The Depression and New Deal

The Stock Market Crash and Underlying Causes of the Depression

• Why does the 20s bull market collapse?– Inflated stock values– Borrowing to buy stocks – Stock Market Crash – October 1929

• Underlying economic weaknesses– Durable goods and construction – Corporate profits vs. wages– Consumer indebtedness– Banking and stock-brokerage– Agricultural sector weakness– High Tariffs

Ecological Disaster

• The “Dust Bowl”

• Agricultural prices (1929-1932)

• Foreclosures and farm abandonment“The farmers are all in the same class. Broke—financially, underfeed.[sic] —under clothed, all have the blues and

disgusts.” --John A. Garner

• Hitting the Road – “Okies”

Minorities and the Depression

• Mexican-Americans– Unemployment rates– Forced repatriation

• African-Americans– Unemployment rates– Lynchings “create vacancies”

Contrasting Approaches to National Emergency

Herbert Hoover and voluntarism”

Franklin Delano Roosevelt

Roosevelt’s New Deal

• Bank Holiday and Emergency Banking Act

• Agricultural Adjustment Act (AAA)

• Federal Emergency Relief Administration

• Civilian Conservation Corps

• National Youth Administration

• Works Progress Administration

• Social Security Act

Assessing the New Deal

• Expansion of Federal Spending

• Transformation of State Bureaucracies

• Establishment of a welfare state

• Maintenance of American income levels

Expansion of Government

• Government spending on public aid (all levels)– 1913-- $21 million

– 1932-- $208 million

– 1939-- $4.9 billion

• Public Aid as percentage of all government expenses– 1913-- 1%

– 1933-- 6.5%

– 1939-- 27.1%

• Per Capita spending on public aid (all levels of government)– 1913-- $.22

– 1939-- $37.80

Unemployment and Wages

Year Pct.

1929 3.2%

1930 8.7%

1931 15.9

1932 23.6%

1933 24.9%

1934 20.1%

1935 16.9%

Going West

Civilian Conservation Corps (CCC)

FERA canning operation

Waiting for Relief Checks