Causes of the Great Depression

• Overproduction and under consumption of goods.

• Farm Debt / Credit Problems

• Uneven distribution of wealth

Effects of the Great Depression

Stock Market Crash – Panic of 1929

Factories Close - 1931 Ford lays off 75,000

Unemployment Rises - 1932 13 million without jobs (25%)

Effects of the Great Depression

5,500 banks close and 9 million accounts vanish

Gross Domestic Product = 103 billion in 1929 GDP = 56 billion in 1933

Hoover’s Philosophy1929-1932

“The spread of government destroys initiative and thus

destroys character. Character is made in the community as well as in the individual by

assuming responsibilities and not escaping them.”

Hoover’s Aid Policies

Reconstruction Finance Corporation

Agricultural Marketing Act

Hoover’s Unpopularity

Hoovervilles

Bonus Army

1933: A New President A New Deal

The New DealGoals

Fix the Banks

March 6, 1933 close banks to inspect the financial health of all banks.

Establish the FDIC = Insure bank accounts up to 5,000

Reopen banks on March 16 and deposits exceeded withdrawals

The New Deal Goals

Provide Relief

Federal Emergency Relief Administration (FERA) -Give money to local relief agencies.

New Deal Goals

Create Jobs “Public Works Programs”

Provide JobsCivil Works Administration (CWA) = roads, parks, and airports

Civilian Conservation Corps (CCC) = forest, beach, and park maintenance/restoration

Public Works Administration (PWA) = dams and bridges

Tennessee Valley Authority = cheap electric power and flood control of the Tennessee Valley

Stimulate Economic Recovery

National Recovery Administration (NRA) = regulate wages, working conditions, production, prices, minimum wage and collective bargaining.

Security and Exchange Commission (SEC) = regulate the stock market

Agricultural Adjustment Act (AAA) = raise crop prices through lowered production.

The Second New Deal1935

Works Progress Administration (WPA) = provided 8.5 million jobs

Social Security Act (SSA) = pensions for workers, unemployment insurance, aid to dependent mothers and children, to the blind, and physically disabled

New Deal Criticisms

Many acts deemed unconstitutional (too socialist)

Did not end discrimination to any minorities

Did not end the Great Depression