The Great Depression,
1929–1941
“The United States is nearer
to the final triumph over
poverty than ever before in
the history of any land.”
Herbert Hoover, 1928
Everyone Can Be Rich!!!
“If a man saves $15 a week, and invests in good common
stocks, and allows the dividends and rights to accumulate,
at the end of twenty years he will have at least $80,000 and
an income of around $400 a month. He will be rich.”
-John J. Raskob, Democratic National
Committee Chairman, 1929
The stock market became an attractive gamble!
 dramatic difference between the return on a savings
account and what could be made in the stock market
Signs of Economic Trouble
Chapter 26, Section 1
Seven months after Herbert Hoover’s inauguration in 1929,
the stock market crashed. It was the beginning of the worst
economic depression in United States history. How did it
happen?
Early signs of trouble
– Many Americans had not shared in the prosperity of the
1920s—textile workers and coal miners, for example.
– Farmers faced hard times. Over-production kept farm
prices low.
– In the mid-1920s, the economy began to slow down, but
no one noticed because at that time the government did
not keep detailed statistics.
Signs of Economic Trouble
Chapter 26, Section 1
The Crash
•
•
•
•
By August 1929, some investors worried that
the boom might end, so they began selling
their stocks.
Other investors noticed the sell-off and began
to sell their stocks, too. Stock prices began to
fall.
Many investors had bought stocks on margin,
that is, they had put down only part of the
cost of the stock when they bought it and
borrowed the rest from their stockbrokers.
With prices falling, brokers asked investors to
pay what they owed. Those who could not
pay had to sell their stock to get money. Panic
set in as desperate investors tried to sell
millions of shares. Stock prices fell further.
• When the stock market
opened on Tuesday, October
29, a wild stampede of selling
took place.
• Stock prices plunged. Stocks
that had been valuable were
now suddenly worthless.
• The day came to be known as
Black Tuesday.
Signs of Economic Trouble
Chapter 26, Section 1
The period of economic hard times that followed the crash is known
as the Great Depression. It lasted from 1929 to 1941. The stock
market crash did not cause the Great Depression, but it did shake
people’s confidence in the economy. What had happened to the
prosperity of the 1920s?
Overproduction
Farms and factories produced vast amounts of goods in
the 1920s, but wages did not keep up with prices. Thus,
workers could not afford to buy many goods. As orders
slowed, factories closed or laid off workers.
Weakness in the
banking system
• In the 1920s, banks made unwise loans. For example,
they lent money to people to buy stocks. When the
stock market crashed, borrowers could not repay
loans. Without money from the loans, banks could not
give depositors their money back if they asked for it.
• Between 1929 and 1932, more than 5,000 banks
closed.
Signs of Economic Trouble
Chapter 26, Section 1
Each
economic
disaster led
to others
• The stock market crash ruined many
investors. Without money from
investors, businesses could not grow
and expand.
• Businesses could not borrow from
banks because banks were in trouble.
• As factories cut back on production,
they cut wages and laid off workers.
Unemployed workers had little money
to spend, so demand for factory goods
fell further. Many businesses went
bankrupt—they were unable to pay their
debts—so even more people lost jobs.
• The Great Depression led to worldwide
economic crisis. American banks had
loaned money worldwide. When they
stopped making loans and demanded
repayment of loans, banks in other
countries began to fail
Chapter 26, Section 1
Hard Times
Unemployment 1929–1941
Chapter 26, Section 1
Hard Times
•
In the 1930s, many Americans no longer
lived on farms. Millions lived in cities and
worked in factories. When factories closed,
the jobless had no money for food and no
land on which to grow it.
•
As the depression spread, unemployment
soared. By the early 1930s, one in every
four workers was jobless. Others worked
short hours or took pay cuts.
– On city streets, people sold apples and
pencils, shined shoes, begged for
money, and picked through garbage
dumps.
Hard Times
• Marriage and birthrates dropped.
• Some families split up. Fathers,
and even children as young as 13
or 14 years old, left home.
• Jobless men and women drifted
from town to town looking for
work. Some “rode the rails,”
living in railroad cars.
• People shared what they had.
Some families doubled up, taking
in relatives.
• Jobless people suffered from the
feeling that they had failed.
