MT 5 The Great Depression & The New Deal
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Transcript of MT 5 The Great Depression & The New Deal
MT 5The Great Depression
& The New DealLearning Target: #1
What caused the Great Depression?What steps were taken by the federal
government (congress, president Hoover and FD Roosevelt) to fight the economic crisis?
Answer the questions at the end of this power point and turn them in with handout #1
The Great Depression was a time in USA history when many people, companies and nations lost large amounts of money.
Stock market crash- Buying on Margin and Over speculation
Banks collapse (run on banks) Overproduction of expensive goods Employees wages decrease or Layoff workers = Extremely high unemployment High tariffs caused low demand for goods Federal reserve keeps interest rates low
Causes of the Great Depression
Stock Market Crashes
The rise before the fall The 1920’s create a lot of success for
USA New inventions led to new companies
which resulted in new stock for purchase From 1920 to 1929 stock prices
soared = Bull Market(long period of time were the stock prices rise) Investors began buying stocks on
MARGIN (payment plan for buying stocks) Problem: People bought stocks but didn’t
have the money to pay it back if the stocks fell
Investors also began over speculating on stock prices (buying stocks on a guess that the price of the stock would increase)
The fall
October 29, 1929 Black Tuesday
Stock prices drop People lost
millions
More issues with the
economyBanks collapse
Banks had lent money to stock investors When the stock market crashed
the investors couldn’t pay their loans = banks lost money
Banks had invested depositor’s (people’s) $$ in the stock market When the stock market crashed
the bank lost all those peoples money
Banks closed People afraid their bank might
close made “bank runs”- lots of people withdraw their money from a bank at the same time
Over production causes wage cuts and unemployment
Factories were able to produce a lot of stuff in the 1920’s Factory owners did not
increase wages People bought expensive
things on installment plans When people could not pay
all bills they cut back on stuff When people cut back on
stuff and companies have an overproduction of stuff This caused factories to cut
wages and lay off workers (high unemployment)
More issues with the
economyHigh Tariffs = High Taxes
Foreign countries stopped buying American made goods because of high tariffs
Effect Slowed USA
production of goods down even more = more lay offs= more unemployment = less people spending money
Federal Reserve mistake The federal reserve
is the main USA bank
When the economy began to slow the Federal Reserve kept loan rates low
Effect People/companies
kept borrowing money = banks lost more money
USA has the Great
Depression http://
www.youtube.com/watch?v=RJpLMvgUXe8&feature=player_detailpage
What steps were taken by the federal government
(congress, president Hoover and FD Roosevelt) to fight
the economic crisis?
He hoped to down play the depression. He was against
giving government money to the poor families. He called business leaders (factory, railroad,
other owners) to voluntary act – not lay off people The business owners did this for 1 month
Hoovers next step was to increase public works (government funded building projects) He hoped this would replace some jobs lost in the
private sector (factory jobs) Hoover set up the National Credit Corporation to
help troubled banks loans money (1931) Hoover set up Reconstruction Finance Corporation
so the government could loan money to business, banks, railroads and agricultural (1932)
President Hoover’s Actions
The depression hurts
Farmers revolt- stop growing crops, burn
crops, destroy crops (corn, wheat, milk) People protest, march, broke into grocery
stores, join communist rallies to overthrow government
WW1 veterans march to get $1,000 bonus from government Congress failed to approve Protesters camped out and the government
sent in the National guard to forcefully remove Hoover failed to be reelected.
Americans angry
Franklin Delano Roosevelt
The New Deal
Roosevelt & New
Deal In his inaugural
speech, “First of all let me assert my firm belief that the only thing we have to fear is fear itself.”
First 100 days as president Roosevelt & congress pass 35 laws = The New Deal
1st- Bank holiday = close banks Said banks were safe
2nd – Securities and Exchange Commission Watch stock market Get involved in private
investing Provide insurance to
banks to protect individuals bank accounts
The following programs put people to work or provided other
assistance Tennessee Valley Authority – built dams for flood control and
electrical power Civilian conservation corps – gave jobs to men 18-25 in the
forest Agricultural Adjustment Act – paid farmers to not grow certain
crops to increase prices so farmers could make money Federal Emergency Relief Agency – let the federal government
give state governments money to help the unemployed Public works and Civil works administration – gave people
constructions jobs (schools, roads, airports, parks, bridges)http://www.youtube.com/watch?v=wF80co_Y_Bc&feature=player_detailpage
Roosevelt creates many programs to help the poor
1. What was the great depression?2. What was going on with the stock market in the 1920’s?3. Why were buying on margin and over speculation a problem?4. What was black Thursday?5. Why did the banks fail? What events happened to cause the
banks to fail?6. Why were installment plans a problem?7. Why did other countries stop buying USA made products?
And why was this bad?8. List three things President Hoover did that he thought would
help the USA during the great depression.9. Why were the American people angry?10. What was the new deal?11. List three things President Roosevelt did to help the USA
during the great depression.
Questions