President Hoover’s Programs
• Federal Home Loan Bank Act (1932): Lowered
mortgage rates for homeowners and allowed
farmers to refinance their farms loans to avoid
foreclosure.
• Reconstruction Finance Corporation (1932):
Congress provided $2 million for emergency
financing for banks and large businesses. Today
we would call this a bail out.
• Trickle Down Economics: Give tax breaks or
money to big businesses or the rich. The “bail
out” $ will trickle down to the average citizens
through job growth and an improved economy.
Hoover Dam
• Employed out of work
citizens, skilled and
unskilled laborers, to
build.
• Cost $165 million.
• Real name is the
Boulder Dam.
• Constructed from 19311935 on the Colorado
River.
FDR
New Deal=Government programs created by FDR
to provide direct and indirect relief to the citizens.
• New Deal would be a series of “trial and error”
actions.
• “Take a method and try it. If it fails, admit it
frankly and try another.”
• FDR compared himself to a QB. He could not call
the next play until he knew the results of the
previous one.
• “All there is to fear is fear itself.”
3 Goals of the New Deal
New Deal=Government programs created to provide direct
and indirect relief to the citizens.
1. Relief for the needy: Immediate action taken to halt the
economies deterioration.
2. Economic recovery: "Pump - Priming" Temporary
programs to restart the flow of consumer demand.
3. Financial Reform: Permanent programs to avoid another
depression and insure citizens against economic disasters.
*FDR and Congress passed 15 major pieces of legislation in
the first 100 days. No president has ever been close to
breaking that record.
DEFICIT SPENDING
• Government spends
more money than they
collected in taxes.
• Government then
borrows money at low
interest rate to pay for
their programs.
• “Living outside your
means.”
• Why? Prime the pump!
Prime the Pump=Dump $
into the economy to
stimulate the economy.
Emergency Banking Relief Act
• 1st day in office FDR declares a national banking
holiday.
• Every bank in the country is closed. Permitted
financially sound banks to reopen 4 days later.
Unsound banks were not allowed to reopen until
they were fixed.
• FDIC: insured personal accounts in banks up to
$5,000.
• Fireside Chats: FDR convinces the American people
their money is safe in the banks. Result=the next day
the number of deposits exceeds withdrawals.
The Social Security Act, 1935
• Supplemental income and retirement system.
• Employee contributes to the SS fund as does
the employer.
• SS pays for:
1) Supplemental retirement: $10-85 month in
1935.
2) Unemployment
3) Aid to families with dependent children and
aid to people with disabilities.
Securities and Exchange Commission:
SEC
• SEC regulated the stock market.
• Stock no longer is allowed to be sold “on
margin”.
• Stock prices are based on profit-loss margin
rather than speculation.
• Companies must now open their financial
records to the public.
Rural Electrification Administration:
REA
• In 1935, only 12.6 percent of American farms
had electricity.
• FDR created the REA to create and finance
electricity to rural areas of the country.
• 90% of American homes and farms had
electricity by 1951.
Agricultural Adjustment Act: AAA
Purpose: Raise crop prices by lowering
production.
Paid farmers to NOT plant crops even though
people are starving.
Result: Helps raise crop prices and puts $ into
the hands of farmers.
CIVILIAN CONSERVATION CORPS:CCC
• Designed to employ men between the ages
of 18-25.
• Built state and national parks, recreational
areas, soil conservation, forestry.
• Pay was $30/month.
• Directed by army officers and the forest
service.
PUBLIC WORKS
ADMINISTRATION:PWA
• Government spent $3.3 billion for public
buildings, highways, bridges, flood control,
and other improvements.
CIVIL WORKS ADMINISTRATION: CWA
• Provided jobs and wages to those able to
work.
• “make work” jobs like leaf raking, ditch
digging, highway building, etc.
• $900 million spent in the winter of 1933-34.
FEDERAL HOUSING AUTHORITY: FHA
• Agency established to furnish loans for home
mortgages and home repairs.
• Still in existence today.
Tennessee Valley Authority: TVA
• Established in 1933 to construct dams and
power plants along the Tennessee River and
its tributaries.
• Employed out of work Americans and
supplied electricity to citizens in 7 southern
states.
• Song of the South
WORKS PROGRESS ADMINISTRATION:
WPA
• Spent $5 billion to employ 8 million people
with no skills.
• Built 850 airports; built or repaired 651,000
miles of roads and streets; built 110,000
libraries, schools, and hospitals.
• Also hired professionals to work in their field.
Teachers, writers, artists, actors, and
musicians.
NATIONAL YOUTH ADMINISTRATION:
NYA
• Provided job training to unemployed youth
and part-time jobs for needy students.
• 2 million high school and college age students
were employed.
FAIR LABOR STANDARDS ACT
• Set the maximum hour work week at 44
hours. 40 hours by 1940.
• Minimum wage set at .25/hr. .40/hr by 1945.
• No hazardous jobs for workers under the age
of 18.
• Set rules on employing children under the
age of 16.
Federal Emergency Relief
Administration: FERA
• Provided $500 million for direct relief for the
needy.
• Furnished food and clothing to the
unemployed, the elderly, and the sick.
Instructions: Place all 14 New Deal
Programs into the appropriate column:
EBRA-FERA on the study guide
Economic Relief:
Immediate action taken to
halt the economies
deterioration.
Economic Recovery:
"Pump - Priming"
Temporary programs to
restart the flow of
consumer demand.
Financial Reform:
Permanent programs to
avoid another depression
and insure citizens against
economic disasters.
The 3 R’s
Economic Relief:
Immediate action taken to
halt the economies
deterioration.
EBRA
FERA
CWA
CCC
Economic Recovery:
"Pump - Priming"
Temporary programs to
restart the flow of
consumer demand.
AAA
WPA
TVA
FHA
NYA
REA
Financial Reform:
Permanent programs to
avoid another depression
and insure citizens against
economic disasters.
SEC
FDIC
Social Security
Fair Labor Standard Act
http://www.youtube.com/watch?v
=7EPTCm9RVRM&safe=active
(The Crash of 1929)