Great_Depression

B. The Great Depression (1929-1941) 1. What was “The Great Depression”' a. The Great Depression was the most severe economic “slow down” in U.S. history. b. The Great Depression lasted longer than any other economic slow down in U.S. history. 1) “Black Tuesday” – the day of the “stock market crash” on October 29, 1929; Black Tuesday is considered to be the beginning of the Great Depression 2. What caused of the Great Depression' a. International Depression 1) European governments were in debt from WWI. 2) European citizens couldn’t buy American products because they were still trying to recover and rebuild from WWI. b. Overproduction 1) Industrial Overproduction – U.S. factories produced too many goods a) By the end of the “Roaring 20’s, American businesses produced more goods than Americans could buy; b) Eventually factories cut production and fired extra workers which caused the economy to slow down. 2) Agricultural Overproduction – farmers were producing too much a) U.S. farmers grew more food than they could sell. b) Also, competition from European farmers drove down the price of farm goods. c) By the end of the middle of the1920’s U.S. farmers were already in a depression c) Many farmers stopped buying machinery and household goods causing the economy to slow down. c. Installment Buying 1) Many Americans bought goods on credit, but they couldn’t afford to pay the bills for the things they had bought. 2) When the economy slowed down and people lost their jobs they “defaulted” on their loans causing the economy to slow down. a) default – failure to meet and obligation; especially a financial one. (also see bankruptcy) b) bankruptcy- the condition of being unable to pay one’s debts; one’s property is managed or sold to pay those to whom one owes money. d. U.S. Tariff Laws 1) During the Roaring 20’s the U.S. raised tariffs to keep foreign goods them out of U.S. markets. a) “Haley-Smoot Tariff Bill” – this was a tariff law passed in the 1920’s which raised the price of foreign goods in the U.S. b) Americans couldn’t afford to buy foreign goods. 2) Some people believe that U.S. tariff laws helped to create a depression outside the U.S. 3. What was it like during The Great Depression' a. The U.S. economy completely collapsed: 1) U.S. GNP collapsed - U.S. GNP fell from $104 billion in 1929 to $ 58 billion in 1932. 2) The Stock Market collapsed - The average value of shares on the N.Y. Stock Exchange fell from $375 a share in 1929 to $75 a share in 1932. 3) Banks failed and closed all over the U.S. a) So many Americans defaulted on their loans that many banks went bankrupt. b) Many Americans lost all their savings when banks went bankrupt. b. Many Amerians lost their jobs – 1) 25% of the working population could not find a job. 2) The jobless rate in 2006 was between 4% and 5%. c. The “Dust Bowl” occurred in the Mid-West (beginning in 1931): 1) Severe drought and poor farming techniques ruined the topsoil on farms in Kansas, Oklahoma, Texas, Colorado and New Mexico. 2) More farmers defaulted on their loans making the economy even worse. 4. What did the government do during The Great Depression' a. There were 2 Presidents during The Great Depression. 1) Herbert Hoover (1929-1933) – President when the Great Depression started. a) What was Herbert Hoover like' (1) Both of his parents died when he was young; quiet, smart and hardworking. (2) Hoover was an engineer and geologist (specializing in mining) (3) President Wilson appointed him to send food shipments to Europe after WWI; he did a really good job and became very popular. (4) He served as Secretary of Commerce during Roaring 20’s. 2) Franklin Delano Roosevelt (“FDR”) (1933-1945) – President during the Great Depression and when World War II started. a) What was FDR like' (1) FDR’s family was wealthy and famous (President Teddy Roosevelt was his cousin); he was outspoken and popular (2) FDR couldn’t walk after age 39; he was paralyzed below the waist after becoming sick with what is believed to have been polio. (3) FDR had been Assistant Secretary of the Navy and Governor of New York. (4) FDR is the only President to serve more than 2 terms; he was elected to 4 terms. (5) FDR died in 1945 shortly after starting his 4th term. b. Hoover Administration (1929-1933) 1) What were Hoover’s policies during the Great Depression' a) Hoover believed that the government shouldn’t help – (1) Hoover supported laissez-faire economic policies; didn’t think the government should do anything to stop the Great Depression. (2) Hoover believed that private voluntary charities (Red Cross, religious charities like The Salvation Army) should organize to help people who were hurt by the Great Depression. (3) Hoover and his supporters opposed government programs to fight the Great Depression for 2 reasons: (a) It would be expensive - programs to fight the Depression would be too expensive and may not do anything to help the economy. (b) The government would become too powerful - programs to help the poor and to regulate businesses and the stock market would expand