Dealing with the Great Depression and the New Deal

1. Dealing with the Great Depression and the New Deal U.S. History

2. New Deal Homework Quiz Answer • Let’s see how we did!!

3. What was the purpose of the Bank Holiday? • March 6, 1922: Bank Holiday – proclamation closing every bank in the nation for a few days • Designed to stop massive withdrawals • Save the banks!

4. What actions did Pres. Roosevelt take to improve Banking? • Examined banks for financial soundness, encouraged people to deposit money, created FDIC

5. What actions did Pres. Roosevelt take to improve Industry? • Passed NIRA to stabilize prices and contract with business for public projects

6. What actions did Pres. Roosevelt take to improve Agriculture? • Passed AAA to limit production and raise prices

7. Who was John Maynard Keynes and what impact did he have on the Great Depression? • John Maynard Keynes – the Government needs to spend money to encourage investment and consumption. • This is what Roosevelt did to fight the Depression he put money into the economy through federal loans and government spending

8. A $100 Dollar Bill

9. A packet of one hundred $100 bills is less than 1/2" thick and contains $10,000. Fits in your pocket easily

10. Believe it or not, this next little pile is $1 million dollars (100 packets of $10,000). You could stuff that into a grocery bag and walk around with it.

11. While a measly $1 million looked a little unimpressive, $100 million is a little more respectable. It fits neatly on a standard pallet...

12. And $1 BILLION dollars... now we're really getting somewhere...

13. Next we'll look at ONE TRILLION dollars. This is that number we've been hearing so much about. What is a trillion dollars? Well, it's a million million. It's a thousand billion. It's a one followed by 12 zeros. (And notice those pallets are double stacked.)

15. “I do not believe that the power and duty of the [federal] Government ought to be extended to the relief of individual suffering…The lesson should be constantly enforced that though the people support the Government, the Government should not support the people.”Herbert Hoover

16. Hoover’s Philosophy • He characterized the depression as a “temporary halt in the prosperity of a great people.” • He agreed with what the NY Times advised that “the fundamental prescriptions for recovery [are] such homely [simple] things as savings…and hopeful waiting for the turn.” • Hoover thought “the way to economic recovery was through individual effort and not from government assistance.

17. Opposing Direct Relief • Americans demand relief for the needy (food, clothing, shelter, money) • “Why are we reduced to poverty and starving and anxiety and sorrow so quickly under your administration as Chief Executor. Can you not find a quicker way of executing us than to starve us to death?” • Hoover continued to reject the idea of government aid.

18. Why? Direct federal relief would: • create a large bureaucracy in government • Inflate the federal budget • Reduce the self-respect of people receiving aid Hoover’s advice: Lift yourself up through hard work and strength of character – rugged individualism.

19. Rugged Individualism • Success comes through individual effort and private enterprise • Private charities and local communities, not the federal government, could best provide for those in need • “A voluntary deed,” is infinitely more precious to our national ideas and spirit than a thousandfold poured from the Treasury.”

20. What Hoover Does • 1930, Hoover creates the President’s Committee for Unemployment Relief (PCUR)[ Community Chest, Red Cross, Salvation Army, YMCA] • It collected information about relief agencies and distributed it to Americans interested in aiding the unemployed • It did very little beyond urging Americans to contribute more to charity

21. Boosting the Economy • Presidential Advice from Secretary of Treasury: Andrew Mellon “Government should keep its hands off the economy. American businesses need to deal with the crisis on their own.” – Laissez-faire Approach

22. Hoover says something has to be done!! • Within weeks of the stock market crash (Oct. 1929), Hoover calls a White House conference of top business, labor, and political leaders to discuss solutions to the economic crisis. • Hoover urged these leaders to voluntarily maintain predepression levels of production, employment, and wages.

23. Hoover and the Great Depression

24. Impact • Hoover’s policies fail to end the Great Depression • However, his policies did represent a major shift in government policy. The President and Congress accepted the idea that the federal government can and should do something to boost the economy in times of crisis

25. Impact • 1932 – President Hoover was perhaps the most hated man in America. His appearance in movie newsreels provoked boos and catcalls from audiences. • “In Hoover we trusted and now we are busted.”

26. The 1932nd Psalm E. J. Sullivan wrote the following satire in 1932. “Hoover is my shepherd, I am in want, He maketh me to lie down on park benches, He leadeth me by still factories, He restoreth my doubt in the Republican Party. He guided me in the path of the Unemployed for his party’sake, Yea, though I walk through the alley of the soup kitchens, I am hungry. I do not fear evil, for thou art against me; Thy Cabinet and thy Senate, they do discomfort me; Thou didst prepare a reduction in my wages; In the presence of my creditors thou anointed my income with taxes, So my expense overruneth my income. Surely proverty and hard times will follow me All the days of the Republican administration. And I shall dwell in a rented house forever. Amen.” Source: McElvaine, Robert. The Depression and New Deal: A History in Documents, page 28.

