The Great Depression covered in a Duarte Design-inspired "Slide Doc".

1. The Great Depression M. Shomaker 2014
Effects of Demobilization
The transition from wartime to peacetime production sparked a spending spree for formerly off-limit
goods.
From 1916—1919, US industry had been focused on
wartime production and was producing materials at an
enormous rate. As more American men were drafted,
women took on industrial labor positions.
With the cessation of hostilities, roughly 4.5 million US
soldiers returned to industries not producing at wartime
levels and found mass unemployment instead.

2. The Great Depression M. Shomaker 2014
Despite the drop in production and rising unemployment,
Americans began buying previously rationed goods
nationwide.
Huge demand and low supply led to major price increases
and helped lead America into a recession in 1920—1921.

3. The Great Depression M. Shomaker 2014
Farmers, who benefitted from the destruction of European farms during World War I, lost captive
markets and money as Europe rebuilt and foreign farms stabilized.

4. The Great Depression M. Shomaker 2014
President Warren G. Harding
Promised a return to “Normalcy!”
The transition from wartime to peacetime production sparked a spending spree for formerly off-limit
goods.

5. The Great Depression M. Shomaker 2014
His pro-business platform
 Tax revision
 High tariffs
 Limits on immigration
The promise of “normalcy”
 World War I cast a gloom over
the majority of America
 Harding promised a return to a
simpler and more peaceful time
Harding and the “little guy”
 Appealed to farmers tired of falling
crop prices.
 Appealed to middle-class Americans
tired of labor strikes and high taxes.
Less government in business
 Harding felt that government should
not interfere with the economy except
to aid business.
These four elements together were to accomplish Harding’s two
chief goals:
1. Reduce the national debt 2. Promote economic growth

6. The Great Depression M. Shomaker 2014
WAS HARDING SUCCESSFUL?
Yes. Harding was able to reduce the national
debt by reducing government spending.
Yes. Kind of. Acts like the Fordney-McCumber
Tariff Act of 1922, which enforced high tariffs
on manufactured goods, kept prices and profits
high. However, Harding’s policies often
ignored anti-trust laws and even facilitated
consolidations.
Also, farmers did not see many fruitful results
because of shrinking markets, low prices, high
interest rates, and debt from the 1920—1921
recession.

7. The Great Depression M. Shomaker 2014
President Calvin Coolidge
The transition from wartime to peacetime production sparked a spending spree for formerly off-limit
goods.
Calvin Coolidge, President Harding’s vice president,
assumed the presidency after Harding died of a heart attack.
Coolidge immediately fired many government officials
involved in the Harding-era scandals and then carried on
Harding’s pro-business policies.

8. The Great Depression M. Shomaker 2014
Coolidge easily won the Republican nomination and the
election in 1924, after which he proved even more
supportive of big-business than Harding had been.
 Favored legislation to aid businesses
 Repealed the gift tax, cut estate taxes, and reduced
taxes on the wealthy through the Revenue Act of 1926
 Further cut government spending by refusing to honor a
WWI veteran’s bonus bill
 Passed the McNary-Haguen Bill, which allowed the
government to buy surplus crop to sell abroad.

9. The Great Depression M. Shomaker 2014
President Herbert Hoover
Calvin Coolidge decided not to run for
reelection in 1928 and Herbert Hoover won
the Republican nomination and the
presidency. Once in office, he followed the
pro-business platform of Harding and
Coolidge.
After the stock market crashed in 1929,
America entered the period known as the
“Great Depression.” Many people looked
to the government for advice on how to
cope.
Hoover’s response was one common and
long-accepted by many Americans.
“During the war we necessarily turned to the
government to solve every difficult economic
problem…However justified in time of war if
continued in peace time it would destroy not only our
American system but with it our progress and
freedom as well…We were challenged with a peace-
time choice between the American system of rugged
individualism and a European philosophy
of…paternalism and state socialism. The
acceptance of these ideas would have meant…the
undermining of the individual initiative and enterprise
through which our people have grown to
unparalleled greatness.”
-Herbert Hoover—1928 campaign speech

