The Great Depression

Effects of the Depression on Americans

Because of the Great Depression, the economy fell hard. When business slowed and went bankrupt, they had to lay of workers and leave them unemployed. Many people were willing to work for half of what they earned and also many unemployed lost their homes. Jobless people ended up on the streets selling products like apples, because on average, only 300 of the 5,000 people looking for work got jobs. Families also suffered while marriage and birth rates dropped. Families searched through city dumps and garbages for meals and pressure caused families to split up. Young children started looking for jobs. Families had to double up as well. Most of all, Americans' belief in themselves was gone.

Brain Trust

During Roosevelt's Presidency, he wanted some advice on how ti fight back the depression. He went to the people that he felt studied and knew the economy the most. He turned to many college professors who were experts on issues in the economy. The Brain Trust was important because they helped FDR plan bold new programs that could help the economy.

Bank Failures

During the 1920s, banks made unwise loans. They lent money to the people who invested in the stock market. Borrowers couldn't repay their loans when the stock market crashed, so the banks could not give depositors their money when the asked for it. Many people lost all of their savings that they kept in banks. Because of this, tons of banks were forced to close.

Election of 1932

Franklin D. Roosevelt and Hoover ran for President. Hoover described himself as Laissez-Faire, "Rugged Individualism", and unresponsive. Roosevelt described himself as hands on, "Forgotten Man", Charismatic, and Experimentation. He made people believe that "Happy Days are Here Again". Democrats believed in Roosevelt. FDR ended up winning by a landslide. "Nothing to Fear but Fear Itself". Supporters believe that FDR and his strategy of continuously trying would lead them out of the depression and prevent another one from happening.

Hoover's Response

Hoover did not act hands on to end the depression because he didn't believe that the government should get involved in business. He was too laissez-faire and believed in "Rugged Individualism" where people solve their own problems. He called on private charities, like churches to set up soup kitchens. He also set up public works where projects are built by the government for the public. When Hoover didn't act hands on, people lost faith in him. They made up names like Hoovervilles and Hoover Flags.

Fireside Chats

While Roosevelt was in office, he gave 30 radio speeches. They were called fireside chats because he sat in a chair near a fire in the White House and discussed what was going on.This was very important so that the people could know what was happening in the economy. This was also very unusual for President to do, but very helpful. Because of these chats, many Americans felt FDR really understood their situation and listened to their problems.

Schecter Poultry Corp vs. USA

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Bonus Army

After WWI, Congress voted to give veterans a bonus of money, to be paid in 1945. When the depression started, more than 20,000 jobless veterans marched to Washington and demanded the bonus right away. The Senate rejected the bill. Some veterans went home, but many stayed and vowed to stay until 1945. When they wouldn't leave, Hoover ordered General Douglas MacArthur to clear them out. MacArthur burned the camp to the ground with weapons. After the attack, Hoover lost the little supporters that he had. America decided that the country needed a new leader to turn to for help.

Court Packing

After the 1936 election, when Roosevelt won, he had a plan to expand the Supreme Court from 9 to 15. This way, he could appoint 6 new Justices who supported his programs for his benefit. People were outraged and accused him of of "packing" the court with only people who supports his views. They saw this as a threat to the separation of powers. He finally withdrew his proposal after 6 months. IN the end, he got what he wanted without the fighting because one Justice started to support him, and another retired.

Overproduction

American industries and farms kept producing vast amounts of goods during the 1920s like they did in WWI. The wages did not keep up with prices, so workers could not afford to buy many goods. They also had little money. Farms were also producing too much goods that people were not buying . As the orders slowed, factories closed or laid off workers. Many workers lost their jobs, and farmers became in debt and were not making any profit.

Black Tuesday

Black Tuesday was the day when the stock market crashed, which signaled the start of a Great Depression. This day was important because it is known as the final straw of a cause that led to the depression.

