Chapter 21 The Great Depression 1928-1932. Section 1 Causes of the Depression.
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Transcript of Chapter 21 The Great Depression 1928-1932. Section 1 Causes of the Depression.
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Chapter 21
The Great Depression1928-1932
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Section 1
Causes of the Depression
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1920’s
•Prosperity•Consumption increased•Gross national product increased
•Stock market increased
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Herbert Hoover
•Chosen by Republicans as Presidential candidate in 1928
•From Iowa; orphaned as a child
•Mining engineer•Head of Food Administration
during WWI
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•Secretary of Commerce for Pres. Harding & Coolidge
•Won the election; defeated Alfred E. Smith (Democrat)
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Economic Troubles
•Farmers: made up ¼ of workforce – had increased farm yields during WWI – bought more land & equipment (huge debts & mortgages) – demand fell after war but production remained high – rural depression
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• Widening gap between the rich & poor
• Overproduction/under-consumption
• Installment buying – (buying on credit) small percentage down payment made at purchase with balance paid over a period of months or years
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Black Tuesday
•Tuesday, October 29, 1929 – stock market crash signaling the beginning of the Great Depression
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Great Depression
• Period lasting from 1929 to 1941 in which the economy faltered and unemployment soared
• 641 commercial banks failed in 1929
• Too little money was in circulation after the stock market crash
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Global depression
•Germany had been forced to pay war reparations
•France & Britain were attempting to rebuild
•Business failures, bank collapses & high unemployment
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Section 2
Americans Face Hard Times
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Effects of Depression
•25% of Americans lost jobs by 1933
•Others saw hours & pay cut
•Ate smaller meals: water replaced milk; no meat
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•Many became homeless developing “Hoovervilles”: makeshift shantytowns of tents & shacks built on public land or vacant lots (So-named for Pres. Herbert Hoover whom they blamed for the Depression)
•Many farmers lost their farms & moved
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Dust Bowl
• Term used for the central & southern Great Plains during the 1930’s when the region suffered from drought & dust storms
• Storms killed cattle, birds & fish• Forced many farm families to
migrate
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Depression Effects (con’t)
•Many men deserted their families
•Birthrates dropped•Many children quit school•African American poverty in
1932 was near 50%
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Section 3
Hoover’s Response Fails
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Hoover’s Plan
•“Hands-off” – at first •Saw business cycles as
natural occurrences•Asked businesses & industries
to keep employment, wages & prices at current levels
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•Called for tax reductions, lower interest rates & public works programs
•Wanted wealthier individuals to give more money to charity
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Localism
•Policy whereby problems could be solved at local & state levels
•More jobs & relief measures by state & local governments
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Reconstruction Finance Corporation
•(1932) – gave $1billion in gov’t loans to railroads & large businesses
•Lent money to banks
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Trickle-down economics
•Economic theory holding that money lent to banks & businesses will trickle down to consumers
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Bonus Army
•Group of WWI veterans who marched on Washington D.C. in 1932 to demand early payment of a bonus promised by Congress
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Chapter 22
The New Deal1932-1941
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Section 1
FDR Offers Relief & Recovery
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Election of 1932
• Herbert Hoover vs. Franklin D. Roosevelt
• Hoover believed relief should come from state & local gov’ts & private agencies
• Roosevelt believed strong action from the federal gov’t was needed
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Franklin D. Roosevelt(FDR)
•Served in the New York State Senate
•Assistant Secretary of the Navy for W. Wilson
•Governor of New York•Promised a “New Deal” for all
Americans
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New Deal
•Programs & legislation enacted by FDR during the Great Depression to promote economic recovery & social reform
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Brain Trust
•Group of professionals & academics who advised FDR in the planning of the New Deal
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First Hundred Days
•FDR proposed & Congress passed 15 bills as part of the First New Deal to accomplish 3 goals: relief, recovery, & reform
•Relief: from the immediate hardships of the depression
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•Recovery: long-term economic recovery
•Reform: to prevent future depressions
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Emergency Banking Bill
•Gave FDR power to declare a four-day bank “holiday” with the idea that banks would get all accounts in order before reopening.
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Fireside chats
•Informal radio speeches made to the American people by FDR explaining the measures taken to relieve the depression
•Reassured the people that the banks were safe
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Federal Deposit Insurance Corporation
•FDIC – insured bank deposits up to $5000 to reform the national banking industry
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Securities & Exchange Commission
•SEC – established by Congress to regulate the stock market & make it a safer place for investments
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Agricultural Adjustment Act
•AAA – sought to end overproduction of farm crops & raise crop prices
•Provided financial aid; paid farmers subsidies not to grow certain crops & to kill excess livestock
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Tennessee Valley Authority
•TVA – built a series of dams in the Tennessee river valley to control flooding & generate electric power
•Replanted forests, built fertilizer plants, created jobs & attracted industry
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Civilian Conservation Corps
•CCC – provided jobs for young men replanting forests, building trails, digging irrigation ditches & fighting fires
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National Industrial Recovery Act
•Established the National Recovery Administration (NRA) to develop codes of fair competition to govern whole industries
•Established minimum wages & prices
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Public Works Administration
•Built bridges, dams, power plants & government buildings
•Improved the nation’s infrastructure & created millions of new jobs
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Section 2
The Second New Deal
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Works Progress Administration
•WPA – created to administer the $5 billion appropriated for new jobs
•Built & improved highways, harbors; promoted soil & water conservation
•San Antonio River Walk & Appalachian Trail
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Social Security Act
•Created a pension system for retirees, established unemployment insurance for workers who lost their jobs, & created insurance for victims of work-related accidents
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Rural Electrification Administration
•Established to loan money to electric utilities to build power lines & bring electricity to isolated, rural areas
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Welfare state
•A government that assumes responsibility for providing for the welfare of children, the poor, elderly, sick, disabled and unemployed
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FDR’s effect on the Presidency
• Increased power of the President & the executive branch
• Made mass media an essential tool in advertising & promoting policies
• Expanded Presidential role in managing the economy
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•Expanded Presidential role in developing social policy
•Won 3rd & 4th terms which led to the 22nd Amendment