Chapter 21 AP US History
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1 Chapter 21 AP US History
2 Focus Questions: What caused the Great Depression, and how did President Hoover respond? What strategy guided the early New Deal, and what problems and challenges arose in ? What key measures and setbacks marked the course of the New Deal from 1935 on? How did the depression and the New Deal affect specific social groups in the United States? What key developments shaped American culture in the 1930s?
3 Crash and Depression, By 1929, 4 million Americans (3% of the population) owned stocks. By late 1929, the stock market was suffering: Not many new investors taking a chance Caused stock prices to drop Bull Market ended Stockbrokers called their margins. Investors sold their stocks rapidly Stock Market plummeted even more October 24 th : The market took a dive that sent the investors into a panic. By October 29 th, the bottom fell out of the market.
4 Causes of the Great Depression The Stock Market crash signaled the beginning of the Great Depression. Lasts from 1929 to 1941 Millions of people are out of work Crash alone did not cause the Depression Made economic collapse happen more quickly Made the Depression more severe Historians and economists differ on the main causes of the Depression. We agree on the following causes:
5 1. An old and decaying industry 4. Unequal distribution of income Causes of the Depression 2. A crisis in the farm sector 3. Availability of easy credit
6 Additional Factors The 4 factors (named above) led to falling demand for consumer goods. Additional Problems: Federal government caused more problems: Keeping interest rates low Allowed businesses and individuals to borrow easily Borrowing builds up large amounts of debt Some of the borrowed money bought stocks Federal government did very little to regulate stock purchases. Borrowers were also not discouraged from purchasing stocks. People were in shock that financial collapse had hit the United States. Hoover encouraged Americans to remain confident about their economic future. There was no stopping this Depression: the worst was on its way!
7 Dow Jones Industrial Average (The Dow) Most widely used barometer (measurement) of the health of the Stock Market. Tracks the state of the Stock Market Still used today! Based on the stock prices of 30 representative large firms trading on the New York Stock Exchange (NYSE). 1920s stock prices rose steadily and people rushed to purchase stock Most engaged in speculation: buying on a chance of making a profit quickly Buying on Margin: paying a portion of the price and BORROWING the remainder BAD!!!
8 Black Tuesday is coming September 1929: stock prices peaked and then fell. Investors began selling October 24: The market to a small plunge Investors panicked Worst was to come October 29: Black Tuesday The bottom fell out of the market 16.4 million shares of stock were dumped on this day Millions of shares could not be sold Many lost their savings in this crash s/resources/shared/primary/source/i mages/irae.jpg
9 The Depression Worsens By 1933 thousands of banks had closed millions of American workers were unemployed Lining Up at Soup Kitchens Bread Lines or Soup Kitchens emerged as the Depression worsened These were started by private charities Served unemployed workers & the poor People could receive free food
10 Living in Makeshift Villages unable to pay your mortgage or rent? Foreclosure = lost homes Often, landlords would use force to remove tenets who refused to leave Bailiff = Court officer who would evict tenets The Rise of Shantytowns Newly homeless people built shacks on public lands referred to these towns as Hoovervilles Dwellers blamed the president for their financial troubles Hobos, or homeless Americans who wandered around hitching rides on railroad cars, searched for work and a better life.
11 Hobo Life Making turtle soup Walking the rails after eviction from a train
12 The Dust Bowl As crop prices dropped in the 1920s, many American farmers left their fields uncultivated. A terrible drought in the Great Plains, beginning in 1932, caused the region to become a Dust Bowl. Many Midwestern farmers and Great Plains farmers lost their farms. Many families moved west to the west coast hoping to find a better life, but most still faced poverty and homelessness.
13 Roosevelt's Rise to Power
14 Early Life Parents: James and Sara D. Roosevelt (both came from old, wealthy American families. Education: Groton, Harvard, and Columbia University School of Law. Married: Eleanor Roosevelt (distant cousin and niece to Teddy Roosevelt). Family: Eleanor and Franklin had 5 children. 4 boys and 1 girl 3 of his sons would serve in the US House of Representatives.
