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Roots of the Great Depression Unit 6, PowerPoint #2
The Rise of Herbert Hoover By the late 1920s, Herbert Hoover was very popular Hoover was became a hero during World War I for his leadership guiding the Food Administration Hoover was Secretary of Commerce under both Warren G. Harding and Calvin Coolidge during the ‘20s “ Given the chance to go forward with the policies of the last eight years, we shall soon with the help of God, be in sight of the day when poverty will be banished from this nation.” – Herbert Hoover, 1928
Hoover Becomes President Hoover defeats Democratic nominee Alfred E. Smith in the Election of 1928 Prohibition and Religion big factors Hoover was for Prohibition and was a Protestant; Smith was against Prohibition and was a Catholic
Hoover was the third Republican president in a row
Herbert Hoover Calvin Coolidge Warren G. Harding
Followed fellow Republicans Harding and Calvin Coolidge
Continued “laissez faire” economic philosophy
Felt government should not interfere with the economy
Hoover called his policy “rugged individualism”
People encouraged to invest in the stock market to help business
The Mellon Plan Andrew Mellon was the U.S. Secretary of the Treasury who was important in developing the U.S. economic policy during the 1920s
He reduced government spending and cut the federal budget
He refinanced the national debt at a lower interest rate to greatly reduce the U.S. debt
He persuaded the Federal Reserve to lower the interest rate for the general public
He worked to reduce taxes with the belief that it would allow businesses and consumers to spend and invest their extra money
People believed Hoover and Mellon when they said that the economy was healthy.
The Dow Industrial Average was up 30 pts.
People rushed to buy stocks.
Warning signs There were numerous warning signs in the late 1920s that the economy was beginning a downward turn:
There was an uneven distribution of wealth.
Large companies dominated economy.
Too many Americans were buying on credit.
Overproduction of goods.
People gambling on the stock market
The Stock Market Many people in the 1920s bought stock ‘on margin’, meaning they paid for a small percentage of the stock, with the agreement they would pay it off later The stock market is a system for buying and selling shares of stock in a company, thus owning a small piece of the company.
The Stock Market Crashes Beginning on October 29, 1929, the Stock Market collapsed, losing almost 50 percent of its value in a month The Stock Market crash marked the beginning of the Great Depression
The Great Depression Begins The Great Depression was a severe economic depression that dominated the 1930s. The Great Depression was the longest, most widespread, and deepest depression in United States History.
The Great Depression Begins The Great Depression started in about 1929 and lasted until the beginning of World War II. Personal income, profits, prices, as well as trade dropped dramatically. Unemployment in the U.S. rose to 25%.
HOOVER AND The Depression Unit 6, PowerPoint #2
Banks Begin to Fail Banks were the first thing hit by the stock market crash as numerous banks closed their doors When the stock prices fell, many banks lost money on their investments. People who had deposits in these banks lost all their savings. Others took their deposits out as quickly as possible, creating runs.
A Bank Run A bank run occurred when people, fearing the bank would go bankrupt, rushed to the bank to take out their money A bank run led to the closing of a bank because all of the banks money would be gone
Hoover met w/bankers, businessmen,& labor leaders.
He asked employers not to fire workers or lower their pay.
He asked labor leaders not to ask for higher pay or to strike.
Reconstruction Finance Corps The Reconstruction Finance Corporation was the government agency that gave $2 billion in aid to state and local governments and made loans to banks, railroads, farm mortgage associations, and other businesses. The main purpose of the RFC was to create jobs for Americans who wanted to work
The Hoover Dam Hoover used the Boulder Dam project as a model of how federal government could encourage cooperation b/w private groups
Hoover believed that charities or state and local governments - not the federal government – provide food & shelter to people who were poor or out of work. Relief line waiting for commodities, San Antonio, Texas . Hoover Federalism
Despite Hoover’s hope, the economy continued to shrink & unemployment continued to go up Unemployed workers sit in front of a shack with Christmas tree, New York City, in December, 1937. The Depression Worsens
Turning Against Hoover In the 1930 elections, the Democrats gained more seats in Congress
Farmers burned crops & dumped milk rather than sell it for less than it cost them to produce it. Fields of uncut wheat northwest of Great Falls, Montana.
