant
– Agricultural Adjustment Administration (AAA)
• Promoting economic development &
homeownership
• Remembering the “Forgotten Man”
– Civilian Conservation Corps (CCC)
– Federal Emergency Relief Administration
(FERA)
Protests and Political
Challenges
• Critics attack the New Deal
– Right Wing
– Left Wing
• Demagogues turn up the heat
– Huey Long
The Second New Deal
• Energizing the country with electricity &
jobs
– Works Progress Administration (WPA)
– Schechter Poultry Corp v. U.S.
• Bill of rights for workers
– Wagner Act
• Economic security for Americans
– Social Security Act
• Battling the Supreme Court
Social and Political Impacts
• Good deal for workers
– Congress of Industrial Organizations (CIO)
• Mixed deal for women
•
•
•
•
– Mary McLeod Bethune
Disappointing deal for African Americans
Better deal for American Indians
Tough deal for Mexican Americans
Emergence of a New Deal Coalition in
politics
Legacy of the New Deal
• Unalienable Rights: Life, liberty and
economic security
– Welfare State
• Larger role for Uncle Sam in people’s
everyday lives
– Deficit Spending