The Great Depressionand

F.D.R’s NEW DEAL

Ms. Hoye AP DC US History

Republican-1928 elected by landslide

-Promise to keep Prohibition-took credit for Prosperity of ’20s

•Stock Market Crash

•Black Tuesday, Oct. 29, 1929

•Hoover was blamed for not

providing “direct relief” to help

Americans? WHY?

•US Govt. should not provide

“direct relief”

Endorsed “laissez faire”

Rugged individualism: Americans are self-sufficient and would work

themselves out this depression through hard work and determination.

Charitable organizations: Churches, volunteers and people helping

one another.

Campaign slogan: “A Chicken in EVERY POT”

The Stock Market

Stock– Ownership in company

– Sold to raise capital Improvements, expansion

Stock market– Where stock is bought

and sold

Bull market– Period of rising stock

value

– Caused millions to invest heavily

Buying on margin

– Small down payment

– Pay off balance ‘loan’ when stock sold

– Safe as long as stock price rises

Margin call

– Calling in ‘loan’ for repayment

Speculation

– Buying stock at low price

– Hold for short time

– Sell for quick profit

• No government regulation

• Stock bought not reflect true value-Prices bid up without looking at company’s earnings and profits

The Crash

Margin calls

– Led to stock sales

Flooded market– Caused prices to drop

– Panic on Oct 24, 1929

– More & more stock put up for sale

– Stock priced bottomed out

Tuesday, Oct. 29, 1929

– “Black Tuesday”

– Stock market crashed

– Beginning of Great Depression

Stock values drop from $87 - $19 billion

Steel production drops 80%

Industrial output drops 50%

500,000 homes and farms foreclosed

“Run on the banks”, 5,190 banks failed

9 million people lost their savings

4 million by 1930----12 million by 1932

25,355 businesses fail

Work week cut----3 to 1 and lay offs.

Unemployment 25—40%

domino effect

Collapse of Banking Industry

Banks had invested in stock market

Risky loans

– Could not collect money

People pulled money out

–‘RUN ON BANKS’Unstable banks closed

A Wise Economist

Asks A Question

Bank failures crushed the

average American who put faith in the banks to save their money.

When they went to withdraw their

money, it had been lent out so

they lost savings.

Black_Tuesday

Other Factors to Consider

Decline of farming industry

Uneven distribution of wealth

International economic policies- TARRIFF WARS

Easy credit purchasing during the 20s

Weak and unregulated banks

Hoover’s attempted Relief Efforts

Public works

– Gov’t financed building projects

Provided jobs lost in private sector

To pay for projects—raise taxes or borrow from banks

Reconstruction Finance Committee

– Provide funding for banks, railroads, and agricultural institutions

Too cautious with loans to be effective

“too little, too late”

Hoovervilles or shantytowns, were migrant towns of people who were out of work and on the move to find

work. Usually outside large cities where migrants were trying to find jobs. Named after President

Hoover because he wouldn’t do anything to help the people who were in need…….

HOOVERVILLES

Welcome_to_Hooverville 6.22

DEBTS

•Bonus Army March in the summer of 1932 over 20,000 veterans from WWI marched on Washington, DC.

•Demanded their $1000 Bonus promised to them by the government for fighting

in WWI.

•They were out of work and wanted to feed their families.

•Congress voted down payment of bonus

•Veterans protested and set up a “HOOVERVILLE” on

Capital steps

•Hoover sent in ARMY to remove our own VETERANS!

*NAIL IN HOOVER’S COFFIN*

Farmers and Dust

Decline of the farmer

– Overproduction Drop in farm prices

Economic devastation

– Loss of farms

– Overuse of land Fields left bare, exposed to elements

1932 drought

Winds caused blowing sand

Farming poverty contributed to nation’s overall economic decline

•The Dust Bowl was an ecological and human

disaster that took place in the southwestern

Great Plains region, including Oklahoma, in

the 1930's.

•It was caused by misuse of land and years

of sustained drought.

•Millions of hectares of farmland became

useless, and hundreds of thousands of people

were forced to leave their homes----many

migrated to California. (OKIES)

•As the land dried up, great clouds of dust

and sand, carried by the wind, covered

everything and the word "Dust Bowl" was

coined.

At the height of the Great Depression Lange photographed the woman and her two small children. It came to epitomize the poverty & suffering of those displaced. Dorothea Lange’s photography was to inspire Steinbeck’s “The Grapes of Wrath” which in turn inspired John Ford’s film adaptation.

dust bowl

Dust Bowl 6:06

A Time for Change

Election of 1932

– Hoover, Republican

– Franklin D. Roosevelt, Democrat

Republicans blamed for economic hardships

FDR and his “New Deal” wins

•FDR and Hoover at FDR’s inaugural

•Americans believed FDR could get the country out

of the depression and put people back to work……

“The only thing we have to fear is fear itself”-FDR

•Promised a “NEW DEAL” for the

American people

•Democrats

•Used “FIRESIDE CHATS” on radio

inform/consul public

•FDR appealed to the common man because

he was crippled by Polio

•Eleanor became the eyes and ears for her

husband

•Promised to help the people through the

Great Depression by

Eleanor Roosevelt visiting a West Virginia Coal Mine, 1933 as FDR’s “Eyes,

ears and legs”

-Major advocate for African Americans and Women

-Strongest and most opinionated 1st Lady in American History. Hillary Clinton

would be compared to Eleanor

Eleanor Roosevelt visits West Virginia Coal Mine, 1933

FDR’s Immediate Actions

Restore confidence in banks

– Called national bank holiday

– Congress passed Emergency Banking Relief Act

Glass-Steagall Act (Banking Act of 1933)Federal examiners survey banks

– Issue licenses to the financially sound

Fireside chat to inform public banks were secure

– Following day—deposits outweighed withdrawals

•President Roosevelt began the “fireside chats” on a

weekly basis as a way to reassure the American

people.