President Hoover Responses
Chapter 26, Section 1
•
President Hoover was concerned about the
suffering, but he believed that the
government should not become directly
involved in ending the crisis, or it might
become too powerful. He thought it was up
to businesses to end the downslide.
– At first, Hoover opposed government
relief programs—programs to help the
needy. He called on business leaders to
provide jobs, instead.
– Hoover also called on private charities
to help. Churches set up soup kitchens,
places where the hungry could get a
free meal.
Hoover Responds
As conditions grew worse, Hoover
set up public works programs to
provide jobs. (no direct relief)
Public works are projects built by the
government for public use, such as
schools, dams, and highways.
Hoover asked Congress to approve
the Reconstruction Finance
Corporation (RFC), which loaned
money to banks, railroads, and
insurance companies. Hoover hoped
that saving these businesses would
save jobs. (no direct relief)
President Hoovers Responds
Chapter 26, Section 1
• Hoover did more to reverse
hard times than any previous
President, still his efforts were
too little too late.
• Many people blamed the
President for doing too little.
They gave the name
Hoovervilles to the shacks of
the homeless.
Hoover Responds
Some World War I veterans took action to help
themselves.
After the war, Congress had voted to give
veterans a bonus, or sum of money on top of
their wages, to be paid in 1945.
In 1932, more than 20,000 jobless veterans
marched to Washington to demand the bonus
right away. This Bonus Army camped in a tent
city along the Potomac River.
After the Senate rejected a bill that called for
paying the bonuses immediately, local police
tried to force the veterans to leave. Four people
were killed. Finally the army moved into the
camp and burned it to the ground. After the
attack on the Bonus Army, Hoover lost what
little public support he had left.
Section2
The Hundred Days
Chapter 26, Section 2
Franklin D. Roosevelt
Who was Franklin D. Roosevelt?
•
Franklin Roosevelt, known as FDR,
came from a wealthy family. In 1905,
he married Anna Eleanor Roosevelt.
•
During World War I, FDR had served as
assistant secretary of the navy. He
later became governor of New York.
•
In 1921, Roosevelt was stricken with a
severe case of polio, a disease caused
by a virus. His legs were totally
paralyzed.
•
In 1932, the Democrats made him
their presidential candidate.
.
What did Roosevelt say he
would do as President?
Roosevelt declared: “I pledge
myself to a new deal for the
American people.” He did not spell
out what he meant, but he struck a
hopeful note.
In campaign speeches, he promised
to help the jobless, poor farmers,
and the elderly.
Voters responded to his confident
manner and personal charm.
Election of 1932
Routing of the Bonus Army was
the last nail in Hoover’s political
coffin
When Hoover tried to campaign
he was often booed
On his way to vote on Election
Day people threw stink bombs
at his car
Franklin Delano Roosevelt won
the election in a landslide
On his inauguration day,
Roosevelt spoke with
optimism. Then, he issued
a call to action. People
welcomed his energetic
approach.
newsreel
Chapter 26, Section 2
The Hundred Days
The new President moved forward
on many fronts:
He urged his staff to “take a
method and try it. If it fails, admit
it and try another. But above all try
something.”
The President sent many bills to
Congress during his first three
months in office.
Between March 9 and June 16,
1933, Congress passed 15 major
new laws. This period is called the
Hundred Days.
Roosevelt’s first challenge was
the nation’s crumbling banking
system
On his second day in office, he
declared a bank holiday. He
closed every bank in the
country for four days.
He then asked Congress to
pass the Emergency Banking
Relief Act. Under this act, only
banks with enough funds to
meet depositors’ demands
could reopen. The others had
to stay closed.
Chapter 26, Section 2
The Hundred Days
– Roosevelt spoke to Americans by
radio. The President told the
people, “it is safer to keep your
money in a reopened bank than
under your mattress.” People
began to return their money to
banks.
• Altogether, Roosevelt made 30
radio speeches while in office. He
called them fireside chats
because he spoke from a chair
near a fireplace in the White
House.
Roosevelt’s program for economic
recovery was called the New Deal. New
Deal programs had three main goals: relief
for the jobless, plans for economic
recovery, and reforms to prevent another
depression.
