THE GREAT DEPRESSION AND THE NEW DEAL Organizing

THE GREAT DEPRESSION AND THE NEW DEAL

Organizing Principle As the traumatic experience of the Great Depression unfolded, Herbert Hoover did little to mend the broken economy. In 1932, America sought bold new leadership to heal the ailing nation. Franklin Delano Roosevelt, a charismatic, empathetic man rose to the challenge. He promised Americans a “new deal” at a time when political conservatives advocated weathering the storm. Though the New Deal was largely unsuccessful in restoring the economy on the whole, it did restore morale to the hopeless, and patched a hole in a sinking ship of state.

Herbert Hoover 1928 “In America today, we are nearer a final triumph over poverty than is any other land. ”

The Causes of the Great Depression Debtor/Creditor shift Exporter to importer Tariffs? Loans Economics of Depression Industries Lack of demand, saturated markets, housing starts Farming Decline in demand—increase in supply Mc. Nary-Haugen Bill—vetoed § Price supports denied

Continued… Trickle down (d)effect Wealthy gained— 5% owned 25% of all wealth Business profits soared—stagnant wages and prices/increased productivity Low-taxes for wealthy—capital investments Everybody else Wages were stagnant Credit The Stock Market Holding companies—pyramid schemes Speculation—capital gains Margin loans

Depression in the Cities Desperation Unemployment Evictions Shanty towns Shacks-“Hoovervilles” Soup kitchens & Bread lines Plight of minorities

Herbert Hoover 1931 “Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body - the producers and consumers themselves. ”

Hoover’s (in)Actions Voluntary cooperation Charitable acts No lay-offs No pay raises NO DIRECT RELIEF! Public Works Boulder Dam Intervention Federal Farm Board National Credit Corporation Federal Home Loan Bank Act: lowered mortgage rates Reconstruction Finance Corporation (RFC): emergency

The Bonus Army WWI veterans 10, 000 -20, 000 marched on D. C. Wartime compensation bonus (1945) The Patmen Bill Voted down by the senate Most soldiers leave Gassing the Bonus Army Hoover calls in the army

FDR Franklin Delano Roosevelt Political career: NY legislature, nominated VP, assistant secretary of navy, governor of NY Eleanor Roosevelt: “conscience of the New Deal” Social activist

Americans Get a New Deal Election of 1932 Roosevelt Hoover: blamed for doing too little Campaigns free enterprise and individualism FDR: (D) v. Hoover (R) reform minded—”forgotten man” Champions a “New Deal” relief for needy, economic recovery, and financial reform Roosevelt wins The 20 th amendment Hoover encourages anti-inflationary policies Democrats gain control of the House and Senate

Restoring Confidence The First 100 Days “Fireside chats” Bank Holiday Emergency Banking Act 75% banks reopen Economy Balance Act budget Glass-Steagall Act Separates S&Ls and Investment Banks Federal Deposit Insurance Corporation (FDIC) Federal Securities Act Securities Prohibition and Exchange Commission