Causes of the Great Depression

Boom Spirit of the 1920s- With people having the time of their lives in the 1920s, they were wondering when it would end and all go downhill. Unequal distribution of wealth- The rich got richer and 80% of the nation had less than half the income. Overextention of Credit- Banking had very low interest rates and they owed more money than it had in reserves. Also, installment Buying and Margin Buying were big causes. Overproduction/Under consumption- Farmers kept producing at WWI levels. Wages did not keep up with prices, so workers could not afford any goods. They kept producing more goos than people were buying which caused orders to slow. Laissez-Faire Policies- Coolidge and Hoover supported laissez-faire, which everyone wanted, and big business. This type of government who allowed business to regulate on its own led to the depression. Stock Market Crash- immediate cause

Alphabet Agencies

CCC (Civilian Conservation Corps)- The CCC hired unemployed single men between the ages of 18 and 25 to work for $1 a day. These men would plant, build, worked on flood-control projects, and open new parks. It gave many jobs to young people and conserved natural resources. TVA (Tennessee Valley Authority)- This set out to remake the Tennessee River Valley. TVA engineers build 49 dams to control floods. These damns also produced chap electrical power. They also deepened river channels and planted new forests, and ste up health centers and schools. Some people supported what they were doing, but people like ones in Power Companies. WPA (Works Progress Administration)- This put the jobless to work by making clothes, building hospitals, schools, parks, airports, and more. They also hired artists, photographers, actors, writers, composers, and more. Critics accused the WPA of doing things that won't benefit the nation in the future. AAA (Agricultural Adjustment Act)- the government also paid farmers ti plow surplus crops under the soil and to destroy surplus cows and pigs. He also paid farmers not to grow certain crops. FDR hoped that with a small harvest, supply and demand would force prices to rise. FERA (Federal Emergency Relief Administration)- This gave federal money to state and local agencies. These agencies would then give out the money to the unemployed. NRA (National Recovery Administration)- To enforce new codes for industry, they passed the NRA. Companies that followed NRA codes stamped a blue eagle on their products. MAny companies ignored the codes and small businesses felt the codes favored bigger firms. PWA (Public Works Administration)- It promoted recovery by hiring workers for thousands of public works projects. People believe the PWA dud little to bring recovery. FDIC (Federal Deposit Insurance Corp)- It insured savings accounts in banks approved by the government. If the FIDC failed, the government would make sure the depositor would receive their money.

Deficit Spending

Critics of the New Deal were alarmed from deficit spending. In this practice, the government was creating a huge increase in national debt, or the total sum of money the government owes.

100 Days

During FDR's first 100 days of being President, were days of hard work. During these 100 days, Roosevelt produced 15 new laws like the alphabet agencies, had about 30 fireside chats, held a bank holiday, and more. All of the bills covered programs for job relief, to planning for an economic recovery. Together, they made FDR's New Deal with 3 main points (RRR).

Franklin Delano Roosevelt

FDR became President by a landslide in the Election of 1932. Roosevelt was a very hands-on President who did experimented anything he could to get out of the depression. During the Hundred Days, FDR created numerous amounts of laws to help unemployment, industries, banking, and more. He also urged to help prevent another depression. SOme critics thought he was too hands-on and too communist like, but others loved the fact that he was trying to help and kept trying. "Nothing to fear but fear itself". He is an important President because from this point on, Americans expected hands-on Presidents.

Bank Holiday

FDR knew that if banks weren't safe, the economy would not be able to recover. On his second day as president, he declared a bank holiday which closed every bank in the country for four days. In order to do this, he asked Congress to pass the Emergency Banking Relief Act. This only allowed safe banks to open. After he went to each bank, he went on radio to explain what he had done. He told Americans how it is now safe to keep your money in the safe banks.

The Stock Market Crash

In 1929 people started to worry when the boom was going to end. Everyone holding stocks went on a panic and started to sell them all at once. The rash of selling caused stock prices to fall, causing the crash to occur.Desperate people also tried to unload million of shares causing the stock prices to fall even further. When the market reopened, there were no buyers and people who thought they owned valuable stocks, were left with nothing.

