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The Great Depression and New Deal affected the lives of millions of Americans.

Causes of the Great Depression

o Stock market crash

o At the end of the 1910s, World War 1 was just coming to an end.

Because of this, the focus turned to relaxing and having fun, which means people were

spending money. When people spend money, the economy grows.

This period, during the 1920s was dubbed the Roaring Twenties because of

the atmosphere surrounding this time.

There were also groundbreaking new items for consumers to buy, such as cars

and radios.

However, there was a huge gap forming between the rich and poor. America

was being insanely productive, but the fruits of this labor was going towards

the higher ups (i.e. management, administrators, etc) as opposed to the actual

workers.

This led people to go on strikes and to protest these bad working

conditions with little pay.

o Even beyond just industries, agriculture was already taking a big hit. Newer

technologies helped farmers to plant more, but demand wasnt growing at the same

rate as supply, so prices were forced to drop, which made farmers incomes drop also.

Because the work they did was very niche oriented, it was hard for farmers to

just pick up and find another job.

o During this time, the concept of credit came about, meaning people could buy

things they didnt have money for at the time, with the expectation that they would

pay it back later.

This caused people to spend more money than they had and not save as much.

o It also wasnt uncommon for the population to borrow money so they could invest in

stocks.

Stocks allow for the general population to purchase part of a company.

When they purchase stock, they purchase it at one price (for example, $10.00

for one share of stock for one company, and people can buy as many shares

as they please), but they buy it with the expectation that the company will

grow and prosper and therefore, in time, the share they bought for $10.00

might be worth $50.00, making their profit $40.00, which was worth more

then, than it is now.

During this time, 2 out of every 5 dollars a bank loaned out was used for

people to purchase stocks.

This also harkens back to the fact that people had to be loaned this

money because they didnt have it readily available to them, but they

were expected to make money from the stocks and therefore, they

would be able to pay it back.

Between 1921 and 1929, the stock market grew by an unprecedented 600%.

Everyone thought that the economy would never stop growing and that

everyone would be rich.

However, it could not keep growing at the rate it had been.

o The economy began to slow down and stocks for big companies like General Electric

and US Steel began to plummet. Stocks began dropping on October 23rd, 1929, it

hardly ever plateaued and consequently dropped faster and faster.

Seeing this, many investors thought it was a good idea to go ahead and cash in

on their stocks. Because many people had the same idea, shares began

dropping in price.

Warren G. Harding

29th president from 1921-1923, was aware of crime within the

government, but was not involved in any wrongdoing.

Public did not know about his wrongdoings until after his death when

Teapot Dome Scandel, Secretary of the Interior Albert Fall corruptly

let oil companies use public lands for bribes. Many other officials were

accused of payoffs and embezzling funds.

Calvin Coolidge

30th president from 1923-1928 following the death of President

Warren G. Harding until President Herbert Hoover took office.

Helped clean up the corruption left from President Warren G.

Harding.

Created many laissez- faire policies that contributed to the Great

Depression.
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Rejected joining the League of Nations and placed high tariffs on

goods.

Stock Market Crash

o From the second the opening bell rang on the following Monday (now known as

Black Monday), prices were dropping.

Because of this, stockbrokers began calling in on stockholders credit. If they

did not have the money to back up their stocks right then and there, then

stockbrokers were forced to sell those stocks. A lot of times, people invested

their life savings into the stock market, expecting it to greatly profit from the

investment, so having their life savings taken away obviously took a huge toll

on families nationwide.

o The stock market lost approximately $25 billion dollars (more than $300 billion in

todays currency) by the end of 1929

o Much of this money was loaned from banks so, if stockholders lost their money, they

couldnt pay back the bank, so the banks subsequently lost money.

One of the biggest problems with this was that the money that the banks

loaned out belonged to regular people who put money in the bank.

o When people caught wind that the banks were starting to not be able to give people

the money they were supposed to have had in their account, people went rushing to

the banks to take out all the money from their accounts.

o Because the banks were completely unprepared for this, it caused many of them to

fail and close.

In the years between 1923 and 1930, it is estimated that nearly 5,000 banks

closed.

o When the economy and banks fail, companies also fail, so 30% of Americas work

force were laid off or fired because companies couldnt afford to keep them anymore.

