1. Chapter 24

2. Key Topics Causes and Consequences of the Great DepressionCauses and Consequences of the Great Depression The Politics of Hard TimesThe Politics of Hard Times FDR and the 2 New DealsFDR and the 2 New Deals The Expanding federal sphere in the S and WThe Expanding federal sphere in the S and W Legacies and Limits of New Deal ReformLegacies and Limits of New Deal Reform

3. The End of the Roaring Twenties 1920's had been a period of good economic times1920's had been a period of good economic times Tues. Oct. 29th, 1929 - NYC Stock market crashed, causing a depression that would last until 1942Tues. Oct. 29th, 1929 - NYC Stock market crashed, causing a depression that would last until 1942

4. The Stock Market Public Purchases stock in hopes of a large return on their investmentsPublic Purchases stock in hopes of a large return on their investments The booming 1920's economy, led banks to quickly make loans to investorsThe booming 1920's economy, led banks to quickly make loans to investors –investors only had to pay for 10% of the stock's actual value at time of purchase –BUYING ON MARGIN

5. Speculation STOCK SPECULATION - people would buy and sell stocks quickly to make a quick buckSTOCK SPECULATION - people would buy and sell stocks quickly to make a quick buck –Led stock value increase (Ex: G.E stock $130 $396/share) quick turnover didn't help companies they needed long term investments so they could pay bills (stock value was like an illusion)quick turnover didn't help companies they needed long term investments so they could pay bills (stock value was like an illusion) Unscrupulous traders would buy and sell shares intentionally to inflate a given co.'s stock valueUnscrupulous traders would buy and sell shares intentionally to inflate a given co.'s stock value Gave a false sense of security/confidence in the American marketGave a false sense of security/confidence in the American market

6. The Stock Market Crash In Oct. 1929, investors confidence dropped, leading to a market collapseIn Oct. 1929, investors confidence dropped, leading to a market collapse All tried to sell at once and bottom fell out of market = panic selling… (many bankruptcies as banks called in loans)All tried to sell at once and bottom fell out of market = panic selling… (many bankruptcies as banks called in loans) Only a tiny minority of people traded on the stock exchange, but they possessed vast wealth, and the crash had a ripple effect on the economyOnly a tiny minority of people traded on the stock exchange, but they possessed vast wealth, and the crash had a ripple effect on the economy

7. The Ripple Effect For the poor.......For the poor....... –mass consumption was already low (poor could afford to buy little) –unemployment rose no gov't assistance at first Unemployment Unemployment Purchasing Power Productivity

8. Major Problems 1. Over Production1. Over Production 2. Uneven Distribution of Wealth2. Uneven Distribution of Wealth –The middle class - they were not wealthy; they had jobs b/c of the industrialization & consumerization of the American market place depended on their salaries and when productivity declined they lost their jobsdepended on their salaries and when productivity declined they lost their jobs cut back on their purchasescut back on their purchases decline in consumption among the middle class influenced the whole countrydecline in consumption among the middle class influenced the whole country

9. Hoovers Response The gov't should play an active role in the economyThe gov't should play an active role in the economy VOLUNTARY NON - COERCIVE COOPERATIONVOLUNTARY NON - COERCIVE COOPERATION –tax breaks in return for private sector economic investment HOOVER MORATORIUM –HOOVER MORATORIUM – –put a temporary stop to war debt & reparations payments –Euro. countries were to purchase American goods instead to stimulate American economy –Tariff Wars

10. Americans React to Hoover Hoover was increasingly unpopular, but he continued to try... he persuaded Congress to establish the RECONSTRUCTION FINANCE CORPORATIONHoover was increasingly unpopular, but he continued to try... he persuaded Congress to establish the RECONSTRUCTION FINANCE CORPORATION emergency loans to banksemergency loans to banks Too little too late…Too little too late… –Hoover wouldn't involve himself in any programs of direct gov'tal aid to individuals - didn't want to erode Americans sense of "RUGGED INDIVIDUALISM Protest MovementsProtest Movements –Milk Dumping –Bonus Army –Hoovervilles

11. 1932 Election

12. FDR and the First New Deal A revolution in American societyA revolution in American society - changed completely the way the gov't functions First phase: economic reform –First phase: economic reform – – unlike Hoover, FDR believed gov't legislation/involvement was crucial to stimulate the economy Step 1 - dealt w/ the banking crisisStep 1 - dealt w/ the banking crisis –BANKING HOLIDAY

