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The Great Depression. The 1930’s. The Crash. Black Tuesday Years of over speculation, deregulation leads to market crash Boom market>increased speculation>great sell-off Oct ‘29 America enters the Great Depression. Causes. Market crash – “playing the market”, buying on margin - PowerPoint PPT Presentation
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The Great Depression
The 1930’s
The Crash
• Black Tuesday • Years of over speculation, deregulation
leads to market crash • Boom market>increased
speculation>great sell-off Oct ‘29• America enters the Great Depression
Causes
• Market crash – “playing the market”, buying on margin
• Uneven income distribution & overproduction>>easy credit
• Weak agricultural sector• Gov’t policies– Laissez Faire, dereg., high tariffs,
• Global problems– Interdependence, European debt, Reparations, Tariffs
Effects
• Bottoms out in ’32?• Full recovery took a decade• New Economic Theories – John Maynard Keynes
• Drop in GDP, 50% drop in income, 20% bank failure rate, bank runs, 25-30% unemployed by ’32
• End to Republican dominance• Reemergence of union movement & radicalism
The Depression Worsens
• Hoover’s Policies–Prosperity will return, part of the cycle–Relief should come from states and
localities–Voluntary action• No strikes, no wage cuts, increase in private
charities
Actions of Hoover
• Hawley-Smoot Tariff 1930 – highest in history to protect American manufacturers– Tariff war
• Debt Moratorium– Loan defaults
• Domestic programs– Federal Farm Board
• Hold surplus – too moderate to stabilize prices– Reconstruction Finance Corp
• Loans to RRs, banks, insurance cos • Trickle down
Protest• The Bonus Army– Summer of ’32– WWI vets march on Washington petitioning for army bonuses
– Hoover sent Gen McArthur to break the camp
– Tear gas, tanks, and the end of Hoover• Farmers rise up– Farm Holiday Association
• Stop the crop ‘32– Banded together to prevent evictions
• Hoovervilles
FDR & the NEW DEAL
• Franklin D. Roosevelt was elected in 1932 w/60% of pop vote
• Calls for a new deal• Gained support of some socialists
• Dem majorities in both Houses
New Deal• The 3 R’s–Relief, Recovery, Reform– The Brain Trust• Louis Howe• Professors & economists
– The 1st Hundred Days• Bank Holiday– Closed until reorganized
• Repeal of Prohibition• Fireside Chats
1st Hundred• Relief
– FERA (Federal Emergency Relief Administration)– PWA (Public Works)– CCC (Civilian Conservation Corps)– TVA (Tennessee Valley Authority)
• Financial Recovery Programs– Emergency Banking Relief Act– FDIC (Federal Deposit Insurance Corp)– HOLC (Home Owners Loan Corp)– Farm Credit Administration
1st Hundred
• Industrial recovery program– NIRA (National Industrial Recovery Act) > NRA (National Recovery Administration)
– Set wages, production levels– Unconstitutional (Schechter v U.S. 1935)
• Farm production control program– AAA (Agr. Adjustment Admin)– Subsidies for non-production– Unconstitutional
FERA / 1933FERA / 1933Federal Emergency Relief ActFederal Emergency Relief ActDistributed $500 million of direct aid to unemployed workers such as food, clothing and grants of
money to cities.
alphabet
RELIEFRELIEF: : Ease Suffering of the NeedyEase Suffering of the Needy
PWA / 1933 to 1943PWA / 1933 to 1943Public Works AdministrationPublic Works Administration
Employed 8.5 million workers in construction and other jobs, but
more importantly provided work in arts, theater, and literary projects.
alphabet
RELIEFRELIEF: : Ease Suffering of the NeedyEase Suffering of the Needy
CCC / CCC / 1933 to 19421933 to 1942Civilian Conservation CorpsCivilian Conservation Corps•Sent 3 million young men to work camps to build bridges, replant forests and other
conservation tasks. •Develop job skills and improve
environment.• Removed surplus of workers from cities,
provided healthy conditions for boys, provided money for families.
alphabet
RELIEFRELIEF: : Ease Suffering of the NeedyEase Suffering of the Needy
HOLC / 1933HOLC / 1933Home Owners Loan CorporationHome Owners Loan Corporation
Prevented mortgage foreclosures. US Govt. bought up mortgages
and refinanced them so that homeowners could pay their
mortgages.
alphabet
RELIEFRELIEF: : Ease Suffering of the NeedyEase Suffering of the Needy
NIRA / 1933NIRA / 1933 National Industrial Recovery ActNational Industrial Recovery Act
Called the National Recovery ActNational Recovery Act…..Created NRA to enforce codes of fair
competition and minimum wages.
