Roaring twenties, stock exchange crash, great depression, Franklin Roosevelt New Deal and worldwide effects

1. THE GREAT
DEPRESSION 1929
1

2. THE ROARING TWENTIES
• A NEW WOMAN: the
most familiar symbol is
probably the flapper: a young
woman with bobbed hair and
short skirts who drank,
smoked and said what might be
termed “unladylike” things, in
addition to being more sexually
“free” than previous
generations.
PROHIBITION: The 18th
Amendment to the Constitution
banned the manufacture and sale of
alcohol with more than 0,5%. This
made the liquor trade illegal and
controlled by organized crimes
figures such as Alfonso Capone.
2

3. THE ROARING TWENTIES
BIRTH OF MASS CULTURE: many had
extra money to spend, and they spent it on
consumer goods such as clothes and home
appliances like electric refrigerators. In
particular, they bought radios. The first
commercial radio was in 1920; three years
later there were more than 500 stations. By
1929, there were radios in more than 12
million households. People also went to the
movies:, three-quarters of the American
population visited a movie theater every
week. But the most importan product was
the car. By 1929 there was one car out five
americans.
JAZZ AGE: Cars also gave young
people the freedom to go where
they pleased and do what they
wanted. What many young people
wanted to do was dance. Jazz
bands played at dance halls.
3

4. AGRICULTURAL CRISIS
During World War I European
demand for American crops
increased.
• After the war demand
decreased.
As a result, there was a
overproduction and a decline in
the food prices. Farmers
obtained less incomes.As the American economy
was becoming increasingly
mechanized and
industrialized, there was not
a need for half of the
population to work on farms. 4

5. HERBERT HOOVER WINS
1928 ELECTION
Republican Herbert
Hoover won in the 1928
election
Hoover emphasized years
of prosperity under
previous Republican
administrations
• Hoover won an
overwhelming victory
5

6. THE STOCK MARKET
By 1929, many Americans
invested their savings in the
Stock Market
The Stock Market had
become the symbol of a
prosperous American
economy
The Dow Jones Industrial
Average Index is a measure
based on the price of 30 large
firms
6

7. STOCK PRICES RISE THROUGH
THE 1920s
Through most of the
1920s, stock prices rose
steadily
• The Dow almost doubled
its value in five years
(19224-1929).
By 1929, 4 million
Americans owned stocks.
New York Stock Exchange
7
Dow Jones Index
1926-39

8. SHARES SPECULATION
• SPECULATION: Too many Americans
were engaged in speculation – buying
shares & bonds hoping for a quick
profit.
• MARGIN: Americans were buying “on
margin” – paying a small percentage of a
share’s price and borrowing the rest of
the value.
• DEFAULT:
in case of
default (non-
payment) the
only
guarantee
was the value
of the shares. 8

9. OCTOBER 1929 CRASH
 In September the Stock Market
had some unusual up & down
movements.
 On October 24, the market
took a plunge . . .the worst was
yet to come
• On October 29, known as Black
Tuesday, the market crash.
 16.4 million shares were sold
that day( Stock Market
collapsed and prices went
down).
 People who had bought on
margin (credit) were stuck with
huge debts.
9

10. 10

11. 11

12. THE GREAT DEPRESSION
The Stock Market crash
signaled the beginning of the
Great Depression
The Great Depression is
generally defined as the
period from 1929 – 1940 in
which the economy declined
and unemployment
skyrocketed
The crash alone did not cause
the Great Depression, but
made things worse.
12

13. FINANCIAL COLLAPSE
After the crash, many
Americans panicked and
withdrew their money from
banks
Banks had invested in the
Stock Market and lost
money.
In 1929, 600 banks fail
By 1933, 11,000 of the
25,000 banks nationwide
had collapsed.
Bankruptcy 1929, Los Angeles
13

