The Great
Depression
Black Tuesday & the Great
Crash
• bull market – rising stock prices
(way too fast) plummeted to bear
market – falling stock prices
– business community with big profits
• investors tried to sell their stocks
before prices fell any lower too
many selling
• stock market collapsed!
• Dropped $30 billion
The Bank
Business Failures
• loans busted because of stock
investments banks closing
• people panicked & rushed to
withdraw their money banks
don’
don’t keep a lot on hand, they
ran out of money banks
closed
• when banks closed, many
businesses lost their corporate
savings & operating accounts
businesses closed or cutback
on production & workforce
• Unemployment increases (rate
= 25%)
Causes of the Great
Depression
• overproduction – production
exceeded consumption &
surpluses piled up
• global trade problems –
world trade declined
(Europe recovering from
WWI) not a lot of aid
• the Dust Bowl
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President Hoover
• thought that relief and recovery
should come largely through
voluntary cooperation rather
than federal efforts
• created the RFC (Reconstruction
Finance Corporation) – direct
relief to unemployed; loaned
money to railroads and banks
• lowered taxes to stimulate the
economy
• did not realize how severe the
depression was
Farmers
• as prices bottomed out, many
farmers could not sell their crops
• without income, they could not
repay their house and land loans
• banks foreclosed on their homes &
land
• If things weren’t bad enough,
drought struck!
• Dust Bowl – dust storms on the Great
Plains
• families migrated west for a new life
Family Life
• divorce rates increase,
marriage & birth rates
decreased
• men left their families (some
in search of jobs)
• children dropped out of
school to help make money
• food lines (a.k.a
(a.k.a soup
kitchens) – fed the poor
Election of 1932
• FDR (NY governor/D)
vs. Hoover (U.S.
President/R) FDR
won
• Roosevelt promised
relief, recovery, and
reform
• A new deal for the
American people
with federal help
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The New Deal
• federal govt. approved and
financed programs that
battled the depression
• How did they afford this?
– Raise taxes
– Inflation
Frances Perkins
• Secretary of Labor
• 1st woman ever
appointed to the Cabinet
• believed in strong govt.
involvement in the
economy
• created labor reforms
and government agencies
to aid unemployment &
workers
Civilian Conservation
Corps
• designed to tackle the
problem of
unemployed young
men (18-25)
• gave environmental
jobs to men: plant
trees, built public
parks, restocked
rivers with fish, etc.
• 3 million men served
in the CCC
Social Security
• set up to help the elderly, disabled,
children, and unemployed
• 1. created a pension for retired
workers (65+)
• 2. offered unemployed short-term
benefits while they looked for
work
• 3. provided payments to women
with dependent children or to
disabled people
The WPA
• Works Project Administration –
largest employer of the country
• purpose: create organizations that
give jobs & wages to people
currently unemployed
– Ex. building roads, libraries, parks,
airports, etc.
The Federal Housing
Administration
• insured mortgages of lower-income
Americans (helping these people
afford homes)
• provided loans to local govts. for
public housing projects
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Eleanor Roosevelt
• political
“helpmate”
(compared to
Hillary Clinton)
• she became FDR’s
eyes & ears
(especially during
ill times)
• strong 1st lady
behind the man
Indian New Deal
• hopped on the bandwagon
• used federal funding to create
jobs for Indians on reservations
(built schools, hospitals, gave
food aid)
• Indian Reorganization Act – selfgoverning reservations
The Supreme Court
• Supreme Ct. worried that President
Roosevelt was taking more power than
the Constitution
• The Court had ruled against some New
Deal programs, so…
• “Court Packing bill” – allowed the
President to appoint up to 6 new justices;
rejected; but established power of the
Presidency
Arizona & the Depression
• Route 66 – population increase
(migrant farmers from the Dust Bowl)
• JOBS! Copper, cotton, farming, and
mining flourished during this time
• copper & cotton prices drop
Congress of Industrial
Organization
• federation of unions that organized
industrial workers
• sit-down strike – remained in the
factories but refused to work
– to prevent owners from replacing
them with new employees
Why haven’t we had another
Depression?
• govt. set up programs to prevent
another Depression
– i.e. Social Security & Federal Deposit
Insurance Corporation
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