Section 1: An End to ProsperityKeep the Good Times Rolling

1. People were spending more than they were making2. They were investing in the stock market and values kept climbing and climbing

A Boom on Wall Street1. Many people felt that purchasing stocks in companies on Wall Street was the key to

instant wealth2. Millions of shares were bought and sold every day3. Brokers, those who handled the buying and selling of stocks, were always busy4. People were buying stocks on margin, paying for only part of the stock’s value, and

then placing the remaining balance on credit with the brokera. Stock is worth $100. You pay $10 up front and $90 on marginb. When the stock went up, you sold the stock, paid the broker the $90

margin and then pocketed the restc. While stock markets continued to rise, it was called a bull market

5. 3 million out of 120 million Americans owned stock in 1929a. 1/6th bought stock on marginb. Many believed there was no way stock prices would decline

Continue Section 1…The Big Crash

1. Tuesday, October 29th, 1929, a selling panic begana. Many people has feared stock prices would begin falling months before,

had begun to sell their stocksb. As selling increased, stock prices decreasedc. People who had borrowed money to buy stocks on margin had to repay

the moneyd. Began to face a bear market, when stock prices continued to fall

2. On that day, nearly 13,000,000 shares of stock were sold a lowered valuesa. Investors had lost over $15,000,000,000 by mid-November

3. Banks also ran into troublesa. Investors were withdrawing money to cover stock lossesb. Others were taking from their savings to pay mortgages and loans that

they owed on goodsc. All this caused banks to run out of money, more than 5,000 closed

between 1929 and 19324. Businesses also suffered

a. Lack of customers and moneyb. Between 1929 and 1932, over 10,000 businesses had to close and

thousands of people that worked there lost their jobs

Continue Section 1…c. In 1929, the number of people that lost jobs were 1,500,000 to about

12,000,000 in 1932. That’s 25% of the work forced. Blacks who moved North to take factory jobs before and during WW I was

the first to be laid off5. Because people weren’t working, they had little money to spend on food, clothing,

and sheltera. Led to further cuts in business and layoffs for even more workers

6. 1929 – 1941 is called the Great Depressiona. Long period of economic hard times that people experiencedb. Similar conditions were occurring in other countries, especially Europe

1. They were looking to the US for loans to rebuild their war-torn economies

2. As loans and trade decreased, they also experienced economic depressions

3. Pictures of worthless foreign currency

Causes of the Depression1. No one can agree on any one specific cause. There were a number of conditions

though that led to the unstable economy.2. Many of these conditions were overlooked because everyone was making money

and having fun in the earlier years.

Continue Section 1…3. Overproducing and borrowing

a. Factories were turning out more goods than the public was buyingb. Declining trade also contributed to overproductionc. Not only were people buying stocks on margin but they were purchasing

goods with installment loansd. Because the price of goods rose faster than wage increases, the only way

to buy items was on credit (businesses encouraged this)e. People were also taking out mortgages that they couldn’t afford, to buy

housesf. People that borrowed money and the banks that loaned money were in

serious financial trouble even before the stock market crash

4. Uneven distribution of wealtha. Wages for workers were generally low

1. Lacked money to buy goodsb. Too much money went into profits that business leaders then used to

expand their business, pay stockholders and get rich themselvesc. Farmers were worse off than others

1. They purchased land and equipment on credit to produce food during WW I; after the war, demand fell, as did farm prices

Continue Section 1…2. Blacks and other minorities had very little purchase power

We Lost Everything”1. Doing without

a. The wealthy had to give up many luxuries: like college educations for their kids

b. Many people lost their homes because they couldn’t pay their mortgages or were thrown out of their apartments because they couldn’t pay their rent

c. Many homeless built shacks out of wooden crates and scraps of metal1. Became known as “Hoovervilles”2. Named after Herbert Hoover, President when the Depression

began2. Hunger was widespread

a. People stood in line for hours at soup kitchens or breadlines to receive free food donated by churches, charities or local governments

b. For some this was extremely humiliatingc. A large number of Americans died from lack of food, housing and medical

care

Continue Section 1…3. Families learned to put pride aside and people did almost anything to survive

a. People lived in boxcars or some (men, women and children) hopped freight trains looking for work and food

b. Some moved south in the winter and west in the summer, or from cities to rural areas, but conditions rarely changed

