Economic Economic Depression:Depression:

The 1930sThe 1930s

RecessionRecession or or Depression?Depression?

►RECESSION:RECESSION: A significant A significant declinedecline in activity in activity spread across the economy, lasting longer spread across the economy, lasting longer than a few months.than a few months. Two consecutive Two consecutive quarters of quarters of negative economic growthnegative economic growth

►DEPRESSIONDEPRESSION: : A A sustained economic sustained economic recessionrecession in which a nation's Gross National in which a nation's Gross National Product (GNP) is falling and marked by Product (GNP) is falling and marked by low low productionproduction andand sales sales andand a high rate of a high rate of business failuresbusiness failures and and unemployment unemployment

Reasons for the Great Reasons for the Great DepressionDepression

►UNEVEN DISTRIBUTION OF WEALTH: UNEVEN DISTRIBUTION OF WEALTH: 71% of Americans below poverty 71% of Americans below poverty level. level. NO SAVINGS. NO SAVINGS. Can’t afford to Can’t afford to buy factory goods.buy factory goods.

►INSTALLMENT BUYING:INSTALLMENT BUYING: Not enough Not enough REAL $$REAL $$ in circulation. in circulation.

►OVERSPECULATION:OVERSPECULATION: Too many stocks Too many stocks bought in a marketbought in a market

Reasons, con’t.Reasons, con’t.

►OVERPRODUCTION: OVERPRODUCTION: Businesses produced more goods than Businesses produced more goods than

people could buypeople could buy Factories closed. Factories closed. People lost jobs.People lost jobs.

Farmers produced more cropsFarmers produced more crops. . Borrowed $$ to buy new equipment & Borrowed $$ to buy new equipment & land. land. Prices fellPrices fell. . Couldn’t Couldn’t pay $$ backpay $$ back..

BANKS CLOSEDBANKS CLOSED

Farmers & others can’t pay back Farmers & others can’t pay back loans.loans.

Banks make no $$.Banks make no $$.

Banks close their doorsBanks close their doors..

People can’t get to their savings.People can’t get to their savings.

Hawley-Smoot TariffHawley-Smoot Tariff

Act signed into law on June 17, 1930, Act signed into law on June 17, 1930, thatthat

raised U.S. tariffsraised U.S. tariffs on over 20,000 on over 20,000 imported goods to record levels. imported goods to record levels.

Other countries stopped buying Other countries stopped buying U.S. goods in retaliation. U.S. goods in retaliation.

Hurts our economy.Hurts our economy.

Herbert HooverHerbert Hoover► President from 1929 to 1933. President from 1929 to 1933.

► Was President only a few months Was President only a few months when the Great when the Great DepressionDepression began began

► A A RepublicanRepublican=reluctant to use =reluctant to use the power of the federal the power of the federal government against the government against the Depression.Depression.

► Tried to persuade voters that Tried to persuade voters that private enterpriseprivate enterprise could turn the could turn the economy aroundeconomy around

► Lost the election of 1932 to Lost the election of 1932 to Franklin D. Franklin D. RooseveltRoosevelt. .

Hoo·ver·ville   (hōō'vər-vĭl')  Hoo·ver·ville   (hōō'vər-vĭl')     

n.  A crudely built camp put up usually on the edge of a town to n.  A crudely built camp put up usually on the edge of a town to house the dispossessed and destitute during the depression of house the dispossessed and destitute during the depression of the 1930s.the 1930s.

FDR & The New DealFDR & The New Deal► The 32nd PresidentThe 32nd President (1933- (1933-

1945). 1945).

► Ran for President with the Ran for President with the promise of a promise of a New DealNew Deal for for the American people.the American people.

► Administration wasAdministration was marked by marked by relief programsrelief programs, ,

measures to increase measures to increase employmentemployment and and assist assist industrial and agricultural industrial and agricultural recovery recovery from the from the DepressionDepression

► Only U.S. President to be Only U.S. President to be reelected reelected threethree times times (1936, 1940, and 1944). (1936, 1940, and 1944).

► He died in office. He died in office.

The The NewNew Deal Deal

►The Great Depression of the 30s hit The Great Depression of the 30s hit not only America but the rest of the not only America but the rest of the world as well.world as well.

►Germany, Italy and Japan turned to Germany, Italy and Japan turned to dictator to deliver them from despair.dictator to deliver them from despair.

►The New Deal was significant because: The New Deal was significant because: It proved that a democratic society could It proved that a democratic society could

overcome the challenges presented by a overcome the challenges presented by a severe economic crisis. severe economic crisis.

