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The Depression Begins

The Depression Begins. Farmers had suffered throughout the 1920s and were the first group to plunge into depression Businesses increased profits while holding down material costs and wages, thus suppressing consumer spending power

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The Depression Begins

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  1. The Depression Begins • Farmers had suffered throughout the 1920s and were the first group to plunge into depression • Businesses increased profits while holding down material costs and wages, thus suppressing consumer spending power • Global economic problems created by World War I were the main factors

  2. Hoover and the Great Depression • President Hoover took aggressive action to stem the depression by using the power of the federal government • He created a wide variety of agencies and boards that contained the best minds in American business to suggest solutions • He also sponsored a tax cut hoping to stimulate the economy

  3. The Election of 1932 • Hoover’s unpopularity denied him his second term and ushered Franklin Roosevelt into the White House • Roosevelt promised a “New Deal” for Americans and relief from the depression • “The only thing we have to fear is fear itself.”

  4. The First New Deal: Relief Measures • The Federal Emergency Relief Administration (FERA) • The Civil Works Administration (CWA) • The Public Works Administration (PWA) • The Agricultural Adjustment Act: stabilized prices on farm produce through paying farmers to reduce their acreage under cultivation

  5. The Banking Crisis • Many American banks had closed immediately after the stock market crash and the public no longer trusted them • Roosevelt tabled an emergency Banking Relief Act that gave the executive broad powers of financial reform • Additional legislation followed strengthening the Federal Reserve and establishing the FDIC to insure deposits

  6. Industrial Recovery • The National Industrial Recovery Act (NIRC) • The National Recovery Administration (NRA) • National Labor Board

  7. The Second New Deal: Work Relief and Social Security • The Works Progress Administration (WPA) • The National Youth Administration (NYA) • The Social Security Act of 1935

  8. The Battle of the Supreme Court • As the first act of his second term, Roosevelt announced a plan to reform the judicial system • Angry with the Supreme Court for foiling several New Deal measures, the president was determined to create a more willing court • His scheme was complex and produced a public outcry of dictatorship; Roosevelt quickly pulled back his plan • Ironically, the Court began passing practically every new initiative after this event

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