The New DealThe New Deal

J. MARSHALL, 2008

Blessing or Curse?

Reasons for the Crash and other factors that led to depressionReasons for the Crash and other factors that led to depression

• The stock market was a relatively new thing - stocks vs. gold (traders and buyers were inexperienced)

• Buying on margin - a license to print money• Panicked selling over almost a week caused

the Wall St. market to collapse on Black Tuesday, Oct 29, 1929

The crash did not cause the Depression - it did make

the suffering worse.

Other economic problemsOther economic problems

• The price of wheat had been falling since 1927: over-production didn’t drop so prices did - farmers’ mortgages suffered: no cash means no new tractors

• Manufacturers were over-producing consumer goods = few consumers = layoffs = less spending money = fewer consumers

• USA protectionist tariffs = trade barriers for all• Germany’s inability to pay reparations affected

the Allies’ ability to repay loans to USA

The Beginning was Worst:Looking at CanadaThe Beginning was Worst:Looking at Canada• Canada’s economy was very closely connected to

the USA - trading/branch plants/investors:– Wheat (40% of world supply)– Newsprint (65% of world supply)

• As the economy failed people lost their jobs and the ability to pay rent: vagrancy meant jail time

• To collect POGEY or the “DOLE” (Relief vouchers) one had to publicly declare her poverty: why would so may do without relief?

• Private charity/soup kitchens

Women and their children suffered as men looked for work, often “riding the rods”

Laissez Faire - let it beLaissez Faire - let it be

Herbert Hoover1928-1932

• Rich/Republican• Blindsided by the

Depression• Didn’t want to threaten

the “American Way of Life” (free enterprise)

= Hoovervilles

On the eve of FDR’s inauguration

Franklin D. Roosevelt1932-1945

• Democrat• Called Keynes a “fool”

(interesting)• “Nothing to fear…”• New Deal - 3 Rs• First 100 Days

Relief Recovery Reform

John Maynard Keynes (“Canes”)

FDR listened to the economist:

“SPEND YOUR WAY

OUT OF DEPRESSION”

FDR listened to the economist:

“SPEND YOUR WAY

OUT OF DEPRESSION”

Only government is big enough

to deal with the problem

Herbert Hoover vs. RooseveltHerbert Hoover vs. Roosevelt

• Hoovervilles

• Hoover’s strategy was to lower interest rates -

the problem was too big!• FDR’s 100 days in 1933

– Close banks for three days– New Deal = “alphabet agencies”– Every letter to the President will be answered– End Prohibition– create CONFIDENCE and give LEADERSHIP

Tennessee Valley Authority

Public Works

Admin Works Progress Admin

Agricultural

Adjustment

Admin

National Recovery Admin

Mass CommunicationMass Communication

• Fireside Chats - the soap box is dead!

• All letters to the

President will be answered! (1000s / day)

Millions were Suffering

• Sharecroppers were displaced

ex. Grapes of Wrath

Eleanor Roosevelt

Alphabet Agencies

• Success was

mixed

Corporate State?

What did they do?

WPA?

Make work?

How successful were they?

• Is a minimum wage

a good thing?

• Predict -

outcome for workers?

…for owners?

…for the country?

Blue Eagle!Blue Eagle!

GOP?

W5 ?

Separating myth from reality…

Hopkins

FDR

“Just in case they ever wanted to slow down,” Mar 5, 1936

1937 saw a new recession.

Meanwhile What About the Main Line Express?

Bias?

When did the debt rise the most?

Search for arguments on the

effectiveness of The New Deal:

• Statistics New Deal• Effectiveness New Deal• Criticism New Deal• New Deal Extended the Depression

• Benefits of the New Deal• Damage of the New Deal