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The Great Depression &
The New Deal:
Relief, Recovery, & Reform
Economic Depression
• Stock Market Crash – 1929
• High Unemployment (Avg. 25-30%)
• Dust Bowl
• Banking Collapse
• People wandering from city to city to find work
• Dismal situation
• Pres. Hoover = laissez faire economics
Dust Bowl Map
Causes:
• Drought
• Poor
agricultural
practices
• Overproduction
• Flat landscape
Psychological Depression
• Sense of hopelessness
• People didn’t see any way out
• Suicide
• Abandonment of families
• Feeling of failure
What caused it?
• Huge consumer debt
• Buying on Margin
• Overproduction
• No government regulation of the stock market or big business
• All of this leads to economic collapse
Background on FDR • Franklin Delano Roosevelt
is elected POTUS in 1932 (serves from 1933-1945)
• Originally from New York
• Very prideful, confident
• Marries his 4th cousin, Eleanor
• Has an affair with her secretary, Lucy Mercer
• Marriage evolves into business partnership
• Served in the NY State Assembly as a young man until he became ill with polio
FDR Faces Illness
•Left him unable to use his legs; led to a very deep depression; felt that his career was over
•Eleanor keeps his political career alive
Becoming President • Elected as New York’s
Governor in 1928
• Four years later elected as POTUS
• Promises a New Deal for America
• New role for the Federal Gov’t
• Active participation in the economy
• Alphabet programs
• Closest we’ve ever come to ―socialism‖
John Maynard Keynes
• Keynesian Economic
Theory
• Economic slowdown,
increase gov’t
spending (deficits) &
cut taxes
• Rapid economic
growth, raise taxes &
cut spending
The New Deal
2 phases:
• 1st New Deal ~ 1933
• 2nd New Deal ~ 1935
• FDR = completely
opposite philosophy of
Hoover—gov’t will act!!!
(First 100 days)
• Regulation of the banks
• FDIC insured accounts
• Restore faith in the
banking system
Alphabet Programs/Agencies
• CCC = Civilian
Conservation Corps
• TVA = Tennessee
Valley Authority
• WPA = Works
Progress
Administration
• SEC = Securities &
Exchange Comm.
TVA Map
Additional New Deal Programs
• AAA (Agricultural Adjustment Act) = farm subsidies
• Rural Electrification Act
• Wagner Act = joining a union is a right
• Fair Labor Standards Act
Psychology of Recovery
• 21st Amendment = Repeals prohibition
• Gov’t actions = gives people hope
• At least the Prez was doing something to help
• Fireside Chats = directly talk to the people
The New Deal Legacy
• Many programs exist
today (Social
Security)
• Public Projects
(Grand Coulee Dam)
• Most importantly:
changes the role of
gov’t forever (pro-
active)