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Great Depression

The Stock Market Crash

The New Deal in Ten Minutes




The Market Crashes (22-1)


  • In September, the Dow Jones Industrial Average, an average of stock prices of major industries, had reached an all time high of 381.
  • On Black Tuesday, October 29, 1929, most people sold their stocks at a tremendous loss.

  • This collapse of the stock market is called the Great Crash.  Overall losses totaled $30 billion.

  • The Great Crash was part of the nation’s business cycle, a span in which the economy grows, and then contracts.


Effects of the Great Crash, 1929    

The Great Depression

  • The economic contraction that began with the Great Crash triggered the most severe economic downturn in the nation’s history—the Great Depression.

  • The Great Depression lasted from 1929 until the United States entered World War II in 1941.

  • The stock market crash of 1929 did not cause the Great Depression.  Rather, both the Great Crash and the Depression were the result of deep underlying problems with the country’s economy.

Underlying Causes of the Depression


Social Effects of the Depression (22-2)


Poverty Spreads

  • People of all levels of society faced hardships during the Great Depression.

  • Unemployed laborers, unable to pay their rent, became homeless.

  • Sometimes the homeless built shacks of tar paper or scrap material.  These shanty town settlements came to be called Hoovervilles.

  • Farm families suffered from low crop prices.


As a result of a severe drought and farming practices that removed protective prairie grasses, dust storms ravaged the central and southern Great Plains region.  This area, stripped of its natural soil, was reduced to dust and became known as the Dust Bowl.

The combination of the terrible weather and low prices caused about 60 percent of Dust Bowl families to lose their farms.


Poverty Strains Society


Surviving the Great Depression (22-3)


Americans Pull Together

  • Throughout the country, people pulled together to help one another.

  • Neighbors in difficult circumstances helped those they saw as worse off than themselves.

  • When banks foreclosed on a farm, neighboring farmers would bid pennies on land and machines, which they would then return to the original owners. These sales became known as penny auctions.

Some Americans called for radical political and economic change.  They believed that a fairer distribution of wealth would help to end the hard times.


Jokes and humor helped many people to fight everyday despair.


Signs of Change


The Election of 1932 (22-4)


Hoover’s Limited Strategy


Hoover convinced business leaders to help maintain public confidence in the economy.

  • To protect domestic industries, Congress passed the Hawley-Smoot tariff, the highest import tax in history.  European countries also raised their tariffs, and international trade suffered a slowdown.

  • Hoover set up the Reconstruction Finance Corporation (RFC), which gave government credit to banks, industries, railroads, and insurance companies.  The theory was that prosperity at the top would help the economy as a whole.  Many Americans saw it as helping bankers and big businessmen, while ordinary people went hungry.

  • Hoover did not support federal public assistance because he believed it would destroy people’s self-respect and create a large bureaucracy.

  • Finally, public opinion soured for Hoover when he called the United States Army to disband a protest of 20,000 unemployed World War I veterans called the Bonus Army.

A “New Deal” for America


  • FDR promised a New Deal for the American people.

  • He was ready to experiment with government roles in an effort to end the Depression.

  • As governor of New York, Roosevelt had set up an unemployment commission and a relief agency.

  • FDR’s wife, Eleanor, was an experienced social reformer.  She worked for public housing legislation, state government reform, birth control, and better conditions for working women.

  • When the Roosevelts campaigned for the presidency, they brought their ideas for political action with them.

The Election of 1932

Herbert Hoover

  • Believed that federal government should not try to fix people’s problems.

  • Argued that federal aid and government policies to help the poor would alter the foundation of our national life.

  • He argued for voluntary aid to help the poor and argued against giving the national government more power.

  • Hoover gave very few campaign speeches and was jeered by crowds.

Franklin Roosevelt

  • Believed that government had a responsibility to help people in need.

  • Called for a reappraisal of values and more controls on big business.

  • Helped many Americans reassess the importance of “making it on their own” without any help.

  • Much of his support came from urban workers, coal miners, and immigrants in need of federal relief.

  • Roosevelt won 57 percent of the popular vote and almost 89 percent of the electoral vote.



1930's domestic

31. What was a major cause of the Great Depression?

(1) Overproduction and under consumption                  (Jan 11’)

(2) A decrease in the supply of consumer goods

(3) An increase in demand for imported products

(4) An increase in the price of wheat on the world market


32. The New Deal changed American political thinking because it was based on the principle             

that the (Jan 11’)

(1) Economy will fix itself if left alone

(2) Federal government should attempt to solve social and economic problems

(3) Political parties must work together to deal with national problems

(4) States should take a leadership position in


30 Many of the songs, movies, and books of the 1930s are similar in that they

(1) romanticized urban life

(2) relived the bad times of the past

(3) helped people escape from the realities of everyday life

(4) pointed out the mistakes that led to the Great Depression



29 One major way President Franklin D. Roosevelt’s New Deal tried to combat the effects of the Great Depression was by
(1) keeping workers’ wages low
(2) increasing protective tariff rates
(3) giving states more control over the federal budget
(4) funding public works relief programs


