The Great Depression

By: Teja Devanaboyina

Fundamental Causes of the Depression

  • Drop in farm prices
  • Massively uneven distribution of income
  • "Get rich quick" schemes in real estate and stocks
  • Over extension of Credit: DEBT
  • Increase inventories of goods
  • Immediate cause: October 1929 stock market crash

Black Tuesday


  • October 29th, 1929
  • More than 16 million shares traded in one day
  • Stock market lost $30 billion
  • Beginning of the "Great Depression"

Banking System Collapses


  • Banks invested heavily in the market
  • Collapse of market led to bank failures
  • Banks lost millions after crash
  • 1920-1929 600 banks closes
  • 1930-1933 10,000 banks failed nationwide
  • Many depositors panicked, leading to even more bank failures
  • no "Safety Net"

Hoover's Response

  • President Hoover overwhelmed
  • Business owners to stay open and not cut wages
  • let corporate profits suffer rather than purchasing power
  • Believed that private charity was best suited to solve problems
  • "Trickle down" method

  • Most efforts taken failed
  • Unable to find solutions to: unemployment, failing banks, foreclosures and the rapidly declining economy

  • Hoover lost public support
  • ridiculed and blamed for the Depression's economic issues

Dust Bowl: Causes


  • Over cultivation of land in the Great Plains
  • Drop in value of wheat, needed to plow more land to make a profit
  • Sustained drought throughout the region
  • Very hot temperatures
  • loosened and broken up soil dried out more quickly
  • High winds blew away loose topsoil
  • Soil from the Great Plains found in New England
  • More livestock

the Dust Bowl: Causes


  • Over cultivation of land in the Great Plains
  • Drop in value of wheat, needed to plow more land to make a profit
  • Sustained drought throughout the region
  • Very hot temperatures
  • loosened and broken up soil dried out more quickly
  • High winds blew away loose topsoil
  • Soil from the Great Plains found in New England

Map of the Area's Affected by the Dust Bowl

The Dust Bowl: Impact


  • More than 500,000 left homeless
  • Storms blew large amounts of dust from the Plains into the cities such as Chicago and Buffalo
  • Four pounds of dust per person fell on the city
  • "Red Snow" fell on towns in New England
  • major loss of livestock
  • many people died
  • dust pneumonia was very common

Civilian Response


  • Hunger Marches started breaking out after the crash
  • 1,200 hunger marchers assembled and chanted, "Feed the hungry, tax the rich"
  • Farmers Revolt!
  • During WW1 farmers heavily mortgaged farms to pay for seed, feed and equipment
  • After WW1, prices sank and farmers could not pay back what they owed
  • 1930-1934 nearly one million farms were foreclosed, taking possession of the farm, evicting families
  • Farmers started destroying crop in an attempt to raise crop prices by reducing supply
  • In Nebraska, farmers burned corn to heat their homes
  • In Iowa, food growers prevented the delivery of vegetables to distributors
  • In Georgia, Dairy farmers blocked highways and stopped milk trucks
  • they then dumped milk

The Election of 1932

Once Franklin D. Roosevelt got elected as the new president he...

  • Attempted to restore confidence in the American people
  • "The only thing we have to fear is fear itself"

  • Asked for broad executive powers to combat the Depression

The "New Deal"

  • Named after a phrase in FDR's 1932 nomination speech
  • Became the nickname for FDR's economic program
Consisted of three separate aspects:
  • Relief: attempting to solve the immediate problems of the depression (Unemployment and Bank Failures)
  • Recovery: Get the economy back to the pre-crash levels
  • Reform:Ensure that the conditions that led to the depression never reoccurred

The First Hundred Days

  • Three month period after inauguration
  • Saw most of the New Deal's relief programs established, such as:
  • Agricultural Adjustment Act
  • Tennessee Valley Authority
  • Glass-Steagall Banking Act

Solving the Banking Crisis

  • 1930-1933: Nearly 10,000 banks closed
  • FDR established a Bank Holiday

  • Banks closed for four days for inspection
  • Federal inspectors would review the banks assets and determine if healthy enough to reopen
  • Emergency Banking Relief Act
  • permitted banks to reopen