alphabet
TVA / 1933TVA / 1933 Tennessee Valley AuthorityTennessee Valley Authority
Federal government built a series of dams to prevent flooding and
sell electricity in the South.
alphabet
Regulated stock market and restricted margin buying, and frauds.
alphabet
REFORMREFORM:: Prevent Another Depression Prevent Another Depression
SEC / 1934SEC / 1934 Securities and Exchange Securities and Exchange
CommissionCommission
Glass-Steagall Act created federally insured bank deposits ($2500 per investor at first) to
prevent bank failures.
alphabet
REFORMREFORM:: Prevent Another Depression Prevent Another Depression
FDIC / 1933FDIC / 1933Federal Deposit Insurance CorporationFederal Deposit Insurance Corporation
The Dust Bowl
• The Dust Bowl - farmers crops literally blown away or buried
• OK, KS, CO• Okies head west but find few jobs (fruit picking, odd jobs)
• Grapes of Wrath – John Steinbeck
•
Life During the Depression
• Women – lower pay, more working, family strain
• African Americans – hardest hit, excluded from relief programs, increase in lynchings, little support from FDR– Improvements – some relief provided, support from Eleanor, Fair Employment Practices Committee 1941(A.Phillip Randolph)
Continued
• Mexican Americans – Discrimination in society & ND, increase in white migrant labor, some return to Mexico
• N. Americans – John Collier (BIA) brought CCC to reservations, NA included in WPA– Indian Reorganization Act 1934
• Repealed Dawes, NA culture ok, no real NA control
2nd New Deal• WPA (Work Progress) 1935 – Harry Hopkins, bridges, roads, pub buildings
• Resettlement Admin – loans to small/sharecroppers, housing for migrants
• Nation Labor Relations Act (Wagner) 1935
• REA (Rural Electrification)• Increased taxes on wealthy• Social Security Act 1935
Reaffirmed labor's right to unionize, prohibited unfair
labor practices, and created the National Labor Relations
Board. alphabet
REFORMREFORM:: Prevent Another Depression Prevent Another Depression
Wagner Act / 1935Wagner Act / 1935National Labor Relations ActNational Labor Relations Act
It provided retirement pensions, unemployment
insurance, aid to blind, deaf, disabled, and dependent
children. alphabet
REFORMREFORM:: Prevent Another Depression Prevent Another Depression
SSA / 1935SSA / 1935 Social Security ActSocial Security Act
Response to critics (Dr.Townsend and Huey Long),
it provided pensions, unemployment insurance, aid to blind, deaf, disabled, and
dependent children. alphabet
REFORMREFORM:: Prevent Another Depression Prevent Another Depression
SSA / 1935SSA / 1935 Social Security ActSocial Security Act
Election of 1936
• Alf Landon – progressive Rep• Landslide win for FDR• New Deal Coalition 1930’s-60’s– Solid south, ethnic workers, African Americans (in northern cities), Midwest farmers, labor unions
Critics of The New Deal
• Liberals – too much for business• Conservatives – socialism!!!• Demagogues – Father Coughlin (National Union for Social Justice)
• Dr. Francis Townsend – the Townsend Plan > SS
• Huey Long “Share the Wealth”– Assassinated will running for Pres
100 days
Criticisms of New DealCriticisms of New DealUS government and President too powerfulViolated laissez faireSupreme Court declared NIRA and AAA unconstitutionalCritics:
Father Charles CoughlinDr. Francis TownsendHuey Long
Deficit spending: Govt. spends $$$ to stimulate the economy and help people even if it means US Govt. goes into debt.Welfare state----Created a population of Americans who relied on the US Govt. to live
Successes of New DealSuccesses of New Deal
100 days
AMERICANS IN 1939 WHO WANTED THE NEW NEW DEALDEAL TO CONTINUE WAS 55%55%….. ….. 37%37% REGARDED IT AS A BAD INFLUENCE AND
WANTED A NEW PRESIDENT…………...
Stimulated the economy
Put people back to work….
Improved morale and self-confidence of the people
US Govt’s. role changes and became directly involved in helping people
WWII ended the Great Depression not FDR’s New Deal
•Spending all $200 would also be required to boost economic demand.
•Townsend Clubs created all over the nation.
•Influenced FDR’s creation of Social SecuritySocial Security
•He wanted the government to help older citizens.
•Retired California Physician.
•Suggested a $200 per month $200 per month pensionpension for people over 60.
(This is socialismThis is socialism)
•Open jobs for the younger unemployed.
alphabet
Part of FDR’s New Deal……Agencies
created by the US Govt. to bring
about the 3 R’s……Relief, Relief, Recovery, and Recovery, and
ReformReform.