4. Lots of emotional sufferinga. Many were raised to believe that the American Dream could be obtained

with hard work, people though began to lose their confidence because of so few jobs

President Hoover and the Depression1. At the start of the Depression, he tried to restore confidence in the economy

a. Told people that prosperity was just around the cornerb. Hoped that businesses would hold wages and prices but they had to

reduce both to try and survive2. Opposed to the idea that government projects should be used to help the

unemployed but had to eventually change his minda. Asked Congress to lower taxes to have money to spendb. Asked for millions of dollars to provide jobs building schools, roads,

bridges and dams (the Boulder Dam which became the Hoover Dam)

Continue Section 1…3. Established, by Congress, the Reconstruction Finance Corporation (RFC)

a. Loaned money to financial institutions, banks, to keep from closingb. Federal Farm Board, an offshoot, was to loan money to cooperatives and

buy surplus crops to help try to raise farm prices4. He was willing to get the government involved in the economy but not with direct

relief to the needya. Felt that handouts to the poor went against American values like hard

work and self-reliance5. Although extremely unpopular, Hoover was renominated by the Republicans to go

up against Franklin Delano Roosevelt, the Democrats nomineea. Roosevelt promised a “new deal” while playing his campaign song “Happy

Days are Here Again”b. Roosevelt won, gaining 472 electoral votes to Hoover’s 59

Complete Section 1 Review

Section 2: Fighting the DepressionFranklin Delano Roosevelt

1. Had been Sec. of the Navy under President Wilson2. In 1921, he was stricken with polio, never to walk again without steel braces on his

legs3. In 1928, he returned to politics (urged on by his wife Eleanor) and was elected

Governor of New Yorka. New York was the first state to provide direct relief to victims of the

Depression4. To calm fearful Americans, he used a series of radio talks called fireside chats

a. He gave them by the fireplace in the White Houseb. Eased the nation’s fears

5. Used his brain trust, or small group of intellectual advisors, for new ideas

Banking and Business1. Just days after the inauguration, President Roosevelt called Congress into special

session (known as the Hundred Days)a. Led to Congress enacting several New Deal proposals into law

Continue Section 2…2. The First New Deal – President Roosevelt’s initiative to lead the US out of the Great

Depression, March 1933 through the end of 1934a. Relief

1. Providing jobs for the unemployed and helping farmersb. Recovery

1. Aimed at stimulating the economyc. Reform

1. Covered measures to prevent another depressiond. The goals of relief and recovery were stressed

3. FDR closed all banks until laws for government supervision and aid could be passed, this was called a bank holidaya. By the end of the month, the nation’s strongest banks were reopened

while the weakest were permanently closedb. The FDIC (Federal Deposit Insurance Corporation) was established

1. This protected people’s bank deposits by insuring $2500 originally then up to $5000.

2. Gave people confidence to deposit their money in banks againc. An act was also passed to regulate stock market practices like buying

stocks on margin

Continue Section 2…4. The National Recovery Administration (NRA)

a. Sought cooperation between business, labor and government1. Companies drew up codes of fair competition, set price

guidelines and production limits (to prevent overproduction)

2. They also set maximum hours and minimum wages for workers and guarantee them the right to bargain collectively

3. Codes were hard to enforce because they were so detailed; small businesses said the codes favored larger companies

4. Workers argued the minimum wage was too lowb. There was a brief improvement during the Spring of 1933 but then went

down again c. In 1935, the US Supreme Court ruled that the President and private

companies didn’t have the right to pass the codes and that the government had no right to control any industry that was not involved in interstate commerce (the buying and selling of products and services across state borders)

