the great depression and the new deal. herbert hoover: president 1928
TRANSCRIPT
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The Great Depression and The New Deal
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Herbert Hoover: President 1928
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BLACK Tuesday
• October 29, 1929 STOCK PRICES PLUNGED
• STOCK MARKET CRASHED- start of the great depression▫Buying on Margin-
borrowing money from a broker to buy a stock
• Bull Market 1920s vs Bear Market 1930s
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BANKING CRISIS• Banks loaned money to stock brokers• Stock Market Crashed- People could not pay brokers
from buying on Margin, Brokers could not pay banks, Banks collapsed, peoples savings were wiped out.
• Bank Runs- People lined up to withdraw their money, 3,800 banks failed 1931-32, 1/5 of the nations banks failed
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Overproduction and Underconsumption• Overproduction- making too many goods
▫Assembly line• Underconsumption- people not buying as much
▫Farming industry hit hard• Wealth Gap
▫Wealthiest 5% received 1/3 of the money
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Government worsens Great Depression
•Federal Reserve System- Central Bank of the US, controls the money supply▫Discount Rate: Rate of interest banks can
borrow money from the federal reserve Fed increases Discount Rate (Interest
Rates)----- decreases the Money Supply---- business fail---- unemployment increases
•Hawley Smoot Tariff Act- law raising taxes on imported goods▫Tariff war--- halted trade--- worsening the
great depression
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CAUSES OF THE GREAT DEPRESSION•Bank failures•Overproduction•Underconsumption•Stock Market Collapse•Tariffs
B—O—U—S—T
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Bonus Army•WWI Veterans requested early retirement
payment and marched on Washington•President Hoover ordered the National
guard to regain control, loosing support from the veterans
•VIDEO
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Ideology- beliefs and valuesRADICAL CONSERATIVE LIBERAL
Extreme Change Leave it Alone Minor Changes
- Encouraged by the working class to rebel against greed capitalists-EX: Communism, Socialism- Complete government intervention
- Tradition-Belief in the business cycle, a recovery will follow a recession and/or depression -No Government Intervention
-Expansion of Liberty-Public Works Projects – government funded projects to provide jobs-Social welfare programs to provide those in need- Limited government intervention
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Hoover’s Response•No Government
intervention▫Hoovervilles-
shantytowns that homeless people built out of cardboard and tarpaper
•Relied on Optimism•RFC- Reconstruction
Finance Corporation ▫Trickle Down Theory
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FRANKLIN DELANORE ROOSEVELT
•President elected in 1932•NEW DEAL- program of relief, recovery, and reform•First Hundred Days- Congress passed a record
number of bills implementing the New Deal
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Human Impact
•25% unemployed- few could earn a living wage (wage high enough to provide an acceptable standard of living)
•Farmers lost their land- property values depleting▫Foreclosure- legal process of
a lender (bank) taking over a property
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Human Impact•Unemployment led to psychological problems
▫Marriage rate down▫Birth rates down▫Divorce Rates down (too expensive)▫Suicide rate up▫Teenagers left home
•Eviction- legal process where landlords remove tenets, Eviction rates rose
•Malnutrition- psychological condition from lack of adequate diet
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Human Impact
•Soup Kitchens•Breadlines
▫Sprang up around the country, 82 in NYC
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DUST BOWL•Dust Bowl- area of the Great Plains that
suffered from a drought, wind erosion, and poor farming ▫Black Blizzards- dust storms▫Desertification- land becoming desert like▫Depopulation- loss of residents from an area
Grapes of Wrath- novel by John Steinbeck about a family leaving the great plains during the dustbowl
Okies- people who followed Route 66 toward California, 300,000 left the Plains
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Great Flood•1936: Great Flood- Devastating flood in
New England that resulted form a series of record- breaking storms in March 1936
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Americans survival
•Americans sold anything they cold for money, cut corners financially, and did whatever they could to avoid receiving public relief
•Public Assistance- aid in the form of money, goods, or services that government provides to those in need
