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The great depression
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- 3. Election of 1928Prohibition and poverty major campaign issues Republicans take credit for prosperity of ’20s Herbert Hoover, Republican, elected by landslide Promise to keep Prohibition Prosperity of ’20s
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- 5. The Stock MarketStock Ownership in company Sold to raise capital Improvements, expansion Stock market Where stock is bought and sold Bull market Period of rising stock value Caused millions to invest heavily
- 6. Buying on marginSmall down payment Pay off balance ‘loan’ when stock sold Safe as long as stock price rises Margin call Calling in ‘loan’ for repayment Speculation Buying stock at low price Hold for short time Sell for quick profit
- 7. Problems with StockMarket No government regulation Stock bought not reflect true value Prices bid up without looking at company’s earnings and profits
- 8. The Crash Margincalls Led to stock sales Flooded market Caused prices to drop Panic on Oct 24, 1929 More & more stock put up for sale Stock priced bottomed out Tuesday, Oct. 29, 1929 “ Black Tuesday” Stock market crashed Beginning of Great Depression
- 9. Collapse of BankingIndustry Banks had invested in stock market Risky loans Could not collect money People pulled money out ‘ bank runs’ Unstable banks closed
- 10. Causes of Great Depression
- 11. Efficient machinery OverproductionDecline in Sales
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- 13. Gov’t economic policiesHigh Import Tariffs High Export Tariffs- no foreign markets
- 14. Overproduction- Surplus goods-Unemployment
- 15. Unchecked Stock SpeculationIncrease in stock price Decrease in stock demand
- 16. Stock Market CrashOct. 29, 1929 “ Black Tuesday”
- 17. Unregulated Banking IndustryRisky loans- Overextended credit Inability to recover money
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- 19. Other Factors toConsider Decline of farming industry Uneven distribution of wealth International economic policies Easy credit purchasing Weak and unregulated banks
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- 21. Farmers and DustDecline of the farmer Overproduction Drop in farm prices Economic devastation Loss of farms Overuse of land Fields left bare, exposed to elements 1932 drought Winds caused blowing sand Farming poverty contributed to nation’s overall economic decline
- 22. Hoover’s Relief EffortsPublic works Gov’t financed building projects Provided jobs lost in private sector To pay for projects—raise taxes or borrow from banks Reconstruction Finance Committee Provide funding for banks, railroads, and agricultural institutions Too cautious with loans to be effective
- 23. Veteran’s march forbonus Promised $1,000 to be paid in 1945 1931 legislation, borrow ½ of bonus 1932 marched on Washington D.C. for full amount Congress voted down pmt of bonus Hoover did more to expand role of federal gov’t than any previous president Hoover Cont’d……
- 24. A Time forChange Election of 1932 Hoover, Republican Franklin D. Roosevelt, Democrat Republicans blamed for economic hardships FDR and his “New Deal” wins
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- 26. 32nd President NewDeal Fireside Chats “ The only thing we have to fear is fear itself” Talent for giving hope and confidence to Americans Franklin Delano Roosevelt
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- 28. FDR’s Immediate ActionsRestore confidence in banks Called national bank holiday Congress passed Emergency Banking Relief Act Federal examiners survey banks Issue licenses to the financially sound Fireside chat to inform public banks were secure Following day—deposits outweighed withdrawals
- 29. Federal Deposit InsuranceCorporation (FDIC) – provide gov’t insurance for bank deposits up to certain amount Securities and Exchange Commission (SEC)– regulate stock market and prevent fraud
- 30. The New DealProduced amazing amount of legislation first 100 days in office Based on: Relief – immediate relief for needy Recovery – recovery for nation at large Reform - long-range reform for economic institutions
- 31. Civilian Conservation CorpsUnemployed men 18-25 yrs old Work in nat’l parks Planted trees, fighting forest fires, built trails Rec’d $30/mo plus food, shelter, clothing, education opportunities
- 32. Civil Works AdministrationEstablished 1933, abolished 1934 Men worked on federal, state, local projects Built roads, schools, airports, parks Funded by Federal Emergency Relief Admin.
- 33. Created to expand fight against unemployment Based on idea of work relief Gave unemployed jobs rather than money - construction & improvement - bridges, roads, bldgs Established programs to help writers, actors, and artists— Federal Number One Works Progress Administration
- 34. Public Works AdministrationBoost economy & stimulate industrial recovery Worked with private companies & military bldg schools, hospitals, courthouse, navy cruisers Permitted contractors to hire 650,000 workers Absorbed 1943 by Federal Works Agency
- 35. Agricultural Adjustment AdministrationRelief for farmers Paid to limit crop and livestock production Created limited supply Caused prices to increase Helped some; caused hardship for tenant farmers
- 36. Tennessee Valley AuthorityMost celebrated accomplishment of New Deal Redeveloped 40,000 square miles covering seven states along Tennessee River Provided flood control, cheap electricity, new factories, jobs Constructed dams and electrical power projects
- 37. Most important legislationin American history Monthly pensions to qualified retirees over 65 Benefits began 1942 Funded by special tax Established system of unemployment insurance Assistance programs for other “dependent” people Social Security Administration
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- 39. The End ofAn Era Democratic Party members shifted from mainly white Southerners to include African Americans, farmers, laborers, new immigrants, & women Roosevelt 2 nd term has limited successes Congress begins to block New Deal legislation Caused economic downturn by cutting gov’t spending Era ended 1939 Gave Americans stronger sense of security and stability Cut gov’t spending which caused economic downturn
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