Continue Section 2…Helping Farmers and Other Workers

1. Major problem with farmers was overproduction that led to low farm pricesa. The Agricultural Adjustment Act (1933) paid farmers to take land out of

production in order to grow less cropsb. Money paid to farmers came from a tax on processors of farm productsc. Farmers were encouraged to destroy existing crops and livestock at a time

when people were dying of hungerd. Led to a rise in farm incomee. The Farm Security Administration (FSA) gave aid to some tenant farmers

and sharecroppers (less than 2% of the total)

Relief for the Tennessee Valley1. Major New Deal program2. The Tennessee Valley Authority, TVA, (see map on page 709) covered 7 states that

was underdeveloped and regularly flooded by the Tennessee River3. Plan was to buy, build and operate flood control dams and generate and sell electric

powera. Helped transform the region into a prosperous industrial area

4. Improved navigation of the River and created recreational areas5. Brought new economic life to the entire region

Continue Section 2…Direct Relief Programs

1. New Deal provided direct relief to unemployed Americans2. The Federal Emergency Relief Administration (FERA)

a. Created in May 1933, distributed $500 million to state and local governments1. Governments used the funds to provide money, food and

clothing to millions of Americans3. The Public Works Administration (PWA)

a. Created in 1933, helped create 34,000 projects at a cost of $5 billion 1. Created jobs in construction, provided cheap electricity, aided

flood control and provided irrigation4. The Civilian Conservation Corps (CCC)

a. Provided jobs for young men between 18 and 25b. Cut brush, cleared trails, planted trees, built small dams, and performed

other conservation tasks in national parks and recreational areasc. Men lived in camps and earned $30 a monthd. 2,000,000 young men took part in the CCC

Continue Section 2…5. Civil Works Administration (CWA)

a. Created in 1933b. Provided jobs by placing people directly on federal payrollsc. Repaired roads, painted schools, built playgrounds and raked leaves in

public parksd. Employed 4,000,000 men and women by January of 1934

Plot to Overthrow FDR1. Plotted by very well know and wealthy individuals in the US2. Chose General Smedley Butler (winner of the Congressional Medal of Honor, twice)

to lead a military coup to overthrow the president of the United States3. How far reaching and even how far it was planned it debatable

Critics1. Claimed that many projects (like raking leaves) were “make work” that was

unnecessary and demoralized workers2. Private power companies claimed the TVA was unfair because part of the costs of

the program was paid for by the federal government3. Many claimed that the New Deal interfered with private enterprise and gave

government too much power4. The Supreme Court ruled 11 New Deal measures unconstitutional

Complete Section 2 Review

Section 3: Roosevelt and ReformFirst New Deal – concentrated on relief and recoverySecond New Deal – emphasized reform; included programs for making long lasting economic

and social changing

Angry Voices for Reform1. Some reforms were for people who complained that the First New Deal didn’t go

far enough2. Father Charles Coughlin – radio preacher

a. Wanted the government to take control of banks and issue large quantities of paper money and silver

b. Proposed a pension – money paid to a retired person, of $200 for everyone over the age of 60 from the government1. Must be spent within 30 days

3. Huey Long – senator from Louisiana, the Kingfish (Had a crazy brother who also became governor of Louisiana)a. Turned against FDR b. Wanted each family to have a $5000 home, an annual income of $2500, a

car and a radio

Continue Section 3…c. Every young person should get a free college educationd. Proposed paying for all this by seizing all fortunes over $5 million and

levying a 100% tax on all incomes over $1 millione. Ended with his assassination in 1935 in the Louisiana State Capital by Dr.