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NEW DEAL and it LEGACY
•The First New Deal▫Fireside Chat with 60 Million radio
listeners Emergency Banking Act- Closed all banks
FDIC (Federal Deposit Insurance Corporation) $5000
Securities and Exchange Commission- Stock Market Reform
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NIRA• National Industrial Recovery Act (NIRA)- Centerpice
of New Deal, goal: increase production, boost wages and prices. Aimed at Businesses, labor unions, and the UnemployedBusinesses Labor Unions Unemployed
National Recovery Act (NRA)
Required standardized products, minimum prices and announce price increases
NIRA guaranteed unions collective bargaining and minimum wages and maximum hours
NIRA allotted 3.3 billion dollars for public works projects
Public Works Administration (PWA)- oversaw construction jobs
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NEW DEAL ACTS• AAA (Agricultural Adjustment
Act)▫Aid farmers by reducing crop
production and raising prices, also helped farmers pay their mortgage Parity: Price that gives farmer
purchasing power• TVA (Tennessee Valley
Authority)▫Built series of dams in the
Tennessee River Valley to create jobs, controlled floods, stopped erosion and provided hydroelectric power to 7 Southern States
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NEW DEAL ACTS• Home Owners Loan Corporation- provided loans for
mortgages• FHA(Federal Housing Administration)
▫ Boosted banking by insuring mortgage loans to 80% of the homes value
• CCC (Civilian Conservation Corps)▫ Employed young men planting trees and working on
conservation projects• FERA (Federal Emergency Relief Administration)
▫ Sent money to the state governments to distribute money to the needy
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Responses to the New Deal
•Right Winged Response- Conservative critics of the New Deal, thought it went TOO FAR
•Left Wing Responses- Liberal Critics who believed FDR needed to go further
•Demagogues- Huey Long “Every Man a King”
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The Second New Deal•Electricity and Jobs- 1935 20%
of farmers had electricity, new deal created power plants, power lines, and 90% had electricity by the end of the decade
•WPA (Works Progress Administration)- Work relief program which put 3 million Americans to work. ▫Bridges, parks, public buildings,
artists for murals, guidebooks and folk music
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Supreme Court Attacks New Deal•Wagner Act (National Labor Relations
Act)- protected workers right to organize into unions, It continued the NIRA policies after it was considered unconstitutional
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Social Security Act•Created a social insurance program that
provides two main types of benefits:▫Retirement▫disability
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FDR: Packing the Supreme
Court
•FDR attempted to add more justices to the supreme court due to their inability to keep up with the work-load (age), when obviously he just wanted liberal justices to back the New Deal
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New Deal: Good and bad for whom?Workers Women African
AmericanAmerican Indians
Mexican Deal
Good Deal Mixed Deal Disappointing Deal
Better Deal Tough Deal
Unions strongerCIO- Congress of Industrial Organization- union established to organize workers by industry rather than occupation
FDR, put many women in his administration thanks to EleanorThe Economy Act of 1932- no Husband and wife working in fed gov. Women exclusion from unions
CCC and WPA helped African Americans survive, some New Deal agencies practiced racism and segregation. Eleanor took a stance on racism
Indians were living in poverty.John Collier, Commissioner of foreign affairs stopped assimilation and Indian cultural awareness and healthcare improved. Indian Rec. Act.
Mexicans faced poverty and unemployemnt. The AAA cut down on farming which forced them to move into cities. They could not enroll in gov. programs (illegal) deported?Best to Worst: Workers, American Indians, Women,
African Americans, and Mexican Americans
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New Deal Coalition•A political partnership formed during the
1930s among various social and political groups in support of the New Deal, democratic party, and FDR
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New Deal Legacy• Economic Security: New Deal promised people the
right to a job, adequate wages, a decent home, medical care, and a good education
• Welfare State- A social system in which government takes responsibility for the economic well-being of its citizens▫The Federal Government is now actively involved in the
economy▫Deficit Spending: Spending more than the
government receives in revenues. He Financed the deficit by borrowing money
▫Lasting Programs: Social Security, TVA, SEC, FDIC, etc…