1920's had been a period of good economic times Tues. Oct. 29th, 1929 - NYC Stock market

crashed, causing a depression that would last until 1942

1. Speculation: Buying on margin, people don’t actually own stocks.

2.Great Depression: 12 year economic downturn caused by overproduction, underconsumption, expanded credit, & weak government response.

3.Herbert Hoover: Did not adequately respond with direct relief. Promised a return to prosperity.

4.Hooverville: homeless communities.5.Bonus Army: WWI Veterans seeking bonus

payment for service in war. Hoover uses force against them.

6.Dust Bowl: 7 years of drought in the midwest. Deepens farmer’s depression.

7. FDR: 1932 elected president. Serves 4 terms. NEW DEAL.

8. The New Deal: Plan for Relief, Recovery, and Reform to end the Great Depression.

9. FERA: Federal Emergency Relief Administration, assistance to states.

10. PWA: Public Works Administration. Jobs.11. CCC: Civilian Conservation Corps.12. WPA: Works Progress Administration.13. NRA: National Recovery Administration.

UNCONSTIUTIONAL.14. Wagner Act: Collective bargaining and

unions to labor.

15. Schecter Poultry: declares NRA unconstitutional. Allows for intra state commerce regulation.

16. US v. Butler: AAA declared unconstitutional. Local, not national issue.

17. TVA: Tennessee Valley Authority. Electricity to rural areas.

18. Court Packing Plan: FDR attemps to “pack” the court by adding justices who agree with New Deal.

19. Social Security Act: provide retirement income for elderly

20. FDIC: Federal deposit insurance corporation .

7 CAUSES OF THE DEPRESSION:

1.Weakness in the Overall Economy: overproduction, underconsumption

2.Unequal Distribution of income: 65% of country under 2,000/year.

3.**Excessive buying on credit: leads to underconsumption as people pay loans.

4.Weak Corporate Structure: no competition.

5.Weak Banking Structure: 6,000 bank failures in the 1920s. Too little reserves.

7 CAUSES OF THE DEPRESSION:6.Inadequate

government policy: Speculation unregulated, tax policy favors wealthy, ignore anti-trust laws.

7.Weak International Economy: WWI had caused depression in Europe. Tariffs hurt international trade.

President Hoover responds

Hoover organized private relief agencies for the unemployed

Europe could stop reparation payments.

Should purchase American goods instead to stimulate American economy

Believes economy will “fix itself” through laissez faire policy.

Hoover unpopular, Congress passes the RECONSTRUCTION FINANCE CORPORATION

emergency loans to banks

too little too late…NO POLICIES OF DIRECT

AID TO INDIVIDUALS.

1932 ELECTION1 out of 4 was

unemployed…income was 50% of

what it had been in 1929

Hoover no hopewinner by a landslide

is FRANKLIN DELANO ROOSEVELT (Dem - N.Y. governor) Promises a NEW DEAL for America.

**RELIEF, RECOVERY, REFORM are the Goals of the NEW DEAL under FDR.

Step 1 -BANKING HOLIDAY- banks shut down & inspected by Gov. Allowed to open when "healthy"

people's confidence returned Redeposit $$.

Step 2 - Stock market reform- Security Exchange Commission

Step 3 - to put more $ in circulation, U.S. OFF THE GOLD STANDARD

Step 4: The “New Deal”. (Alphabet Soup)

NAMNAMEE

SummarySummary

FDICFDIC Federal Federal Deposit Deposit Insurance Insurance CorporationCorporation

ReformReform

19331933Insures Bank Insures Bank deposits up deposits up to $100,000to $100,000

AAAAAA Agricultural Agricultural Adjustment Adjustment AdministratiAdministrationon

RecoverRecoveryy

19331933

Farmers paid Farmers paid not to grow not to grow certain crops.certain crops.

****UNCON****UNCON

CCCCCC Civilian Civilian ConservatioConservation Corpsn Corps

RecoverRecovery, y, ReliefRelief

19331933

Provides jobs Provides jobs to young men to young men to work in to work in environmentaenvironmental jobs.l jobs.

PWAPWA Public Works Public Works AdministratiAdministrationon

19331933

ReliefReliefPorts, Ports, Schools, Schools, AirportsAirports

NIRANIRA National National Industrial Industrial Recovery ActRecovery Act

19331933

ReforReformm

Set prices, Set prices, wages, wages, hours.hours.

***** ***** UNCONUNCON

TVATVA Tennessee Tennessee Valley Valley AuthorityAuthority

19331933 Built Dams Built Dams to set to set power in power in SoutheastSoutheast

FHAFHA Federal Federal Housing Housing AdministratiAdministrationon

19341934 Insure Insure mortgagesmortgages

Wagner Act: 1935 Guaranteed Labor Unions the right to form. Created NLRB. (National Labor Relations Board)

Fair Labor Standards Act: Set minimum wage at 25 cents, and maximum hours at 44 per week. Banned child labor in interstate commerce.

Social Security Act (1935)

**Schechter Poultry Corporation v. US (1935) declared NRA UNCONSTITUTIONAL.

US v. Butler: AAA ruled Unconstitutional. Farming was state, not national issue.

Court Packing Plan fails. (add 6 judges)

ELECTION OF 1936 - FDR won easily (v Repub. Alf Landon - Kansas governor)

FDR given a mandate to continue New Deal policies

Tries to reorganize the Supreme Court - they disallowed some New Deal legislation

FDR wants # of judges changed from 9 15 (to "pack the court") - great opposition, so FDR w/drew this proposal

but judges retired & FDR got to appoint new ones they approved all New Deal legislation

**ELECTION OF 1940 - FDR broke with tradition & ran a 3rd time

FDR v. Wendell Wilkie - American support of the Allies (G.B.), now in WWII v. Nazi Germany.

both U.S. pol. parties wanted to support England, but to remain neutral –

both parties approved of (most) New Deal legislation & wanted an isolationist foreign policy- FDR won in 1940 (and again in 1944)

*More gov. involvement. Stretched S.O.P. and C&B…

New Deal helped in stimulating the U.S. economy, but only WWII would solve the problem unemployed found jobs in wartime factories & the military. U.S. becomes:

**ARSENAL OF DEMOCRACY . (sell items to England for war)

**LEND-LEASE ACT.

Should US Join the War???

**Impact of the New Deal and FDR