The Great Depression

Causes

• Drop in farm income.

• Low factory wages.

• Worldwide depression.

• Underconsumption.

• Margin buying of stocks.

Business Cycle 1890-1940

Hoover’s Response

• Initial “wait and see” attitude.

• Government works programs.

• Reconstruction Finance Corporation

• Bonus March

Election of 1932

• Hoover - Rep.• Roosevelt - Dem.• “Prosperity is just…”• “New Deal for …”• Movement of Black

voters to the Democrats.

The New Deal

• Walked a tightrope between the extreme positions of the left and right.

• Pragmatic.• Piecemeal.• Try anything

approach.

Three Goals of the New Deal

Relief

• “The only thing we have to fear is fear itself.”

• Short range goal to help the immediate concerns of the nation.

Recovery

• Stable money. Regulating banks.

• Getting off the Gold Standard

Reform

• Banking.• TVA.• Labor

Effects of the Great Depression

• “value” of stocks drops from $87 to $19 billion.

• Steel production drops 80%

• All industrial output drops 50%.

• 500,000 homes and farms foreclosed.

• 1931 alone 2500 banks failed.

• Unemployment 33-40%

Psychological aspects, etc.

• Despair/ “Failure”• Mistrust• Hunger • Inadequate medical

care.• Living conditions.• Divorce rate goes

down.

Key legislation & creations

• Emergency Banking Act of 1933.

• Glass-Steagall Act• Agricultural

Adjustment Act of 1933

• National Industrial Recovery Act (NRA)

• Works Progress Administration (WPA)

• Frazier-Lemke Act.• Civilian Conservation

Corp (CCC)• Federal Emergency

Relief Act (FERA)• Home Owners’ Loan

Corporation (HOLC)• Tennessee Valley

Authority (TVA)• Wagner Act (NLRA)