•His comforting voice, calming words, confidence in

the country and the American people helped restore

faith of the American people in democracy.

chats

“I pledge to you,

pledge myself to

a NEW DEAL for

the American

People.”

“The only thing

we have to

fear…is fear

itself.”

Roosevelt’s 100 days was

very successful….FDR

and Congress went to

work providing for direct

relief, recovery and

reform.

From March of 1933 to

June of 1933, Roosevelt

sent 15 proposals to

Congress and all 15 were

adopted

Congress and President

tried anything reasonable

to overcome the Great

Depression.100 days

NEW DEAL CARTOON

Govt. programs which provided direct relief to suffering Americans through

govt. spending……… Renew democracy

Restore confidence in the banking

Stimulate economy

Put people back to work.

Restore self confidence

Relief: ease suffering of the needy

Recovery: begin economic growth

Reform: help prevent future

economic crises

How? FDR’s 3 R’s

Social Engineers

Brain Trust

FERA / 1933

Federal Emergency Relief

Act

Distributed $500 million of

direct aid to unemployed

workers such as food, clothing

and grants of money to cities.

alphabet

RELIEF: Ease Suffering of the Needy

WPA / 1933 to

1943

Works Progress

Administration

Employed 8.5 million

workers in construction

and other jobs, but more

importantly provided

work in arts, theater,

and literary projects.

alphabet

RELIEF: Ease Suffering of the Needy

•Works Progress

Administration (WPA),

the New Deals main

relief agency.

•People employed by

the WPA at its peak

was more than 3 million

•2,500 hospitals

•5,900 schools

•13,000 playgrounds

•125,000 public

buildings

wpa

•Develop a poor section of

the Southeast U.S.

•Stimulate the economy and

produce cheap electricity.

•Built a series of DAMS…

generated electricity

•Control floods, planting new

forests.

•Bring this section into the

20th

century.

TVA

94 percent of property owners and 98 percent of

tenants did not have electricity.

30 percent of property owners and 41 percent of

tenants had no toilet facilities whatsoever

Created federally insured

bank deposits ($2500 per

investor at first) to prevent

bank failures.

alphabet

REFORM: Prevent Another Depression

FDIC / 1933

Federal Deposit Insurance Corporation

Regulated stock

market and restricted

margin buying, and

frauds.alphabet

REFORM: Prevent Another Depression

SEC / 1934

Securities and Exchange

Commission

It provided

retirement pensions,

unemployment

insurance, aid to

blind, deaf, disabled,

and dependent

children.

alphabet

REFORM: Prevent Another Depression

SSA / 1935

Social

Security Act

•One of the most important features of the New Deal.

•Established a retirement for persons over 65 funded by a tax on wages paid equally by

employee and employer.

•Old age insurance

•Protect Americans who were unable to support themselves.

•Unemployment compensation

•Compensation to disabled workers and assistance to

widows and children

•Created in April 1933.

•Within 4 months, 1300 CCC

camps were in operation.

•300,000 men in 1933

between ages 18 and 25

•Signed up for 6 months and

made $30.00 a month.

•1933 and 1941 over

3,000,000 men served in the

CCC .

•Goal: Keep teenage young

men off the street and away

from the job market.

•Develop job skills and

improve environment

Planted trees, built public parks, drained swamps to fight malaria,

restocked rivers with fish, worked on flood control projects and a range of other work that helped to conserve

the environment.

Agricultural Adjustment Administration

AAA

Relief for farmers

Paid to limit crop and livestock production

Created limited supply

– Caused prices to increase

Helped some; caused hardship for tenant farmers

FHA- Federal Housing Admin

The New Deal 808

100 days

Criticisms of New Deal

US government and President too

powerful

Violated laissez faire

Supreme Court declared NIRA and

AAA unconstitutional

Deficit spending: Govt. spends $$$ to

stimulate the economy and help people

even if it means US Govt. goes into

debt.

Welfare state----Created a population

of Americans who relied on the US

Govt. to live

“Old Reliable” cartoon

“New Deal Remedies”

Successes of New Deal

100 days

AMERICANS IN 1939 WHO WANTED THE NEW DEAL TO CONTINUE WAS 55%….. 37%

REGARDED IT AS A BAD INFLUENCE AND WANTED A NEW PRESIDENT…………...

Stimulated the economy

Put people back to work….

Improved morale and self-confidence of the people

US Govt’s. role changes and became directly involved in helping

people

WWII ended the Great Depression not FDR’s New Deal

•Economic system based on

cooperation rather than

competition

• Believes in government

ownership of business and capital

•Government controls production

and distribution of goods.

•Opposite of laissez faire and

capitalism

•Supreme Court was striking

down New Deal legislation.

•Roosevelt proposed a bill to

allow the president to name

a new federal judge for each

who did not retire by age 70

and 1/2.

•6 justices over age limit.

•Would have increased the

number of justices from 9 to

15, giving FDR a majority of

his own appointees on the

court.

•The court-packing bill was

not passed by Congress.

The End of An Era Democratic Party members shifted from mainly white

Southerners to include African Americans, farmers, laborers, new immigrants, & women

Roosevelt 2nd term has limited successes

– Congress begins to block New Deal legislation

– Caused economic downturn by cutting gov’t spending

– Era ended 1939

– Gave Americans stronger sense of security and stability

– Cut gov’t spending which caused economic downturn

The_Second_New_Deal