Margin

Many people bought stocks on margin. Under this system, the buyer held the stock until the price rose, and then sold it at a profit. This system only worked as long as the stock prices keep going up. Experts warned people that the bull market couldn't last forever, but most investors ignored the warnings.when prices kept falling, stock brokers asked investors to pay back what they owed. Investors who couldn't pay back their loans had to sell the stock which caused more selling of the stocks.

Migrants

Migrant workers are people who move from one region to another in search of work. During the Dust Bowl, poor farmers like "Okies" and "armies" moved to California and other places to escape the horrible conditions. They hoped to find jobs in orchards in California, Oregon, and Washington. Many of the migrant workers were not wanted because local citizens felt they could take their jobs away. Migrants who did find work were only paid a little.

Critics of the New Deal

Most critics of the New Deal were supporters of FDR in 1932. For example, Huey Long and Francis Townsend had different plans. They believed the President either had too much power, or was doing too little for African Americans and the poor. Many conservatives formed the Liberty League to combat FDR's New Deal. They thought the New Plan was too hands-on in business and people's freedoms. They felt as if the government was taking away American freedoms.

Radio, Movies, the Arts

Painting and Photography were big in the depression, showing the stories of people during the hardships. For example, John Steinbeck wrote a novel on the Okies. People also photographed people. The radio was a way to escape the hard times. Listening to the radio and going to the movies had people forget the depression they were in. Movies inspired many Americans to forget what was going on and inspired them to keep going and not to give up.

Dust Bowl

The Dust Bowl was a time of complete drought during the depression in the Great Plains. HUge dust storms would blow and ruin almost everything. They were called "Black Blizzards" and the "Dirty Thirties". It was caused by overgrazing of cattle and plowing by farmers which ruined the grasses that held the soil in place. It went on for about 4 to 5 years.

Social Security

The President sought to help the elderly. The Social Security Act had 3 parts. 1- set up a system of pensions for older people. Payments from employers and employees supported this. 2- set up the nation's first system of unemployed insurance. People who lost their

Relief, Recovery, Reform

The RRR stands for relief for the jobless, recovery for agriculture and industry, and reforming to fix the economy forever. This was apart of the New Deal. Relief for the jobless contained laws that gave people jobs. Recovery helped overproduction in industry and farming. We also reformed out economic system to prevent another depression. All of the R's had laws apart of the alphabet agencies.

Wagner Act

This act supported union workers. It protected American workers from unfair management practices, like firing a worker for joining a union. It also gave them the right to collective bargain, which is when a union representing workers negotiates with management for a contract. The act helped union membership grow from 3 million to 9 million during the 1930s.

Collective Bargaining

This is when a union representing workers negotiates with management for a contract. This helped union membership grow a very big amount. With more members, unions increased their bargaining powers and became more powerful in politics.

Emergency Banking Relief Act

This was introduced in order for a bank holiday to happen. This act would reopen the banks with enough funds to meet depositors' demands. FDR picked out these safer banks that could reopen, and the rest would have to close. This act helped Americans because now they wouldn't have to hide their money under their mattresses.

New Deal

While a flood of new laws came in, they were putting together FDR's New Deal. The New Deal had 3 main points (RRR); Relief for the jobless, Recovery plans for the economy, and Reforms to prevent another depression from happening. Roosevelt set up many amounts of programs to achieve these goals. There were critics and many supporters of Roosevelt's New Deal.

New Deal for: Women, Blacks, Native Americans

Women: Women faced problems in the depression. They had to earn extra money from laundry, and more. They also needed to take care of the family and nurture the unemployed husbands. Usually, jobs were taken by men first before women, so it was hard to find jobs. But, they ended up earning wages and worked as secretaries, teachers, and more. Blacks: African Americans were usually the first to lose their jobs, and some charities refused to give to blacks, but FDR helped. The Black Cabinet included African American leaders. They kept the pressure for equal treatment and civil rights. Native Americans: Even though Native Americans were citizens, they still continued to live in deep poverty. The Indian New Deal helped give them more control over their affairs. the IRA and IECW were laws that helped with their reservations and jobs for the unemployed.