1920's -Spending/Good Economic times Tues. Oct. 29th, 1929 - NY Stock Market

Crashed Caused-G. Depression last until 1942

Stock MarketInvestors-purchased stocks; hope to make profitBanks loaned $$ to investors Investors only had to pay for 10% of the stock's at time of purchase-known as BUYING ON MARGIN, Balance paid at later date

STOCK SPECULATION - Buy & sell stocks quickly to make quick $$$

b/c of buying & selling, stock value increased

Often inflated values Gave false sense of

security/confidence in American market

Oct. 1929-Stocks prices began to drop

Invest. Confid. dropped

Invest. tried to sell Stocks

Bottom fell out of market = panic /RUSH TO sell… (many Inv. go bankruptcies as banks recall loans)

Ripple effect on the economy

Effect of Stock Market Crash- Rush to sell stocksPeople withdrew money from banksBanks collapsedBanks loaned out no moneyBanks recalled loansBusiness collapsedFactories closed down

Unemployment rose no gov't assistance at first-No goods purchasedpurchasing power declined reduced productivity yet again (= ECONOMIC CYCLE)

DOMINO EFFECT

Unemployment

Purchasing Power Productivity

1920's U.S. Eco. based on Productivity – Producing goods-Provided employement Goods produced -purchasing demand had to

be there:

Productivity-Purchasing-High employment =Healthy economy

1920-27, U.S. productive capacity doubled b/c of technological innovation (OVERPRODUCTION)

Uneven Dist. of Wealth0.1% at top owned as much as bottom 42% of American families Middle Class -Bulk of pop. Not wealthy; job b/c of the industrialization & consumerization Depended on salariesProductivity declined lost jobsCut back on purchasingDecline in Consumption among the middle class ruined the whole country

Pres. Hoover’s ResponseLAISSER FAIRE Attitude-Gov't say out of economy wouldn't create programs of gov' aid to individuals - "RUGGED INDIVIDUALISM

-Volunter $$ /Donations Persuaded bankers/business to VOLUNTER $$$$ Hoover organized private relief agencies for unemployedTax breaks in return for private sector economic investment

HOOVER MORATORIUM - Stop war Reparations payments-in return-Euro. countries purchase American goods to stimulate American economy

HOOVER Passed

Passed Smoot Hawley Tax- Protect U.S. industry (stimulate purchasing of U.S. goods)

fatal error... Congress did not

understand that the world had become a GLOBAL ECONOMY

in retaliation European countries passed high tariffs on foreign goods coming into their country-

Hoover increasingly unpopular….to little to late..

RECONSTRUCTION FINANCE CORPORATION

-Emergency loans to banks

In 1931- Soviets flooded world market with cheap wheat

Resulted in -Global BANKERS’ PANIC

Bankrupt, wiped out life savings of thousands of Americans/Europeans

Dairy Farmers frustrated w/low price of milk refuse to sell (dump it)

WW1 veterans (March on Washington = BONUS MARCH 1931,-reached Wash. Set up shantytowns = HOOVERVILLES (food scraps = HOOVER-MEALS…

Dispersed (MacArthur/Eisenhower)

1932 ELECTION1 / 4 unemployed…nat'l income 50% less than in 1929Repubs. nominated Hoover no hopewinner by a landslide = FRANKLIN DELANO ROOSEVELT (Dem - N.Y. governor)

The Great DepressionFDR’s “New Deal”

Franklin Delano Roosevelt (FDR)

Eleanor Roosevelt

*A woman is like a tea bag- you never know how strong she is until she gets in hot water.

Eleanor Roosevelt - US diplomat & reformer (1884 - 1962)

*Great minds discuss ideas; Average minds discuss events; Small minds discuss people.

.

Revolution in American society - changed way gov't functioned

-FDR believed gov't involvement in economy was crucial to stimulate the economy

Banking Hoilday- shut down banks /gov't inspection-re-open when "healthy"- people's slowly redeposited-allowed banks to invest in the economy

Brain TrustColumbia University

President Roosevelt's advisors, met with him at his home in New York state throughout the spring and summer of 1932 to come up with a solution for the Depression - wanted to modify and survey the United States' laissez-faire economy by advocating government and big business cooperation and beginning public works projects and state and federal funded relief programs to help future economic downturns.

http://www-rohan.sdsu.edu/~belier/brain_trust.htm

1. Black voters shift from Republican to Democrat2

Stock Market Reform-Security Exchange Commission control & Regulate Stock Market

-Print $$$: Keynesian Economic Theory

(Cauz/= inflation), value of dollar less- gave gov't spending power

NATIONAL INDUSTRIAL RECOVERY ACT (NIRA) / NATIONAL RECOVERY ADMIN (NRA) –

-Gov. regulates business/indust. -labor & business

TENNESSEE VALLEY AUTHORITY (TVA) - Electricity/Hydroelectric power (nationalization v. privatization of elec.)

The Annual MoveThe Annual Moveby Otis Dozier, 1936by Otis Dozier, 1936

The Annual MoveThe Annual Moveby Otis Dozier, 1936by Otis Dozier, 1936

AGRUCULTURAL ADJUSTMENT ACT (AAA) - Aid formers- SUBSIDIES

Food Stamp Act of 1939 - gave away surplus food to poor, also guaranteed (small) farmers a market

CIVILIAN CONSERVATION CORPS (CCC) - Set up to establish work for young men -in areas of reforestation, soil conservation, flood control, road construction - also took them out of urban labor markets

NATIONAL YOUTH ADMIN. (NYA) - created jobs for young in urban areas

National Labor Relations Act (aka Wagner Act)- legitimized unions & labor -collective bargaining & collective action (strikes, etc...) - it outlawed BLACKLISTS & other anti-union practices

Construction of the Construction of the DamDam

by William Gropperby William Gropper

Construction of the Construction of the DamDam

by William Gropperby William Gropper

Social Security Act (1935)-Retirement/unemployemen

- "creeping Socialism"- WELFARE STATE - unemployment insurance, old age pensions

ELECTION OF 1936 - FDR won easily

Reorganize Supreme

Court – to get New Deal legislations passed

FDR wants # of judges changed from 9 15 (to "pack the court") – with judges that approved New deal

but judges retired & FDR got to appoint new ones they approved all New Deal legislation

1930's – new Qs arose… Forgein Issues-WWII

ELECTION OF 1940 - FDR broke with tradition & ran a 3rd time

Isolationist foreign policy- FDR won in 1940 (and again in 1944)

INCREASED GOV’INTERVENTION

CREEPING SOCIALISM WELFARE STATE CONTROLLED BUSINESS

a person, esp. an orator or political leader, who gains power and popularity by arousing the emotions, passions, and prejudices of the people.

Father Charles Coughlin“Social Justice”Hate Radio

Dr. Francis E Townsendof California“Senior Citizens”

The way ofJefferson, Madison,& Lincoln

The way of Jefferson,Madison, and Lincoln

Radical shortcut