  • Fireside chats
  • FDR insisted for people to trust banks again
  • Deposits exceeded withdrawals
  • Glass-Steagall Banking Act Created the Federal Depositors Insurance Corporation (FDIC)
  • Made the federal government the insurer of individual bank deposits
  • Protecting private accounts from bank failures

Managing Farms and Industry

Agriculture

  • Farmers were suffering because prices were too low and production too high
  • The Agricultural Adjustment Administration (AAA)
  • Government would pay farmers not to raise certain livestock and crops
  • $100 million paid to cotton farmers to plow under 25% of crop
  • Farmers withdrew millions of acres from production, receiving $1 billion in support payments
  • Accomplished Goal: Farm surplus fell and food prices rose, increasing farm incomes
  • Fall backs: benefited large commercial farmers, hurt small farmers
  • Small farmers lost jobs and became homeless

Business


National Industrial Recovery Act
  • Allowed business, labor and government to cooperate, setting up rules for each industry
  • Codes of fair competition
  • Set prices
  • Limiting what could be manufactured
  • Established minimum wages
  • limited factories to two shifts per day
  • Shortened working hours
  • Guaranteed workers right to form unions
  • National Recovery Administration(NRA)
  • Businesses signing on to code agreements:
Blue Eagle
  • Urged consumers to buy products from industries with the blue eagle
  • Benefited large corporations
  • limited competition
  • Both NIRA and AAA were deemed unconstitutional and disbanded in 1935
NIRA
  • "Fair competition" was never defined
  • Schechter Poultry Co. Vs. U.S.
  • Exceeded power to regulate commerce
  • Basically told businesses what they could or could not produce
AAA
  • Told farmers what they could or could not produce
  • U.S. Vs. Butler
  • Tax imposed by the act to encourage farmers to produce less

Key Economics

  • Increase government expenditures and lower taxes
  • Saving industries through government spending
  • Creating jobs

  • Opening banks
  • Stimulates demand

Tennessee Valley Authority

  • Tennessee River valley was very underdeveloped
  • poverty-stricken

  • High illiteracy rates
  • disease rampant
  • TVA created to assist the area
  • Provided flood control and cheap hydroelectric power
  • Protected the social and economic welfare of people in the area
  • The Tennessee River Valley became the largest producer of hydorelctric power in the nation

The Second New Deal


  • FDR was disturbed at the failure of the New Deal to generate a rapid economic recovery
  • 1935, launched the Second New Deal...
  • ...with another series of programs and reforms
  • Hoped it would speed up the nation's recovery
  • provide economic security to every American
  • Ensure his re-election in 1936

the new deal impact for...

Women

Many of the New Deal programs discriminated against women
  • Not directed towards women
  • given lower paying jobs
  • sewing, book binding, helping the elderly
  • New Deal brought an increase in women's political influence
"Women's Network"
  • linking personal friendships and professional connections
  • Presence felt in national politics
  • Actively promoted women"s suffrage, labor law reform, and welfare programs
Eleanor Roosevelt : First Lady
  • Found jobs for 100,000 women (Nursing and sewing)
  • Frances Perkins: First women cabinet member, Secretary of Labor
  • Helped create the Social Security Act and the Fair Labor Standards Act

Minorities


African Americans suffered through the 1930's
  • "Last hired, first fired"
  • FDR made little effort to fight racism
  • Did not want to offend the powerful southern democrats
  • New Deal programs accepted discrimination
  • CCC established separate camps for African Americans
  • NRA labor codes established lower wages for black workers
  • African Americans could not get jobs from the TVA
  • AAA reduced acreage and production in the south, thousands of black sharecroppers were forced off the land
  • FDR banned discrimination in WPA projects
  • Minimum wage of $12 a week
  • FDR appointed several African Americans to second-level administration positions, Known as the "Black Cabinet"
Mexican Americans also faced labor shortages
  • Massive layoffs, deepening poverty and deportation
  • 400,000 Mexican nationals returned to Mexico, due to lack of relief from the government
  • Native-born Americans believed this would reduce unemployment for Americans

What did the "New deal" do?

  • Increased the role of the federal government in American lives and communities
  • Social Security established the framework for a welfare state
  • American Government took responsibility for assisting the needy
  • American Government guaranteed the rights of workers to join trade unions, set minimum wages and maximum hours
  • Government would become a much greater center of economic regulation and political power

THE END !!!