The Great Depression and the New Deal

Many Americans began to invest more money in the stock market.

American Presidents Harding and Coolidge gave businesses more freedom to achieve and succeed.

Wealth distribution was vastly unevenAmericans were purchasing items with credit.Buying stocks on margin.

Lead up to a Depression

One factor in the Great Depression was the crashing of the Stock Market on October 29, 1929, a day later named Black Tuesday.

On that one day investors dumped more than 16 million shares of stock

The crash led to panic among people in business and industry and triggered a banking crisis

Many companies began to layoff workers because consumers were spending less in fear of economic troubles

The Stock Market Crashes

People throughout the country lost jobsFarms across the country began to fail due to the

drop in prices of foodMany farms and landowners faced foreclosure –

when a bank or lender takes property from someone who has not made payments

Thousands were left homeless and flocked to shanty villages called Hoovervilles, a reference to President Herbert Hoover, who many blamed for the depression

Times got even worse when drought and dust storms swept throughout the country

Hard Times for Americans

President Hoover believed in the idea of “rugged individualism” – that government should not get involved and that individual people and businesses would be the ones to fix the economic crisis.

In 1930 Hoover signed the Smoot-Hawley Tariff Act that raised the cost of imported goods for American consumers. The tariff was a disaster and nearly led to an end in world trade.

Hoover’s Response

In 1932 Franklin Roosevelt destroyed President Hoover in the election for President

After his landslide election Roosevelt immediately set to work of repairing the nations economy

Roosevelt delivered fireside chats over the radio to help calm American’s fears and deliver his plans

FDR's Fireside Chat: Unemployment

The beginning of Roosevelt’s presidency was later called “the Hundred Days” referring to FDR’s first 100 days as President

His plan was called the New Deal

FDR

The New Deal centered around 3 R’s1) Relief – for those suffering2) Recovery – of the economy3) Reforms – that would prevent another

depression in the futureRoosevelt created the Civilian Conservation

Corps (CCC) which paid Americans to work in projects like planting trees and improving parks

The Agricultural Adjustment Act (AAA) gave farmers a subsidy to grow fewer crops in order to bring the price back up

The New Deal

The Public Works Administration (PWA) managed all of the New Deal plans dealing with work and projects

In 1934 the Securities and Exchange Commission (SEC) was created to serve as the watchdog over the stock market

These are just some of the various “Alphabet Soup” programs that FDR created

The New Deal

Many Republicans were angered at the amount of spending and government power being used to create the New Deal

The Supreme Court also ruled that parts of the New Deal were unconstitutional

In response FDR put forth what was called the “court packing plan (or scheme)” to add justices that would favor the New Deal to the Supreme Court

After that threat the Supreme Court began to support more of FDR’s plans and gave way to the Second New Deal

Trouble for the New Deal

The Works Progress Administration (WPA) had workers building roads, subways, airports, and even zoos.

Social Security provided financial assistance to the retired and elderly (65 or older) and provided money for people who had lost their jobs

Another big part of the Second New Deal was the Rural Electrification Act (REA) that tried to bring electricity to rural areas of the nation.

SHEG: Social Security

Second New Deal

While the New Deal did help Americans get back to work the economy still struggled throughout the 1930’s.

The New Deal made FDR incredibly popular among the people, especially poor whites and African-Americans. Because of this many African-Americans began voting for a Democrat for the first time.

Parts of the New Deal including Social Security, minimum wage, and projects that were completed are still part of our country today.

Impact of the New Deal

What Finally Ended the Depression