13. The First New Deal Step 2 - stock market reformStep 2 - stock market reform –Security Exchange Commission Step 3 - to put more $ in circulationStep 3 - to put more $ in circulation –went off the GOLD STANDARD circulation, wages and prices increasedcirculation, wages and prices increased Created Inflation, causing dollar value to lower- gave gov't spending power (Keynesian economics)Created Inflation, causing dollar value to lower- gave gov't spending power (Keynesian economics)

14. 100s Days and ABCs NATIONAL INDUSTRIAL RECOVERY ACT (NIRA)NATIONAL INDUSTRIAL RECOVERY ACT (NIRA) NATIONAL RECOVERY ADMIN (NRA)NATIONAL RECOVERY ADMIN (NRA) Response: LIBERTY LEAGUE –Response: LIBERTY LEAGUE – –the Supreme Ct. overturned the NIRA & NRA, claiming that fed. gov't was exceeding its authority (by interfering in state jurisdiction) Other Orgs…Other Orgs… –CCC, FERA, AAA, TVA, PWA –Priming the Pump

16. The New New Deal Unemployment still a problemUnemployment still a problem SOCIAL REFORM ASPECT-SOCIAL REFORM ASPECT- –immediate economic relief & reform addressed, New Deal turned to Social Welfare Social Security Act (1935)-Social Security Act (1935)- – feared by opponents as "creeping socialism"- this act typifies the WELFARE STATE - unemployment insurance, old age pensions –Problem: it took some $ out of circulation (payroll deductions) at a time when purchasing power was already low- also, it only covered the unemployed

17. Social Aspects Cont. National Labor Relations ActNational Labor Relations Act –legitimized unions and labor tactics – it outlawed BLACKLISTS & other anti-union practices

18. Election of 1936 FDR won easily (v Repub. Alf Landon - Kansas governor)FDR won easily (v Repub. Alf Landon - Kansas governor) –victory gave FDR a mandate to continue his New Deal policies First objective: to reorganize the Supreme CourtFirst objective: to reorganize the Supreme Court –they disallowed some New Deal legislation –Court Packing –New Appointments

19. International Issues In the late 1930's – new questions aroseIn the late 1930's – new questions arose –FDR concerned w/ int'l issues –in 1939 he proposed no new major domestic reform measures (1st time in his pres.) ELECTION OF 1940 - FDR broke with tradition & ran a 3rd timeELECTION OF 1940 - FDR broke with tradition & ran a 3rd time –FDR v. Wendell Wilkie - the big issue here was American support of the Allies (G.B.), now embroiled in WWII v. Nazi Ger. –both U.S. pol. parties wanted to support G.B. but to remain neutral - in fact a CONSENSUS had developed b/n the Dems. and Repubs. –both parties approved of (most) New Deal legislation & wanted an isolationist foreign policy- FDR won in 1940 (and again in 1944)

20. The Impact of the New Deal A 3rd revolution in American culture and politicsA 3rd revolution in American culture and politics – more gov't involvement but w/in the context of traditional U.S. democracy (not socialist…) New Deal helped in stimulating the U.S. economy, but only WWII would solve any lingering problemsNew Deal helped in stimulating the U.S. economy, but only WWII would solve any lingering problems – unemployed found jobs in munitions factories and the military as the U.S. became the ARSENAL OF DEMOCRACY New Deal saw expansion of U.S. gov't in :New Deal saw expansion of U.S. gov't in : 1) eco. - constant gov't intervention/deficit spending 2) social reform - welfare state - after this point the U.S. gov't was expected to play a role in any economic crisis So FDR fundamentally reformed (not transformed) American society.So FDR fundamentally reformed (not transformed) American society.

21. In the South and West…In the South and West… How did the New Deal reshape western communities and politics?How did the New Deal reshape western communities and politics? –What specific programs had the greatest impact on the region? The Impact of the New Deal

22. The Dust Bowl What were the reasons for this ecological disaster?What were the reasons for this ecological disaster?

23. Depression-Era Culture To what extent were the grim realities of the Depression reflected in popular culture?To what extent were the grim realities of the Depression reflected in popular culture? To what degree were they absent?To what degree were they absent?