The Great Depression & the New Deal Chapter 25
The Great Depression When did the Great Depression begin? Stock value drops $14 billion on black Tuesday From 1929 to 1932 stock values decrease by 80% How much wealth disappeared? Unemployment reached? Starvation / “Hoovervilles”
Causes of Stock Market Crash numerous investors buying on “margin” - putting up 10% & borrowing the rest - expect to sell stock for profit - money invested in “risky” businesses - banks demanded payment of loans
Prolonged Depression mistakes by the Federal Reserve raised interest rates in 1930 & 1931 Deepening inequality (p 641)
Prolonged Depression Tariff Act of 1930 (Hawley-Smoot Tariff act) Raised tariffs on agriculture - protect American farmers Legislation led to disaster - foreign gov’ts retaliated by raising tariffs International trade declines
Hoover’s policies Limited government intervention - providing money to unemployed would break their will to work Americans blamed Hoover for continuing depression
FDR Front-runner of democratic ticket in 1932 Governor of New York What did FDR promise to the American people? Assumed office in March st order of business- save the nation’s financial system
FDR’s takes office Economy in shambles - between , 100k businesses went bankrupt - over 5,000 banks closed by 1933 (p 647) - unemployment soared
FDR’s New Deal The “Hundred Days” legislation (p 647) - saved banks, repealed prohibition etc Used “fireside chats” to communicate FDR established a stronger government (p 659)
FDR’s New Deal (continue) Created the Civilian Conservation Corps (CCC) & Civil Works Administration (CWA) - employed more than 6 million Public Works Administration (PWA) - improve nations infrastructure - building of roads, bridges, airports etc
The Dust Bowl Little relief for rural poor Great Plains farmers suffered (Okies) - many loaded their “jalopies” and headed west along route 66 - Steinback’s The Grapes of Wrath (1939)
The Second New Deal Roosevelt described Second New Deal as: “a program to limit the power & privilege of the wealthy and to increase the security and welfare of ordinary citizens”
The Second New Deal (continue) Social Security Act (1935) - funds for elderly poor, disabled - set up a retirement fund National Labor Relations Act (NLRA) - right of every worker to join a union of choice
Election of 1936 Roosevelt’s New Deal gained wide support (new deal coalition) - party of the common man Handed FDR the greatest landslide victory in the history of American politics Received 98% of electoral vote (p 658)
US abroad FDR recognizes Soviet Union (1933) Announced the “Good Neighbor Policy” towards Latin America Renounced the Platt Amendment Granted Panama more control over canal
Conclusion FDR’s New Deal stimulates economy and saves US from Depression Economy still suffers another recession in 1937 Not until WWII does US return to full employment & prosperity Roosevelt’s leadership propels him to an unprecedented 3 rd & 4 th term FDR’s public appearance