1. The Great Depression and The New Deal

2. What is The Great Depression and The New Deal?
The Great Depression was a period during when the United States faced a economical crisis.
The New Deal was the solution to the economical crisis.
(Right) Herbert Hoover Us president during The Great Depression. (Left) Franklyn D. Roosevelt US president that propose The New Deal.

3. Key Terms: The Business Cycle
Before World War I the US economy was in expansion. In the Twenties was in the peak. In the Great Depression was in recession.
Rising Production, employment, and income.
Declining production, employment, and income.

4. Key Terms: Fiscal Policy and Types of Policies
Use of the government spending and revenue collection to influence the economy. The fiscal policy is important because influence economic growth, control employment rates and maintain price stability.
Expansionary Policy
Decreases taxes and increases spending to increase growth or to prevent or reverse a recession.
Contractionary Policy
Decreases spending and increases taxes to slow the economy in times of increasing demand and inflation.

5. Causes of The Great Depression
Overproduction and undercomsuption of agricultural crops
Uneven distribution of income
Gradual accumulation of consumer debt
Widespread stock market speculation

6. Overproduction and underconsumption of agricultural crops
Farmers contracted debts by bought costly tractors and other modern equipments.
After war demand for American crops felt. They can’t sell their crop surpluses and pay their debts.
They don’t have money to buy new American goods.
The Great Depression began in the rural zone. Many families lost their farms and leave.

7. Wealth is Distributed Unevenly
Corporate investors generate higher profits that the workers.
Workers can’t buy all the new American goods and the rich can’t buy it all.
The problem was that the fabrics were producing more than the people need or can buy.

8. Gradual Accumulation of consumer debts: Easy Credit Hides Problems
Americans bought automobiles, appliances, radios and other goods on credit.
They were accumulating debts. When they loose their jobs they couldn’t pay their debts and the banks wouldn’t recuperate their loans.

9. Widespread stock market speculation
Investors were gambling with money that they didn’t have, on stock increases to turn quick profits.
Black Thursday:
October 24, 1929
Nervous investors began to sell under price because they fear that the stock market will felt. For example, General Electric actions were sold by $283 when the real price was $400.
Black Tuesday
October 29, 1929
Investors pull their money from the stock market. Billions of dollars were lost.
This day is also know as the Great Crash.

10. Effects of The Great Depression
Banks and business fail
Unemployment soars
Personal incomes shrink
Countries enact high tariffs to protect their products from foreign competition; world trade declines
American loans to Europe dry up

11. The Banks Collapse
3, 691 banks fail. Federal Reserve limited the money supply, that mean no cash circulating. The people loose their savings.

12. Business Close and Unemployment Rises
Companies, including Ford Motors, began closing plants. By 1933, nearly 25% of all American workers had lost their jobs.

13. Tariffs Add to Woes
Hawley-Smoot Tariff 1930 raises prices on foreign imports. European countries also adopted protective tariffs. So, Europeans wouldn’t buy American products.

14. Depression Goes Global
Americans can’t invest in loans to European nations, Europeans can’t rebuilt their cities and pay their debts.
US investors have little or no money to invest abroad.
European nations cannot pay off war debts.
European production plummets.
Europeans cannot afford American goods.
US profits plummet.
Worldwide Depression

15. Consequences to Americans
Americans Face Hard Times
Consequences to Americans
Misery and despair grip America’s cities the people began to suffer starving and became homeless. They felt that the American Dream was betrayed by their economical system.

16. The New Deal
Roosevelt's plan to Relief, Recovery and Reform

17. First New Deal:
Relief and recovery from the immediate hardships of the depression and achieve a long-term economic recovery.
Reforms to prevent future depressions.

18. Projects Federal Deposit Insurance Corporation (FDIC)
Guaranteed bank deposits up to $5,000 to ease banking crisis
National Recovery Administration (NRA)
Establish codes to regulate wages and prices, stimulate consumer activity, and promote fair competition
Securities and Exchange Commission
Regulates the stock market and restored investor confidence
Civilian Conservation Corps (CCC)
Provided jobs for millions of young single men on conservation projects
Public Works Administration (PWA)
Sponsored large-scale government construction projects to create new jobs and improve the nation’s infrastructure
Agricultural Adjustment (AAA)
Paid subsidies to lower production on farms and raise crop prices
Tennessee Valley Authority (TVA)
Built dams and hydroelectric plants in the Tennessee River valley to control flooding, generate power, and attract industry to the South
Home Owners’ Loan Corporation
Provide low- interest loans to homeowners who were unable to make mortgage payments

19. Second New Deal Projects to resolve elderly, poor and the unemployed problems.
Social Security Act
Established a pension system and unemployment insurance; provide payments to workers injured on the job, the poor, and people with disabilities.
Works Progress Administration
Employed millions of people on government projects ranging from highway construction to arts programs.
Rural Electrification Administration
Provide loans to electric companies to build power lines, bringing electricity to isolated rural areas.
National Labor Relations Act
Outlawed unfair labor practices; granted workers the right to organize unions and to bargain collectively; created the National Labor Relations Board.
National Youth Administration
Trained and provide jobs and counseling for unemployed youth between the ages of 16 to 19
Banking Act of 1935
Finalized the creation of the FDIC and made insurance for bank deposits permanent; created a board to regulate the nation’s money supply and interest rate on loans
United States Housing Authority
Subsidized construction of low-cost public housing by providing federal loans
Food, Drug and Cosmetic Act
Prohibited the mislabeling of food, drugs, and cosmetics and ensured the safety and purity of these products

20. Effects of The New Deal Immediate Efffects Long Term Effects
Banking system is stabilized.
Federal payments help farmers.
Work-relief programs provide jobs.
Social Security provides safety net.
New Deal helps to unify the nation.
Long Term Effects
Power of the presidency increases.
Government takes active role in the economy.
New Deal coalition is powerful political force.
Wagner Act protects workers and raises standard of living.
Minorities and women gain positions in government.