The Great Depression and the New Deal The

The Great Depression and the New Deal The Great Depression The New Deal The Second New Deal and Its’ Effects

The Great Depression Causes of the Depression Ø Roaring 20 s help Herbert Hoover get elected in 1928 Ø Several underlying problems during 1920 s boom l l l Farm Problems-After WWI demand for crops and crop prices fall Wealth is distributed unevenly- Rich become richer, workers became less poor Easy Credit- debt grows as people can’t pay off credit

The Great Depression Stock Market Crash Ø Investors buy stock on speculation- hope the stock would go up Ø October 1929 - Market up and down; scared investors sell all stock Ø October 29, 1929 Black Tuesday Ø 1 st example of business cycle- growth and slow down of economy Ø When the market collapsed, the Great Depression began- 1929 -1941 l l l Banks collapse- ppl. pulled all savings from banks close Businesses closed, unemployment rises- 1933: 25% UR Hawley Smoot tariff- Gov’t passes extremely high tariff, only hurts economy

The Great Depression Hoover and the Great Depression Ø While most Americans kept their job, wages were drastically cut Ø Bread lines, soup kitchens, homeless shelters become common--. American Dream impossible Ø Hoovervilles created- tents/shacks built on vacant lots for homeless Ø Some farmers prosper- grow own food most lost their farms to banks- tenant farmers Ø 1930 s- terrible drought in the Great Plains Dust Bowl Ø Farm families had no choice but to migrate Dust Bowl refugees were known as Okies

The Great Depression Hoover’s Response Fails Ø Urged Americans to go about their business as usual Ø Laissez Faire attitude says Americans should take care of themselves- no gov’t welfare Ø Believed gov’t should help businesses, not control them Ø Organized Boulder Dam- gave power and water and work to millions Ø Begins passing measures to reform banking l l Federal Home Loan Bank Act lower interest rates for mortgage Reconstruction Finance Corporation Finance big business, money will trickle down to citizens

The Great Depression The Bonus Army Ø WWI vets march on the White House lawn demanding promised bonus checks Ø Hoover uses force to remove Bonus Army soldiers from local shantytowns

The New Deal FDR Takes Charge Ø 1932: Democrat Franklin D. Roosevelt wins election Ø FDR campaigns using “New Deal” plan l l l Gov’t should play active role in ending Depression FDR uses the “Brain Trust”, group of close advisers, to help plan New Deal Frances Perkins-first woman to serve in a cabinet position

The New Deal The First Hundred Days Ø FDR passes 15 new bills (First New Deal) relief, recovery, reform l Federal Deposit Insurance Corporation (FDIC)- insured bank deposits l Agricultural Adjustment Act (AAA)- provides financial aid to farmers l Tennessee Valley Authority (TVA)- Gov’t builds dams along TN River to provide jobs and electricity l Civilian Conservation Corps (CCC)- provide jobs for young men l National Recovery Administration (NRA)- set minimum wage, govern competition in business l Public Works Administration (PWA)- built bridges, dams, power plants Ø FDR immediately starts a bank holiday- close all banks for 3 days Ø Begins giving weekly speeches on radio to reassure the nation Fireside Chats

Migrant Mother Photo by Dorothea Lange

The New Deal Opposition to the New Deal Ø Some thought New Deal was too radical, some thought it didn’t do enough Ø Most complained New Deal was making the gov’t too big and powerful Ø These critics formed the American Liberty League- thought FDR was socialist

The New Deal Ø FDR has 3 very outspoken critics: l l l Francis Townsend- favors giving checks to citizens and money would “filter” out Charles Coughlin- said FDR wasn’t doing enough to fight Depression Huey Long- Proposes a “Share Our Wealth” solution- high taxes on wealthy, cut taxes for middle class

The Second New Deal Ø Goals: l l Promote general welfare Intervene to protect citizens’ rights

The Second New Deal Ø Ø Ø Works Progress Administration (WPA)- built/improved nations’ highways, etc. New programs expensive gov’t uses deficit spending (spending money you don’t have) FDR creates the Social Security Act- unemployment insurance for workers/pension plan for retirees FDR still trying to help farmers electricity- Rural Electrification Admin (REA) Gov’t gives price supports (subsidies) to farmers Surge in labor union membership Wagner Act guaranteed employees the right to join and labor union

The Second New Deal Act also granted collective bargaining- right to negotiate between employer and employee Ø 1936 -FDR re-elected Ø Supreme Court begins to question FDR’s authority to create ND programs Ø SC nullifies the NIRA and AAA Ø FDR decides to “pack the courts” Ø l l FDR proposed increasing number of SC justices from 9 to 15, “packing court” with ND supporters SC suddenly starts ruling in favor of FDR’s policies

After his reelection in 1936, and as a reaction to opposition he was getting from the Supreme Court, FDR attempted to "pack" the Court by enlarging it (by 6 judges) and then appointing justices who would agree with his approach. This cartoon is a commentary on the Roosevelt "court-packing" episode.

The Second New Deal Effects of the New Deal Ø Women’s role in society expands b/c of Eleanor Roosevelt Ø ER fights for AA rights Black Cabinet- AA leaders to advise FDR Ø FDR runs for a 3 rd and 4 th term in 1940 and 1944 Ø FDR had created a solid supportive groups of Democrats New Deal Coalition l Southern whites, AA, farmers, northern workers, immigrants

The Second New Deal Legacy of the New Deal Ø New Deal increases size of Fed. Gov’tsome programs still around Ø ND didn’t end Depression, but helped restore economy Ø FDR rejected laissez faire economicsleads to welfare state provide for all US citizens