The First 100 Days:The First 100 Days:Relief, Recovery & ReformRelief, Recovery & Reform

Roosevelt’s 3 Main GoalsRoosevelt’s 3 Main Goals

►RELIEF:RELIEF: Provide immediate Provide immediate relief from the hardships of relief from the hardships of the depressionthe depression

►RECOVERY:RECOVERY: Achieve a long-Achieve a long-term economic recovery.term economic recovery.

►REFORM:REFORM: Institute reforms Institute reforms to prevent future to prevent future depressions.depressions.

The First 100 Days:The First 100 Days: New Deal ProgramsNew Deal Programs

FDICFDIC NRANRA CCCCCC PWAPWA AAAAAA TVATVA

FDICFDIC==Federal Deposit Federal Deposit InsuranceInsurance

Insured bank deposits up to Insured bank deposits up to $5,000$5,000

NRANRANational RecoveryNational Recovery AdministrationAdministration

Developed codes for Developed codes for fair competition in fair competition in business/industry. business/industry. Minimum wage for Minimum wage for workers; minimum workers; minimum price for productsprice for products

CCCCCCCivilian Conservation Civilian Conservation

CorpCorpProvided jobs for 2 Provided jobs for 2 million young men. million young men. Replanted forests, Replanted forests, built trails, fought built trails, fought fires, dug irrigation fires, dug irrigation

ditches.ditches.

PWA=PWA= Public Works Public Works Administration Administration

Built bridges, dams, power Built bridges, dams, power plants plants

& gov’t buildings.& gov’t buildings.

AAAAAAAgricultural Agricultural

Adjustment ActAdjustment ActSought to end Sought to end

overproduction of overproduction of agricultural agricultural goods. Paid goods. Paid

farmers farmers NOTNOT to to grow crops.grow crops.

TVATVATennessee Valley Tennessee Valley

Authority Authority Built dams in Tenn. Built dams in Tenn.

River Valley to River Valley to control floods & control floods &

provide electricity.provide electricity.Also replanted forests Also replanted forests

& provided jobs.& provided jobs.

The 2The 2ndnd New Deal New Deal

►Addressed the problems of the elderly, Addressed the problems of the elderly, the poor, and the unemployedthe poor, and the unemployed

► Created new Created new public-works projectspublic-works projects

►Helped farmers Helped farmers

► Enacted measures to Enacted measures to protect workers’ rights.protect workers’ rights.

22ndnd New Deal Programs New Deal Programs

►SSA=SSA=Social Security ActSocial Security Act►WPA=WPA=Works Progress AdministrationWorks Progress Administration►REAREA=Rural Electrification Administration=Rural Electrification Administration►USHAUSHA=United States Housing Authority=United States Housing Authority►National Labor Relations ActNational Labor Relations Act=“Wagner =“Wagner

Act”Act”►Fair Labor Standards ActFair Labor Standards Act►Food, Drug, and Cosmetic ActFood, Drug, and Cosmetic Act►NYANYA=National Youth Administration=National Youth Administration

The Second New DealThe Second New Deal

1.1. SSA:SSA: Pension system & unemployment Pension system & unemployment insurance. Payments to those injured on insurance. Payments to those injured on the job, the elderly and the disabled.the job, the elderly and the disabled.

2.2. WPA:WPA: Employed millions of people in Employed millions of people in gov’t jobs. Highway construction to arts gov’t jobs. Highway construction to arts programsprograms..

3.3. REA:REA: Brought electricity to isolated rural Brought electricity to isolated rural areasareas

4.4. USHA:USHA: Low cost federal housingLow cost federal housing

The Second New DealThe Second New Deal

►Wagner Act:Wagner Act: Outlawed unfair labor Outlawed unfair labor practices. Granted workers right to organize practices. Granted workers right to organize unions & tounions & to collective bargainingcollective bargaining..

►Food, Drug, & Cosmetic Act: Food, Drug, & Cosmetic Act: Prohibited Prohibited the mislabeling of food, drugs, & the mislabeling of food, drugs, & cosmetics. Ensured the safety of these cosmetics. Ensured the safety of these products.products.

►Fair Labor Standards Act: Fair Labor Standards Act: Banned child Banned child labor, established a minimum hourly labor, established a minimum hourly wage, established a 44-hour work week.wage, established a 44-hour work week.

Chief complaint against Chief complaint against New Deal Programs:New Deal Programs:

It made governmentIt made government tootoo

Court PackingCourt Packing

FDR’s attempt to add FDR’s attempt to add

6 more justices to the 6 more justices to the

Supreme Court in orderSupreme Court in order

to get support for his to get support for his

New Deal programs.New Deal programs.