Hoovervilles Many homeless people were forced to live in shacks or “shanties” during the Depression Because many felt that President Hoover was to blame, some people called these places Hoovervilles
In 1932, WWI veterans came to the Capital in Washington, D.C. These veterans had been promised bonuses to make up for their poor wartime pay. Congress was about to vote on a bill to give the vets their bonuses so they wouldn’t have to wait. The Bonus Army
Thousands of veterans & their families came to D.C. This so-called BONUS ARMY set up tents to live in near the Capitol building.
At first, Hoover sent the veterans food…. But after the bonus was voted down in Congress, Hoover told the veterans to leave.
About 2,000 stayed. Hoover ordered the army to use force to remove them.
The sight of U.S. Army troops using tear gas on U.S. war veterans outraged many people.
Shacks put up by the Bonus Army on the Anacostia flats, Washington, D.C., burning after the battle with the military, 1932.
The Depression brought suffering & hardship to many Hard economic times ruined many people’s lives. Millions lost jobs, went hungry, or became homeless. Effects of the Depression
Many people turned to charitable organizations in order to survive Many people resorted to soup kitchens and bread lines for their food Turning to Charities Charities became an major source of assistance to many who were “down on their luck.”
Much of this area had been grassland that farmers broke up with their plows to grow crops
Soil was exhausted from over-farming. Grass that had once held the soil in place was gone. When winds swept across the Great Plains, the soil blew away. This dry area of blowing soil called the DUST BOWL.
Huge dust storms covered the Great Plains and blew dust as far away as the East Coast
Dust Storm in Rolla, Kansas; "05/06/35; Dear Mr. Roosevelt, Darkness came when it hit us. Picture taken from water tower one hundred feet high. Yours Truly, Chas. P. Williams." Photo: Massive Dark cloud approaching village in forefront .
Other families broke apart under the strain of poverty & unemployment.
Many men felt ashamed because they lost their jobs.
Some men left their families & wandered the country looking for work.
Depression leads to depression
Hobos Many homeless people began to wander around the country, walking, hitchhiking or, most often, “riding the rails” (hopped on trains). These men who wandered the country were called “hobos”
Toward Los Angeles, California. 1937. Photographer: Dorothea Lange. Perhaps 2.5 million people abandoned their homes in the South and the Great Plains during the Great Depression and went on the road.
Unemployed men vying for jobs at the American Legion Employment Bureau in Los Angeles during the Depression
Depression literature, art Novels such as John Steinbeck’s Grapes of Wrath gave readers a vivid account of what life was like during the Depression. Grant Wood’s American Gothic showed traditional American values, particularly those of rural Americans in the Midwest .
Many families pulled together during the hard time and shared what they earned. Instead of going out for entertainment, parents & children often stayed home to play games or listen to radio.
Children suffered terribly during the Depression
Many children had poor diets & no health care.
Many children ran away from home, hopping rides aboard freight trains.
FDR’s FIRESIDE CHATS Roosevelt used radio addresses to assure the nation, keep them informed, and let them know that he was working for them
THE HUNDRED DAYS Americans wanted the government to take immediate action to solve the nation’s economic problems In his first HUNDRED DAYS in office, FDR has Congress pass, and he signs into law, numerous laws in an attempt to end the Great Depression During those 100 days of lawmaking, Congress granted every "request" that Roosevelt asked for
Emergency Banking Relief Act Law passed by Congress that would close down insolvent banks and reorganize and reopen those banks strong enough to survive.