14. UNEMPLOYMENT INCREASED
Between 1928-1932, the
U.S. Gross Domestic
Product (GDP), the total
output of goods and
services, fell nearly 50%
from $104 billion to $59
billion
90,000 businesses went
bankrupt
• Unemployment increased
from 3% in 1929 to 25%
in 1933
14

15. CRASH EFFECTS IN THE ECONOMY.
Impact on Europe
• As a consequence of World
War I, European economies
were indebted. They had
borrowed a great deal of
money from American banks
that the banks now wanted
back.
• With U.S. buying less goods,
foreign businesses were less
able to export their products
and were forced to lay off
workers.
• Governments tried to protect
themselves by passing high
tariffs (protectionism), making
foreign goods expensive.
Impact on Business
• The crash crushed
businesses, because banks
couldn’t lend money.
• Consumers also cut their
spending on everything but
essentials, and companies
were forced to lay off
workers when demand
decreased.
• Unemployed workers had
even less money to make
purchases.
• In the year after the crash,
American wages dropped by
$4 billion and nearly 3
million people lost their jobs.
15

16. HAWLEY-
SMOOT TARIFF
The U.S. was not the only
country affected by the
Great Depression.
In 1930, Congress passed
the toughest tariff in U.S.
history called the Hawley-
Smoot Tariff.
It was meant to protect U.S.
industry but had the
opposite effect.
Other countries approved
their own tariffs and soon
world trade fell 40%
16

17. HOOVER STRUGGLES WITH THE
DEPRESSION
After the stock market
crash, President Hoover
tried to reassure Americans
He said, “Any lack of
confidence in the economic
future . . . Is foolish”
He recommended business
as usual.
Hoover was not quick to
react to the depression
"It is not the function of the government to relieve
individuals of their responsibilities to their
neighbours, or to relieve private institutions of their
responsibilities to the public."
17
"Prosperity is just around the
corner“, Herbert Hoover, 1932.

18. The Great
Depression brought
homelessness and
hunger to millions.
Across the country,
people lost their
jobs, and their
homes
Some built
makeshifts shacks
out of scrap
material
These shantytowns
were called
Hoovervilles in
reference to the
president of USA.
18
Seattle
New York

19. SOUP KITCHENS
One of the common
features of urban areas
during the era were
soup kitchens and
bread lines
Soup kitchens and
bread lines offered free
or low-cost food for
people
19

20. RURAL LIFE DURING
THE DEPRESSION
While the Depression
was difficult for
everyone, farmers did
have one advantage;
they could grow food for
their families
Thousands of farmers,
however, lost their land.
Many turned to tenant
farming because of their
debts with the banks.Between 1929-1932 almost half million
farmers lost their land 20

21. THE DUST BOWL
A severe drought
affected the Great
Plains in the early
1930s
Wind scattered the
topsoil. The resulting
dust traveled hundreds
of miles.
One storm in 1934
picked up millions of
tons of dust from the
Plains an carried it to
the East Coast
Kansas Farmer,
1933
21

22. Dust storm approaching Stratford, Texas, 1934 22

23. Storm approaching Elkhart, Kansas
in 1937
23

24. Dust buried cars and wagons in South Dakota
in 1936
24
Boy covers his mouth
to avoid dust, 1935

25. • Many farmers migrated
to California and other
Pacific Coast states,
mostly to California. 25
Kansas, Oklahoma,
Texas, New Mexico, and
Colorado were the
hardest hit regions
during the Dust Bowl

26. 26

27. FRANKLIN D. ROOSEVELT- 1932
Franklin grew up in a wealthy and
influential New York family. He
was tutored at home and traveled
the world with his family during his
childhood. He graduated from
Harvard in 1904. Roosevelt became
active in politics in 1910 when he
was elected to the New York State
Senate and, later, the Assistant
Secretary of the Navy. However, his
career stopped for a while in 1921
when he became sick with polio.
Although he survived, he nearly
lost the use of his legs. For the rest
of his life he could only walk a few
short steps by himself.
27