The President’s New Deal programs
changed the relationship between
government and the economy. From then
on the federal government took an active
role in managing the American Economy.
New Deal Reforms to Prevent Another Depression
Chapter 26, Section 2
The New Deal aimed to prevent another depression by reforming
the economic system.
Truth-inSecurities Act
This act was designed to end the risky buying and
selling of stocks in hopes of making a quick profit.
Federal Deposit
Insurance
Corporation
(FDIC)
The FDIC insured savings accounts in banks approved
by the government. If a bank insured by the FDIC
failed, the government would make sure depositors
received their money.
Section 3
New Deal Programs
Chapter 26, Section 3
Program
The New Deal
Initials
Begun
Purpose
Civilian Conservation Corps
CCC
1933
Provided jobs for young men to plant trees,
build bridges and parks, and set up floodcontrol projects
Tennessee Valley Authority
TVA
1933
Built dams to provide cheap electric power
to seven southern states; set up schools and
health centers
Federal Emergency Relief
Administration
FERA
1933
Gave relief to unemployed and needy
Agricultural Adjustment
Administration
AAA
1933
Paid farmers not to grow certain crops
National Recovery
Administration
NRA
1933
Enforced codes that regulated wages, prices,
and working conditions
Public Works
Administration
PWA
1933
Built ports, schools, and aircraft carriers
The New Deal, continued
Chapter 26, Section 3
Program
Initials
Begun
Purpose
Federal Deposit Insurance
Corporation
FDIC
1933
Insured savings accounts in banks
approved by the government
Rural Electrification
Administration
REA
1935
Loaned money to extend electricity to
rural areas
Works Progress
Administraion
WPA
1935
Employed men and women to build
hospitals, schools, parks, and airports;
employed artists, writers, and
musicians
Social Security Act
SSA
1935
Set up a system of pensions for the
elderly, unemployed, and people with
disabilities
Chapter 26, Section 3
Critics of the New Deal
By 1934, New Deal programs had restored hope, but they had not
brought back prosperity. Some people believed that government was
doing too much. Others believed that it was doing too little.
Senator Huey
Long of
Louisiana
• Long believed that the New Deal had not gone far enough
to help the poor. He called for heavy taxes on the rich to
provide every American family with a house, a car, and a
decent annual income.
• People cheered. They overlooked the fact that he had
used bribery and threats to win political power.
Dr. Francis
Townsend
• Townsend’s plan was to give everyone over age 60 a
pension of $200 a month. A pension is a sum of money
paid to people on a regular basis after they retire.
• People receiving the pension would be required to retire
to free up a job for someone else and spend the pension
money at once to boost the economy.
FDR and the Supreme Court
Chapter 26, Section 3
• In 1935, the Supreme Court
ruled that the National
Industrial Recovery Act was
unconstitutional.
• The Court said it gave too much
power to the President. A year
later, the Court struck down the
Agricultural Adjustment Act.
Then, the Court overturned
eight other New Deal laws.
Roosevelt’s plan for the
Court:
After his inauguration in
January 1937, Roosevelt put
forth a plan to enlarge the
federal courts.
He called for raising the
number of Supreme Court
Justices from 9 to 15.
This would make it possible
for him to appoint six new
Justices who supported his
programs.
Reaction to Roosevelt’s
plan:
Both supporters and critics
of the New Deal accused
him of trying to “pack” the
Court with Justices who
supported his views.
They said his move
threatened the principle of
separation of powers.
Roosevelt fought for his
plan for six months. Finally,
he withdrew his proposal.
The New Deal Balance Sheet
Chapter 26, Section 3
Arguments Against the New Deal
• The federal government grew in size and power. Many people
complained that the government was intruding in people’s lives,
threatening individual freedoms and private property. These
critics called for a return to the policy of laissez faire—the idea
that government should play as small a role as possible in the
economy.
• Critics were alarmed because the government was spending more
than it took in. This practice of deficit spending was creating a
huge increase in the national debt, or the total sum of money the
government owes.
• Other critics said that the New Deal had not achieved its major
goal of ending the depression. Full recovery did not come until
1941, when the United States was about to fight World War II.