10. The Great Depression M. Shomaker 2014
ONCE IN OFFICE, HOOVER ADVOCATED TWO BIG IDEAS
 Hoover argued that direct relief would
create a large bureaucracy, inflate the
federal budget, and reduce the self-respect
of people receiving aid.
 He instead encouraged hard work, saving,
and strength of character.
 He also believed that private charities and
local communities could best provide for
those in need.
 Hoover believed that private charities and
local communities could best provide for
those in need.
 However, a lack of money and resources
among charities complicated the plan as
local and state governments were stretched
beyond their limits.
 The President’s Committee for
Unemployment Relief (PCUR) was created
to assist local and state relief efforts but
had little success beyond urging more
donations from Americans.
Opposing direct relief Encouraging volunteerism

11. The Great Depression M. Shomaker 2014
As the severity of the Depression worsened, Hoover did
involve the government in business by asking businesses to
keep pre-Depression levels of industrial production,
employment, and wages. He also funded public-works
programs, created a Federal Farm Board to help farmers,
and created the Reconstruction Finance Corporation (RFC).
The RFC loaned money to troubled banks, insurance and
railroad companies, and other institutions in order to stabilize
them. The RFC had limited success but it, along with
Hoover’s other efforts, failed to end the Depression.

12. The Great Depression M. Shomaker 2014
America “Plays” the Market
Bolstered by the nation’s economic prosperity,
a growing number of Americans bought on
credit, which the government encouraged by
keeping interest rates low.
The problem: easy credit enabled
Americans to buy goods without having the
money to pay for them.
In addition to consumer credit, American also
began playing the stock market. Stock
speculation—buying and quick selling to make
a profit—was widespread.
The problem: speculation led to inflation in
which stocks sold for more than they were
worth. This was fine as long as demand was
high. If demand dropped however, the
stock’s worth would bottom out.
Margin buying—purchasing a percentage of the
stock with borrowed money—further aggravated
the situation.
The problem: many speculators only put up
10% of the money for the stock. If the stock
could be sold at a higher price, the different
would be covered. If the stock bottomed out
however, the speculator would be left with a
debt.

13. The Great Depression M. Shomaker 2014
The Market Crashes
The stock market crashed in October, 1929
when a large number of investors, nervous
about rising interest rates, dumped huge
amounts of stock on the market, which
wrecked investor confidence, causing stock
prices to plunge.
On “Black Tuesday,” October 29, panicked
investors dumped more than 16 million shares
on the market causing it to bottom out.
Speculators who bought stock on margin were
left with a debt they were unable to pay.
The eventual losses in the stock market in
1929 totaled more than all of the money the
US spent on the war effort during World War I.

14. The Great Depression M. Shomaker 2014
Why was it so severe?
Like other American investors, large banks
suffered significant losses when the stock
market crashed. The worst crisis came when
borrowers began defaulting on their loans.
As the large banks began floundering,
customers across the country became scared
and countless numbers tried withdrawing their
funds at once causing smaller banks to close.
Businesses suffered from both the stock
market crash and the banking crisis.
Customers refused to buy products on credit
and many businesses refused to sell on credit.
Economic trouble in Europe was another
cause of the Depression’s severity. Global
trade declined in the 1920s—1930s, which left
American manufacturers with large surpluses.
Some historians have argued that the unequal
distribution of wealth was another central
cause of the Great Depression. The income
gap between rich and poor meant that most
people did not have the buying power to boost
the economy.

15. BUSINESS-CYCLE
NORMAL

16. BUSINESS-CYCLE
1930s

17. The Great Depression M. Shomaker 2014
The Election of FDR
Franklin Delano Roosevelt was a two-term governor of New
York who implemented policies that proved to be effective in
combating poverty and unemployment.
FDR was a reform-minded politician who defeated Hoover by
nearly 10 million popular votes. His Democratic Party
claimed a 2/3 majority in the Senate and a 3/4 majority in the
House, which was the largest party takeover since before
the Civil War.
Roosevelt came to office with a mind for change and a
Congress to help accomplish it.

