The Great Depression and the New Deal Unit 9. The Great Depression

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The Great Depression and the New Deal Unit 9 Slide 2 The Great Depression Slide 3 Slide 4 Gross National Product Slide 5 Unemployment Slide 6 Workers Yearly Wages Slide 7 Business Failures Slide 8 Bank Closures Slide 9 Photo Courtesy of Dorothea Lange Slide 10 Slide 11 Slide 12 Slide 13 Slide 14 1929 - Bull Market Slide 15 Buying On Margin Slide 16 The Great Crash Oct. 29, 1929 Slide 17 Slide 18 Slide 19 Slide 20 Slide 21 CAUSES Decrease in consumer spending Unequal distribution of wealth Overproduction of goods Huge farms surpluses War debts not paid back Buying on margin (Credit) EFFECTS Under consumption of goods and services---not buying goods Families had limited income to purchase goods Led to falling prices of goods Led to drop in farm prices Banks didnt get back their $$$ Speculation on stocks Investors buy stocks on credit Wealth on paper events Slide 22 Bankers call brokers wanting their money! Brokers go to investors to collect their money to pay the bank loans borrowed by broker for investor Orders to sell any any price swamped the market--nobody would buy Brokers go under--stocks are worthless--investors loose their savings! Run on the BanksRun on the Banks: People begin to panic and go to banks---try to withdraw their moneyBanks dont have any money to give back Banks close---people lost their savings Businesses close---could not pay back loans to banks. Workers loose their jobs No money to buy consumer products Sales fall---more businesses shut down More workers lose their jobs domino effect Slide 23 Great Crash Investors Businesses and Workers Investors lose millions. Businesses lose profits. Consumer spending drops. Workers are laid off. Businesses cut investment and production. Some fail. Banks Businesses and workers cannot repay bank loans. Savings accounts are wiped out. Bank runs occur. Banks run out of money and fail. World Payments Overall U.S. production plummets. U.S. investors have little or no money to invest. U.S. investments in Germany decline. German war payments to Allies fall off. Europeans cannot afford American goods. Allies cannot pay debts to United States. Great Crash Investors Investors lose millions. Businesses lose profits. Great Crash Investors Businesses and Workers Investors lose millions. Businesses lose profits. Consumer spending drops. Workers are laid off. Businesses cut investment and production Some fail. Great Crash Investors Businesses and Workers Investors lose millions. Businesses lose profits. Consumer spending drops. Workers are laid off. Businesses cut investment and production Some fail. Banks Businesses and workers cannot repay bank loans. Savings accounts are wiped out. Bank runs occur. Banks run out of money and fail. World Payments Overall U.S. production plummets. U.S. investors have little or no money to invest. U.S. investments in Germany decline. German war payments to Allies fall off. Europeans cannot afford American goods. Allies cannot pay debts to United States. Great Crash Investors Businesses and Workers Investors lose millions. Businesses lose profits. Consumer spending drops. Workers are laid off. Businesses cut investment and production Some fail. Banks Businesses and workers cannot repay bank loans. Savings accounts are wiped out. Bank runs occur. Banks run out of money and fail. World Payments Overall U.S. production plummets. U.S. investors have little or no money to invest. U.S. investments in Germany decline. German war payments to Allies fall off. Europeans cannot afford American goods. Allies cannot pay debts to United States. Effects of the Stock Market Crash Slide 24 President Herbert Hoovers Response (31 st President) Republican WWI Food Administration Secretary of Commerce under President Harding and Coolidge A chicken in every pot and a car in every garage. H. Hoover Slide 25 Impact of the Crash Slide 26 Bank Failures 5,197 banks collapse 500,000 farms and homes foreclosed Stock Value: $87bi $19 bi Slide 27 Slide 28 Slide 29 Slide 30 Slide 31 Slide 32 Hoovervilles Slide 33 Slide 34 Slide 35 Business Failures Steel Production drops 80% Industrial Output drops 50% Slide 36 Unemployment Chicago = 50% Farmers = 33% Nationwide = 25% - 40% Slide 37 Slide 38 Psychological Impacts Slide 39 Slide 40 Slide 41 Some people starved and thousands went hungry. Children suffered long-term effects from poor diet and inadequate medical care. Social and Psychological Effects 19281932, suicide rate rises over 30% Admissions to state mental hospitals triple Impact on Health Living conditions declined as families crowded into small houses or apartments. Men felt like failures because they couldnt provide for their families. Working women were accused of taking jobs away from men. Stresses on Families