The Great Depression&New Deal
Causes and Effects of the Depression
- Wall Streets Crash was the rise of the stock prices that had become some sort of wealth during the 1920's. Stock prices kept rising for 18 months from march 1928 to September 29. A lot of people invested in the boom of the market of 1928 and lots of people lost their money in October of 1929 when the stock market collapsed.
- The causes of the crash had nothing to do with the Great Depression. Many people didn't get paid the same income as others most rich people received over 33 % of all income. Stock market speculation was another cause of the crash most people thought that they could sell a stock as soon as it went up to make a quick profit . Excessive use of credit also had a great toll on the stock market crash many people who didn't have the money to buy certain things would just put stuff on credit knowing that they probably would never have the money to pay those things back. As the depression continued the farm economy got weak bad weather and long droughts were some of the farmers difficulty. Government policies raised taxes that hurt farmers and international traders.
- Effects of the Crash came with a new world war to begin in 1939. The Great Depression had an influence on the way Americans thought. The U.S. Gross National Product the value of foods and goods produced in the nation in one year dropped from 104 billion to 56$ billion.
- President Hoover thought that the nation could get through the hard times if people took his advice about voluntary action and resistant. President Hoover didn't want businesses to cut wages , unions not to strike , and private charities to increase their efforts for the needy.
- The Wall Street Crash had an tremendous effect on financial centers of Europe the U.S. had to repay war debts and European prosperity was closely tied to the U.S. in June 1930 president hoover signed a document that made the tariff rates the highest in history. Congress set tax increase from 31 percent to 49 percent on foreign imports. The effect was to reduce trade for all nations , meaning that both the national and international economies sank further into depression. By 1931 things had gotten so bad in both Europe and the U.S. that the Dawes Plan for collecting war debts couldn't continue.
- By 1931 President Hoover was convinced that some government action was needed to pull the U.S. economy out of its doldrums. The farm board was created in 1929 before the stock market crashed. The board help farmers price goods by temporarily holding surplus grain and cotton. The reconstruction finance corporation federally funded government owned corporation was created by congress. The president convinced people that the emergency loans from the RFC would help them.
- By 1932 millions of people were unemployed and were in a state bordering on desperation. Many farmers banded together to stop banks from foreclosing on their farms or getting evicted from their homes. In 1932 thousands of employed world war I veterans marched to Washington D.C. to demand that they get paid immediately the bonuses that they were promised. Congress failed to pass the bonus bill that they wanted. The incident caused many Americans to regard president hoover as heartless and uncaring.
- 1932 was the depressions worst year, The democrats nominated new York governor Franklin D. Roosevelt for president and speaker of the house. Almost 60% of voters wanted a change , not only was the new president democrat but both houses of congress were to have a large democratic majorities.
Franklin D. Roosevelt New Deal
- President Franklin was a distant cousin of president Theodore and was married to Theodore's niece Elanor. Roosevelt would dominate the nation and the U.S. Government for an unprecedented stretch of time , 12 years and 2 months. Franklin was an only child of a wealthy New york family. Franklin admired his cousin Theodore and followed his footsteps to become state legislator. In the middle of franklins career he was paralyzed by polio in 1921, eventually he gained full control of his upper body even though he could never walk again. Eleanor emerged as a leader in her own right, she became the most active first lady in history.
- In 1932 president Roosevelt offered vague promises but no concrete programs. President Roosevelt had the 3R's relief for people out of work, Recovery for business and the economy as a whole , and reform of American economic institutions.
- Immediately after being sworn into office Roosevelt called congress into a hundred day long special session. Congress passed into every law that president Roosevelt requested. The president ordered that all banks close on an holiday.
- In late 1934 the democratic congress were easy to persuade to enact The Civil Works Administration, The Securities and Exchange Commission, The Federal Housing Administration.
The Second New Deal
- Roosevelt's first two years in office were focused on the 3R's. In the summer of 1935 the second new deal was made. Works progress administration employed million of men and women after its first year of opening under Hopkins. It paid double relief rates but less than the going wage of regular workers. One part of the WPA was to provide part time jobs to help young people stay in high school and college.
- The reform legislation of the second new deal stated that industrial workers and farmers needed to receive more government assistance than members of the business and privileged classes. The national labor relations was a major labor law of 1935 that replaced the labor provisions of the National Industrial Recovery Act.
- The Social Security Act was the reform that for generations afterward but it would affect the lives of nearly all Americans in 1935. It created a federal insurance program based upon the automatic collection of taxes from employees and employers.
- By the Election of 1936 the economy improved but still weak and unstable in 1936 when the democrats nominated Roosevelt for a second term. Alf Landon was challenging Roosevelt for president , Landon didn't like that democrats were spending so much money but accepted most of the new deal.
New Deal - 1930's Government Promotional Video (1of4)
The Social Security Act of 1935