The Roar Ends & The Roar Ends & Depression Sets InDepression Sets In

The Great Stock CrashThe Great Stock Crash

Stocks grew rapidly through the 1920sStocks grew rapidly through the 1920s Based on Based on speculationspeculation People bought stocks on People bought stocks on marginmargin (did not (did not

actually own, used speculation)actually own, used speculation) People began demanding that people pay for People began demanding that people pay for

their stockstheir stocks

The Great Stock CrashThe Great Stock Crash

Result, Result, Panic SellingPanic Selling Black TuesdayBlack Tuesday, October 29: Stocks fell by , October 29: Stocks fell by

$14 billion and continued to drop in the weeks $14 billion and continued to drop in the weeks to cometo come

America, we have now reached the Great America, we have now reached the Great DepressionDepression

Black Tuesday

Causes of the Great DepressionCauses of the Great Depression After the market crashed in 1929 stock prices After the market crashed in 1929 stock prices

collapsedcollapsed The The Federal ReserveFederal Reserve failed to prevent widespread failed to prevent widespread

collapse of the nation’s banking system in the late collapse of the nation’s banking system in the late 1920s and early 1930s1920s and early 1930s This led to severe contraction in the nation’s supply of This led to severe contraction in the nation’s supply of

money in circulationmoney in circulation The Tariff Act of 1930The Tariff Act of 1930 or the or the Haley-Smoot ActHaley-Smoot Act: :

High protective tariffs that produced retaliatory High protective tariffs that produced retaliatory tariffs in other countries, strangling world tradetariffs in other countries, strangling world trade

Impact of the Depression of Impact of the Depression of AmericansAmericans

Unemployment and Homelessness Unemployment and Homelessness Collapse of financial systemCollapse of financial system = bank closings= bank closings Political Unrest = growing militancy of labor Political Unrest = growing militancy of labor

unionsunions Farm foreclosures and migration Farm foreclosures and migration

Impact of the Depression of Impact of the Depression of AmericansAmericans

DustbowlDustbowl: Severe draught in the Southern Plains : Severe draught in the Southern Plains caused crops to failcaused crops to fail Caused dust storms that threw dust all over the country Caused dust storms that threw dust all over the country

““HoovervillesHoovervilles:” Large areas of homeless families that :” Large areas of homeless families that make houses and communities out of boxes and make houses and communities out of boxes and packing crates, wrapped themselves in newspapers packing crates, wrapped themselves in newspapers for blankets for blankets

SuicideSuicide: Increased 30% between 1928 and 1932: Increased 30% between 1928 and 1932

FDR & the FDR & the New Deal

OverviewOverview ““Black Tuesday” Stock market crashesBlack Tuesday” Stock market crashes Early 1930s farm product prices drop by 55%, Early 1930s farm product prices drop by 55%,

hundreds of thousands of farmers lose everythinghundreds of thousands of farmers lose everything By end of 1932 around 5,500 banks failBy end of 1932 around 5,500 banks fail By 1933 the saving of over 9 million American are By 1933 the saving of over 9 million American are

wiped outwiped out Extremely high unemployment (25%)Extremely high unemployment (25%) President Hoover struggled, unsuccessfully to stop President Hoover struggled, unsuccessfully to stop

the slidethe slide FDR (Franklin Delano Roosevelt) ran against Hoover FDR (Franklin Delano Roosevelt) ran against Hoover

in 1932 electionin 1932 election

FDRFDR

Won election in a Won election in a landslide landslide

Confined to wheelchair Confined to wheelchair due to poliodue to polio

NY SenatorNY Senator Governor of NYGovernor of NY

FDRFDR

Assistant Secretary of Assistant Secretary of the Navy under Wilsonthe Navy under Wilson

Promised “Action, and Promised “Action, and Action now” at his Action now” at his inaugurationinauguration

Announced his Announced his decisions at “fire-side decisions at “fire-side chats” to the nationchats” to the nation

New DealNew Deal

15 major bills were passed in the first 100 days of 15 major bills were passed in the first 100 days of the New Dealthe New Deal

Emergency Bank ActEmergency Bank Act Took US off the gold standardTook US off the gold standard Federal Relief AdministrationFederal Relief Administration Alphabet agenciesAlphabet agencies

TVATVA AAAAAA NRANRA FDICFDIC

New DealNew Deal

Programs changed the role of the government Programs changed the role of the government to be a more active participant in solving to be a more active participant in solving problemsproblems

