2 Causes of the Depression Fewer goods are sold. Demand drops. In order to stay in business...

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Causes of the Depression

Fewer goods are sold.

Demanddrops.

In order to stay in businesscompanies cut

wages

People lose theirconfidence &

start saving their money

Demanddrops even

further.

Companies are forced to cut costs

by laying people off

Even more peopleLose their confidenceAnd spend less money

People lose their jobs.

The Spiral Of

Depression

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Great Depression in the Cities

• In cities across the country people:– lost their jobs– Were evicted from their

houses– Ended up living on the

street.

• Shantytowns, soup kitchens and bread lines appeared

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People waiting in line for bread and soup and also living out of their car.

I. A NEW DEAL FIGHTS THE DEPRESSION

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HooverFDR

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What were we thinking?What were we thinking?

Americans Get a New Deal

• 1932 election Americans clearly wanted a change

• Before FDR was president many state governors declared “bank holidays” TO PREVENT RUN ON THE BANKS

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ELECTION OF FDR

• Franklin Delano Roosevelt (Democrat) governor of New York

• Democrats win control of both houses

• Why was the victory easy- President Hoover’s failure to do ANYTHING EFFECTIVE ABOUT THE DEPRESSION

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Waiting for FDR too take Over

• FDR began to formulate a set of policies (New Deal) that would deal with problems caused by the Great Depression

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FDR and the New Deal

• During the presidential campaign of 1932, FDR promised Americans a NEW DEAL.

• This would be his program to get America back on its feet.

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1. Relief Help people right away

2. Recovery Get the US out of the

Depression

3. Reform Make sure another

depression does not happen

Goals of New Deal Program

The Hundred Days

• Between March 9 and June 16, 1933 came to be called the hundred days

• FDR launched a period of intense activity

• Known as the hundred days

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The Hundred Days

• 15 major pieces of legislation

• What was the Emergency Banking Relief Act? Shut down banks until government inspected them

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New Deal: Relief• Federal Emergency Relief

Association (FERA)• Civil Works Administration

(CWA)• Public Works Administration

(PWA)• Civilian Conservation Corps

(CCC)• Farm Credit Association (FCA)• Homeowners Loan Corporation

(HOLC)

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New Deal: Recovery• Works Progress

Administration (WPA)• National Recovery

Administration (NRA)• Agricultural Adjustment

Act (AAA)• National Youth

Administration (NYA)• Federal Housing Act

(FHA)

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New Deal: Reform• Federal Deposit

Insurance Company (FDIC)

• Securities and Exchange Commission (SEC)

• Wagner Act (NLRB)• Tennessee Valley

Authority (TVA)• Social Security

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Key Quotes: FDR’s Inauguration Speech

This Nation asks for action, and action now. Our

greatest primary task is to put people to work. I shall

ask Congress for broad executive power to wage

was against the emergency.

Link to:•Text of Speech

•Video

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• Series of radio addresses by FDR

• 30 total between 1933 to 1944

• FDR used these to calm American people down.

• CLICK on the radio to link to hear the 1st chat on the Bank Crisis

An Important Fireside Chat

• What was their significance? People again began to deposit money in banks

• By the time of FDR’s inauguration in 1933, most of the nation’s banks were closed ONE IN FOUR WORKERS WERE UNEMPLOYED

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Regulating Banking and Finance

• After his inauguration President Roosevelt’s first challenge was to restore America’s confidence IN THE BANKING SYSTEM

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Regulating Banking and Finance

• Glass-Steagall Act = established the Federal Deposit Insurance Corporation (FDIC)

• It provided federal insurance for individual bank accounts

• Separated commercial and investment banking

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Regulating Banking and Finance

• Federal Securities Act + required corporation to provided complete information on all stock offerings

• What is the SEC? the Security and Exchange Commission whose job was to regulate the stock market

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Helping the American People

• Roosevelt administration implemented programs to provide relief to– Farmers– Other workers– Attempted to stimulate

the economy

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Rural Assistance

• Agriculture Adjustment Administration- sought to

• raise crop prices• Lowering production

by paying farmers not to grow so much

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Rural Assistance

• What did the government do that upset many Americans?

