B. The Great Depression (1929-1941)
1. What was ???The Great Depression???
a. The Great Depression was the most severe economic ???slow down??? in
b. The Great Depression lasted longer than any other economic slow
down in U.S. history.
1) ???Black Tuesday??? ??“ the day of the ???stock market crash??? on October
29, 1929; Black Tuesday is considered to be the beginning of the
2. What caused of the Great Depression
a. International Depression
1) European governments were in debt from WWI.
2) European citizens couldn??™t buy American products because they
were still trying to recover and rebuild from WWI.
1) Industrial Overproduction ??“ U.S. factories produced too many goods
a) By the end of the ???Roaring 20??™s, American businesses produced
more goods than Americans could buy;
b) Eventually factories cut production and fired extra workers
which caused the economy to slow down.
2) Agricultural Overproduction ??“ farmers were producing too much
a) U.S. farmers grew more food than they could sell.
b) Also, competition from European farmers drove down the price
of farm goods.
c) By the end of the middle of the1920??™s U.S. farmers were
already in a depression
c) Many farmers stopped buying machinery and household goods
causing the economy to slow down.
c. Installment Buying
1) Many Americans bought goods on credit, but they
couldn??™t afford to pay the bills for the things they had bought.
2) When the economy slowed down and people lost their jobs they
???defaulted??? on their loans causing the economy to slow down.
a) default ??“ failure to meet and obligation; especially a financial
one. (also see bankruptcy)
b) bankruptcy- the condition of being unable to pay one??™s debts;
one??™s property is managed or sold to pay those to whom one
d. U.S. Tariff Laws
1) During the Roaring 20??™s the U.S. raised tariffs to keep foreign
goods them out of U.S. markets.
a) ???Haley-Smoot Tariff Bill??? ??“ this was a tariff law passed in the
1920??™s which raised the price of foreign goods in the U.S.
b) Americans couldn??™t afford to buy foreign goods.
2) Some people believe that U.S. tariff laws helped to create a depression
outside the U.S.
3. What was it like during The Great Depression
a. The U.S. economy completely collapsed:
1) U.S. GNP collapsed – U.S. GNP fell from $104 billion in 1929
to $ 58 billion in 1932.
2) The Stock Market collapsed – The average value of shares on the
N.Y. Stock Exchange fell from $375 a share in 1929 to $75 a
share in 1932.
3) Banks failed and closed all over the U.S.
a) So many Americans defaulted on their loans that many banks
b) Many Americans lost all their savings when banks went
b. Many Amerians lost their jobs ??“
1) 25% of the working population could not find a job.
2) The jobless rate in 2006 was between 4% and 5%.
c. The ???Dust Bowl??? occurred in the Mid-West (beginning in 1931):
1) Severe drought and poor farming techniques ruined the topsoil on
farms in Kansas, Oklahoma, Texas, Colorado and New Mexico.
2) More farmers defaulted on their loans making the economy
4. What did the government do during The Great Depression
a. There were 2 Presidents during The Great Depression.
1) Herbert Hoover (1929-1933) ??“ President when the Great
a) What was Herbert Hoover like
(1) Both of his parents died when he was young; quiet, smart
(2) Hoover was an engineer and geologist (specializing in mining)
(3) President Wilson appointed him to send food shipments to
Europe after WWI; he did a really good job and became very
(4) He served as Secretary of Commerce during Roaring 20??™s.
2) Franklin Delano Roosevelt (???FDR???) (1933-1945) ??“ President
during the Great Depression and when World War II started.
a) What was FDR like
(1) FDR??™s family was wealthy and famous (President Teddy
Roosevelt was his cousin); he was outspoken and popular
(2) FDR couldn??™t walk after age 39; he was paralyzed below the
waist after becoming sick with what is believed to have been
(3) FDR had been Assistant Secretary of the Navy and
Governor of New York.
(4) FDR is the only President to serve more than 2 terms; he
was elected to 4 terms.
(5) FDR died in 1945 shortly after starting his 4th term.
b. Hoover Administration (1929-1933)
1) What were Hoover??™s policies during the Great Depression
a) Hoover believed that the government shouldn??™t help ??“
(1) Hoover supported laissez-faire economic policies; didn??™t
think the government should do anything to stop the Great
(2) Hoover believed that private voluntary charities (Red Cross,
religious charities like The Salvation Army) should organize
to help people who were hurt by the Great Depression.
