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The Great Depression
Transcript of The Great Depression
The Great Depression (1929-1939) was the deepest and longest economic downturn in the history of the western industrialized world
The Roaring 20s
The Roaring 20s were a lively time of prosperity after the war, as new technology hit the markets, credit was available, and people were moving upward in society
Economy underwent a massive transformation.
Prosperity led to
-the production of goods in large quantity.
Cause and Effect
The Great Depression is often believed to have started with the Stock Market crash of 1929, but history is usually a series of events that leads up to a pivotal moment rather than a single event. Let's take a look at the decade before!
The Great Depression
and why it was more depressing than great :(
"The only thing we have to fear is fear itself"
32nd U.S. President, 1933-1945
7 Causes of the Great Depression
1. Overproduction of goods
2. Uneven Incomes
3. Wall Street Crash
4. Weak banking system
5. European Recession
6. The Gold Standard
7. Hoover's failures
lIFE IN THE 1920s
The Depths of Depression
The Face of Depression
had expanded to help the war
Mechanization improved output, but cost more
Farmers incurred DEBT
Land prices dropped
Price of products fell
Many farms closed
was prosperous in 1920s
New technology and credit
Production increased faster than the demand
Too many products, too little money
Economic problems in Europe prevented export/sales of American products overseas
Growing disparity between richest and poorest
1% of workers in 1929 increased income by 75%
99% had only 9% increase
Production rose by 50%, but wages didn't rise fast enought to allow people to afford
Most people in 1920s were in poorer than the Roaring 20s portray
Believed in limited government
Limited amount of federal assistance to poor and unemployed (didn't want to encourage sloth and dependance on government)
Internationalist - Thought major problems were outside American borders
Smoot-Hawley Tariff to protect agriculture and balance world markets - worsened the depression by halting trade
Requested Europe repay debts
Associationalism - Trying to get farmers, businessmen to work together to aid recovery
Against expansion of government, but after several efforts failed, approved limited-expansion measures
When the country began to go in debt becuase of his efforts, he began eliminating federally created programs, and raised taxes on Americans
Herbert Hoover Tries to fix it
Despite his attempts to fix the problem, the public blamed him for the Great Depression
FAILURE AND BLAME
FDR promised to “Kick Out Depression with a Democratic Vote.” During his acceptance the of democratic nomination, he promised Americans a "New Deal"
The Campaign Trail
The Great Depression and the World
Political consequences - Fascism, Nazis, Communism, Dictatorships
Welfare capitalism - Govt. assumes ultimate responsibility to promote fair distribution of wealth and power
By 1936, most countries had reduced unemployment, but U.S. unemployment still exceeded 17% until 1939, and stayed at 14% until 1941
Strengthened federal presence in American life
Old age pensions, unemployment compensation, low-cost housing
Owed money to the U.S.
When American economy failed, requested repayment
Struggling economies become weaker without U.S. aid
Could not afford to buy American products
Trade ended when U.S. raised taxes
European economy collapsed
Overproduction of products with no one to buy
Same pattern through the industrialized world during Depression
Herbert Hoover, 34th president of U.S. is often blamed for Depression
He worked hard to fix it, but it was the wrong actions
His actions made it worse at home and abroad
Old system in which money is tied to an amount of gold
Foreign investors would buy goods with gold
At start of 1930s they stopped buying, so there was no more gold to back up the money in circulation
During recession periods, governments must often abandon gold standards to devalue money to prevent worsening
Not all the affected countries abandoned it simultaneously, which made it worse
Overplowing of soil
Techniques of farmers/prairie grass
Dust killed plants and people
Created massive migration
"It was the best of times; it was the worst of times..."
It was the 1920s
3 waves of A NEW DEAL
Rural and farm assistance
New public works programs
Expansion of existing public works programs
Housing and mortgage reform
Relief and welfare
Labor law and assistance
Trade, transport and communications
Arts and culture
NEW DEAL ACCEPTANCE
Urged the American people to face the difficult tasks ahead with patience, understanding and faith.
Through depression and war, the reassuring nature of the fireside chats boosted the public’s confidence and contributed to his future election wins.
REBUILDING CONFIDENCE AND HOPE
Wall Street Crash
Black Tuesday Oct. 29, 1929
Speculation as easy money
Often purchased with credit
When many people began purchasing, stocks lost value and people panicked
Half of countries wealth was lost
Select #1 or 2 and write it down
Pick #1-6 and write it down
Rent payments $20/month
Car payment $15/month
Food costs $1/person/week
Add up total cost based on # of people in your family
How much do you need to make to support your family?