The New Deal Balance Sheet
Chapter 26, Section 3
Arguments for the New Deal
• Supporters noted that FDR had steered the nation through the
worst days of the depression. New Deal legislation had ended the
banking crisis, protected farmers, and found work for the jobless.
• Supporters also argued that the government had a responsibility
to use its power to help all of its citizens, not just businesses and
the wealthy.
• Most important, supporters argued that the New Deal had saved
the nation’s democratic system. Elsewhere in the world, people
turned to dictators to lead them out of hard times. Roosevelt
restored the nation’s economic health while preserving its
liberties.
Section 4
The Nation in Hard Times
Chapter 26, Section 4
The Dust Bowl
Chapter 26, Section 4
•
The Dust Bowl
During the 1930s, states from Texas
to the Dakotas suffered a severe
drought. Topsoil dried out. High
winds carried the soil away in
blinding dust storms. The area
became known as the Dust Bowl.
• What caused the Dust
Bowl?
– Years of overgrazing by cattle
and plowing by farmers
destroyed the grasses that once
held the soil in place.
– The drought dried out the soil,
and high winds blew it away.
Who was affected by the dust
storms?
• Hardest hit were poor farmers in
Oklahoma and other Great
Plains states. Hundreds packed
their belongings into cars and
trucks and headed west.
• They became migrant workers—
people who move from one
region to another in search of
work. “Okies”
• Once the migrants reached the
West Coast, they faced a new
hardship—they were not
wanted. Sometimes, angry
crowds blocked the way and
sent the migrants away.
Women in the Depression
Chapter 26, Section 4
• Traditional roles took on
added importance during the
depression. Some women
took in laundry or boarders to
help pay the rent.
• Working women faced special
problems. If jobs were
available, employers hired
men before they would hire
women. The federal
government refused to hire a
woman if her husband had a
job.
Women
• Millions of women
worked to support
themselves and their
families.
• The number of
married women in the
work force increased
by 52 percent.
• Some women workers
went on strike for
better pay when
employers lowered
their wages.
Eleanor Roosevelt
• Eleanor Roosevelt created
a new role for the First
Lady. She toured the
nation as the President’s
“eyes and ears.”
• She used her position to
speak out for women’s
rights, and as an advocate
for the poor.
African Americans Face the
Depression
Chapter 26, Section 4
• When hard times hit, African American
workers were often the first to lose their
jobs. They were often denied public works
jobs, too. Some charities even refused to
serve blacks.
• Eleanor Roosevelt and others close to the
President urged him to improve the
situation of African Americans.
• FDR invited black leaders to the White
House. These unofficial advisers became
known as the Black Cabinet. The President
appointed Mary McLeod Bethune to head
the National Youth Administration’s Division
of Negro Affairs. She was the first African
American to head a government agency.
The Arts During the Depression
Chapter 26, Section 4
Artists portrayed the hardships of depression life. In his 1939 novel The Grapes of
Wrath, John Steinbeck told the story of the Okies streaming over the mountains
trying to find new homes in California.
Painting and
photography
• Thomas Hart Benton painted huge murals of frontier life.
• In American Gothic, Grant Wood painted an Iowa farmer
and his daughter who express the will to survive.
• The government sent out photographers, including
Dorothea Lange and Margaret Bourke-White, to create a
lasting record of American life during the Great Depression.
Radio
• Comedians George Burns and Gracie Allen made people
forget their troubles.
• Daytime radio shows—soap operas—which told stories
of families, became popular.
The Arts During the Depression
Chapter 26, Section 4
Radio
• The most famous radio broadcast took place in 1938. On
Halloween night, Orson Wells presented a “newscast”
based on a science-fiction novel, The War of the Worlds.
Many people mistook the program for real newscast and
frantically sought ways to escape the Martian invasion.
Movies
• To help escape the depression, movies told optimistic
stories of love and success.
• Child star Shirley Temple became hugely popular.
• A popular movie was Walt Disney’s Snow White and the
Seven Dwarfs, the first full-length animated film.
• In 1939, Judy Garland won American hearts in The Wizard of
Oz.
• The most expensively made and most popular movie of the
1930s was Gone With the Wind. It showed the Civil War in a
romantic light. It made people feel that Americans had
survived hard times before. They could do it again.