FDR: ‘This nation asks for Action, & Action Now.’ The New Deal FDR: ‘This nation asks for Action, & Action Now.’

Causes of the Great Depression Agricultural overproduction Industrial overproduction Unequal distribution of wealth Over-extension of credit International economic situation

How Herbert Hoover Dealt with the Crisis He played the game of confidence economics and just kept saying: “Prosperity is right around the corner.”

Voluntary Measures Hoover eventually established two privately-funded organizations: The National Credit Association provided $1/2 billion to businesses for emergency loans, but it was too under-funded to do much good. The Organization for Unemployment Relief was a clearing house for relief agencies. However, state and local governments were already in too much debt to benefit from it.

Limited Government Intervention In the end, Hoover resorted to government intervention: The Reconstruction Finance Corp gave $1-1/2 billion in federal loans to banks, insurance companies, and industry to prevent bankruptcies, but it was too little, too late. The Home Loan Bank Act provided federal loans to homeowners to prevent foreclosures, but got bogged down in red tape.

Reasons for Ineffectiveness Hoover thought business should be self-regulating. He had a mania for a balanced budget. He lacked political finesse.

Franklin D. Roosevelt’s Appeal In 1932 presidential election, FDR was perceived as a man of action. Hoover was viewed as a “do-nothing president.” Norman Thomas, the Socialist candidate, was viewed as a radical. Results: a landslide for Democrats and a mandate to use government as an agency for human welfare.

Situation When FDR Entered Office In March 1933, the country was virtually leaderless and the banking system had collapsed.

FDR Restored Confidence In his inaugural address, he said “The only thing we have to fear is fear itself….” He promised vigorous leadership and bold action, called for discipline and cooperation, expressed his faith in democracy, and asked for divine protection and guidance.

FDR’s Personal Qualities He was a practical politician who practiced the art of the possible. He was a charismatic person who exhibited a warmth and understanding of people. He knew how to handle press by focusing attention on Washington. He provided dynamic leadership in a time of crisis. He was willing to experiment

Key Quotes: FDR’s Inauguration Speech Let me assert my firm belief that the only thing we have to fear is fear itself This Nation asks for action, and action now. Our greatest primary task is to put people to work. I shall ask congress for broad executive power to wage was against the emergency.

Causes of the Depression: Fear People lose their jobs. Demand drops. Fewer goods are sold. The Spiral Of Depression Even more people Lose their confidence And spend less money In order to stay in business companies cut wages Good place to point out that the spiral of depression is the opposite to the cycle of prosperity. Even discuss in relation to Henry Ford and the impact on the other industries that produced his standardised goods. Companies are forced to cut costs by laying people off People lose their confidence & start saving their money Demand drops even further.

The Causes of People’s Fear Losing their job Becoming homeless Forced to live on their savings. Banks going bust. Hint Why did banks start to go bankrupt in 1929? Buying in the margin Hire Purchase Why did the Depression make even more banks go bankrupt? A run on a bank, New York 1933. Panicky savers are queuing up to take their money out before it goes bust.

Action to End the Depression Emergency Banking Act Fireside Chats Beer Act - ended prohibition. The Alphabet Agencies How would ending Prohibition help FDR create jobs?

Emergency Banking Act, 1933 This Act closed all of America’s banks whilst they were inspected by government officials. Only banks that were properly run and had enough funds were be allowed to reopen after the bank holiday. Once a bank has been inspected, the government promised to compensate people if that Bank go bust in the future.

broadcasts were called Fireside Chats These Fireside chats aimed to restore peoples’ confidence. These Fireside Chats were broadcast once a week over the radio. FDR would explain what he had done that week to help take action to end the Depression. Why do you think these broadcasts were called ‘The Fireside Chats?’

Fireside Chats ‘I can assure you that it is safer to keep your money in a reopened bank than under the mattress’ Why were people hiding their savings under their mattresses? Which Law did FDR get Congress to pass which stopped banks going bankrupt?

Fireside Chats & Cycle of Prosperity

The Alphabet Agencies CCC: Civilian Conservation Corps. AAA: Agricultural Adjustment Administration. TVA: Tennessee Valley Authority PWA: Public Works Administration. WPA: Works Progress Administration NRA: National Recovery Administration. Separate PowerPoint's will be made on each of these agencies. The aim of this PowerPoint is to cover the theory behind the New Deal

Reversing the Spiral of Depression Government Spending $ More Pay = More Taxes Alphabet Agencies More Jobs Cycle of Prosperity! Democrats called this Process ‘Pump Priming’ More Jobs More goods have to be produced More Spending Demand for goods increases Why not print this presentation out using the print handout command and select 3 slides per page. The students can then make notes as they go along! Demand for goods increases More Spending More goods have to be produced More people with Jobs = more pay $

Reversing the Spiral of Depression

Summary Key Words In order to get a a grade ‘C’ upwards in exams, you must learn and use the key words & facts. These concepts will be awarded as key ‘knowledge.’ Spiral of Depression Cycle of Prosperity Fireside Chats Emergency Banking Act Alphabet Agencies Pump priming AAA, CCC, TVA, NRA, WPA & PWA

Exam Question 1 ‘Let me first of all state my firm belief is that the only thing we have to fear is fear itself. This nation asks for action, and action now. Our greatest task is to put the people to work… It can be achieved in part by the government itself creating jobs’ Use you own knowledge to say whether the source fully explains why the New Deal was introduced.

Mark Scheme Level Grade Description 1 E Simple undeveloped answer. 2 D Uses or combines information from the sources. 3 C/B Uses sources & own relevant knowledge / concepts. 4 A/A* Balanced answer covering both parts of the question

Level 4 = an answer which includes one from each column. For Against Unemployment caused by depression ‘Fear’ = loss of confidence which results in a drop in demand. ‘Action’ because Hoover did nothing to end the Spiral of Depression.’ No mention of Hoovervilles, Breadlines or problems of the farmers. No mention of Banking Crisis caused by fear & panic. Level 4 = an answer which includes one from each column.

Exam Question 2 This cartoon shows one of FDR’s methods of trying to deal with the Depression. How useful is this source to explain what action FDR took to end the Depression?

Level 4 = an answer which includes one from each column. Question 2: Level 3 For Against No mention of the Alphabet Agencies: CCC, AAA, TVA, NRA, PWA & WPA. Pump Priming to reverse the spiral of depression No mention of Beer Act which ended prohibition to create jobs and raise taxes to pay for New Deal. Fireside Chats’ introduced to tackle ‘Fear’ which was resulting in a loss of confidence led to people not spending money & ‘Spiral of Depression.’ ‘Banking Crisis,’ FDR used Fireside chats to restore public confidence in the reopened banks. Level 4 = an answer which includes one from each column.