Carl Weiss (who was shot 62 times in return)

The Second New Deal1. Because the Democrats won a lot of the Congressional elections in 1934, President

Roosevelt was able to get a lot of support for reform legislation2. The Works Progress Administration (WPA) was created in 1935

a. Spent almost $5 billion on public-works programsb. Goal was to provide jobs for both skilled and unskilled workers

1. Included writers, artists, musicians, actors and teachers2. Providing workers with money led to factories reopening and

the economy to be stimulated3. People kept their dignity since they were getting money from

the government by working for it

Continue Section 3…1. The 2nd Agricultural Adjustment Act (AAA) passed in 1938

a. 1st one was ruled unconstitutional in 1936 on the grounds that government had no right to tax one group for the benefit of another

b. 2nd paid farmers to plant less acreage and to begin soil conservation which was very important to the Great Plains, which became the Dust Bowl during the 1930s1. Huge dust storms because year after year there was a drought

and the misuse of land2. Blew from Texas to the Dakotas (see map on page 711)3. Farmers who remained on the land got federal money and were

encouraged to plant soil-conserving crops like cloverc. Also, established subsidies – a system of government payments to farmers

to supplement their incomes in years when farm prices are lowd. Helped change farming into a business where only the larger, efficient

farms would do well.

Continue Section 3… The Elderly, Unemployed and Needy

1. The most important reform act was the Social Security Acta. People over 65 were the fastest growing portion of US populationb. Only a few had pensions and most were poverty-strickenc. Had 3 major parts

1. Provided small monthly pensions for people who retired from work after the age of 65

2. Created a program of unemployment insurancea. People who lost their jobs could collect insurance

payments for a certain number of weeksb. Came from a payroll tax on employers and was

administrated by the states3. Provided federal grants to the states to help the blind, the

physically handicapped, the needy elderly and widows with dependent childrena. States had to match the federal grants

2. Conservatives complained that Social Security went against the American tradition of self-helpa. Others claimed payments were too low and excluded some groupsb. Still around today although Medicare is looking at insolvency around

2024 and Social Security around 2033

Continue Section 3… A New Deal for Labor

1. National Labor Relations Act, known as the Wagner Act (named after Senator Robert Wagner of New York, its chief sponsor)a. Protected the rights of workers to join unions and bargain collectivelyb. Established the National Labor Relations Board (NLRB) to look into labor

disputesc. Revitalized the labor movement and permanently changed labor-

management relations

2. As a result of the Wagner Act, the American Federation of Labor (AFL) and other industrial unions grewa. Industrial unions – an organization of all workers in a single industry, such

as mining b. John L. Lewis, who led the United Mine Workers since 1919, by 1935 he

headed the Committee for Industrial Organization within the AFL1. The AFL kicked out the CIO because they were opposed to

organizing workers in industry2. Lewis stayed on as the head of the CIO but changed the name of

the organization to the Congress of Industrial Organization

Continue Section 3… c. By the late 1930s, he succeeded in unionizing the automobile and

steel industries1. Didn’t come easily2. Industries fought back against them the entire way3. Workers went on strike and many times the strikes became

violent and deaths occurred4. The CIO grew to about 5 million workers by the end of the

1930s a. Also made up of blacks and women who made up a large part of the unskilled work force

Section 3 Review

Section 4: Life Under the New DealBleak Times for Black Americans

1.

Placeholder

Blank slide between old and

new

Continue Section 4… A Bigger Role for Government

1. To meet the needs for the war, President Wilson and Congress create almost 5,000 new federal agenciesa. Most powerful was the War Industries Board

1. Goal – to run industry as a single factory dominated by one management

2. Told manufacturers what they could and could not make3. Allotted raw materials and fixed prices on finished goods4. Succeeded in organizing US industry behind the war effort

b. The Food Administration1. Headed by Herbert Hoover (future president)2. Goal – to supply the food needed by troops overseas3. Encouraged farmers to increase production

a. Offered high prices for their crops4. Encouraged Americans to plant “Victory Gardens”

a. Have meatless and wheatless daysc. The Fuel Administration

1. Headed by Harold Garfield2. Introduced daylights-saving time and rationed coal and oil4. Set days people couldn’t drive, shut down non-essential

factories one day a week to save coal

Continue Section 4… Labor in the War

1. Unions and government worked together (gov’t getting the most out of it)a. AFL president enlisted workers support for the warb. Goal was to get reforms for labor in return for the supportc. President Wilson responded with important reforms