the powers of the government beyond what Hoover believed was stated in the Constitution. b) Reconstruction Finance Corporation (RFC) (1931) - created by Hoover to provide low interest loans to businesses and state and local governments that were hurt by the Depression 2) What did people think of Hoover’s policies' a) People didn’t like Hoover; (1) They thought his policies helped businesses but did nothing to directly help people who had no money. (2) They thought he didn’t understand how bad the Depression was; what he did “too little, too late”. (3) “Hoovervilles”- shacks built by the homeless all over the U.S. out of scraps of wood and packing crates; Americans called these shack cities Hoovervilles as a way to mock Hoover and his policies. b) The Bonus Army (1932) (1) What was the “Bonus Army”' - WWI veterans who came to Washington during the Depression to collect a $1,000 bonus Congress had promised to pay them in 1945; they wanted the money now (1932) as a way to ease the Depression. (2) The Veterans created Hooverville city in Washington while they waited to get the money. (3) Congress voted not to give the money to the veterans and Hoover sent the U.S. army (including tanks!) to push the Bonus Army out of Washington. (4) Hoover’s treatment of the Bonus Army convinced many Americans that Hoover was “out of touch” with their problems and had no idea how to stop the Depression. c. Roosevelt Administration (1933-1945) 1) What were Roosevelt’s policies during the Great Depression' a) The “New Deal” – policies created by President Roosevelt to end the Great Depression (1) How did the New Deal work' (a) relief – programs to provide direct emergency assistance to the poor; with jobs or cash! (FERA, PWA, WPA, CCC, NYA) (b) recovery – programs to end the Depression. (NRA, AAA, NLRB/Wagner Act, SSA, FLSA) (c) reform – programs to prevent another Depression. (EBRA, FDIC, SEC) (2) “Hundred Days” – special session of Congress to deal with the Depression; banks were closed and the Emergency Banking Relief Act was passed. (3) “fireside chats” – were radio speeches made by Roosevelt to explain his programs to the people; (a) Roosevelt was the first President to use mass media to explain new programs. (b) “Fireside chats” were very popular. 2) What did people think about The New Deal' a) People liked Roosevelt because it seemed like he was trying to do something (anything') to end the Depression. b) Many people believed that Roosevelt’s New Deal saved the nation from the Depression. c) Many people believed that Roosevelt’s New Deal created programs that gave poor people a chance to earn a good living in the U.S. economy. 5. Results of the Great Depression (How did the Great Depression change the U.S') a. The New Deal changed the U.S. economy- 1) The New Deal gave the government more power over the economy. a) The New Deal created more regulation for businesses (including banks and the Stock Market). b) The New Deal created more regulations for farms. 2) Some people say the New Deal created less capitalism and free enterprise and more socialism. a) Social Security Act (1935) created a government run pension system for all Americans, and unemployment insurance. b) FSLA created the first minimum wage laws; businesses were forced to pay their workers based on a government created minimum wage. b. Labor Unions became stronger and larger 1) NLRB/Wagner Act guaranteed the right of workers to form unions. 2) NLRB/Wagner Act allowed workers to “bargain collectively” for better pay and working conditions. c. Women enter the workforce 1) Women were the first factory workers (in the early 1800’s) but factory workers were a small part of the economy then. 2) In World War I, women worked in the factories because the men were in the army; when the war ended women lost their jobs to the men. 3) In the Depression, many women re-enter the workforce because their families needed the money to survive. 4) Working women faced discrimination in the Depression – why' a) People believed that if a women was working she was taking a job away from a man who was trying to provide for his family; married women were often fired. b) Many people (including many women) thought that is was “proper” for women to stay at home and take care of the home and the kids. d. Eleanor Roosevelt – (The First Lady; 1933-1945) – her political career began with the election of her husband during the Great Depression. 1) Mrs. Roosevelt encouraged the President to create relief programs for the poor. 2) She became a hero to many people because she worked for equal treatment under the law for all Americans (especially women and African Americans). 3) She was the first First Lady to offer opinions: She spoke out and wrote about U.S. and world events at a time when it was not considered proper for a woman to have opinions! 4) After the President died, she helped to create the United Nations. a) She served as the U.S. Ambassador to the U.N. from 1947 to 1952. b) She helped to create The U.N. Universal Declaration of Human Rights; a “bill of rights for the world”.