The Great Depression and FDR

Stock Market Boom and Crash Everyone investing in stocks– bull market-high confidence in making $$ Bear market– value of stocks drop Stock exchange– buying and selling shares in corporations

Late in 1920’s stocks area at high levels Investors can’t afford all their buying so they buy on margin– pay part, borrow the rest If value of stock rises, can pay back, if not investors going into debt Speculation– high risk for high profit

September 1929– investors get scared & sell stocks like crazy End of October prices plunging, Black Thursday 24th to Black Tuesday 29th Corporations lose tons of $$$

The Great Depression Stock market crash didn’t cause it but was a factor Crash happens, people can’t pay debts, bank in trouble, people rush to take their $$ out, banks fail, and $$ is lost

1920’s people bought luxury items, by 1929 people who could afford had bought, led to surpluses Farming, textile, lumber, railroad industries decline Employers cut salaries & laid off workers

1929 less than 1% owned 1/3 of all US wealth US big in trade, our depression to decline in trade– international depression 20-25% of people unemployed

People wait in lines for food, soup kitchens form Hobos travel the country looking for work and food on RR’s People build shelters out of whatever available --Hoovervilles

Hoover and the Depression Pres. Hoover believed things would fix themselves & hoped charities would help people out Later realizes he needed to do something Public Works Programs– projects for the community, gave people jobs Reconstruction Finance Corp.– lend $ to businesses, too strict though, failure

WWI veterans promised $1,000 bonus in 1945, need $ now Vets march and protest in DC– Bonus Army, camp out in front of capital Hoover calls in the army to remove them, 2 vets killed, people furious

FDR Republicans hurt because of Hoover, Democrats nominate Franklin Delano Roosevelt in 1932 FDR- distant cousin of Teddy, from wealthy NY family, married to Eleanor Roosevelt

Suffered from polio from a pool when young, paralyzed in both legs Always wanted to be photographed sitting or behind podium (wheelchair, leg braces never seen) thought it showed weakness Gov. of NY before Pres– reputation for reform

Group of advisors– Brain Trust– economists, professors, businessmen FDR wins by a landslide but depression gets worse by time he takes office Inauguration quote– “Only thing we have to fear is fear itself.” Closes banks for 4 days and calls special session of congress (also demos)

Famous for his ability to talk to Americans, “fireside chats”– weekly radio broadcasts 1st Hundred Days– FDR sends 15 proposals to congress, all approved, these new laws become the New Deal

New Deal Programs Federal Deposit Insurance Corporation (FDIC)– insured $ in banks, prevents banks from failing Civilian Conservation Corps (CCC)– hired young men to work on nature related projects, parks, trails

Agricultural Adjustment Act (AAA)– tried to lower farm production to raise prices- paid farmers to destroy crops while people in cities starved Social Security Act– set aside $$ for people when they retire