The Great Depression

The Great DepressionWhat is GNP?Gross National ProductIt is the total value of all goods and services produced within a nation in a particular year, plus income earned by its citizens.

For graph analysis2Brother Can You Spare a Dime?They used to tell me I was building a dreamAnd so I followed the mobWhen there was earth to plow or guns to bearI was always there right on the job

They used to tell me I was building a dreamWith peace and glory aheadWhy should I be standing in lineJust waiting for bread

Once I built a railroad, I made it runMade it race against timeOnce I built a railroad, now it's doneBrother, can you spare a dime?

Once I built a tower up to the sunBrick and rivet and limeOnce I built a tower, now it's doneBrother, can you spare a dime?

Once in khaki suits, gee we looked swellFull of that Yankee-Doodley-DumHalf a million boots went slogging through HellAnd I was the kid with the drum

Say, don't you remember? They called me "Al"It was "Al" all the timeWhy don't you remember, I'm your palSay buddy, can you spare a dime

Once in khaki suits, ah gee we looked swellFull of that Yankee-Doodley-DumHalf a million boots went slogging through HellAnd I was the kid with the drum

Oh, say, don't you remember, they called me "Al"It was "Al" all the timeSay, don't you remember, I'm your palBuddy, can you spare a dime?

Introduction Great DepressionEconomic Troubles

Some became wealthy, others couldnt earn a livingIndustries struggledFarmers could not sell the amount of goods produced

Industries Weaken

Railroads and steel barely made a profitResult of new forms of transportationCoal mining dropped by about 50%Replaced with hydroelectric power, oil, and natural gasHousing market fallsRelated industries (furniture, lumber, etc.) fall too

Farmers Struggle

Decline of demand for crops by 40% after WWIMany farmers produced more in hopes of selling morePrices dropped dramaticallyFarmers couldnt pay debts and went into foreclosure lose propertyGovernment issues McNary-Haugen Bill- calling for government price supportsGovernment would buy excess crops from farmersPresident Coolidge vetoed the bill twice- Farmers have never made money. I dont believe we can do much about it.

Major Issues Facing Americans

Rising pricesStagnant wagesUnbalanced distribution of incomeOverbuying on credit

Uneven Distribution of Wealth

1920-1929, wealthiest 1% of Americans income rose by 75%Only a 9% increase among Americans as a wholeMore than 70% of Americans earned $2,500 per yearThis was considered the minimum amount needed for a decent standard of livingFamilies earning double that could not afford basic goods

Stock Market

Most visible sign of American economic prosperityDow Jones Industrial Average- barometer of stock market healthMeasure based on stock prices of 30 large firms trading on New York Stock ExchangeDuring the 1920s, the stocks were a bull market- period of rising stock pricesAmericans bought many stocks and bondsMany bought stocks who were average Americans hoping to strike it richSome buyers used speculation- bought stocks on the chance of a quick profitThey used buying on margin- paying a small percentage of a stocks price as a down payment and borrowing the restInvestors spent money and prices soared

Stock Market Crash:Sept. 1929- Stock prices peaked and then fellConfidence in the market started to waverInvestors quickly sold stocksOct. 24 1929- market took deeper plunge and investors sold more sharesOct. 29 1929-BLACK TUESDAY- bottom fell out of the market and the nations confidenceMillions of shares were sold on this day (16.4 million)Many lost savings and could not repay debts

Terms:Recession: A period of unemployment and low business activityDepression: A period of high unemployment and extremely low business activity

1928 Herbert Hoover won the election in a landslide

A chicken in every pot and two cars in every garage

2007 4.6 2008 5.8 2009 9.3 2010 9.6 2011 8.9 2012 8.1

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Conrad Albrizios

The New DealWhat does this mural reveal about the role of the government during this time period?

Election of 1932: Republican candidate: Herbert HooverDemocratic candidate: Franklin Delano RooseveltRoosevelt won the election by a landslide and the Democrats won control of the House and Senate

Roosevelts Plan FDR had to wait 4 mos. to be sworn in officially20th Amendment- shortened time until presidential inauguration had not been passed yet (lame duck)FDR began working right away with his team of advisers Brain Trust select group of professors, lawyers, and journalistsDeveloped a program to alleviate the problems known as the New DealRelief for needyEconomic recoveryFinancial reform

Hundred Days Name given to time period early in Roosevelts presidency where there was intense activity to pass New Deal initiativesNew initiatives expanded the role of the federal government in the nations economyBanksMarch 1933- declared a bank holiday and closed all banksEmergency Banking Relief Act- authorized the Treasury Dept. to inspect the banksHeld a fireside chat- radio talk about issues of public concern, explaining in simple terms the New Deal measuresRESULTS: American regained confidence in using the banking system again

Helping the American People Agricultural Adjustment Act (AAA)- raise crop prices by lowering productionGovernment paid farmers to leave fields unseededCivilian Conservation Corps (CCC)- young men, 18-25, built roads, developed parks, planted trees, and helped soil erosion. National Industrial Recovery Act (NIRA)- provided money to states to create jobs in construction of schools and other community buildings

Helping the American People cont. Works Progress Administration (WPA)- Goal was to create as many jobs as possible as quick as possibleBuilt airports, roads, public buildings, garment (textile) work, etc. Gave work to more than 8 million workers Social Security ActOld age insuranceUnemployment compensationAid to families with disabled (dependent) children

Criticism of the New Deal: Deficit spending- spending more money than the government receives in revenueLiberal criticism- Programs did not go far enough to help the poorConservative criticism- believed certain programs gave too much control over agriculture and industry to the government 1935- Supreme Court stated NIRA was unconstitutionalSaid the federal government overstepped bounds of position and gave legislative powers to the executive branchRoosevelt requested 6 judges to be added to the Supreme Court (packing the court) Many felt the president was violating the separation of powers Roosevelt got his way and added judges that ultimately favored the New Deal

Supreme Court declares NRA unconstitutional because it gave the executive branch legislative power.First, the federal government, through the National Recovery Administration, would help businesses establish a means to regulate themselves and to guarantee fair trade. Roosevelt hoped that businesses, by engaging in fairer business practices that would encourage friendly rather than cut-throat competition, would help reduce unemployment and stimulate the economy. If a business agreed to follow the new code, the federal government would exempt it from antitrust laws. Second, the NIRA recognized laborers' right to unionize. A new National Labor Board, chaired by United States Senator Robert F. Wagner, would enforce this part of the statute. Finally, the NIRA created the Public Works Administration. Under this part of the act, the federal government was to provide 3.3 billion dollars to hire Americans to work on public works projects. These projects ranged from sidewalks and school buildings to dams.

According to the court, the federal government--especially the president--had assumed powers that the United States Constitution did not grant. In particular, the first part of the NIRA allowed the federal government to regulate businesses that did not engage in interstate commerce.

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