US History The End of Prosperity The Big Idea Main Ideas

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1 The End of Prosperity The Big Idea The collapse of the stock market in 1929 helped lead to the start of the Great Depression. Main Ideas The U.S. stock market crashed in The economy collapsed after the stock market crash. Many Americans were dissatisfied with Hoover s reaction to economic conditions. Roosevelt defeated Hoover in the election of 1932.

2 Main Idea 1: The U.S. stock market crashed in s stock market was a bull market, or one with rising stock values. Many people began to buy stocks. Some who could not afford the stocks full price began buying on margin, or purchasing stocks on credit. Few considered what might happen if the bull market turned into a bear market, or one with declining stock prices. Stock prices peaked in the summer of Prices started to drop. Frightened investors rushed to sell their stocks in order to pay off their loans.

3 Black Tuesday In September 1929, total value of all stocks was $87 billion. On Thursday, October 24, panic hit the stock market. Within three hours the market lost $11 billion in value. On Monday, October 28, prices dropped again. On Tuesday, October 29, the stock market crashed. So many people wanted to sell their stocks, and so few wanted to buy, that stock prices collapsed. Became known as Black Tuesday By November 1929, $30 billion in stock value had disappeared.

4 Main Idea 2: The economy collapsed after the stock market crash. Banking crises after the stock market crash Banks lost heavily on their investments. Customers unable to pay back bank loans Some banks went out of business, and people who had deposited their savings in those banks lost everything. Public panic followed Effects on business Customers rushed to banks to withdraw their money. Banks ran out of money. More banks closed in 1931 alone, 2,200 closed. Some lost their savings and were forced to close. Others forced to cut back production resulting in loss of jobs. Unemployment soared to more than 4 million workers.

5 Causes of the Great Depression Business cycle the rhythm in which an economy expands and contracts its production The economy did not recover quickly from the downturn that began in Unemployment rose and businesses failed. Became known as the Great Depression because of its severity and length Government s monetary policy Overproduction American businesses were producing far more goods than people were consuming. Uneven distribution of wealth millions of Americans did not earn enough to afford expensive new products. Declining world trade Europe, still recovering from the war, could not afford to buy American goods or to pay the high tariffs required to sell their own goods in the United States.

6 Main Idea 3: Many Americans were dissatisfied with Hoover s reaction to economic conditions. President Hoover did not believe it was the federal government s role to provide direct relief. Created Reconstruction Finance Corporation that loaned $1.2 billion to financial institutions Resisted giving direct assistance to individuals Americans were angry at the lack of government response. Hoovervilles, or groups of tin and cardboard shacks, were built. Bonus Army of war veterans built a Hooverville in Washington, D.C., and demanded early payment of a military bonus. Hoover authorized use of force to scatter the veterans, resulting in some deaths. Public was outraged.

7 Main Idea 4: Roosevelt defeated Hoover in the election of Herbert Hoover Republican nominee Few believed he could win. Strategy: warning that Democrat aid programs would weaken Americans sprit of self-reliance. Franklin D. Roosevelt Democratic nominee Had already taken active steps to provide aid as governor of New York Had confident and optimistic personality that appealed to voters Won the 1932 election in a landslide

8 Roosevelt s New Deal The Big Idea Franklin Roosevelt s New Deal included government programs designed to relieve unemployment and help the economy recover. Main Ideas Congress approved many new programs during the Hundred Days. Critics expressed concerns about the New Deal. New Deal programs continued through Roosevelt s first term in what became known as the Second New Deal. Roosevelt clashed with the Supreme Court over the New Deal.

9 Main Idea 1: Congress approved many new programs during the Hundred Days. A New President Took office in March 1933 Said that economic recovery was possible Promised that the government would help The Hundred Days Roosevelt called special session of Congress that became known as the Hundred Days. President and Congress worked together to create new programs to battle the Depression and aid economic recovery. These programs became known as the New Deal.

10 Restoring Confidence Roosevelt worked to restore confidence in American banks. Ordered all banks to temporarily close Emergency Banking Relief Act was quickly passed. Government inspected finances of a bank before it was allowed to reopen. Plan was announced in Roosevelt s first fireside chat. Radio address in which he spoke directly to the American people Gave many chats over the course of his administration

11 Selected New Deal Programs Civil Works Administration employed 4 million Americans to build road and airports Civilian Conservation Corps provided jobs to thousands Tennessee Valley Authority hired people to build dams and generators, bringing electricity and jobs to Tennessee River Valley Farm Credit Administration helped farmers refinance mortgages so they could keep their farms Agricultural Adjustment Act stabilized agricultural prices National Industrial Recovery Act passed with support from Frances Perkins, the nation s first female Cabinet member, addressed business concerns

12 Main Idea 2: Critics expressed concerns about the New Deal. New Deal: Goes Too Far Criticized expansion of federal government American Liberty League argued New Deal gave president too much authority. Business leaders concerned about potentially higher taxes New Deal: Not Enough U.S. senator Huey Long believed the rich should pay extra taxes to support the poor. Some felt that the New Deal helped only business interests.