18. The Great Depression M. Shomaker 2014
Roosevelt’s “100 Days”
Once FDR became president in March of
1933, he launched 100 days of intense political
maneuvering during which Congress passed
more than 15 major pieces of “New Deal”
legislation.
The Emergency Banking Relief Act was
passed and FDR declared a bank holiday
during which all banks in the nation were shut
down and inspected. The Treasury
Department reopened financially sound banks.
The Glass-Steagall Act established the Federal
Deposit Insurance Corporation (FDIC), which
insured bank accounts in order to reassure
would-be investors.
The 21st Amendment was pushed through
Congress to repeal prohibition and helped boost
government revenue through taxes.

19. The Great Depression M. Shomaker 2014
Roosevelt’s Critics
Father Charles Coughlin
was a Catholic priest who
broadcast radio political
sermons with an estimated
listening audience of 40-45
million people..
Dr. Francis Townsend, a
California doctor, argued
FDR did not do enough for
the elderly and proposed
massive government
support to that population.
The Louisiana Kingfish, Huey
Long, was a senator who
believed FDR’s “New Deal” did
not do enough for the poorest
citizens. He proposed the
“Share Our Wealth” plan.

20. The Great Depression M. Shomaker 2014
The “Alphabet Soup” Programs
SEC: Regulated companies that
sold stocks to protect investors
from fraud.
AAA: Lowered production of crops
and livestock to keep prices high.
TVA: Built dams along the
Tennessee River to provide jobs
and electricity to rural areas.
CCC: Employed single men
between 18-25 to build roads,
develop parks, plant trees, and
other conversation jobs.
NIRA: Created the PWA, CWA,
and NRA.
HOLC: Gave government loans to
homeowners about to be
foreclosed upon.
FERA: Direct financial aid to
Americans.
FSA: Helped tenant farmers
become landholders and created
camps for migrant farm workers.
WPA: Crated over 8 million jobs in
almost every field.
NYA: Education, jobs, counseling,
and recreation for young people.
Social Security Act

21. The Great Depression M. Shomaker 2014
FDR Verses the Court
FDR was up for reelection in 1936 and won
easily after vowing to continue his New Deal
programs. Some of his Republican and, to a
lesser extent, conservative Democratic support
wore off when he was accused of “court
packing” after his reelection.
FDR was upset that the Supreme Court had ruled
that many New Deal programs were
unconstitutional. He labeled the justices “Nine
Old Men”—six were 70 or older—and asked
Congress to give him the power to appoint 1 new
justice for each member 70 or older.
Congress rejected FDR’s request but most of the
older justices died or retired soon afterwards and
by 1945 eight of the nine justices were FDR’s
appointees.

22. The Great Depression M. Shomaker 2014
The Dustbowl
Farmers were some of the hardest hit during
the Depression because of heavy loan debt,
massive overproduction, which led to lower
crop prices, and the “Dustbowl”.
The Dustbowl—Poor agricultural practices, a
sustained drought, and erosion of top soil left
dry, unnutrious dust carried freely by the wind
across the Great Plains.
Huge dunes of dust appeared across Kansas,
Oklahoma, Texas and farming families were
forced to leave the area in order to plant or
find another living.
In 1939, author John Steinbeck wrote “The Grapes of
Wrath” about Tom Joad and his “Okie” family
moving to California to escape the conditions in the
Midwest. Steinbeck was financed and enabled to
write this now classic novel through a government
program called the “Federal Writers’ Project”.

23. The Great Depression M. Shomaker 2014
Roosevelt and Labor
Roosevelt signed the Wagner Act into effect:
-Prohibited threatening striking or union workers
-Prohibited firing union members
-Prohibited interfering with union organizing
-Set up a board to hear testimony about unfair practices
FDR also signed the “Fair Labor Standards Act,” which set maximum workweek hours at
40, set minimum wage, set safety rules for employees under 16 and banned hazardous work
for those under 18
Labor Disputes
So, in spite of, or, in response to the 2nd New Deal labor reforms, union membership grew
dramatically from 1934-1937. The American Federation of Labor (AFL), the United Mine
Workers of American (UMW), and the Congress of Industrial Organizations (CIO) were
instrumental in empowering potential union members with the tools and knowledge to get
their demands met.