1. 8 hour work day in war related industries, improved wages and working conditions

2. Created a War Labor Board – standardized wages and hours, protected the rights of labor to organize and bargain collectively

Women and Minorities in the War1. Women started working in factories and drove streetcars, delivered mail, were

traffic cops, and worked in the war effort making weapons and planesa. Treatment varied but in most places they were paid the same as menb. When the men returned from war, they lost the jobs and gains they made

2. Lots of Blacks headed north during the war to work in factoriesa. Most were young and single and worked in factories, steel mills and coal

mines, while black women worked in stores and restaurantsb. Led to race riots in 1917 and 1919

3. Many Mexicans came to work on farms, ranches, railroads and mines, some in factories in the North; from 1917 to 1920, 100,000 immigrated to Texas, Arizona, New Mexico and California

Section 5: The End of the New DealWilson’s Fourteen Points

1. Even before the war ended, President Wilson was outlining a peace proposal, known as the Fourteen Points a. They were farsighted and generous but failed to meet the needs of some

countries1. Britain and France wanted Germany to lose its military, be

completely disarmed and have its colonies seized, to never be able to war again.

2. Meant to establish a just and lasting peace3. First 5 Points

a. End to secret treatiesb. Freedom of the seasc. Free trade among nationsd. Arms reductionse. New ways of settling disputes over colonies

4. Next 8 Pointsa. Redrawing the map of Europe; this would lead to self-determination –

people of Europe would have the right to their own countries and governments

5. Final Pointa. Set up a League of Nations – association of nations established to

guarantee the political independence of all nations great and small

Continue Section 5… Peace at Paris

1. President Wilson went to the peace conference2. January 19, 1919

a. Held at the Palace of Versaillesb. 27 nations represented c. Big Four dominated, they were the US (Wilson), Britain (Prime Minister

David Lloyd George, Italy (Prime Minister Victorio Orlando) and France (Prime Minister Georges Clemenceau)1. Britain, Italy and France pushed for a weakened Germany and

harsh penalties2. President Wilson’s ideas of the Fourteen Points were being torn

apart

The Treaty of Versailles1. June 28, 1919

a. Germans were forced to sign the treatyb. Germany had to pay reparations – war damages, to the nations that it

invadedc. Germany had to give up territory to France, to Poland and give up all its

overseas colonies

Continue Section 5… 2. President Wilson had the Allies apply the principle of self-determination

a. Created several new nations/countries formerly held by Germany, Austria- Hungary and Russia

b. Map on page 6673. The League of Nations was one of the Fourteen Points that did get done

a. To be an assembly of 42 Allied and neutral nations, and a Council controlled by the Big Four and Japan

b. Also a League Court of International Justice1. All Nation member disputes would be referred to the League2. Pledged to protect each other’s independence

Debate over the treaty1. President Wilson presented the treaty to the Senate which was met with opposition

from Republicansa. 14 were totally against the treatyb. 23 would only accept the treaty with major changesc. 12 would accept the treaty with minor changes

2. Democrats urged the President to compromise with the Republicans but he refused say “Anyone who opposes me…I’ll crush”

3. Constant lobbying and trying to get support for the treaty had a physical effect on the President. On October 2, 1919, President Wilson had a stroke at the White House and was found by his wife, Edith

Continue Section 5… Rejection by the Senate

1. Wasn’t enough in the treaty to protect the interests of the US2. Henry Cabot Lodge, R-Mass, brought up the Fourteen Reservations

a. Added to the Fourteen Points3. The treaty failed by a 39 to 55 vote on November 19, 1919. It included the Lodge

reservations which the Democrats wouldn’t vote for4. The constant push for passing the treaty would cause the Democrats the 1920

election when Warren G. Harding wona. At first, Wilson thought of running for a 3rd term but decided against itb. American’s were looking for a change

Section 5 Review

Chapter 5 Study Guide

Chapter 5 Test