• Paid Hog farmers to slaughter 6 million hogs

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Rural Assistance

• Farm Security Administration gave loans to tenant farmers so they could PURCHASE THEIR OWN FARMS

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Rural Assistance

• Congress authorized the Farm Security Administration to help farmers REFINANCE THEIR MORTGAGES

• Tennessee Valley Authority (TVA) = created 1000s of jobs providing electricity to the Tennessee Valley

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Providing Work Projects

• Civilian Construction Corps (CCC) = young men to work building roads, planting tress ect. UNDER THE DIRECTION OF THE FOREST SERVICE

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Providing Work Projects

• National Industrial Recovery Act (NIRA)= BUSINESS, LABOR, AND THE GOVERNMENT WERE ALLOWED TO SET PRICES, CODES OF FAIR COMPETITION

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Promoting Fair Practices

• NIRA also sought to promote industrial growth by establishing fair codes for individual industries

• Workers were allowed to organize unions and bargain collectively

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• Home Owners Loan Corporation (HOLC) = provided government loans to homeowners who could not make their payments

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Food. Clothing, and Shelter

Food, clothing, and Shelter

• Federal Emergency Relief Administration (FERA) = $500 million to provide relief to the needy

• Define deficit spending- spending more money that you are making

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Reversing the Spiral of Depression

Government Spending $

Alphabet Agencies

More Jobs

More Spending

Demand for goods increases

More goods have to be produced

More people withJobs = more pay $

More Spending

Demand for goods increases

More goods have to be produced

More Jobs

More Pay = More Taxes

Cycle of

Prosperity!

Democrats called this Process

‘Pump Priming’

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FDR and the Supreme Court

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Court Packing….• The Supreme Court struck

down several New Deal laws as unconstitutional.

• FDR wanted to increase the size of the court from 9 to 15.– Would appoint justices who

were pro-New Deal

• Congress did not agree with FDR.

• This hurt FDR’s image.

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Huey Long• FDR was NOT doing

enough for the poor.• Long pushed his “Share

Our Wealth” program.• Take all income over

$1,000,000 to give:– House– Car– Annual Salary– For all Americans

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Dr. Francis Townshend

• FDR was NOT doing enough for old people.

• Proposed a $200 a month pension to everyone over 60.

• This was good for (2) reasons:– $$ to boost economy– Open a job up for a

younger American

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Charles Coughlin• FDR had NOT done

enough….

• Fr. Coughlin felt that FDR did not take on the powerful bankers in the United States.

• Used the radio to blast FDR and became known as the “Radio Priest”.

Three Fiery Critics

• Attracted to the ideas of Frances Townshend the ELDERLY mobilized as a political force for the first time

• Roosevelt faced criticism from Democrat Huey Long who planned to run for president in 1936

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II. THE SECOND NEW DEAL TAKES HOLD

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The Second Hundred Days

• By 1935 Roosevelt was seeking ways to build on programs from the first hundred days (The Second New Deal)

• Who pushed for this? His wife Eleanor- a social reformer with great political skills

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The Election of 1936

• Republicans ran Alfred Landon (governor of Kansas)

• Democrats ran FDR and he won easily

• What two groups voted Democrat for the 1st time? African-Americans and Labor UNions

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The Election of 1936

• President Roosevelt won a landslide in 1936

• Partly because millions of Americans OWED THEIR JOBS AND SAFETY OF THEIR BANK ACCOUNTS TO THE NEW DEAL

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Roosevelt Extends Relief

• As part of the Second new Deal, Roosevelt administration and congress set up a series of programs to help

• Youth• Professionals• And other workers

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Work Progress Administration

• Set up to create as many jobs as possible as quickly as possible

• Headed by Harry Hopkins

• Spent $11 billion and gave jobs to more than 8 million workers

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Work Progress Administration

• New Deals largest public works program

• Employed 8.5 million workers

• Built 65,000 miles of roadways

• 853 airports• 124,000 bridges• 8,000 parks

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Works Progress Administration

• List jobs for unskilled workers: construction workers

• List jobs for skilled workers: teachers, writers, musicians, artists and theatre people

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National Youth Administration

• Created specifically to provide– Jobs– Counseling– recreation

• For young people• Students worked part-

time jobs while in school

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Improving Labor and Other Reforms

• FDR brought important reforms in

– Labor relations

– Economic security for retired workers

• President Roosevelt’s and New Deal supporters in Congress believed that UNIONS could help the Depression by negotiating higher wages

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Improving Labor Conditions

• After the Supreme Court ruled the NIRA unconstitutional

• FDR and Congress passed the Wagner Act or National labor Relations

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Improving Labor Conditions

• Wagner Act– Allowed for workers

to join unions– Allowed for collective

bargaining with binding arbitration

– National labor Relations Board – watch for unfair labor practices and labor elections

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Improving Labor Conditions

• Committee for Industrial Organization set out to organize all

• SKILLED AND UNSKILLED WORKERS IN THE AUTOMOBILE INDUSTRY

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Improving Labor Conditions

• Fair Labor Standards Act –– Maximum hours per

week (44)– Minimum wage ($.25)– Set rules for those

under 16– Banned hazardous

work for those under 18

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Social Security Act of 1935

Old Age Insurance

• 65 and older receive pensions funded by workers/employers

• FDR imposed payroll taxes on workers and employers to help pay for Social Security benefits were A CRUCIAL ELEMENT of the economic program

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How is Social Security funded?