15 Political Start Began his political career in 1910 winning a seat in the New York State Senate. Allied himself with other New York Democrats standing against Tammany Hall. Roosevelt was a progressive who supported reforming American politics. Supported Woodrow Wilson in the 1912 presidential election. Served as the assistant Secretary of the Navy from Viewed by many as an able administrator. Roosevelt s only political loss was in the 1920 presidential election where his was nominated as the vice presidential candidate for the democratic party.
16 FDR as Assitant Sec. of the Navy
17 Polio and Politics 1921 = Roosevelt contracted polio while on vacation. Polio left him a paraplegic (paralyzed from the waist down). Roosevelt worked out daily and was able to regain partial use of his legs (with braces). Roosevelt reentered politics in 1928 Elected governor of New York Instituted a series of programs to combat problems of unemployment and poverty. Farm Relief Plan State Power Authority Regulation of Public Utilities Old age Pension programs 1932 = surrounded himself with a group of intellectuals that became known as the Brain Trust He was one of the most determined and dedicated political officials willing to confront the Depression.
18 Roosevelt with another Polio survivor Roosevelt as New York Governor
19 Roosevelt's Inauguration Roosevelt projected an air of friendliness and confidence that attracted voters. Roosevelt was unafraid to try something new. Hoover was viewed as a do-nothing president. Roosevelt won by a landslide. Between the election in November 1932 and inauguration in March 1933, Roosevelt planned how to defeat the Depression. His plan was called the New Deal
20 The Hundred Days Begins March 9-June 16, 1933: referred to as the Hundred Days What is the Hundred Days? This is the first 100 days of any presidency. Historians study or watch each president s first 100 days thinking it will reveal what is to come in that presidency. During Roosevelt s 100 Days Congress passed 15 major pieces of legislation designed to assist America in this economic crisis These programs become The New Deal
21 Preparing for the Presidency
22 Roosevelt s advisers proposed ideas to meet everyone s needs These advisers divided into 3 major groups: New Nationalism (advocated by Teddy Roosevelt) Government and business should work together to manage the economy. Government Planning Wanted government control of the economy New Freedom (advocated by Woodrow Wilson) Government s responsibility to restore competition to the economy.
23 Fixing the Banks and the Stock Market Roosevelt had to restore America s trust in the Banking system. Declared a national bank holiday (closing all banks) Requested a special session of Congress Emergency Banking Relief Act Required federal examiners to survey the banks. Treasury Department would then license sound banks. Securities and Exchange Commission (SEC) Required new regulations for banks and the stock market Glass-Steagall Banking Act Separated commercial and investment banking. Stock Market speculation becomes illegal Created the FDIC (Federal Deposit Insurance Corporation) = government insures bank deposits to a certain amount. First Fireside Chat Encouraged Americans to trust the banks. The banking crisis ended.
24 Managing Farms and Industry Roosevelt asked Congress to pass other laws to help farming and industry: Agricultural Adjustment Administration (AAA) Reduced production Increased prices Ultimately helped those who raise on large crop rather than small farmers National Industrial Recovery Act (NIRA) Suspended antitrust laws Allowed business, labor, and government to cooperate in establishing voluntary rules Codes of Fair Competition Everything was run by the National Recovery Administration (NRA) People were encouraged to buy products only from those who were members of the NRA. Declared unconstitutional by the Supreme Court 1935!
25 National Recovery Administration Poster
26 Providing Debt Relief Helping America deal with debt: Home Owners Loan Corporation (HOLC) Bought mortgages of homeowners behind in payments. Restructured the mortgages to have longer to pay and lower interest rates. Loans were only granted to employed persons. Failure to pay = foreclosure. Farm Credit Administration (FCA) Established to help farmers refinance their mortgages. Could have slowed true economic recovery This act only provided for poor inefficient farmers instead of business.
27 Spending and Relief Programs Roosevelt also supported work programs: Civilian Conservation Corps (CCC) Employed young men (18-25) Worked with the National Forestry Service Planted trees, fighting forest fires, and building reservoirs Federal Emergency Relief Administration (FERA) Channeled money to help state and local agencies fund relief projects Public Works Administration (PWA) Begins construction projects Civil Works Administration (CWA) Established by Harry Hopkins (head of FERA) Hired workers directly Shut down because of cost!
Name Date MOD. fireside chat informal in which FDR. FDIC Federal Deposit Insurance Corporation; government agency that. and generate power
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