The Great Depression/New Deal
Quick Notes
II.
III.
I.
Banks and Stocks
Causes of the Great Depression
Life During the Great Depression
IV. The New Deal
Economics: A social science dealing with the production, distribution, and
consumption of goods and services.
I. Banks and Stocks
Bank Diagram
LOANS
Earn 3% interest
per year in
Savings! But Pay
10% on Loans!
SAVINGS
Interest: Banks offer a small percentage of money back to customers that keep their
money in the bank.
How do banks make money?
Banks take the money from their customers and loan it to others at a higher interest
rate…
…or invest it in other places.
The Stock Market: Corporations sell part of their business to investors. The value of
these shares can go up or down.
How do stock prices RISE and FALL?
Stock prices RISE when there are more BUYERS.
Stock prices FALL when there are more SELLERS.
NYSE: The New York Stock Exchange. This is where the majority of stocks are
“traded” in the United States.
Wall Street: The NYSE is located on Wall Street in New York City.
II. Causes of the Great Depression
1. Overproduction: Companies made too much “stuff” to sell. Stock prices had
become “artificially” high (Over-speculation of Stocks).
2. Stock Market Crash: 10/29/29. Investors tried to sell all of their stock at once.
3. Bank Failures: People who borrowed money to invest in the stock market could
not pay it back. Federal Reserve - government agency that failed to prevent the
collapse of the banking system at the start of the Great Depression
4. High Tariffs: Used to pay off War debts, but hurt international trade.
The Great Depression lasted almost 11 years.
Memory Game-Causes for the Great Depression
High Tariffs
Overproduction/Over-speculation
Bank Failures
o
Stock Market Crash
III. Life During the Depression
Unemployment: NO JOB. Approximately 1/4 (25%) of Americans were unemployed.
Herbert Hoover: President in 1929 when the Depression began
Hoovervilles: Run down “shanty” towns. Poked fun at Hoover because people thought
he did nothing to help with depression.
Soup Kitchens: Unemployed workers and families waited in “breadlines” and ate at
soup kitchens.
Great Plains: Flat lands in the central United States where farming is a major industry.
“Dust Bowl”: During the Great Depression the Great Plains were struck with dust
storms that wiped out farming. Thousands of farmers moved away.
Farmers: During the Great Depression, farmers’ incomes fell to low levels. They also
faced problems in the 1920s due to crop prices falling after World War I. Migrant
workers moved around to find work. (John Steinbeck wrote about migrant workers
during the 1930s.)
IV. The New Deal
Franklin D. Roosevelt: (FDR) Elected president in 1932. Promised to help America out
of Depression with a “New Deal”
The New Deal: A series of Government programs to help with the Depression (such as
Social Security, federal work programs, and increased rights for labor).
New Deal Programs
Major features included:
1. Environmental Programs
2. Farm Assistance Programs
3. Increased rights for labor
4. Federal Work Programs
5. Social Security
Federal Work Programs:
AAA: Agricultural Adjustment Act
Helped Farmers by raising crop prices. Farmers produced LESS.
TVA: Tennessee Valley Authority
Created jobs and electricity by building dams.
FDIC: Federal Deposit Insurance Corporation
Insured Bank Deposits to protect banks from failing and customers losing their
money.
SSA: Social Security Administration
The government provides money for elderly, unemployed, blind and disabled
(Social Security).
SEC: Security Exchange Commission
Makes sure businesses and investors follow rules in stock market
Eleanor Roosevelt: Wife of FDR. Extremely popular…she worked hard for women and
African Americans.
Fireside Chats: FDR’s radio broadcasts.