Agency created by the government to oversee the stock market and prevent fraud
Federal Deposit Insurance Corporation Government agency created to insure bank accounts and gain confidence in banks The purpose was to inspire people to have enough trust in the banks to start making deposits in the bank rather than withdraws
Agricultural Adjustment Administration Congress declared that they had the right to balance supply and demand for farm commodities so that prices would support a decent purchasing power for farmers AAA controlled the supply of seven "basic crops" – corn, wheat, cotton, rice, peanuts, tobacco and milk – by offering payments to farmers in return for taking some of their land out of farming, not planting a crop.
The Second New Deal Democrats made further gains in the House and the Senate in the 1934 elections Roosevelt saw the results of the mid-term elections as a mandate to continue with his New Deal plan Party Total seats (change) Seat percentage Democratic Party 322 +9 74.0% Republican Party 103 -14 23.6% Wisconsin Progressive Party 7 +7 1.6% Farmer-Labor Party 3 -2 0.6% Totals 435 +0 100.0%
Works Progress Administration Under the WPA, 8.5 million workers built miles of highways, roads, public buildings, parks. The WPA was the largest New Deal agency; it created construction jobs
Works Progress Administration The WPA also created jobs in artwork and writing Posters and slogans were created to promote the general welfare of citizens
Federal Housing Authority Its intent was to regulate the interest rate for people buying houses, which increased the amount of people who could afford a down payment on a house. The National Housing Act of 1934 was passed and the Federal Housing Administration was created.
Passed to give unemployed and elderly a SAFETY NET
Gave unemployed people money until they got a job
Gave elderly a check after they retired from work at the age of 65
Birth of Social Security The act was a milestone in American history because it acknowledged the responsibility of the federal government to take care of the less fortunate
The early 1930s were marked by intense industrial unrest, large-scale strikes, and social turmoil. Congress respond to the labor unrest with the Wagner Bill. Labor Unrest
Wagoner Act helps unions The Wagner Act (also known as the National Labor Relations Act) guaranteed workers the right to organize unions, and to strike, boycott and picket their employers.
Birth of the CIO The Congress of Industrial Organizations (CIO) was the large union created in 1935 as an organization for industrial laborers The CIO’s first leader was famed labor leader John L. Lewis
Father Charles Coughlin was a Catholic priest who used radio broadcasts to slam Roosevelt for not doing enough for the poor Opponents to the New Deal U.S. Senator Huey Long (left) of Louisiana had a plan of heavily taxing the rich and giving anyone out of work $200 a month.
With leg braces, FDR learned how to “appear” to walk
Wife Eleanor made public appearances on his behalf
March of Dimes Founded Roosevelt having polio raised national awareness of the disease and a drive to find a cure In 1938, the National Foundation for Infantile Paralysis is founded. It later changes its name to the March of Dimes. A vaccine for polio was discovered by Dr. Jonas Salk in 1955.
Women of the Depression The most influential woman during the Depression was Eleanor Roosevelt She was a tireless worker for the poor and minorities, and pushed her husband’s ideas
Women of the Depression Frances Perkins was the first woman in U.S. History to hold a Cabinet position (she was FDR’s Secretary of Labor) Perkins played a large part in the passage of the Social Security Act
Minorities in the Depression Mexican woman and children looking over side of truck which is taking them to their homes in the Rio Grande Valley from Mississippi where they have been picking cotton. Filling station, Neches, Texas) As unemployment rose during the Depression, many Mexicans were deported back to Mexico Even Mexican-American children who were U.S. citizens were sent back to Mexico with their parents
During the Depression, most African Americans became Democrats Blacks still did not benefit as much as whites during the Depression Minorities in the Depression
Depression Era Pastimes Going to movies like “The Wizard of Oz”: Taking part in novel things such as Dance Marathons
Will Rogers The humor of Oklahoma cowboy Will Rogers helped many people find a smile during the Depression Among Rogers’ famous quotes: “I never met a man I didn’t like.”