How did you feel knowing you still had a job?
How did you feel knowing you lost your job and had to somehow support your family?
Should government be involved with this, and what kind of programs would be helpful?
(CCC) Civilian Conservation Corps
(PWA) Public Works Administration
(WPA) Works Progress Administration
What would you think if this were you in the picture or job description? How
would you react to this job assignment?
Does your “family” qualify for this program?
Would you want to do any of these jobs?
Would it be worth it to you to do all this work for such little pay?
Would any of these work in today’s world? Would people respond well to these ideas now?
Questions for Discussion
FDR was elected president in 1932 based on promise to end New Deal
Worked with congress to create 16 new agencies in the first 100 days of his presidency
Cut government pay
Saved $1 billion
Repealed prohibition for taxes
The End... or is it?
Close all banks until they were healthy enough to reopen, because most of the damage of the Depression was caused by bank runs
1929-1933 40% went bankrupt
1929-1933, 6000 (40%) of banks closed
13 million people were unemployed
400,000 family farms were lost
2600 schools were closed
Admission to mental hospitals went up by 300%
2 million men became homeless
Suicides increased by 30%
Great depression revealed weakness in banking systems
Banks did not have money insured
Panic = Bank Runs
Banks shut down with no money
Lesson 1 Homework
Read personal accounts of great depression (
Analyze passages for person, age, status in society, requests, outlook
Discuss as a group tomorrow
Lesson 1 Group Work
In groups of 4, discuss
Main factors that led to the Great Depression
How we could have prevented it
How we might fix it
Questions for discussion
How were people feeling about the government and the American Dream in the midst of the conflict?
Read FDRs inauguration speech of 1933
(email link http://historymatters.gmu.edu/d/5057/)
Does he give hope?
Bank run 2
Higher Education down
High School up
Results of the Depression
New Deal programs
"I AM certain that my fellow Americans expect that on my induction into the Presidency I will address them with a candor and a decision which the present situation of our Nation impels. This is preeminently the
time to speak the truth, the whole truth, frankly and boldly
. Nor need we shrink from honestly facing conditions in our country today.
This great Nation will endure as it has endured, will revive and will prosper.
So, first of all, let me assert my firm belief that the
only thing we have to fear is fear itself
—nameless, unreasoning, unjustified terror which paralyzes needed efforts to
convert retreat into advance
. In every dark hour of our national life a leadership of
frankness and vigor has met with that understanding and support of the people themselves which is essential to victory
. I am convinced that you will again give that support to leadership in these critical days."
iNAUGURATION ADDRESS 1933
"In such a spirit on my part and on yours we face our common difficulties.
They concern, thank God, only material things
. Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone.
More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment."
"...Restoration calls, however, not for changes in ethics alone. This Nation asks for action, and action now. 9
Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely and courageously.
It can be accomplished in part by direct recruiting by the Government itself, treating the task as we would treat the emergency of a war, but at the same time, through this employment, accomplishing greatly needed projects to stimulate and reorganize the use of our natural resources."
"We face the arduous days that lie before us in the warm courage of the national unity; with the clear consciousness of seeking old and precious moral values; with the clean satisfaction that comes from the stern performance of duty by old and young alike. We aim at the assurance of a rounded and permanent national life.
We do not distrust the future of essential democracy. The people of the United States have not failed. In their need they have registered a mandate that they want direct, vigorous action. They have asked for discipline and direction under leadership. They have made me the present instrument of their wishes. In the spirit of the gift I take it."
" Hand in hand with this we must frankly recognize the overbalance of population in our industrial centers and, by engaging on a national scale in a redistribution, endeavor to provide a better use of the land for those best fitted for the land. The task can be helped by definite efforts to raise the values of agricultural products and with this the power to purchase the output of our cities. It can be helped by preventing realistically the tragedy of the growing loss through foreclosure of our small homes and our farms. It can be helped by insistence that the Federal, State, and local governments act forthwith on the demand that their cost be drastically reduced. It can be helped by the unifying of relief activities which today are often scattered, uneconomical, and unequal. It can be helped by national planning for and supervision of all forms of transportation and of communications and other utilities which have a definitely public character. There are many ways in which it can be helped, but it can never be helped merely by talking about it. We must act and act quickly."