Unit 7. The Great Depression and the New Deal. Wednesday, February 29, 12

Transcription

1 Unit 7 The Great Depression and the New Deal

2 I. What was the Great Depression? A period lasting from The longest, deepest and most damaging economic downturn in the 20th Century A time in which Americans re-assessed the government s role in creating a just, equitable and fair society

3 II. Causes of the Great Depression Over reliance on consumer credit Sick industries Lack of regulation Failure to enforce anti-trust laws encouraged corporate mergers and thus high prices. Failure to regulate banks and stock trading led to financial recklessness and speculation. Tariff policies that decreased markets for US goods Fordney-McCumbr Tariff, Increased tariffs by 60% on manufactured goods Hawley-Smoot Tariff, Established the highest tariff in US history

4 II. Causes of the Great Depression The Stock Market Crash Stock prices increased during the twenties at twice the rate of industrial production. Belief that prices would continue to rise fueled speculation. Investors often bought on margin, sometimes putting only 10% of their own money into a purchase. So profitable was the market, that many banks and corporations invested money in brokerages who then loaned the money to investors buying stock largely on credit. This guaranteed that when the markets fell, the ripple affect would be huge. The stock market had a huge psychological affect on Americans.

5 II. Causes of the Great Depression Unequal distribution of wealth By 1929, 1/2 of 1% of American Families owned 32.4% of the entire net wealth of the nation. At the same time the bottom 40% of American Families owned only 12% of the nation s net wealth Approximately 1/2 of the nation s population lived at subsistence level or lower. 80% of families had no savings.

6 III. The Impact of the Great Depression

7 IV. Hoover s response to the Great Depression A. Charity and Volunteerism 1. Vetoes of direct relief 2. President s Organization of Unemployment Relief (POUR) 3. Federal Farm Board 4. Corporate pledges

8 B. Government Programs under Hoover 1.The Reconstruction Finance Corporation (1932) 2.The Home Loan savings Board (1932)

9 V. Franklin Delano Roosevelt and the New Deal A. Biography

10 V. Franklin Delano Roosevelt and the New Deal A. Biography B. The Election of 1932 Issues The economy Hoover s handling of the Bonus Marchers Popular vote FDR - 22,821,277 Hoover - 15,761,254 Percentage FDR % Hoover % Hoover s style

11 C. FDR s Style FDR put fourth an optimistic image that reassured many Americans FDR was the first president to make effective use of the radio as a means of communication with the American public Fireside chats - nationally broadcast radio addresses - were meant to reassure, teach and motivate the American public to unify in support the New Deal FDR used these addresses to speak directly to individual Americans FDR s first fireside chat was delivered on March 12, 1933 following FDR s order to close all banks for 1 week to stem the growing panic.

12 D. The Hundred Days Major Laws passed in the first hundred days of the Roosevelt administration: Emergency Banking Act Agricultural Adjustment Act National Industrial Recovery Act Federal Emergency Relief Act Home Owners Loan Act Glass-Steagall Act Tennessee Valley Authority Act Civilian Conservation Corps Act Securities Act

13 E. FDR s three part strategy: relief, recovery and reform Relief - Provide Americans with immediate relief of their suffering. This often took the form of direct cash payments or other direct assistance. Recovery - Programs designed to create jobs and prime the economic pump. Recovery programs sought to get money back into the hands of consumers. Reform - Laws designed to fix the problems with the American financial system that led to the Great Depression in the first place

14 Relief Recovery Reform

15 Program Glass-Steagall Act Securities and Exchange Commission The Agricultural Adjustment Act What the program did? Established the FDIC which guaranteed bank depositors money Regulated banks Required corporations to make complete disclosures regarding stock offerings Separated banking and investment firms Regulated the stock market - banned insider trading Sought to raise crop prices by curtailing production Paid farmers to leave land unused and even to destroy some crops Tennessee Valley Authority Constructed 20 dams and hydro-electric plants in the Tennessee Valley Created Many jobs Civilian Conservation Corps Put young men between to work on parks, planting trees and erosion control projects Workers got a small wage and food and board Public Works Administration Home Owners Loan Corporation Federal Housing Administration Provided money to states to create job building schools and community buildings Provided government loans to home owners who faced foreclosure Provides low interest loans to first time homebuyers

16 Program Works Progress Administration Wagner Act/National Labor Relations Board Fair Labor Standards Act Social Security Act Rural Electrification Act What the program did? Spent 1 billion to create over 8 million jobs Jobs included building airports, roads, sidewalks and public buildings Created jobs for artists, historians, actors and photographers Protected workers right to unionize and bargain collectively Banned unfair practices such as firing suspected union organizers Established the national labor relations board to hear complaints of unfair practices Established the first national minimum age Restricted the work week to 44 (later 40) hours Established rules and restrictions for workers under the age 16 Established a national pension fund so that people above the age of 65 could retire and receive a small monthly income Established a national unemployment compensation system that paid out of work people a small amount each week Provided aid to families who could not work and had young children Provided income for people with disabilities Brought electrical power to rural areas