The Great Depression and the

New Deal (Pt 1)APUSH

March 15

The Stock Market Crash People began to buy stocks

less and less—sensing a decline investors began to sell.

Many sold stocks because of “margin calls”

Stock prices plummeted rapidly

October 29, 1929 the worst day

Over $30 billion lost in total. Signal the Depression had

begun.

Bank Failures When stocks declined,

banks lost money they had invested, and money they had lent to speculators.

Some banks forced to close, with this news, Americans began to pull their money out of banks all at one time.

With too many withdrawals, over 3,000 banks collapsed!

The Devastation of the Depression By 1933, more than 9,000 banks had failed. In 1932 alone, 32,000 companies went out

of business. In 1933, more than 12 million workers were

unemployed. Average family income dropped from

$2,300 to $1600 a few years later.

Urban Areas People lost jobs, couldn’t

pay mortgage or rent, many people homeless.

People set up shantytowns—little towns of shacks where homeless stayed.

Soup kitchens and bread lines were established by local charities to help the needy.

A typical breadline

Hoover’s Solutions Very pro-business. Like most Republicans,

Hoover believed in helping businesses first, and that their wealth would “trickle down” to the poor.

Some public works programs (Hoover Dam)

Provided loans to businesses in distress.

However, his solutions didn’t deal with overproduction—even if companies could produce, people were too poor to buy anything!

Refusal to Provide Direct Relief Didn’t want to spend federal money without

further income. Encouraged private charities and state and local

governments to help the poor. By 1932, such agencies were overwhelmed and

did not have enough money to help many Americans.

By 1930, Americans were more frustrated and started to blame Hoover for economic problems.

The Bonus Army Blunder In 1924, soldiers had been promised a $1000 bonus. With

economic crisis, the House passed a bill which would pay the veterans early.

In 1932, 1,000 soldiers marched across the country to lobby Congress to approve the bill—were called “The Bonus Army.”

Once in Washington, over 15,000 veterans gathered, disappointed when Senate rejected bill.

Many veterans stayed in Washington, because there was nowhere else to go.

Hoover called in troops to force the veterans to leave the city. Two veterans were killed, 1000s were gassed. After this incident, most people were ready to get rid of

Hoover.

Bonus Army Images

Bonus Army Images

Foreign Policy Concerns Japanese Imperialism: 1931 invasion of

Manchuria US responds with Stimson Doctrine—US would

not recognize any territorial acquisitions achieved by force, did little to stop imperialism of Japanese

Good Neighbor Policy: Hoover smoothes relations with Latin America, removal of troops from Haiti and Nicaragua.

The Rise of FDR 5th cousin of TR Governor of New York Polio Grew up wealthy Religion gave him

sympathy for poor (“forgotten man”)

Charisma and political appeal

Election of 1932 Roosevelt promises

“New Deal” from campaign

Wins certain victory Role of blacks key in

this election switch to Democratic Party

Relief, Recovery and Reform First move: Nationwide banking holiday First 100 Days created many key reforms

CCC FERA AAA TVA MANY REFORMS INSPIRED BY PROGRESSIVISM

Congress eager to cooperate with Roosevelt to ensure change and progress

Managing Money Reform of banking system

with Glass-Steagall Banking Reform Act—insured deposits, created FDIC

“Managed currency”—government bought all gold so it could print more money INFLATION

Creating Jobs Roosevelt wanted to BOTH aid

the worker and “prime the pump” of industry

CCC—employment in government camps for young men. Had to send some money home

Provided direct relief with FERA HOLC—helped refinance homes CWA—purely temporary jobs

during difficult winter. WPA—public buildings, bridges

and roads

Roosevelt’s Critics Father Charles Coughlin—

Catholic priest, became fascist-like in his critique of FDR

Senator Huey Long—leftist critic of Roosevelt, “Share our Wealth” program because New Deal wasn’t doing enough

Dr. Francis E. Townsend—raised need for an old age pension

Women in the New Deal Eleanor Roosevelt: Visible

first lady Francis Perkins: America’s

first women cabinet member

Mary McLeod Bethune—director in National Youth Administration

More women in academia and literature as well

Helping Industry and Labor National Recovery

Administration: To assist industry, labor

and unemployed Developed codes of

competition in industry—reduced hours, set minimum wages

Workers formally given right to organize and bargain

Declared unconstitutional in Schecter cases (1932)

Led to PWA Repeal of Prohibition