The New Deal

1
The New Deal

• Causes of the Great Depression

2
Stock Market Speculation
During the 1920s, the United States experienced
a strong bull market (a market where stock prices
are rising). When the stock market crashed on
October 29, 1929, stock prices fell, and the
majority of investors tried to sell all of their
investments. Most of the investors received
pennies on the dollar for their stocks. Others
lost all of their money in stocks. People holding
savings accounts became worried that they would
not be there when the bank experienced so much
loss of cash. They ran to the bank in huge
numbers and withdrew all of their money. As
people pulled their money out, the banks
foreclosed. Businesses closed because they could
no longer borrow money to cover their expenses.
As a result, workers lost their jobs, and
unemployment skyrocketed. This led to a long
period of high unemployment and increased poverty
called the Great Depression (1929-1941).
3
Collapse of Farm Economy

• The biggest problem for farmers during the 1920s
  and 1930s was that they produced more food than
  consumers needed.
• These surpluses drove down prices to the point
  that the harvest could no longer pay for the
  farms operation.
• Between 1933 and 1936, the land between the
  Dakotas and Texas received little rain.
• The huge dust storms blew all of the topsoil away
  know as the Dust Bowl.
• They left their homes by the thousands and moved
  to the Pacific Coast looking for work, further
  aggravating the problems of unemployment.

4
President Hoovers Administration (1929-1932)

• Elected during a time of economic prosperity,
  Republican Herbert Hoover (1874-1964) received
  all of the blame when the economy was thrown into
  depression.
• Between 1929 and 1933, 85,000 businesses shut
  down, and 400,00 farmers lost their farms because
  no one had money to buy farm products.
• Outside the cities, people built communities of
  tents and shack called Hoovervilles.
• Childrens malnutrition rate rose from 18 to
  60.

5
Roosevelts New Deal

• With the help of Congress he instituted a series
  of federal polices and programs to boost the
  economy and put unemployed people to work, known
  as the New Deal.(1932)
• The New Deal was based on three Rs relief,
  recovery and reform.
• Under the Agricultural Adjustment Act (1933), the
  government gave loans to farmers, and the
  government paid farmers not to grow crops

6

• Congress created the Tennessee Valley
  Authority(1933). The TVA built hydroelectric dams
  to bring electricity to new parts of the South,
  including northern Alabama, and to provide
  employment and cheap electricity.
• The Social Security Act, (1935), provided
  retirement income for all workers once they reach
  age 65.
• The Wagner Act of 1935 created a board to monitor
  unfair management practices such as firing a
  worker who joined a union.
• The Fair Labor Standards Act,(1938), raised the
  minimum wage to 40 cents.

7

• Congress established the Civilian Conservation
  Corps in 1933.
• Congress established the Federal Deposit
  Insurance Corporation (FDIC) in 1933.
• Congress established the Works Progress
  Administration (WPA) (1935) to provide jobs for
  unskilled workers.

8
Cultural Developments

• Movies- Movie makers tried to revive peoples
  faith in the nation. Movies told positive,
  uplifting stories about happy families in
  affluent households.
• Radio- Households listened with great enthusiasm
  for the latest news and entertainment.

9
Totalitarianism

• In a totalitarian government one political party
  or group maintains complete control under a
  dictatorship and bans all others.
• The fear of communism caused people in Italy to
  support Benito Mussolini and his political ideas,
  which he called fascism.
• Japan- Japan responded to the growing popularity
  of democratic ideals by granting the right to
  vote to all males.
• Germany- As Germany suffered through the Great
  Depression, its people turned to the National
  Socialists also known as the Nazi Party, led by
  Adolf Hitler.
• The Union of Soviet Socialists Republics- Joseph
  Stalin forced many peasants from their own land
  to work on collective farms.

10
Rejection of Peace

• Sixty-three nations signed the Kellogg-Briand
  Peace Pact. The ratifying countries promised to
  use negotiations rather than war to resolve
  political differences, except for cases of self
  defense
• Italy, Germany, and Japan formed the Axis powers.
• Britain, France, and later The United States
  would become the Allied Powers.

11
World War II Begins

• Hitler invaded Czechoslovakia. In 1939 Hitler
  signed a non aggression pact with the USSR.
  Hitler invaded Poland.

12
United States Involvement

• In 1935 Congress passed the Neutrality Act.
• The Lend Lease Act gave the president the power
  to lend, lease, or sell war supplies to countries
  whose survival was vital the United States
  defense.