The Great Depression N the New Deal


Causes and Effects of the Depression, 1929- 1933

Wall Street Crash

In 1929, what caused a collapsed in a business boom of the 1920s?

During the prosperous 1920s, the rising stock prices became both a symbol of the wealth, economy, and booming society ;on the stock exchange on Wall Street in New York City, the stock prices kept going up. Millions of people had invested in the boom market of 1928 and those millions lost their money and savings in 1929, when the sock market crashed.On Black Tuesday-October 24, 1929- there was an catastrophic sell on the Wall Street, and the stock prices were plummeting.While there was a strategy to buy millions of dollars of stocks to stabilize prices, this only work for one day and from that day on the Wall Street and the stock kept going down.

Causes of the Crash

While the collapse of the stock market in 1929 may have impacted the economic turmoil, it was the primary source for the Great Depression.May combination Factors resulted in the depression throughout the nation during the 1920s. Many factors included:uneven distribution of income, stock market speculation, excessive use of credit, overproduction of consumer goods, weak farmer economy, government policies, and global economic problems.


The U.S. Gross National Product dropped from $104 billion to $56 billions in four years and the nation's income by over 50 percent. 20 percent of all banks closed, wiping out 10 million saving accounts. 13 million people were unemployed by 1933. In the political field, Republican domination of government was at the end. Poverty and homelessness increased while stress on families, and unemployment reached a all time high.

Hoover's Policies

Responding to a Worldwide Depression

Europe's financial and economic center felt the repercussions from the crash of Wall Street. Due to the trades and the Dawes Plan for the war debts, European prosperity was closely tied to the United Stated.

Hawley-Smoot Tariff:In the summer of 1930, Herbert Hoover signed into law a schedule of tariff rates that was the highest in United States history. The law was known as the Hawley-Smoot Tariff, which was to satisfy the U.S business leaders who believed that a higher tariff would secure their markets from foreign competition.

Debt Moratorium: By 1931, Europe's and United States condition became so bad that eventually the Dawes Plan for saving war debts could no longer continue.Hoover proposed a suspension on international debt payments but the international economy suffered from massive loans defaults.

Domestic Programs: Too Little, Too Late

In order to pull the U.S economy out of its depression, Hoover signed law programs that offered assistance to unemployment, in-debt farmers, and struggling businesses.The Farm Board was created in 1929 to authorized help to farmers by stabilize prices by temporarily holding surplus grain and cotton in grain.In early 1932 the Reconstruction Financial Corporation was created as a measure for propping up railroads, banks, life insurance companies to would eventually stabilize key business.

Despair and Protest

In 1932, desperation from millions of unemployed workers and impoverished farmers fueled them to take forces in their on hands.In most communities, to stop banks from foreclosing on their farms and evicting them from their homes, farmers band together to form the Farm Holiday Association., which attempted to reverse the drop in price by stopping the entire crop of grain harvest .To demand immediate payment of the bonuses that was promised to them during the summer of 1932, a thousand employment World War I veterans marched in Washington D.C.

The Election of 1912

The depression’s worst year happened to be a presidential election year in 1932.Running as a presidential candidate,Roosevelt pledged a “new deal” for the American people, the repeal of Prohibition, aid for the unemployed, and cuts in government spending.As the results not only was the new president to be a Democrat but both houses of Congress were to have large Democratic majorities.For the four months between Roosevelt’s election and his inauguration in March 1933, Hoover was still president and was known as the lame duck.

Franklin D. Roosevelt’s New Deal

F.D.R: The Man

Franklin Roosevelt was the only child of a wealthy New York family who admired cousin Theodore and eventually in his footsteps as a New York state legislator and then as U.S. assistant secretary of the navy. Unlike Republican Theodore, however, Franklin was a Democrat.Roosevelt was paralyzed by polio in 1921 but labored instead to resume his career in politics and eventually regained the full power of his upper body, even though he could never again walk unaided and required the assistance of crutches, braces, and a wheelchair. Roosevelt’s greatest strengths were his warm personality, his gifts as a speaker, and his ability to work with and inspire people.

New Deal Philosophy

In his presidential campaign in 1932, Roosevelt offered vague promises but no concrete programs. While he did not have a detailed plan for ending the depression, but he was committed to action and willing to experiment with political solutions to economic problems.” During the early years of his presidency, it became clear that his New Deal programs were to serve three R’s: relief for people out of work, recovery for business and the economy as a whole, and reform of American economic institutions.In giving shape to his New Deal, President Roosevelt relied on a group of advisers who had assisted him while he was governor of New York. For economic trust, Roosevelt relied on a university professors, known as the Brain Trust, which included Rexford Tugwell, Raymond Moley, and Adolph A. Berle, Jr.

Other Programs of the First New Deal

Immediately after being sworn into office on March 4, 1933, Roosevelt called Congress into a hundred-day-long special session; Congress ,during this time, passed into law every request of President Roosevelt new laws and agencies that they were commonly referred to by their initials: WPA, AAA, CCC, NRA.The Civilian Conservation Corps (CCC) employed young men on projects on federal lands and paid their families small monthly sums.The NRA was an attempt to guarantee reasonable profits for business and fair wages and hours for labor.The Civil Works Administration (CWA) was added to the PWA and other New Deal programs for creating jobs. This agency hired laborers for temporary construction projects sponsored by the federal government.Most WPA workers were put to work constructing new bridges, roads, airports, and public buildings.

The Second New Deal


The reform legislation of the second New Deal reflected Roosevelt’s belief that industrial workers and farmers needed to receive more government help with legislation laws.A new agency, the National Labor Relations Board (NLRB), was empowered to enforce the law and make sure that workers’ rights were protected.Rural Electrification Administration (REA) agency provided loans for electrical cooperatives to supply power in rural areas.Federal taxes. A revenue act of 1935 significantly increased the tax on incomes of the wealthy few; It also increased the tax on large gifts from parent to child and on capital gains.

The Social Security Act

Social Security Act created a federal insurance program based upon the automatic collection of taxes from employees and employers throughout people’s working careers. The Social Security trust fund would then be used to make monthly payments to retired persons over the age of 65;also . Also receiving benefits under this new law were workers who lost their jobs, persons who were blind or otherwise disabled, and dependent children and their mothers.

The Election of 1916

Because of his New Deal programs and active style of personal leadership, the president was now enormously popular among workers and small farmers. Business, however, generally disliked and even hated him because of his regulatory programs and pro-union measures such as the Wagner Act.Upon the election of 1916, Alfred Landon challenged Roosevelt and criticized the Democrats for spending too much money.The results were that Roosevelt swamped Landon with more than 60 percent of the popular vote. Behind their president’s New Deal, the Democratic party could now count on the votes of a new coalition of popular support.

Great Depression Pictures