Competition for jobs produced a rise in hostilities against African Americans, Hispanics, and Asian Americans. Lynchings increased. Aid programs discriminated against African Americans. Discrimination Increases Poverty Strains Society Slide 42 Hoovers Response to the Crash Slide 43 Federal Farm Board (1930) Slide 44 Hawley-Smoot Tariff (1930) Slide 45 Slide 46 Slide 47 Volunteerism Slide 48 Public Works Hoover Dam Slide 49 Reconstruction Finance Corporation Slide 50 Norris-LaGuardia Anti-Injunction Act (1932) Slide 51 Rugged Individualism Slide 52 Bonus Army Slide 53 Slide 54 Slide 55 Dust Bowl Slide 56 Slide 57 Slide 58 dust bowl Slide 59 Slide 60 Slide 61 Slide 62 Slide 63 Slide 64 Slide 65 Slide 66 The Election of 1932 Herbert HooverFranklin Delano Roosevelt Slide 67 FDRs Campaign I pledge you, I pledge myself to a NEW DEAL for the American people. Government Aid to the People (Direct Relief) Repeal of Prohibition Slide 68 Hoovers Campaign Higher Tariffs Rugged Individualism Slide 69 Slide 70 Slide 71 Slide 72 20th Amendment Slide 73 21 st Amendment (1933) Slide 74 The New Deal Slide 75 Slide 76 Slide 77 Slide 78 Slide 79 Brain Trust Slide 80 FDRs Inner Circle Cordell Hull: Sec. of StateFrances Perkins : Sec of Labor Slide 81 Harold L. Ickes: Sec of Interior, Head of PWA Harry Hopkins: Head of FERA and later PWA Slide 82 Eleanor Roosevelt Slide 83 FDRs First Hundred Days Bank Holiday Federal Emergency Relief Association (FERA) Civil Works Administration (CWA) Public Works Administration (PWA) Civilian Conservation Corps (CCC) Homeowners Loan Corporation (HOLC) Slide 84 The Three Rs Relief - direct aid to the people Recovery fix the current economy Reform prevent a future collapse Slide 85 Bank Holiday Slide 86 Banking Crisis 5,190 Banks Failed in 1933 Total: 10,951 38 Banks closed Only banks who were solvent could reopen Gold Standard Emergency Banking Relief Act of 1933 Slide 87 Federal Emergency Relief Association (FERA) Headed by Harry Hopkins Slide 88 Civil Works Administration (CWA) Slide 89 Public Works Administration (PWA) Headed by Harold L. Ickes Slide 90 Civilian Conservation Corps (CCC) Slide 91 Home Owners Loan Corporation (HOLC) Slide 92 The New Deal Works Progress Administration (WPA) National Industrial Recovery Act ( NIRA) National Recovery Administration (NRA) Agricultural Adjustment Act (AAA) National Youth Administration ( NYA) Federal Housing Act (FHA) Slide 93 Works Progress Administration (WPA) Slide 94 National Industrial Recovery Act ( NIRA) Slide 95 National Recovery Administration (NRA) Blue Eagle Created under leadership of Hugh Johnson Slide 96 Agricultural Adjustment Act (AAA) Federal Farm Loan Act Headed by George Peek Slide 97 National Youth Administration ( NYA) Slide 98 Federal Housing Act (FHA) Slide 99 The New Deal Glass-Steagall Act Federal Deposit Insurance Corporation (FDIC) Securities and Exchange Commission (SEC) Wagner Act created National Labor Relations Board (NLRB) Fair Labor Standards Act (FLSA) Tennessee Valley Authority (TVA) Social Security Slide 100 Federal Deposit Insurance Corporation (FDIC) Glass-Steagall Act Slide 101 Securities and Exchange Commission (SEC) Slide 102 National Labor Relations Board (NLRB) Yellow Dog contracts Slide 103 Fair Labor Standards Act (FLSA) Slide 104 Tennessee Valley Authority (TVA) Slide 105 Housing Reform Federal Housing Administration (FHA) United States Housing Authority (USHA) Slide 106 Social Security Act Slide 107 Revenue Act of 1935 Slide 108 Indian Reorganization Act Indian Emergency Conservation Program Slide 109 Criticisms of the New Deal Slide 110 Critics The American Liberty League Father Charles Coughlin Senator Huey P. Kingfish Long Dr. Francis Townsend Slide 111 The American Liberty League Slide 112 Father Charles Coughlin Senator Huey P. Kingfish Long Slide 113 Dr. Francis Townsend Old Age Revolving Pension Plan Slide 114 Criticism of the New Deal Failed to fix the Great Depression National debt doubled America becoming a Handout state Class status (Business and Labor/farmers) FDRs want to change the Supreme Court Planned economy Millions Still Unemployed The New Deal didnt cure Depression, WWII did Slide 115 Court Challenges to the New Deal Schechter vs. US Slide 116 Butler vs. US AAA is unconstitutional Slide 117 Judiciary Reorganization Bill Court Packing Slide 118 End of the New Deal Pump Priming Practice Slide 119 FDR employed economic theory of John Maynard Keynes Slide 120 Support of the New Deal Help relieved the worst crisis in 1933 Help prevent hunger by managing economy Slide 121 Distribution of national income Americas economic system kept from collapse Slide 122 Citizens retain self respect Slide 123 FDR saves Americas free enterprise system from socialism and anti- business interests Slide 124 FDR Cured Capitalism of its abuses Slide 125 Middle of the Road Approach