Chapter 24 The Great Depression and the New Deal, 1929-1940.docx

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Chapter 24: The Great Depression and the New Deal, 1929-1940- Causes and consequences of the Great Depression- The politics of hard times- Franklin D. Roosevelt and the two New Deals- The expanding federal sphere in the West- American cultural life during the 1930s- Legacies and limits of New Deal reformHard Times-No event of 20thcent. had more profound impact on Am. life than Great Depression-Statistics document slumping econ., mass unempl., swelling relief rolls, but #s tell only part of story; emotional/psych. toll of yrs must be considered in understanding worst econ. crisis in Am. historyThe Bull Market-Stock trading in late ‘20s captured imagination of broad Am. public; resembled sporting arena w/ millions following stock prices-Just as installment plans had stimulated car indus., buying on margin brought new customers to stock market-New approaches to buying stock contributed to expansive/optimistic atmosphere on Wall St.The Crash-Crash of ’29 was steep downward slide-Black Tues: > 16 million shares traded as panic selling took hold-US’s pol./econ. leaders downplayed impact of Wall St’s woes; no one predicting depressionUnderlying Weaknesses-Revealed underlying econ. weaknesses left over from previous decade-Workers/consumers received too small share of enormous ↑ in labor productivity-Better machinery & more efficient indus. organiz. ↑ed labor productivity, but wages/salaries hadn’t risen nearly as much-↑ in productivity had encouraged overproduction in many indus.—farm sector unable to regain prosperity of WWI yrs-Farmers suffered declining prices for crops, drop in exports, large debts incurred by wartime expansion-Most important weakness in econ: un= distribution of income/wealth-Crash undermined confidence, investment, spending of businesses & well-to-do-Manufacturers ↓ production & began laying off workers → further declines in consumer spending & round of prod. cutbacks-Consumers had less to spend as indus. laid off workers & reduced work hrs-Shrinking market for products → businesses hesitant to expand-Many banks failed as anxious depositors w/drew funds; thousands of families lost savingsMass Unemployment-Unempl. insurance didn’t exist & public relief inadequate—job loss meant econ. catastrophe
-Mass unempl. across Am. became most powerful sign of deepening depression-Many Am.s raised believing they were responsible for own fate blamed selves for failure to find work-Common feelings of shame, guilt by unempl., inadequacy, uselessness, despair-Unempl. undermined traditional authority of male breadwinner-Women found it easier to hold onto jobs (cheaper labor than men’s)-Fear of unempl. & deep desire for security marked depression generationHoover’s Failure-Enormity of GD overwhelmed traditional (meager) relief sources—lacked $, resources, staff to deal w/ worsening situation-Hoover administered large-scale humanitarian efforts in WWI w/ great efficiency, but failed to face facts of depression; resisted ↑ calls from Congress & local comm.s for ↑ fed. role in

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