1. The Great Depression and The New Deal
UNIT 3
The Great Depression and
The New Deal

2. Causes of the Great Depression
Uneven distribution of income
Low level of buying power
Supply exceeds demand
Easy credit
Stock market (speculation)
Not required to pay off prior loans
Federal banks could not loan on stock exchange, but private banks could

3. Causes, cont. Unbalanced foreign trade Mechanization Dust Bowl
Keep out foreign trade goods
Hawley Smoot Tariff Act
Mechanization
Modern plants require fewer workers
More products, but no money to buy them
Dust Bowl
Drought in the Great Plains caused by overproduction

4. The Dust Bowl

5. Black Tuesday October 29,1929 16 million shares dumped
By November, $30 billion was lost (amount US spent during WWI)
Americans panicked and withdrew $$ from banks causing banks to collapse.

6. Aftershocks National Income
Payments to producers cut in half - $81 billion to $41 billion
85,000 businesses shut doors
400,000 farms lost
6,000 banks failed - $9 million in savings accounts
Every week, 100,000 workers lost jobs

7. Aftershocks, cont. Women & children Malnutrition
1928 – 18%
1931 – 60%
Sweatshops = no school = no teachers
60 days of school/year

8. No Direct Relief
The Bonus Army Camp

9. Unit 3 part 2
“The New Deal”

10. So, how do we fix it? Philosophies:
Treasury Secretary Andrew Mellon – Depressions were normal part of Laissez Faire (Hands Off).
President Hoover – economy is too complicated.

11. Solutions Do not cut payrolls Labor leaders – no raises
No shortened hours
Tax cut
Easier to borrow $$ from fed banks
$800 million set aside for public works – Hoover Dam
Farmers limit production
Still failed – too little, too late

12. Problems Hoover’s ideals Humanitarianism vs. rugged individualism
He wanted to help people, but felt that it should be the local government’s responsibility

13. How did homeless and unemployed feel?
*Hoovervilles
*Hoover blankets
*Hoover flags

14. No Better off in Europe US investors pull out of European stock market
Hoover tells Allies to hold payments of war debts
Europe discards gold standard – pays US w/ cheap money

15. FDR’s Programs FDR wins election of 1932 – The New Deal
“The only thing we have to fear is fear itself.”
“I will apply action.”
“War against poverty and pessimism.”
Pragmatist – the value of an idea is whether or not it works
Fireside chats – radio
First Lady – Eleanor Roosevelt made sure policies included women and minorities.

16. Bipartisan Cabinet – “Brain Trusts”
Harry Hopkins – work relief rather than monetary relief
Francis Perkins, Secretary of Labor – creation of Social Security system (first woman on a presidential cabinet)

17. FDR’s Programs, cont. Relief Programs – His first 100 days
Bank Holiday
Banking Relief Bill
CCC – Civilian Conservation Corps
SEC – Securities and Exchange Commission
FDIC – Federal Deposit Insurance Corporation
TVA – Tennessee Valley Authority
SSA – Social Security Act

19. Stories from Great Depression

20. Ringer #7