(3) Hoover and his supporters opposed government programs to
fight the Great Depression for 2 reasons:
(a) It would be expensive – programs to fight the Depression
would be too expensive and may not do anything to help
(b) The government would become too powerful – programs
to help the poor and to regulate businesses and the stock
market would expand the powers of the government
beyond what Hoover believed was stated in the
b) Reconstruction Finance Corporation (RFC) (1931) – created
by Hoover to provide low interest loans to businesses and state
and local governments that were hurt by the Depression
2) What did people think of Hoover??™s policies
a) People didn??™t like Hoover;
(1) They thought his policies helped businesses but did nothing to
directly help people who had no money.
(2) They thought he didn??™t understand how bad the Depression
was; what he did ???too little, too late???.
(3) ???Hoovervilles???- shacks built by the homeless all over the U.S.
out of scraps of wood and packing crates; Americans called
these shack cities Hoovervilles as a way to mock Hoover
and his policies.
b) The Bonus Army (1932)
(1) What was the ???Bonus Army??? – WWI veterans who came to
Washington during the Depression to collect a $1,000 bonus
Congress had promised to pay them in 1945; they wanted the
money now (1932) as a way to ease the Depression.
(2) The Veterans created Hooverville city in Washington
while they waited to get the money.
(3) Congress voted not to give the money to the veterans and
Hoover sent the U.S. army (including tanks!) to push the
Bonus Army out of Washington.
(4) Hoover??™s treatment of the Bonus Army convinced many
Americans that Hoover was ???out of touch??? with their problems
and had no idea how to stop the Depression.
c. Roosevelt Administration (1933-1945)
1) What were Roosevelt??™s policies during the Great Depression
a) The ???New Deal??? ??“ policies created by President Roosevelt to end
the Great Depression
(1) How did the New Deal work
(a) relief ??“ programs to provide direct emergency assistance to
the poor; with jobs or cash! (FERA, PWA, WPA, CCC,
(b) recovery ??“ programs to end the Depression. (NRA, AAA,
NLRB/Wagner Act, SSA, FLSA)
(c) reform ??“ programs to prevent another Depression. (EBRA,
(2) ???Hundred Days??? ??“ special session of Congress to deal with the
Depression; banks were closed and the Emergency Banking
Relief Act was passed.
(3) ???fireside chats??? ??“ were radio speeches made by Roosevelt to
explain his programs to the people;
(a) Roosevelt was the first President to use mass media to
explain new programs.
(b) ???Fireside chats??? were very popular.
2) What did people think about The New Deal
a) People liked Roosevelt because it seemed like he was trying to do
something (anything) to end the Depression.
b) Many people believed that Roosevelt??™s New Deal saved the
nation from the Depression.
c) Many people believed that Roosevelt??™s New Deal created
programs that gave poor people a chance to earn a good living in
the U.S. economy.
5. Results of the Great Depression (How did the Great Depression change the
a. The New Deal changed the U.S. economy-
1) The New Deal gave the government more power over the economy.
a) The New Deal created more regulation for businesses (including
banks and the Stock Market).
b) The New Deal created more regulations for farms.
2) Some people say the New Deal created less capitalism and free
enterprise and more socialism.
a) Social Security Act (1935) created a government run pension
system for all Americans, and unemployment insurance.
b) FSLA created the first minimum wage laws; businesses were
forced to pay their workers based on a government created
b. Labor Unions became stronger and larger
1) NLRB/Wagner Act guaranteed the right of workers to form unions.
2) NLRB/Wagner Act allowed workers to ???bargain collectively??? for
better pay and working conditions.
c. Women enter the workforce
1) Women were the first factory workers (in the early 1800??™s)
but factory workers were a small part of the economy then.
2) In World War I, women worked in the factories because the men were
in the army; when the war ended women lost their jobs to the men.
3) In the Depression, many women re-enter the workforce because their
families needed the money to survive.
4) Working women faced discrimination in the Depression ??“ why
a) People believed that if a women was working she was taking a job
away from a man who was trying to provide for his family; married
women were often fired.
b) Many people (including many women) thought that is was ???proper???
for women to stay at home and take care of the home and the kids.
d. Eleanor Roosevelt ??“ (The First Lady; 1933-1945) ??“ her political career
began with the election of her husband during the Great Depression.
1) Mrs. Roosevelt encouraged the President to create relief programs for
2) She became a hero to many people because she worked for
equal treatment under the law for all Americans (especially women
and African Americans).
3) She was the first First Lady to offer opinions: She spoke out and
wrote about U.S. and world events at a time when it was not
considered proper for a woman to have opinions!
4) After the President died, she helped to create the United Nations.
a) She served as the U.S. Ambassador to the U.N. from 1947 to
b) She helped to create The U.N. Universal Declaration of Human
Rights; a ???bill of rights for the world???.