Great Depression

The End of The Economic Boom

What Led to the Great Depression?

The Wall Street Crash was the U.S. Stock Market crash of October 29, 1929, which precipitated a world-wide collapse of share values and triggered the Great Depression.Many investors had placed huge stock orders using money they borrowed from their brokers, called buying on margin. When stock prices fell, the brokers called in the loans. This cause many people to empty out their life savings to pay off their loan. The Stock Market Crash wasn't the only cause of the Great Depression; however psychologically, it destroyed confidence in the economy.

These were the results of the Stock Market Crash :

1. 12 million people were out of work.

2. 20,000 companies had gone bankrupt

3. 1 farmer in 20 were evocted

4. 12,000 people being made unemployed every day

5. 23,000 people commited suicide within one year

6. 1616 banks had gone bankrupt

1929 Wall Street Stock Market Crash

Hoover's Policies

Herbert Hoover promised the American people prosperity and attempted to first deal with the Depression by trying to restore public faith in the community. Hawley-Smoot Tariff charged a high tax for imports thereby leading to less trade between America and foreign countries along with some economic retaliation. Hoover proposed a moratorium on the payment of internal debts because both America and Europe were in debt. Federal Farm Board offered farmers insurance against loss of crops due to drought; flood; or freeze. It did not guarantee profit or cover losses due to bad farming. Reconstruction Finance Corporation was designed to provide indirect relief by assisting insurance companies, banks, agricultural organizations, and railroads. The Farm Holiday Association was formed by farmers that banded together to keep banks from foreclosing their farms. Bonus March consisted of 1000 unemployed veterans who were soon joined by many others to demand immediate payment of the bonuses promised them at a later date. Election of 1932 a fresh and energetic Franklin Delano Roosevelt ran against the hapless Hoover. FDR pushed his ambiguous "new deal", and the public ate it up. The election ended in a landslide for FDR.
Hoover announces his 1931 stimulus plan

FDR's New Deal

Franklin Delano Roosevelt was the only child of a wealthy New York family. He followed in the footsteps of his cousin Theodore, the only difference being that Franklin was a Democrat.In 1921 he was paralyzed by polio, he later gained full power of his upper body but needed assistance whenever he walked. Elanor Roosevelt was a great supporter of civil rights and opposed the Jim Crow laws. She also worked for birth control and better conditions for working women. FDR's New Deal was based off the three R's: Relief, Recovery, Reform. The first "R" was the effort to help the one-third of the population that was hardest hit by the depression, & included social security and unemployment insurance. The second "R" was the effort in numerous programs to restore the economy to normal health, achieved by 1937. Finally, the third "R" let government intervention stabilize the economy by balancing the interests of farmers, business and labor. There was no major anti-trust program.Between 8 March and 16 June, in what later became known as the "First Hundred Days," Congress followed Roosevelt's lead by passing an incredible fifteen separate bills which, together, formed the basis of the New Deal. The day after his inauguration, FDR declared a "bank holiday," closing all banks in the country to prevent a collapse of the banking system. With the banks closed, Roosevelt took measures to restore the public's confidence in the financial systems; when the banks reopened a week later, the panic was over. Civil Works Administration was created to reduce unemployment during the cold winter months of 1933; it spent $1 billion on short-term projects for unemployed manual laborers but was abolished in the spring of '34. Federal Housing Administration help stimulate the building industry through small loans to householders.
FDR New Deal

the 2nd new deal

Roosevelt mainly focused on the recovery of the nation to begin with.FDR's relief programs were the WPA and RA. Works Progress Administration was passed in April 1935, the WPA put unemployed people to work in public works projects across the country. It contained a much wider variety of programs than earlier agencies: theatrical productions (the Federal Theater Project) and writing projects (the Federal Writers' Project), as well as the construction of schools, playgrounds, and other public facilities. Resettlement Administration provided loans to sharecroppers, tenants and small farmers, also establishing federal camps for migrant workers to find decent housing. Reform consisted of both the Wagner Act and Resettlement Administration. Wagner Act helped create jobs for those that needed them. It created around 9 million jobs working on bridges, roads, and buildings. Rural Electrification Administration provided affordable electricity would improve the standard of living and the economic competitiveness of the family farm; created to bring electricity to rural areas like the Tennessee Valley; many opposed. The Social Security Act was a governmental legislation created to give money to those in need. It created a federal insurance program based on the automatic collection of taxes from employees and employers. In the Election of 1936 the candidates included Franklin D. Roosevelt from the Democratic Party and Alfred M. Landon from the Republican party. Alf Landon honest and wealthy man from Kansas lost greatly to the Democrat Franklin Roosevelt. He had stressed balancing the budget.The principal issue was how to exploit the New Deal's popularity. In the end, FDR won in a landslide victory.
The Second New Deal