Stock Market Crash/Great Depression---Effects of New Deal

The Stock Market

Crashed on October 29, 1929, also called Black Tuesday

Marked the start of the Great Depression

Banks going bankrupt

Recalled loans and people began runs on the banks. Unemployment skyrocketed and wages decreased

The Dust Bowl

In the Midwest made it hard for farmers to grow food due to poor farming methods and sustained drought

Surplus of industrial goods

Caused countries to start trade wars by passing tariffs on imported goods which caused prices to rise

President Herbert Hoover

Tried to wait out the crash, so Americans blamed him for the crash

Bread lines and soup kitchens

Fed the poor. Homeless people created Hooverville’s or shanty towns

The Federal Reserve

Gave out many low interest loans allowing people to buy luxury items on credit which led to the Great Depression

SEC

Regulated the sale of stocks and oversaw the disclosure of information on stocks being sold

The Social Security Act

• Was signed into law by FDR in 1935

• Supported retirees over age 65

• Created unemployment insurance and welfare programs

• Was funded by workers and employers through payroll taxes

New Deal

Meant the government would try to protect the economy, the environment and the lives of ordinary people with government programs

New Deal programs

The 3 R’s

Relief: was designed to relieve the suffering of those most affected by the economy. They were designed to stop the Great Depression from getting worse and to create jobs (CCC, SSA, FERA, NYA)

Recovery: Programs were designed to help the economy recover some of what was lost int the months before and after the stock market crash

Reform: Programs were designed to reform certain banking and business policies so that the Great Depression could never happen again (TVA, FDIC, SEC, NLRA)

Fireside chats

Roosevelt communicated with Americans over the radio using this

Agricultural Adjustment Act (AAA) Recovery

May 12, 1933

Loans to farmers and payments not to produce crops or livestock

Civillian Conservation Corps (CCC) Relief

April 5, 1933

Forestry and conservation jobs for young single men

Fair Labor Standards Act, Reform

June 25, 1939

Labor and wages regulations including banning child labor, a minimum wage, a 44- hour work week, establishing overtime pay

Federal Deposit Insurance Corporation (FDIC)

June 16, 1933

Insured savings so people would not lose their money if banks closed

National Industrial Recovery Act

June 16, 1933

President had the power to regulate prices and wages

Wagner Act (NLRA)

July 5, 1935

Allowed workers to form unions and engage in collective bargaining; a National Labor Relations Board decided disputes between unions and employers

Works Progress Administation (WPA)

May 6, 1935

Created public works jobs such as repairing roads and bridges, building schools, and parks, creating works for public enjoyment and information which benefited artists and writes

National Youth Administration (NYA)

Began in 1933 and provided work and education for Americans 16-25

Tennessee Valley Authority

Began in 1933 and promoted development projects for the Tennessee River Valley

Federal Emergency Relief Association (FERA)

Began in 1933 and provided grants to states to provided grants to states to provide direct relief to those in need

Laissez-faire

The US had this economy. Progressive reforms addressed the relationship between employers or industries and workers. The Great Depression raised the issue of the role of the government in directing the conomy

Command economies

Are controlled by the government which decides who will produce what for whom and when and for what price. They do not respond to consumer demands

Socialism

Also created a command economy but does not assign workers their jobs

Keynesian economics

Thinks the government should adopt policies to encourage full employment. A government should spend money on education, infrastructure, and unemployment benefits. This practice requires deficit spending

Deficit Spending

Can cause inflation, an increase in prices

The Supreme Court

Struck down the National Industrial Recovery and the Agricultural Adjustment Act as unconstitutional. Roosevelt wanted to Pack the Court by adding justices that would support his policies. Americans did not support Roosevelt’s Court Packing Plan

The New Deal

• Allowed the federal government a greater role in the economy and grew the size of the government

• Failed to end the Great Depression. The Federal Reserve raised interest rates which hurt the economy in 1938

African Americans

Experienced the highest ration of unemployment, but Roosevelt established a committee of civil rights organization to help include African Americans in the New Deal programs

Great Depression & WWII

Allowed media and government to develop a relationship as institutions traded access for information