FDR rallied the nation with his speech “We FDR rallied the nation with his speech “We have nothing to fear, but fear itselfhave nothing to fear, but fear itself

The Alphabet AgenciesThe Alphabet Agencies

AAAAAA

Agricultural Adjustment Act Agricultural Adjustment Act 1933,1937 1933,1937 Establish peace time support for farm prices, Establish peace time support for farm prices,

set production controls, farmers received set production controls, farmers received benefits for following, saved agriculture from benefits for following, saved agriculture from collapsecollapse

Designed to bring the nation out of the Designed to bring the nation out of the depression over timedepression over time

TVATVA

Tennessee Valley Authority Tennessee Valley Authority 19331933 Flood Planning, built hydroelectric dams, Flood Planning, built hydroelectric dams,

brought electricity to rural areas brought electricity to rural areas

FDICFDIC

Federal Deposit Insurance CorporationFederal Deposit Insurance Corporation 19331933 Insure depositors savings up to $100,000, up Insure depositors savings up to $100,000, up

from a $5,000 level from a $5,000 level Corrected unsound banking and investment Corrected unsound banking and investment

practicespractices

SECSEC

Securities Exchange Act Securities Exchange Act 19341934 Had the authority to regulate the stock Had the authority to regulate the stock

exchange and investment advisors exchange and investment advisors

WPAWPA

Works Projects AdministrationWorks Projects Administration 19351935 Designed to provide jobs instead of welfare. Designed to provide jobs instead of welfare.

Built roads, bridges, airports, hospitals, etc. Built roads, bridges, airports, hospitals, etc. adult, education, gave writers and artist jobsadult, education, gave writers and artist jobs

Provided payment to people for immediate Provided payment to people for immediate help help

CCCCCC

Civilian Conservation Corps Civilian Conservation Corps 19331933 work programs for young unmarried men, work programs for young unmarried men,

conservation national parks, forests, recreation conservation national parks, forests, recreation

Social Security Act Social Security Act

1935: combination of public assistance and 1935: combination of public assistance and insurance.insurance. old age insuranceold age insurance unemployment insuranceunemployment insurance Assistance to dependent children, the elderly, Assistance to dependent children, the elderly,

mentally ill,, and handicapmentally ill,, and handicap

Controversies of the New Controversies of the New DealDeal

NRA-National Recovery Act NRA-National Recovery Act

Declared unconstitutional by the Supreme Declared unconstitutional by the Supreme CourtCourt

Congress illegally had the power to regulate Congress illegally had the power to regulate intrastate commerceintrastate commerce

Violated separation of powers Violated separation of powers

AAAAAA

Supreme Court said agriculture was a local, Supreme Court said agriculture was a local, not interstate matternot interstate matter

Violated provisions of the tenth amendmentViolated provisions of the tenth amendment

““Court Packing”Court Packing”

FDR wanted to add more justices to the FDR wanted to add more justices to the Supreme CourtSupreme Court

So he could up hold his decisionsSo he could up hold his decisions Increase the Court from 9 to 15Increase the Court from 9 to 15 Asked Congress to pass the lawAsked Congress to pass the law Never approved, because of separation of Never approved, because of separation of

powerspowers

Roosevelt’s Recession Roosevelt’s Recession

1937 – 1938 a down turn in the Economy 1937 – 1938 a down turn in the Economy (recession) during the New Deal and (recession) during the New Deal and Roosevelt’s presidencyRoosevelt’s presidency

Evaluating the New DealEvaluating the New Deal

Most historians agree on the following Most historians agree on the following assessments of the New Deal:assessments of the New Deal:

World War II was largely responsible for ending the Great World War II was largely responsible for ending the Great Depression, the New Deal did not solve unemployment, the Depression, the New Deal did not solve unemployment, the farm crisis, or undercompsumptionfarm crisis, or undercompsumption

The New Deal helped cope with the effects of the Great The New Deal helped cope with the effects of the Great DepressionDepression

The New Deal brought more power to the presidency and The New Deal brought more power to the presidency and to the federal government. The government now had a role to the federal government. The government now had a role and a responsibility in more aspects of the nations and a responsibility in more aspects of the nations economic and social life.economic and social life.

The New Deal preserved the free-enterprise system The New Deal preserved the free-enterprise system