Soup Kitchen started in 1929- Served soup and bread to the poor and anyone who may have

lost their job at least once a day.

Al Capone in Chicago made the first soup kitchen.

Mostly run by charities and volunteers.

Water could be added to the soup to feed more people.

President Herbert Hoover

Took office the year of the Great Depression in 1929- 1933.

Seemed cold and not able to understand the suffering of the poor

with his belief that the government should play a small role in the

peoples lives. He was defeated in the next election easily. Quoting

I have no fears for the future of our country, It is bring with

hope.

o Thought that the solution to this might be to balance the budget. To accomplish this,

he raised taxes.

People already did not have the money to buy regular necessities, so hiking up

taxes did not encourage people to buy more and, as aforementioned, when

people do not spend money, the economy does not grow.

o As if this economic decline wasnt bad enough, there was also a huge drought going

on in the Great Plains.

o Farmers also were not rotating crops, which caused the land to be infertile and would

not grow or hold crops as well as it once had. This, in addition to drought and

overgrazing, caused the Dust Bowl.

The Dust Bowl was an area of the southern Great Plains where, because the soil would not

hold, the great winds would blow around the dust and dirt. Whole towns would go darks for

days because of the dust that was surrounding it. Despite their best efforts to fend it off, dust,

dirt, and topsoil ended up covering furniture inside houses as well as the outside of the

houses. Children had to wear facemasks to and from school to avoid inhaling the dust.

o The Dust Bowl caused 2.5 million people to move out of the Dust Bowl States

(Kansas, New Mexico, Texas, Colorado, and Nebraska)

Roughly 440,000 people moved out of Oklahoma alone.

Franklin Roosevelt

Took office as President in 1933, until he died 11 weeks into his fourth term.

Created many different programs and reforms called the New Deal to counter

the Great Depression.

He gave hope to the American people.

Lead the nation through World War II and bombing on Pearl Harbor.

The New Deal- Relief, Recovery and Reform- Programs to help stop the fall of the Great

Depression

Relief- was to remove poverty by giving people jobs, stop property loss,

starvation, and help the poor.

Recovery- creating a positive change in the economy by helping business and

creating jobs.

Reform- help build infrastructures such as bridges, hospitals, libraries, and

parks.

o Tennessee Valley Authority started in 1933- Created during the Great Depression by

President Roosevelt.

The government worked with the people of Tennessee Valley to create ways

to reduce floods, eroded land and deforestation.

The program helped to teach new farming methods, tree replanting and

building dams. This program created electricity, jobs, and conserved water

power.

This program extended to Kentucky, Alabaman, Georgia, North Carolina, and

Virginia.

o Civilian Conservation Corps in 1933- a program that selected young men to

contribute to the nations resources while living in camps.

The program was to help with unemployment, resources and education.

o Works Progress Administration between1935-1943- Work program created for

victims during the Great Depression.

It put 8.5 million people to work which cost11 billion. Built roads, public

buildings, bridges, parks and airports.

The Federal Arts Project, Federal Writers Project and Federal Theater Project

were all created under this project.

Duke Ellington
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o Duke Ellington was a huge figure in the early jazz scene.

o He was born in 1899 in Washington D.C and died in 1974 at the age of 75 due to lung

cancer. His last words were Music is how I live, Why I live and How I will be

Remembered.

o He began studying piano and wrote his first song called Soda Fountain Rag where

he drew inspiration from his job at the time.

o He began playing professionally at the age of 17.

o He was the bandleader of a 10-piece ensemble in Broadway, where he specifically

searched for groundbreaking, unique artists to further his specific sound.

o Some of his most famous works include Cotton Tail and Ko-Ko

o His song It Dont Mean a Thing if It Aint Got That Swing has even transcended

his time because the song is well known to this day.

Margaret Mitchell

o Margaret Mitchell wrote Gone With the Wind, which was published in 1936 and

sold over one million copies in six months alone.

This was particularly noteworthy because it came out during the Great

Depression, when people generally did not have money for anything, but they

chose to spend it on her book.

The book brought in culture, grace and an understanding of War that

enthralled the people of the 30s and even today.

The book has sold the 2nd most copies of any book in the world, right behind

the bible.

o Gone With the Wind was Mitchells first and only book she published.
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