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What steps can be taken to help stabilize the country after the stock market crash, bank failures, and subsequent depression?

The New Deal

Relief, Reform, and Recovery

Lesson Essential Question•How did government policies during the

Great Depression affect the stability of the economy?

Herbert Hoover 1929-1933• Followed in the laissez-

faire tradition of Harding and Coolidge before him

• In office less than seven months before the great crash of 1929

• Strong believer in pinpointing government waste and inefficiency and solving those problems through expert consultants

What did Hoover do?Programs Result• Public works efforts

• Smoot-Hawley Tariff

• Hoover Dam▫ - Employed thousands, but at

great cost and lives lost and ecosystems destroyed

▫ - Provides hydroelectric power and tourism revenue

Raised taxes on imports on over 20,000 products in an effort to protect American labor and farms from foreign competition

Election of 1932•Hoover is widely blamed for the onset of

the Great Depression•Franklin Delano Roosevelt, then governor

of New York, accepts the candidacy for Democratic challenger and runs as a candidate of change

•FDR’s campaign song, “Happy Days are Here Again” exemplifies his platform – things can get better

Roosevelt wins by a landslide

Roosevelt’s First 100 Days•Begins laying groundwork for the New

Deal, a series of government instituted programs aimed at tackling the three major issues of the Great Depression:

▫Relief▫Reform▫Recovery

The New Deal – Alphabet Soup

FDIC – Federal Deposit Insurance Company - 1933

• Changed the way that banking and stocks were regulated

• Guaranteed individual bank deposits under $5,000

• Federal Reserve Board – had power to regulate the stock market

• Aimed at protecting bank deposits and preventing speculation on credit

AAA- Agricultural Adjustment Act - 1933

• Plan to restore farmers’ purchasing power

• To convince people to grow less and prevent surplus, the government will set prices of farm goods

• Government will now tell farmers how much to grow and how much to sell it for

CCC- Civilian Conservation Corps• “Save the soil, save the

forests, save young men!”

• Employed 300,000 men ages 18-25 to work planting trees, cleaning camp areas and beaches, building bridges and dams and fire towers

• Provided a service to the country while providing jobs

NIRA- National Industrial Recovery Act - 1933

• Designed to revive industry and reduce unemployment

• Based on the belief that unfair competition and business cartels helped push the U.S. into the Depression

• Established “fair” business practices in various industries

• Formed the National Labor Board to protect labor organizations

PWA- Public Works Administration -1933

• Focused on employment by building and maintaining publicly served areas such as schools, hospital, playgrounds, and warships

• Gave public funding to private companies

• Also spawned a second program, the Works Progress Administration

CWA – Civil Works Administration- 1933

• Very similar to the PWA

• Created jobs in the construction industry, mostly road improvement, bridge building, and sewer line repair

• Part of the notion of “priming the pump” – spending money in the commercial sector to stimulate the economy

TVA- Tennessee Valley Authority - 1933• Considered one of the most

ambitious New Deal projects

• Set out to modernize and invigorate the poor, rural area of the Tennessee Valley by harnessing hydroelectricity through dam building

• The government controlled the output and sale of the electricity, eliminating unfair practices of privately owned electric companies.

• In addition to electricity, the TVA also educated farmers and residents about reforestation, crop yield planning, production of fertilizer, and promoted community leaders

FHA- Federal Housing Administration - 1934

• Created by the National Housing Act of 1934

• New construction and repairs of affordable housing

• Insured local loans from banks for home purchases and improvements, which helped lower interest rates and create favorable terms

SSA- Social Security Act 1935• Created a small cost of

living stipend for the elderly and retired

• Developed an insurance for the unemployed while they search for jobs

• Currently the largest government sponsored program in the world

Legal Troubles•Schechter Poultry Corp v. United States

(1935)▫Declared the NRA unconstitutional▫Challenged the government’s authority to

regulate interstate commerce of private food sales

▫“sick chicken case”

▫AAA struck down in 1936, later amended▫ - court ruled that tax the government used

to generate subsidies was unconstitutional

Criticism of the New Deal• Some felt it wasn’t enough, that more should have

been nationalized

• Many felt it was too much – government and unions became too large and business lost the power to regulate and thrive and that the government was dangerously close to communist or socialist ideals

• Modern interpretations tend to fall somewhere in the middle and be skewed by personal political ideologies

The Three Rs•Relief – relieving anxiety, burden,

anything that lessens tensions

•Reform – changes laws, regulations, and situations that were detrimental to economic and social conditions

•Recovery – helps regain something lost

Exit Ticket•Which New Deal program do you think

was the most beneficial for the people of the United States?

Defend your answer using what you know about why the program was implemented, and the results it had.