28. FRANKLIN ROOSEVELT HUNDREDFRANKLIN ROOSEVELT HUNDRED
DAYS.DAYS.
 Took office in March 1933
 Said that economic recovery was possible
 Promised that the government would help
A New President
• Roosevelt called special session of Congress that became
known as the Hundred DaysHundred Days.
• President and Congress worked togetherPresident and Congress worked together to create new
programs to battle the Depression and aid economic
recovery.
• These programs became known as the New DealNew Deal.
The Hundred Days
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29. Banking CrisisBanking Crisis
• Temporarily closed all theTemporarily closed all the
nation’s banksnation’s banks to stop panic
and large-scale withdrawals: 4
days Bank Holidays. After
these 4 days , banks were
reorganized and closed those
who were insolvent.
• Passed the EmergencyEmergency
Banking Act:Banking Act: within two
weeks, americans redeposited
half of the money that had left
banks months before.
Government created a de facto
100% deposit insurance.
• Glass-Steagall Act createdGlass-Steagall Act created
the FDIC:the FDIC: limited commercial
banks activities. Separated
commercial and investment
banks activities.
Hundred DaysHundred Days
• Critical period ofCritical period of
government activitygovernment activity
• Roosevelt pushedRoosevelt pushed
Congress to put most ofCongress to put most of
his New Deal intohis New Deal into
practice.practice.
• The New Deal promisedThe New Deal promised
relief, recovery andrelief, recovery and
reformsreforms..
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End Prohibition. Alcohol was legal again …. And consumers
paid taxes.

30. Restoring ConfidenceRestoring Confidence
Roosevelt worked to restore confidence in Americanrestore confidence in American
banks.banks.
– Ordered all banks to temporarily close
– Emergency Banking Relief ActEmergency Banking Relief Act was quickly passed .
– Government inspected financesGovernment inspected finances of a bank before it was
allowed to reopen.
Plan was announced in Roosevelt’s first fireside chatRoosevelt’s first fireside chat.
– Radio addressRadio address in which he spoke directly to the
American people
– Gave many chats over the course of his administration
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31. New Deal ProgramsNew Deal Programs
Civil Works AdministrationCivil Works Administration– employed 4 million Americans on building
hospitals, schools, highways, bridges, parks, etc. Also gave work to artists,
writers, theater directors and musicians
Social Security ActSocial Security Act, which guaranteed pensions to million of Americans, set up
a system of unemployment insurance and the federal government would help
care for dependent children and the disabled
Tennessee Valley AuthorityTennessee Valley Authority– hired people to build dams and generators,
controlled flooding and bring cheap electricity and jobs to Tennessee River
Valley
Farm Credit AdministrationFarm Credit Administration– helped farmers refinance mortgages so they could
keep their farms
Agricultural Adjustment ActAgricultural Adjustment Act– stabilized agricultural prices- Helped farmers by
paying them not to grow crops and leave their fields fallow in order to end
surpleses and boost prices.
National Industrial Recovery ActNational Industrial Recovery Act– passed with support from Frances Perkins,
the nation’s first female Cabinet member, give the workers the right to unionize
and collective bargaining (higher wages and better work conditions).
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32. Reformation: A New Deal.
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 Roosevelt used to say "try something, if
it doesn't work try something else." He
and his brain trust recognized, at least,
that they must try to do something.
 These attempts at least gave Americans
the hope that something was being done.
 Roosevelt's basic philosophy of
Keynesian economics manifested itself in
what became known as the three "R's"
of relief, recovery and reform.
 The programs created to meet these
goals generated jobs and more
importantly, hope.