Social SecurityTrust Fund

Workers Employers

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Social Security

UnemploymentInsurance

Old AgePension

Dependent Families

+Disabled

Social Security Act 1935

• Unemployment Compensation – helped workers who were unemployed

• Aid to families- families with dependent children received money

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Social Security Act of 1935

• By establishing safeguards and relief programs that protected against economic disaster were called SAFETY NETS

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III. THE NEW DEAL AFFECTS MANY GROUPS

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• President Roosevelt cut spending

• First Social Security payroll removed 2 billion from economy

• STARTED THE RECESSION OF 1937

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• Roosevelt cited an ECONOMIC THEORY KEYESIANIMS which held the government should spend heavily in a recession

• To jump start the economy

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Women

• Frances Perkins – 1st female cabinet member (Secretary of Labor)– Instrumental in Social

Security and labor legislation

• Still faced discrimination– Lower wages –

accused of taking men’s jobs

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American Indians

• INDIAN REORGANIZATION ACT OF 1934 restored Indian reservation lands

• Gave Native Americans control over their lands

• Permitted them to elect their own government

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African Americans

• PUBLIC WORKS ADMINSTRATION required that contractors not to discriminate against African Americans

• FDR appointed more than 100 African Americans to key positions in government

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African Americans

• A. Phillip Randolph – African-American labor leader

• Mary M. Bethune – educator who worked fro promoting opportunities for young African-Americans

• The Black Cabinet – group of African-Americans advisors to the President

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FDR Creates the New Deal Coalition

• An alignment of diverse groups dedicated to supporting the Democratic Party (Southerners, urban groups, blacks, union workers)

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Labor Unions Flourish

• 1933 – 1941 membership grew from 3 million to 10 million

• Identify the CIO – Congress of Industrial Organization (large labor union)

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Labor Unions Flourish

• What was the Memorial Day massacre?

• 10 people were killed and many injured when police broke up a steel workers strike in Chicago

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IV. THE IMPACT OF THE NEW DEAL

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Impact of the New Deal

• By 1939 the New Deal was effectively over

• FDR was increasingly concerned with events in Europe

• Particularly Hitler’s rise to power

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Impact of New Deal

• Economic recovery from the Great Depression would not be complete and unemployment would run high until AFTER WORLD WAR II

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What will end the Great Depression?

• America’s entry into World War II

Supporters and Critics of the New Deal

• One legacy of the New Deal is the continuing debate over how much the government should INTERVENE IN THE ECONOMY OR SUPPORT THE DISADVANTAGED

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Liberty League• FDR had gone TO FAR

with the New Deal.

• Interfering with business and people’s lives.

• Government was taking away freedoms from Americans.

Supporters of the New Deal

• What did liberals think?

• FDR did not go far enough to socialize the economy

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Expanding Government’s Role in the Economy

• New Deal gave the President the power to have a more active role in the economy by regulating supply and demand and government spending

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Expanding the Government’s Role in the Economy

• The federal government began getting deeper in debt from all the government spending plans

• To pay for many New Deal plans, President Roosevelt abandoned the balanced budget and began using DEFICIT SPENDING

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Protecting Workers Rights

• New Deal legislation set standards

• for wages and hours• banned child labor• Ensured the rights or

workers to organize• And to collectively

bargain

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Protecting worker’s Rights

• FAIR LABOR AND STANDARDS ACT – was a New Deal law that abolished child labor

• Banking and Finance• New policies were

enacted (SEC + FDIC) to regulate the stock market and oversee banking

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Social and Environmental Effects

• Social Security• Creation of Social

Security System would help a large number of Americans receive some assistance

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The Rural Scene

• New Deal legislation set up quotas for production of crops and to control surpluses

• Rural electrification helped to improve conditions in rural America

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The Environment

• Americans also continue to benefit from New Deal efforts to protect the environment

• Identify the Tennessee Valley authority (TVA) Federal project that built a series of dams that provided electricity for the Tennessee Valley

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