|Children of the
- After World War I, Americans wanted a good economy and freedom
from war. The Republicans wanted to support business interests to
keep a strong economy. They also wanted to stay out of European
affairs to avoid war.
- Some warning signs of the Great Depression:
many Americans did not have a very good standard of living. Some
farmers were losing their farms, and costs for products were getting
low. There was less international trade
because of high tariffs.
- A stock market sells
small pieces of big companies to many different people.
- People started to sell stock, because they knew that the economy
was struggling. Stocks were starting to cost less, and more people
were selling their shares. The market crashed when almost every
stock dropped greatly in price.
The Effects of the Crash
- When people lost money on the stock market, they stopped buying
products, causing businesses to fail. Businesses fired many of their
workers, and more than 12 million people lost their jobs.
- About 50 million people in 1932 were in poverty.
- City and state governments could not collect enough taxes to pay
workers such as teachers and policemen.
- The Great Depression was different from the other American depressions
because it was more than 10 years long. Also, there were many goods,
such as food and clothing, but many people could not afford to buy
People help themselves
- People decided to trade goods and services to other citizens.
A doctor, for example, might give medical help in exchange for food.
- A deficit is a debt that occurs when a group or a person spends
more than it earns.
- Roosevelt was afraid that the increasing government debt would
cause more problems with the economy, so he cut back on New Deal spending.
As businesses had more trouble getting loans
and government spending decreased, unemployment rose (3 million
more people out of work).
New Deal Recovery
- Banks had trouble because:
1) businesses took out loans that they could not repay,
2) people took their money out of the banks, thinking they would
- The Emergency Banking Relief Bill loaned money to banks that were
- The Emergency Banking Relief Bill, the banking holiday, and the
fireside chat helped people trust banks again. Many people put their
money back in banks, and many banks reopened.
- In the 1920's, farmers were getting less money for their crops,
while they had to pay more to run their farms. Many farmers could
not pay back their loans. By 1933, farmers were threatening banks
that were foreclosing on
- The government tried to limit crop production so farmers could
get more for their crops.
- The parity payments were meant to help farmers have middle-class
incomes. They helped farmers who could not get a fair price for
- The Agricultural Adjustment Act caused crop prices to rise, and
greatly increased farmers' incomes.
- Under the National Industrial Recovery Act, the industry owners
addressed prices for goods. They decided how to divide the market.
They also discussed wage and
minimum wage requirements.
- The NIRA allowed workers to form unions and to discuss salaries
and working conditions with managers.
- The New Deal built dams in rural areas to prevent flooding, provide
water, create electricity, and make fertilizer.
Effects of the New Deal
- Under the New Deal Legislation:
1) unemployment dropped from 13 to 9 million in 1936.
2) wages paid to workers doubled.
- In general, African Americans did not benefit directly from the
- 1) Most programs in the rural South aided land owners. Most African
Americans did not have land.
2) Much of the aid given to the South was not distributed
among the African Americans.
3) Many African Americans held jobs as janitors, farm workers, hospital
aides, and restaurant and kitchen workers. Social Security did not
apply to these jobs.
- Most New Deal programs were segregated.
The Civilian Conservation Corp, for example, segregated workers. Federal
housing programs also separated African Americans from white people.
- Many African Americans liked Roosevelt because he invited African-American
professionals to the White House, asked their opinions, and assigned
them high-ranking positions in agencies. Eleanor Roosevelt was an
advocate for African-American
Mexican -American Perspective
- Migrants travel around different towns and states, mostly to harvest
- Mexican Americans did not get much help from the New Deal. Unions
saw them as competition. Many were deported,
and many left for Mexico.
- Relief efforts that dealt with farming, industry, and social security
did not really affect Native Americans, because they mostly lived
- The Indian Reservation Act (IRA)
1) said that tribes did not
have to sell their land.
2) tribes would arrange their reservations into districts and elect
3) the tribal councils formed tribal companies that rented and leased
property that belonged to the tribes.
4) tribes would have more input in what was taught in reservation
- The IRA said that the federal government would encourage
respect for tribal governments.
Non-Union Workers' Perspective
- For many non-union workers, the union relief was only enough to
keep them from starving. Many
non-union workers were not covered under the new minimum wage.
- Wealthy people benefited
as the economy got better. Stocks and corporate profits rose.
Union Member Perspective
- The New Deal helped industries borrow money, and thus increased
production. As industries produced more, more workers got jobs.
- The American Federation of Labor (AFL) established
different unions for workers of different skills. The Congress of
Industrial Organizations (CIO) united all the workers of an industry
or factory, even if they had different skill levels.
- A sit down strike: the workers stop their work and stay in the
factory, so owners can't produce anything.
Second New Deal Recovery Acts
- Erosion made some farmers
leave wheat fields unplanted. In the 1930's, there wasn't enough
rain, and the unplanted fields became dust. They couldn't be farmed.
This area was called "the Dust Bowl."
- The 2nd Agricultural Act encouraged farmers to be efficient.
1) It paid farmers to plant crops such as alfalfa, which conserved
2) It paid farmers to rotate crops.
3) It paid farmers to use methods that prevented erosion.
4) It said that farmers could store crops in government warehouses
if they couldn't get a good price for them. They could then take
a loan from the government. Once they sold the crops, they could
pay back the loan.
Some people say that the New Deal was not more effective because
it did not create enough jobs. If more people could have purchased
more products, the economy would have gotten stronger.