Warm-up
What plans do you have for your future?
What would you do if the economy tanked
today and by tomorrow and your family could
hardly afford anything?
FDR and the Great Depression
Election of 1928
Herbert Hoover who was part of the Coolidge
administration ran against Alfred E. Smith of the
Democratic party.
Hoover said that the wealth and prosperity of
the 1920’s was due to the actions of the
republican party.
This would be how he won the election
CAUSES OF THE GREAT DEPRESSION
• Tariffs & war debt
policies
• U.S. demand low,
despite factories
producing more
• Farm sector crisis
• Easy credit
• Unequal distribution
of income
Causes of the Depression
The twenties saw a boom in consumer spending.
As people began to but more durable good such
as cars, and refrigerators production began to
peter off.
Due to the fact that people did not need
multiples of these items.
Causing a brief recession in 1920s
Problems continue to build
Not heeding these signs the government
continued to make it easier for banks to take
out loans.
The hope was to stimulate the economy
Individuals with excess cash began investing in
stock.
During the time the market moved in spurts of
success.
SEEDS OF TROUBLE
• By the late 1920s, problems
with the economy emerged
• Speculation: Too many
Americans were engaged in
speculation – buying stocks &
bonds hoping for a quick profit
• Margin: Americans were
buying “on margin” – paying a
small percentage of a stock’s
price as a down payment and
borrowing the rest
The Stock Market’s bubble was
about to break
Bull market
A Bull market is usually defined as a market on the
rise.
This rising market only lead more people to invest
their money.
THE 1929 CRASH
• In September the Stock Market had
some unusual up & down
movements
• On October 24, the market took a
plunge –”Black Thursday” the
worst was yet to come
• On October 29, now known as Black
Tuesday, the bottom fell out
• 16.4 million shares were sold that
day – prices plummeted
• People who had bought on margin
(credit) were stuck with huge debts
Bank Runs
As the stock market crashed people went to the
banks to pull their money out of the banks. Do
to a fear of a loss of their money.
Banks could not handle so many people pulling
money out and did not have enough money to
give to people
The result was the collapse of banks.
Unemployment
By 1932 the unemployment in the country grew
to 25 percent.
The unemployed stood in lines for hours looking
for relief check.
Some left the city for the country, but still found
little hope.
FARMERS STRUGGLE
• No industry suffered as
much as agriculture
• During World War I
European demand for
American crops soared
• After the war demand
plummeted
• Farmers increased
production sending prices
further downward
Photo by Dorothea Lange
Haley Smoot Tariff
Hoover and
Voluntarism
Hoover who had a lot of promise as a President was
unprepared for the depression.
He told the public good things are right around the
corner as he supported rugged individualism.
Rugged Individualism: the belief that Americans
could improve their own standing if they worked
hard.
He pushed fro charities to give relief, but refused to
provide federal funding when supplies ran out.
Taking action
As Hoover saw his attempts fall apart he began
to take action to change the economy.
Loaned money to cooperatives and bought
access crops.
Created the RFC to help banks.
Pushed for the cutting of taxes and built the
Hoover dam.
Continued Social Reform
When congress came together in 1935 congress
was reminded that it had not provided a
welfare system for its aged and disabled.
Eventually this would become the social security
act
Provided old age pensions
Set up a system of unemployment
Provided federal grants for state welfare.
Roosevelt and the New Deal
1932 the Republicans nominate Herbert Hoover
The Democrats Nominate FDR who proposes the
new Deal in his acceptance speech
The New Deal: A name for the policies that
Roosevelt would use to end the depression.
Election 1932
Roosevelt’s optimism in the future was a stark
contrast to Hoover’s failure.
With this perception Roosevelt won by a land
slide.
Activity
Write down the following two questions then
use the speech that follows to answer the
questions.
1.Why does Roosevelt think that “nameless,
unreasoning, unjustified terror” is such a big
problem?
2.What does the President feel is the nations
primary task. How diligent should they be in it.
Inaugural
Address
This is preeminently the time to speak the truth, the whole truth, frankly and
boldly. Nor need we shrink from honestly facing conditions in our country
today. This great Nation will endure as it has endured, will revive and will
prosper. So, first of all, let me assert my firm belief that the only thing we
have to fear is fear itself—nameless, unreasoning, unjustified terror which
paralyzes needed efforts to convert retreat into advance.
Our greatest primary task is to put people to work. This is no unsolvable
problem if we face it wisely and courageously. It can be accomplished in part
by direct recruiting by the Government itself, treating the task as we would
treat the emergency of a war
The Gold Standard
One of the first things Roosevelt did was end the
Gold standard
The gold standard equated an once of gold to a
certain amount of dollars.
As the dollar value dropped the people began
to cash their money in for gold
Confiscating Gold
Roosevelt ended the Gold standard and began
to collect people’s gold.
This was to increase the value of the dollar.
It was illegal to have more than a certain
amount of Gold.
Bank Holiday
Banks continued to collapse especially due to
the end of gold standard.
Governors created the idea of bank holiday. It
closed the banks giving them time to seek relief
Roosevelt agreed and would help restructure
banks.
The First Hundred Days
The new president sent bill after bill to congress
By the end of the first hundred days the president
passed 15 bills to help the economy.
Fireside Chats
As the President worked to restore the banks he
used to technology to reassure citizens.
Roosevelt took to the radio explaining to the
people what his plans were for banks. As well as
reassure the American people.
FDIC and SEC
SEC: Securities and Exchange Commission:
Existed to manage the stock market and prevent
fraud.
FDIC: Federal Deposit Insurance Corporation
provide government insurance for bank
deposits. Built confidence in the bank system.
HOLC and FCA
HOLC: Home Owners Loan Corporation: Helped
homeowners pay their mortgage.
FCA: The Farm Credit Administration: Help
farmers refinance their mortgages.
The AAA and NRA
AAA: Agricultural Adjustment Administration,
worked to adjust farm prices.
NRA: National Recovery Administration: Lead by
Hugh Johnson Business owners signed a pledge to
sell government products that pushed fair labor
environments.
Unfortunately the NRA was considered
unconstitutional by the Supreme Court and was
removed.
The CCC and
PWA
CCC: The Civilian Conservation Corps: Gave
young men age 18-25 the chance to work with
the forestry service to plant trees and fight
forest fires.
PWA: Public Works Administration:
Most of the those unemployed worked in
construction. Gave jobs on buildings, sewers,
dams, schools, highways.
Critics of the President
Many criticized the new deal for deficit
spending.
Essentially they worried that the President had
barrowed too much money instead of balancing
the budget.
Opposition to the New deal
Floyd Olsen led a group of mid west farming
progressives looking for real change in the
system
Father Charles Coughlin originally supported the
new deal eventually he turned looking to
nationalizing the banking system
Huey long: developed the idea of share the
wealth clubs.
WPA
The Works Progress Administration: Headed by
Harry Hopkins was the largest publics work
program of the New Deal
Employed workers to build roads and highways.
Wagner Act
As the New Deal expanded it continued to help
certain groups such as labor groups
The Wagner act outlawed company unions and
unfair labor practices to ensure collective
bargaining.
This would lead to the national labor relations
board and a fair labor and standards act
passed in 1938
Look at pages 663-667
What groups did the New Deal help and who
were some of the key leaders of these groups.
First Hundred Days