The Great Depression And the New Deal

Problems of the Great Depression Unemployment 1 in 4 were unemployed Homelessness (Hoovervilles) Collapse of the financial system Banks closed Depositors lost money

Problems of the Great Depression Political Unrest Labor unions grew more militant Increase in suicides Farm foreclosures and migration Severe drought – Dust Bowl Many headed west

Franklin Delano Roosevelt The Election of 1932 Herbert Hoover Franklin Delano Roosevelt Believed the country’s economic crisis would resolve itself with minimal government intervention Believed the government should play a more active role in solving problems “I’ll put a chicken in every pot!” Promised “A New Deal” for Americans

Winning Candidate? Franklin Delano Roosevelt Inaugural Address: “We have nothing to fear but fear itself…”

The First Hundred Days Unprecedented volume of new legislation in the first hundred days of FDR’s administration Increased Americans’ faith in the government FDR declared a “Banking Holiday” Had “fireside chats” to increase morale

Impact of the New Deal CHANGED THE ROLE OF GOVERNMENT Government became a more active participant in solving problems FDR was both criticized and praised for his active role. Introduced Social Security safeguards for workers

Many new agencies of government: the three R’s RELIEF Provided direct payment to people for immediate help Example: WPA (Works Progress Administration RECOVERY Designed to bring the nation out of depression over time Example: AAA (Agricultural Adjustment Administration) REFORM Corrected unsound banking and investment practices Example: FDIC (Federal Deposit Insurance Corporation)

Thousands of new jobs for Americans Led to SOME economic improvement Jobs Workers have more money to spend Businesses increase profit as a result of higher demand Businesses require more employees to increase supply Businesses hire new employees