27. Election of 1932 • Republicans reluctantly renominate Herbert Hoover (no one else wanted the nomination) • Democrats nominate N.Y. Governor Franklin D. Roosevelt (FDR)

28. FDR • Distant cousin of Theodore Roosevelt • Married to TR’s niece Eleanor Roosevelt • Believed in progressive and social reform • Vice Presidential Candidate in 1920 • 1921: Polio paralyzes him from the waist down • 1928: Governor of N.Y. overcomes physical challenges

29. FDR As Governor of N.Y.: • Relief programs • Instituted unemployment benefits • Supported failing industries

30. FDR for President “Republican leaders not only have failed in material things, they have failed in national vision, because in disaster they have held out no hope…I pledge you, I pledge myself, to a new deal for the American people.” Franklin D. Roosevelt

31. The Election of 1932

32. FDR Wins!! • Roosevelt: 42 states, 23 million popular votes, 472 electoral votes • Hoover: 16 million popular votes, 59 electoral votes • Additionally, the Democrats win majorities in both houses of Congress

33. President Franklin D. Roosevelt “The whole country is with him, just so he does something. If he burned down the Capitol, we would cheer and say, “Well, we at least got a fire started anyhow.” Will Rogers

35. First Inaugural Address “First of all, let me assert my firm belief that the only thing we have to fear is fear itself – nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days….” The people of the U.S. have not failed. In their need they have registered a mandate that they want direct, vigorous action. They have asked for discipline and direction under leadership. They have made me the present instrument of their wishes. In the spirit of the gift I take it.”

36. Question What words or phrases does Roosevelt use to inspire confidence?

37. That New Deal

38. Roosevelt Confronts Emergency • 1932, while campaigning for the Presidency, Roosevelt formed an advisory group known as the Brain Trust. • They develop the “New Deal” • 15 relief and recovery programs

39. Inaugural Address • Roosevelt told the nation that a “temporary departure” from the “normal balance of executive and legislative authority” might be necessary. If needed the President would ask Congress for “broad executive power to wage a war against the emergency.” • March 15, 1933 Roosevelt calls a special session of Congress in which all 15 programs of the New Deal are passed – in 100 days.

40. Banking Reform • March 6, 1922: Bank Holiday – proclamation closing every bank in the nation for a few days • Designed to stop massive withdrawals • March 9, 1933: Emergency Banking Act – authorized the federal government to examine all banks and allow those that were financially sound to reopen

41. Fireside Chats • March 12, 1933, President Roosevelt addresses the nation on the radio on the first of many “fireside chats” • Roosevelt asks the people to reinvest in banks, explaining how the people’s money is now safe in the bank • It worked! By the end of 1 Month $1 Billion is back into banks – consumer confidence is restored!

42. More Banking Reform • Federal Deposit Insurance Corporation (FDIC) – June 1933 • Insured each bank deposit up to $5,000 [up to $100,000 today]

43. Home Owners Loan Corporation HOLC formed to assist home owners who could not meet their mortgage payments. June 1936, HOLC had saved the homes of 1 million American Families with low – interest, long term mortgage loans

44. Helping the Farmers • 1933, Executive Order from the President – creates the Farm Credit Administration (FCA) • Provided low-interest, long-term loans to farmers • Allowed farmers to pay off mortgages and back taxes, buy back farms, purchase seed and farm equipment

45. Relief for the Needy – Help! How to help 13 million unemployed? • May 1933, Federal Emergency Relief Administration (FERA) • Created to distribute $500 million in relief aid to state and local agencies – at least half of FERA’s money went to states for direct distribution to needy families • 8 million American families receive public assistance

46. But…People don’t just want a handout – they want jobs! • Civil Works Administration (CWA) • Created federal, state, and local “make-work” projects (raking leaves, picking up park litter, etc.) • 1933-34, CWA paid more than $740 million in wages to 4 million men & women.

47. Unemployed Young men 18-25 Civilian Conservation Corps (CCC), 1933 • 250,000 young men left their homes for army camps for CCC training • They planed trees, created park trails, developed campgrounds • $30/month – money sent back mostly to their families

48. Question • In what ways did FERA, the CWA, and the CCC, provide different types of relief?

49. Helping the Nation Recover • Economic Relief = short-term remedy • Economic Recovery = long-term goal • How? Reform business practices!

50. Business Reform Federal Securities Act – created the Securities and Exchange Commission (SEC) • Regulates companies that sell stocks and bonds.