13 Main Idea 3: New Deal program continued through Roosevelt s first term in what became known as the Second New Deal. America showed support of Roosevelt in the Congressional elections of Roosevelt continued to introduce additional New Deal legislation These laws became known as the Second New Deal. First lady Eleanor Roosevelt was an active supporter of New Deal programs

14 Selected Second New Deal Programs Works Progress Administration employed 8.5 million National Youth Administration gave part-time jobs to young workers Social Security Act passed in 1935, worked to provide some financial security for the elderly, the disabled, children, and the unemployed Placed new tax on workers and employers First time the federal government took direct responsibility for many citizens economic well-being

15 New Deal Labor Programs National Industrial Recovery Act passed in Required minimum wage and allowed collective bargaining Declared unconstitutional by Supreme Court in 1935 National Labor Relations Act, or the Wagner Act Allowed workers to join labor unions Established the National Labor Relations Board to oversee union activities Congress of Industrial Organizations Organized workers into unions based on industry, not skill level Allowed African Americans, Hispanics, women, and immigrants as members Led a sit-down strike against General Motors in which they stayed in the factories so that they could not be replaced by new workers

16 Main Idea 4: Roosevelt clashed with the Supreme Court over the New Deal. Roosevelt was reelected in 1936 by a huge margin. Supreme Court issued a series of rulings declaring several New Deal programs unconstitutional. Roosevelt responded by proposing a plan for reorganizing federal judiciary. Drew harsh criticism from Congress and public Critics charged that Roosevelt was trying to change the balance of power defined in the U.S. Constitution. Congress rejected the bill. The Supreme Court did not overturn any more New Deal legislation.

17 Americans Face Hard Times The Big Idea All over the country, Americans struggled to survive the Great Depression. Main Ideas Parts of the Great Plains came to be known as the Dust Bowl as severe drought destroyed farms there. Families all over the United States faced hard times. Depression-era culture helped lift people s spirits. The New Deal had lasting effects on American society.

18 Main Idea 1: Parts of the Great Plains came to be known as the Dust Bowl as severe drought destroyed farms there. Hard times for farmers began in the 1920s because prices for farm products remained low. Severe drought hit the Great Plains in the early 1930s. Lasted most of the decade Crops withered away Massive dust storms swept the region, turning the region into a Dust Bowl.

19 Effects of the Dust Bowl Farmers could not raise crops. Could not pay mortgages Many lost their farms. Government tried to assist. New Deal programs offered price stabilization and loans to farmers. Scientific advances in soil conservation and farming methods Too little, too late People began leaving the region 2.5 million left the area

20 Main Idea 2: Families all over the United States faced hard times. American families faced hard times. Many forced to split up. Some roamed the country trying to find work. Children often had to drop out of school and take low-paying jobs or leave home and fend for themselves.

21 Minority Groups and the Depression Mexican-Americans As white families moved west, it became harder for Mexican Americans to find work. In California, local leaders and unions convinced government to deport many Mexican-born workers and their children, many of whom were U.S. citizens. African Americans Faced discrimination Many lost jobs to unemployed white workers. Many able to find work through relief programs. African American leaders acted as advisors to Roosevelt. Cabinet. Mary McLeod Bethune was an educator appointed to Roosevelt s cabinet. African Americans appointed to Roosevelt s cabinet were known as the Black

22 Main Idea 3: Depression-era culture helped lift people s spirits. WPA Literature Music Radio Film Works Progress Administration put artists to work and helped to create a record of life during the Depression Writers like John Steinbeck explored the theme of Depression life in his writings. Some musicians, like folk singer Woody Guthrie, expressed themes of loss and struggle, reflecting the American Depression experience. Swing music helped people forget their troubles and lifted spirits. Radios provided inexpensive entertainment with music and popular radio shows. Movies offered Americans another way to escape from reality.

23 Main Idea 4: The New Deal had lasting effects on American society. The New Deal has had long-reaching effects: Gave Americans help and hope in a time of severe crisis Expanded the role of federal government Some agencies and programs still exist today and remain an important part of American society. Social Security still provides economic relief to the elderly, children, and those with disabilities. Federal Deposit Insurance Corporation protects the savings of bank customers.

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