Depression and New Deal Causes of the Great

Depression and New Deal

Causes of the Great Depression Section 1

Economic Weaknesses ⦿ Prosperity • GNP – Rose quickly �Workers spent freely • Stock Market – expanded rapidly �People invested freely • Laissez-faire government

Cont… ⦿ Wealth distribution • 70% low income • uneven ⦿ Buying stock on margin • Bought stocks on credit ⦿ Fed Board • Saw a crash coming

Stock Market Crashes ⦿ Sell • Selling started slowly but caught on quickly • Began on a Thursday �On Friday bankers bought back stocks to help • Black Tuesday � 16 million shares of stock dropped �Eventually $16 Billion

Failures ⦿ Banking Crisis • Failed loans based on stock market • Banks failed and closed • Investors lost money ⦿ Business • Businesses cut spending • Consumers stopped buying • Unemployment rose � Less money in circulation to stimulate economy

Cont… ⦿ Farms • Overproduction �Could not sell �Prices fell �Banks foreclosed on farms ⦿ Unemployment • 25% • GNP – dropped 40%

Cont… ⦿ People • Hooverville's �Shantytowns • Hoboes �Traveling workers

Dust Bowl ⦿ Drought and Poor Farming Practices • Led to dust storms � Earth pulled into the air • Ok, Tx, Ka, Nm, Co

Hoover’s Presidency Section 2

Election of 1928 ⦿ ⦿ Herbert Hoover Republican Very highly thought of by people WINNER! ⦿ ⦿ ⦿ Alfred Smith Democrat Catholic

Hoover’s Presidency ⦿ Rugged Individualism • Small government • Let people fix it ⦿ Associative State • Voluntary association of business and government ⦿ Hoover Dam • Colorado River • Provide electricity to west coast • Paid for by government

Cont… ⦿ Response to the Great Depression • Farmers �Pushed for cooperatives • Encouraged businesses not to lay offworkers • Reconstruction Finance Cooperation �First action by Hoover � 2 Billion to help banks

Cont… • Smooth-Hawley Tariff �Europeans responded with tariff ⦿ Nation Responds to Hoover • Lost favor of people • Bonus March • Congressional Election of 1930 �Democrats took control

FDR Section 3

Election of 1932 ⦿ ⦿ Franklin D. Roosevelt Democrat Direct relief for people in NY WINNER! ⦿ ⦿ ⦿ Herbert Hoover Republican Attempted to warn people of Roosevelt

FDR ⦿ Disease • Polio • Few people knew ⦿ Fireside Chats • Talked directly to people ⦿ Eleanor Roosevelt • Social reform

Roosevelt and the Great Depression ⦿ Banks • Closed all banks • Emergency Banking Act �Banks must be sound to re-open • Glass-Steagall Act �Created the FDIC

New Deal Section 4

New Deal ⦿ The Hundred Days • New Deal �Relief �Recovery �Reform • CCC �Civilian Conservation Corps • AAA �Agricultural Adjustment Act • NIRA �National Industry Recover Act

Cont… • PWA �Public Works Administration • Federal Securities Act • SEC �Securities and Exchange Commission �Stock market regulation • TVA �Tennessee Valley Authority • CWA �Civil Works Administration

Cont… ⦿ Critics of the New Deal • Huey P. Long �FDR too friendly to banks and businesses • Courts �Limited New Deal programs �Did no hurt FDR’s popularity

nd 2 New Deal Section 5

2 nd New Deal ⦿ Emergency relief • Emergency Relief Appropriations Act • WPA �Works Progress Administration • Social Security ⦿ Organized labor • Wagner Act �Outlawed anti-labor practices �National Labor Relations Board

Cont… • CIO �Congress of Industrial Corporations • GM Strike �Sit-down strike ⦿ Court packing • FDR attempted to increase # of judges ⦿ Deficit • Growing too big • John Maynard Keynes �Deficit spending was ok

Election of 1936 ⦿ ⦿ ⦿ FDR Democrat Easy Winner! ⦿ Alf Landon • Republican • Reformer � Same as FDR mostly ⦿ Union Party • Anti-New Deal

Legacy of the New Deal Section 6

Popular Entertainment ⦿ Movies • The Grapes of Wrath • Mr. Smith Goes to Washington • Wizard of Oz ⦿ Radio • The Lone Ranger • The War of the Worlds ⦿ Music • swing

End of the New Deal ⦿ Support dwindled towards 1938 • Minimum wage • FDR could not longer pass new laws • Mixed reviews on sucess ⦿ More focus on Europe