33. New Deal Labor ProgramsNew Deal Labor Programs
 National Industrial Recovery ActNational Industrial Recovery Act passed in 1933.
– Required minimum wageminimum wage and allowed collective bargaining
– Declared unconstitutionalunconstitutional by Supreme Court in 1935
 National Labor Relations Act, or the Wagner ActWagner Act
– Allowed workers to join labor unionsAllowed workers to join labor unions
– Established the National Labor Relations BoardNational Labor Relations Board to oversee union
activities
 Congress of Industrial OrganizationsCongress of Industrial Organizations
– Organized workers into unions based on industryindustry, not skill level
– Allowed African Americans, Hispanics, women, and immigrantsAfrican Americans, Hispanics, women, and immigrants
as members
– Led a sit-down strikesit-down strike against General Motors in which they
stayed in the factories so that they could not be replaced by new
workers
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34. 1936 ELECTIONS
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35. Roosevelt was reelected in 1936 by a huge margin.
Supreme Court issued a series of rulings declaring
several New Deal programs unconstitutional.
Roosevelt responded by proposing a plan for
reorganizing federal judiciary.
– Drew harsh criticism from Congress and public
– Critics charged that Roosevelt was trying to change the balance
of power defined in the U.S. Constitution.
– Congress rejected the bill.
The Supreme Court did not overturn any more New Deal
legislation.
35

36. 36
WORLDWIDE EFFECTS.

37. 37
Great Britain trade fell by
half (1929-1933), industry
production fell by a third.
At the depht of the
depression there were 3.5
million unemployed and
many more had only part-
time employment.
GREAT BRITAIN.
Around 200 men marched
from Jarrow to London
over 26 days, carrying a
petition to the British
government requesting the
re-establishment of
industry in the town
following the closure in
1934 of its main
employer, Palmer's
shipyard

38. − Australia's extreme dependence on
agricultural and industrial exports
meant it was one of the hardest-hit
countries in the Western world.
− Unemployment reached a record
high of almost 32% in 1932.
− After 1932, an increase in wool and
meat prices led to a gradual
recovery
38
AUSTRALIA.
People were forced into all sorts of tricks and expediencies to survive, all
sorts of shabby and humiliating compromises. In thousands of homes
fathers deserted the family and became itinerant workers, or perhaps took
to drink. Grown sons sat in the kitchen day after day, playing cards,
studying the horses (betting on horse racing) and trying to scrounge
enough for a three penny bet, or engaged in petty crime, mothers cohabited
with male boarders who were in work and who might support the family,
daughters attempted some amateur prostitution and children were in
trouble with the police.

39. • Harshly impacted by both the
global economic crisis and the
Dust Bowl.
• Canadian industrial production
had fallen to only 58% of the
1929 level by 1932, the second
lowest level in the world after
the United States
• Total national income fell to
55% of the 1929 level, again
worse than any nation apart
from the United States.
39
CANADÁ.
Ontario, Canada
Farms in the west such as this one
were devastated not only by erosion
but also by droughts and plagues of
insects (Saskatchewan).

40. ASIA
• The Great Depression in East Asia
was of minor impact. Asian trade
was dominated by european colonial
powers.
• The Japanese economy shrank by
8% 1929–31
• The invasion of Manchuria in
September 1931 provided Japan
with raw materials and energy.
• The Japanese economy was able to
recover by 1932 and continued to
grow. 40

41. FRANCE
 The Depression began to affect
France from about 1931
 France's relatively high degree of
self-sufficiency meant the
damage was considerably less
than in nations like Germany.
 Though, unemployment was high
enough to lead to rioting and the
rise of the socialist Popular
Front.
41
Leon Blum, 1936, first socialist to
take office.

42. GERMANY.
 Germany's Weimar Republic was
hit hard by the depression, as
American loans to help rebuild the
German economy stopped.
 Unemployment soared, especially
in larger cities, and the political
system was even more influenced
by extremism (communists and
nazis).
 Hitler's Nazi Party came to power
in January 1933.
42

43. World War II:
− US factories flooded with orders
of weapons and ammunition.
− Unemployment decreases and
production increase
− Depression ends completely by
the time the USA entered the
war in 1941
END TO ECONOMIC DEPRESSION
43