The Great Depression
and the New Deal
The Great Depression
The New Deal
The Second New Deal and Its’ Effects
The Great Depression
Causes of the Depression
 Roaring 20s help Herbert Hoover get elected in
1928
 Several underlying problems during 1920s boom
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Farm Problems-After WWI demand for crops and crop
prices fall
Wealth is distributed unevenly- Rich become richer,
workers became less poor
Easy Credit- debt grows as people can’t pay off credit
The Great Depression
Stock Market Crash
 Investors buy stock on speculation- hope the stock
would go up
 October 1929- Market up and down; scared investors
sell all stock
 October 29, 1929 Black Tuesday
 1st example of business cycle- growth and slow down
of economy
 When the market collapsed, the Great Depression
began- 1929-1941
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Banks collapse- ppl. pulled all savings from banks banks close
Businesses closed, unemployment rises- 1933: 25% UR
Hawley Smoot tariff- Gov’t passes extremely high tariff, only
hurts economy
The Great Depression
Hoover and the Great Depression
 While most Americans kept their job, wages were
drastically cut
 Bread lines, soup kitchens, homeless shelters become
common--. American Dream impossible
 Hoovervilles created- tents/shacks built on vacant lots
for homeless
 Some farmers prosper- grow own food most lost their
farms to banks- tenant farmers
 1930s- terrible drought in the Great Plains Dust Bowl
 Farm families had no choice but to migrate Dust Bowl
refugees were known as Okies
The Great Depression
Hoover’s Response Fails
 Urged Americans to go about their business as
usual
 Laissez Faire attitude says Americans should
take care of themselves- no gov’t welfare
 Believed gov’t should help businesses, not
control them
 Organized Boulder Dam- gave power and water
and work to millions
 Begins passing measures to reform banking
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Federal Home Loan Bank Act lower interest rates
for mortgage
Reconstruction Finance Corporation Finance big
business, money will trickle down to citizens
The Great Depression
The Bonus Army
 WWI vets march on
the White House lawn
demanding promised
bonus checks
 Hoover uses force to
remove Bonus Army
soldiers from local
shantytowns
The New Deal
FDR Takes Charge
 1932: Democrat Franklin D. Roosevelt wins
election
 FDR campaigns using “New Deal” plan
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Gov’t should play active role in ending Depression
FDR uses the “Brain Trust”, group of close advisers,
to help plan New Deal
Frances Perkins-first woman to serve in a cabinet
position
The New Deal
The First Hundred Days
 FDR passes 15 new bills (First New Deal)relief, recovery,
reform
 Federal Deposit Insurance Corporation (FDIC)- insured
bank deposits
 Agricultural Adjustment Act (AAA)- provides financial aid to
farmers
 Tennessee Valley Authority (TVA)- Gov’t builds dams along
TN River to provide jobs and electricity
 Civilian Conservation Corps (CCC)- provide jobs for young
men
 National Recovery Administration (NRA)- set minimum
wage, govern competition in business
 Public Works Administration (PWA)- built bridges, dams,
power plants
 FDR immediately starts a bank holiday- close all banks for 3
days
 Begins giving weekly speeches on radio to reassure the nation
Fireside Chats
Migrant Mother
Photo by Dorothea Lange
The New Deal
Opposition to the New Deal
 Some thought New Deal was too radical,
some thought it didn’t do enough
 Most complained New Deal was making
the gov’t too big and powerful
 These critics formed the American
Liberty League- thought FDR was
socialist
The New Deal
 FDR
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has 3 very outspoken critics:
Francis Townsend- favors giving checks to
citizens and money would “filter” out
Charles Coughlin- said FDR wasn’t doing
enough to fight Depression
Huey Long- Proposes a “Share Our Wealth”
solution- high taxes on wealthy, cut taxes for
middle class
The Second New Deal
 Goals:
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Promote general welfare
Intervene to protect citizens’ rights
The Second New Deal
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Works Progress Administration (WPA)- built/improved
nations’ highways, etc.
 New programs expensive gov’t uses deficit spending
(spending money you don’t have)
 FDR creates the Social Security Act- unemployment
insurance for workers/pension plan for retirees
 FDR still trying to help farmerselectricity- Rural
Electrification Admin (REA)
 Gov’t gives price supports (subsidies) to farmers
 Surge in labor union membership Wagner Act
guaranteed employees the right to join and labor union
The Second New Deal
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Act also granted collective bargaining- right to
negotiate between employer and employee
1936-FDR re-elected
Supreme Court begins to question FDR’s
authority to create ND programs
SC nullifies the NIRA and AAA
FDR decides to “pack the courts”
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FDR proposed increasing number of SC justices from
9 to 15, “packing court” with ND supporters
SC suddenly starts ruling in favor of FDR’s policies
After his reelection in 1936, and as a reaction to opposition he was getting
from the Supreme Court, FDR attempted to "pack" the Court by enlarging it
(by 6 judges) and then appointing justices who would agree with his
approach. This cartoon is a commentary on the Roosevelt "court-packing"
episode.
The Second New Deal
Effects of the New Deal
 Women’s role in society
expands b/c of Eleanor
Roosevelt
 ER fights for AA rights Black
Cabinet- AA leaders to advise
FDR
 FDR runs for a 3rd and 4th
term in 1940 and 1944
 FDR had created a solid
supportive groups of
Democrats New Deal
Coalition
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Southern whites, AA, farmers,
northern workers, immigrants
The Second New Deal
Legacy of the New Deal
 New Deal increases size of Fed. Gov’tsome programs still around
 ND didn’t end Depression, but helped
restore economy
 FDR rejected laissez faire economicsleads to welfare state provide for all US
citizens