The Depression
Major Causes of the Depression
1. Demand for durable goods decreased2. Unsold goods increased (mass production)3. Large Inventories created cutback in factoriesFrom 1929 to 1932 -- 5000 Banks Closed
1930 ............ 4 million unemployed1932 ............ 12 million unemployedHow did Hoover respond?
He believed in a Hands Off Policy
How did the people respond?
1930 -- The people elected a Democratic Congress
Efforts by Hoover
Federal money for Public Works (Boulder Dam)Reconstruction Finance Corp. (RFC) -- loaned money to cities and statesHome Loan Bank Act -- special banks designed to give financial assistance to other banks It was too little too late!
Bonus Army marches on Washington
Demanded money now Vets removed by General Douglas MacArthurFranklin D. Roosevelt
Grew up in Hyde Park, NYCollege -- Harvard -- History and Political Science-- Columbia -- Law Political Career
New York State Senator Assistant Secretary of the Navy (Just like TR)Vice Presidential Candidate in 1920Governor of New YorkMost Famous Quote: "The only thing we have to fear is fear itself"
1932 -- FDR (Dem) defeated Hoover (Rep)
New Deal
Hundred DaysMarch 9 - June 16FDRs Philosophy--Take a method and try it. If it fails, try Another.
Established a Brain TrustHarry HopkinsHarold IckesEleanor RooseveltThe New Deal was based on 3 Goals
Relief -- Provide emergency assistance to the needy
Recovery -- End the existing depression
Reform -- Prevent the recurrence of a similar problem in the future
To Help with Relief
To ease the Banking Crisis .....
1. Declared Bank Holiday --stopped run on the bank2. Established fireside Chats3. Allowed Sound Banks to re-open* Emergency Banking Act* (RFC) Reconstruction Finance Organization4. Glass-Steagall Act -- created FDIC5. Securities and Exchange Commission (SEC) supervise stock exchangeTo Aid the Unemployed ....
1. Federal Emergency Relief Administration (FERA)2. Large sums of money for local and state authorities for direct relief.Public Works Administration (PWA) -Harold Ickes
Pump Priming* 12 Billion into economy* 35,000 projects (bridges, sewer systems, schools, parks, swimming pools, etc....)
Also built -- USS Enterprise and USS YorktownWorks Progress Administration (WPA) (Headed by Harry Hopkins)
Goals:* employ 5 million (never achieved) * appropriated $ 5 billion Results: 13,000 Play grounds 6,000 schools 2,500 hospitals78,000 Bridges 800 airportsEleanor Roosevelt headed:
Federal Writers Project -- city guidesFederal Art Project -- murals 10,000 works of artsFederal Theatre Project -- helped actorsCivilian Conservation Corps (CCC)
Put young men to work on projects such as: reforestation, flood control, national parks
* received $30.00 month * sent $20.00 home -- requiredNational Youth Administration (NYA)
Helped H.S. and College Students find part time work so they could stay in school
To Help with Recovery
To aid the Recovery of Industry ....
National Industrial Recovery Act (NIRA) (1933)
established codes of Fair CompetitionJoined Business and Government.National Recovery Administration (NRA)
Known as:
The Big Blue Eagle
It was displayed in windows of the stores
who were using the Codes.
Established:
Price Controls
40 hr. work week WE DO OUR PART
WE DO OUR PART$.40 hr minimum wage
abolish child labor
Declared Unconstitutional in 1935
Roosevelt also given power in the Trade Agreements Act (1934). It gave the President the power to lower tariffs by as much as 50% if other countries would agree to do the same.
Helped revive International Trade
To Aid the Recovery of Agriculture ....
Agricultural Adjustment Act (AAA) (1933)
Based on Supply and Demand
Asked to remove 1/4 to 1/2 of tillable landreceived Benefit Subsidy for each acre removed from productionMoney came from a taxBy 1936 - Farmers income increased 50%
Declared Unconstitutional
2nd Agricultural Adjustment Act (2nd AAA) (1938)
restricted production of cropspaid farmers subsidies based on ParityParity - based on prices from 1909 to 1914. Farmers in the 1930s could determine if they had a good year based on the difference from the Parity Price.
If there was a surplus -- the government stored it for Lean years, and the farmer was given a Commodity Loan. When the market price went up -- Farmers would sell the crops and repay the Loan.
If prices did not go up -- Farmers kept the loan
To Help Labor ....
National Labor Relations Act (NLRA) (1935) also known as the Wagner Act -- guaranteed labor the right to organize and bargain collectively.
Social Security Act (SS) (1935) provide for the payment of pensions
Fair Labor Standards Act (FLSA) (1938) established minimum wage and maximum hours
To Aid Homeowners ....
Home Owners Loan Corporation (HOLC) Refinanced mortgages for low-interest long term.
Federal Housing Administration (FHA) (1937) Insured banks against loss on home loans
To Conserve and Protect National Resources ....
Tennessee Valley Authority (TVA) (1933)
Develop resources of the Tennessee RiverIncludes Parts of 7 statesErected Dams and Power Plants Provided low cost electrical power Introduced flood controlImproved River navigationOther Dams Built
Hoover (Boulder) Dam -- Colorado RiverGrand Coulee Dam -- ColumbiaShasta Dam -- Sacramento RiverFt. Peck Dam -- Missouri RiverRoosevelt Attempts to Pack the CourtMany of FDRs programs were declared Unconstitutional. Angry over cancellation of his programs -- Roosevelt attempted to change the size of the court.
FDR asked and received the permission of Congress for the Judicial Reorganization Bill -- FDR would add a new judge for every judge over 70 years of age who would not retire. He could add up to 15 total.
A Switch in Time saves Nine
Was the New Deal a Success?
1932 ....... 19.5 Billion ........... 12 Million Unemployed
1941 ....... 49 Billion ............ 8 Million Unemployed
Things to Know from the 1930s
Schechter Poultry Corp. v. U.S. (1935) Known as the Sick Chicken Case.
Delayed NIRA and NRA unconstitutional. The President did not have the power to legislate.
U.S. v. Butler (1936) Declared AAA Unconstitutional
Government had no Right to levy a process tax that took money from one group of citizens for the benefit of another.
Huey P. Long (Kingfish) Share Our Wealth
Give every family a Guaranteed annual income a home, and a college education.
The Dust Bowl (1934) After this disaster, the Soil Conservation Service encouraged farmers to use contour plowing, to plant soil-saving crops, and to set out trees as wind breaks.