30 In 1937, President Franklin D. Roosevelt was criticized for his proposal to add justices to the

United States Supreme Court because these appointments would have

(1) broken earlier campaign promises

(2) violated the constitutional limit on the number of justices

(3) threatened the system of checks and balances

(4) established a more conservative Court


31 Which action by the United States best represents United States foreign policy in the


(1) passing the Neutrality Acts

(2) creating the Southeast Asia Treaty Organization (SEATO)

(3) deciding to create the United Nations

(4) joining the Allied powers


33 Congress opposed President Franklin D. Roosevelt’s plan to increase the number of

justices on the Supreme Court because the plan would have

(1) threatened the principle of checks and balances

(2) abolished judicial review

(3) violated the elastic clause of the Constitution

(4) given the federal government too much power over the states


34 The Neutrality Acts of 1935–1937 were primarily designed to

(1) avoid policies that had led to United States involvement in World War I

(2) halt the spread of communism in the Western Hemisphere

(3) promote United States membership in the League of Nations

(4) stop Japan from attacking United States territories in the Far East


33 President Franklin D. Roosevelt’s Good Neighbor policy was designed mainly to

(1) reduce border conflicts with Canada

(2) increase acceptance of minorities within the United States

(3) encourage Germany and the Soviet Union to resolve their differences

(4) improve relations with Latin America


34 One result of President Franklin D. Roosevelt’s New Deal was that it

(1) raised the national debt

(2) weakened labor unions

(3) deregulated the stock market

(4) repealed federal antitrust laws


33 The march of the “Bonus Army” and referring to shantytowns as “Hoovervilles” in the early 1930s illustrate

(1) growing discontent with Republican efforts to deal with the Great Depression

(2) state projects that created jobs for the unemployed

(3) federal attempts to restore confidence in the American economy

(4) the president’s success in solving social problems


35 Critics of the New Deal claimed that the Tennessee Valley Authority (TVA) and the Social

Security System threatened the United States economy by

(1) applying socialist principles

(2) imposing unfair working hours

(3) decreasing government spending

(4) eroding antitrust laws


34 The New Deal programs of President Franklin D.Roosevelt changed the United States economy by

(1) restoring the principle of a balanced budget

(2) expanding the trustbusting practices of Progressive Era presidents

(3) encouraging greater production of agricultural goods

(4) increasing government involvement with both business and labor

25 What were two basic causes of the Dust Bowl  during the early 1930s? 07

(1) strip mining and toxic waste dumping

(2) overfarming and severe drought

(3) clear-cutting of forests and construction of railroads

(4) overpopulation and urban sprawl


27 During President Franklin D. Roosevelt’s administration, the Federal Deposit Insurance

Corporation (FDIC) and the Securities and Exchange Commission (SEC) were created as a

way to

(1) provide jobs to those who were unemployed

(2) raise revenue for relief and recovery programs

(3) limit risks associated with savings and investments

(4) implement the new income tax amendment


28 “Arms Sales to Warring Nations Banned”

“Americans Forbidden to Travel on Ships of Warring Nations”

“Loans to Nations at War Forbidden”

“War Materials Sold Only on Cash-and-Carry Basis”

These headlines from the 1930s reflect the efforts of the United States to

(1) maintain freedom of the seas

(2) send military supplies to the League of Nations

(3) limit the spread of international communism

(4) avoid participation in European wars



34 The New Deal programs of President Franklin D. Roosevelt changed the United States economy by

(1) restoring the principle of a balanced budget

(2) expanding the trustbusting practices of Progressive Era presidents

(3) encouraging greater production of agricultural goods

(4) increasing government involvement with both business and labor


29 Which statement about Franklin D. Roosevelt’s New Deal program is most accurate?

(1) Protective tariff rates increased.

(2) Social welfare programs were expanded.

(3) Government regulation of business was reduced.

(4) Government support of environmental conservation ended.


23 The Neutrality Acts passed by Congress in the mid-1930s were efforts to

(1) avoid mistakes that led the country into World War I

(2) create jobs for the unemployed in the military  defense industry

(3) support the League of Nations efforts to stop  wars in Africa and Asia

(4) help the democratic nations of Europe against Hitler and Mussolini


26 One of the major causes of the stock market crash of 1929 was Aug 2010

(1) excessive buying of stocks on margin

(2) overconsumption of goods and services

(3) failure of international banking systems

(4) low prices of stocks and bonds


27 Which action did President Franklin D. Roosevelt take that helped organized labor gain

strength during the New Deal? Aug 2010

(1) requiring the American Federation of Labor to admit skilled workers

(2) allowing women to work in government agencies

(3) signing the National Labor Relations Act (Wagner Act)

(4) selecting John L. Lewis as his Secretary of Labor


28 Which nations are represented by the two birds in this cartoon?

(1) Soviet Union and Great Britain

(2) United States and Soviet Union

(3) Germany and Great Britain

(4) United States and Germany


29 Which statement most accurately expresses the point of view of the cartoonist?

(1) Isolationism is the safest policy for these countries to follow.

(2) The United States is ignoring the threat caused by foreign aggression.

(3) Trade restrictions are more of a threat than leaders recognize.

(4) England can defend itself against Axis