The GD and New Deal Study

Great depression introduction:


What was the economy like?


  • There is no equal sign between the great crash and the great depression

  • Government was in the position of protecting the economy -> like tariffs 

    • But the government did not manage the economy 

  • Wealth is unevenly distributed, they fell disproportionately to different people

  • The agricultural economy suffered under deflation 

    • They suffered from low prices causing less money to come in so their purchasing power was depressed

  • Industrial workers face falling wages

    • Lower wages 

  • Consumer purchasing power is overall downwards

  • The great crash is not the cause

    • The cause is associated with structural weaknesses 


Causes of the depression:


  • Lack of diversification in the economy

    • Some sectors of the economy like construction and automobile construction but they are not diverse

  • Maldistribution of purchasing power

  • Nations credit structure is severely weakened

    • Many banks engaged in risky lending 

    • They are handing out loans or buying people stocks

  • International trade where tariffs are creating barriers to trade

    • This causes international trade to go down


Patterns of depression culture:


  • Those who were living in poverty blamed themselves

  • Gender role definition

    • Men are increasingly laid of at higher rates since they are more employed

    • American women are finding gainful employment in ways that are visible and invisible

    • Examples for women are like doing laundry and taking in boarders

  • The depression was “hard to see”

    • People in poverty self segregated

    • The development of hoovervilles

  • The desertion rate goes up

    • Men deserting their family thinking they were bringing their family down

  • Marriage rate goes down

    • People put off getting married

  • Birth rate goes down

  • National suicide rate goes up

    • For those living in poverty and economic insecurity

  • Divorce rate goes down 

    • Because of economic insecurity

  • Childhood malnutrition 


Hoover:


  • Many scholars said he was the most prepared 

    • In the first world war he was the one who was in charge of food relief

  • Hoovervilles: what happens under Hoover

    • Hawley smoot tariff

    • No direct relief

    • Eventually does the reconstruction finance corporation (RFC) -> around 2 billion dollars

    • By 1932 the situation has not gotten any better

    • Unemployment is up to 25%

    • U.S steels had 0 employees

    • Underemployment was huge, many people were lucky to have a job

    • The wages depressed


Roosevelt: 


  • 1932, 1936, Roosevelt in elected president 

  • In 1932 it is not clear what he is running on

    • He runs on a departure for republican policies

    • Roosevelt was born into a rich family

    • He eventually gets polio in 1921

    • He goes south in georgia to help get better -> he wants to be able to walk but never gets the chance to walk ever again

    • He concealed living in a wheelchair to the public

    • This forced him as a person born into class and status to have his personality shine

    • Always being the life of the room

  • He has pragmatic experimentalism

    • The idea that of trying new things now matter what

    • Ideological flexibility

  • He takes on a lot of action in the first 100 days

    • The first objective was to stabilize the economy specifically banking

  • FDIC: insures deposits in banks

  • Insures that if a bank fails your money is still there

  • The FDIC did not exist in the depression so when the banks failed, the money was gone

  • Liberalism: The idea the government was the protector of freedom


Passed Acts


  • 1933: Emergency banking act: banks have sound financial footing

  • 1933: Federal deposit insurance corporation (FDIC) 

  • 1933: NIRA (National industrial recovery act): Creates industry codes and standards

    • Section 7A: they try to give more power to unions

    • Declared unconstitutional in 1935

  • The PWA is created by the NRA: construction of hospitals, schools, bridges, etc. to reduce unemployment 

    • This is direct relief for those who are unemployed as you need to hire people to build these things

  • CCC (civilian conservation corp): Disproportionately white men where favored to get gainful employment from the CCC

    • These jobs have to do with the environment

  • AAA (Agricultural adjustment act): Offers relief to agriculture economy, trying to raise prices for farmer to increase purchasing power

    • Declared unconstitutional

  • TVA (1933) electricity distribution, job creator, and federal government in competition with private utilities