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The History of the New Deal


The History of the New Deal. The Stock Market Crash. The Great Depression ... The Dow Jones Industrial average soared and many people were buying stocks in ... – PowerPoint PPT presentation

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Title: The History of the New Deal

The History of the New Deal
  • The Stock Market Crash
  • The Great Depression
  • The New Deal

The Roaring Twenties
  • A time of much prosperity after WWI.
  • Industrialization and technology was increasing
  • Radio and automobiles came on the scene in daily
    life, and air travel became more common.
  • The economy was booming.

The Roaring Twenties
  • Jazz music because very popular.
  • Baseball became Americas past time.
  • Flapper fashion was all the craze.

President Hoover
Possible Causes of the Depression
  • Poor distribution of wealth. No one can afford to
    buy anything.
  • The cost of WWI. Most of the loss was paid in
  • It is all a conspiracy man. Some believed it was
    bankers fault, others blamed Jews, Communists,
    and other minority groups- take your pick.

  • President Herbert Hoover comes in office.
  • In May there is a bump in the stock market. In
    June July following bumps occur and Hoover does
    nothing. He feels the market will settle on its
  • The rise and fall of the market was due to too
    many people selling stocks at once.

Trusts formed
  • People would join together, buy up a ton of a
    companys stock, and then sell all the stock at
    once- creating a drop in the market. The people
    in the trust make a lot of money off of this
    during 1929.
  • Since this time insider trading and stock trusts
    have become an illegal practice

A little info on stocks
  • The stock market was excelling. The Dow Jones
    Industrial average soared and many people were
    buying stocks in the countries largest companies.
  • From 1921 to 1929 the Dow Jones went from 60 to

Dow Jones?
  • Its complicated, but to simplify its
    explanation The Dow Jones Industrial Average is
    a stock market index that represents stock prices
    of its components and dividing by the number of
    stocks. The remaining value represents the
    average price of a stock represented in the
    index. Usually only the top companies are
    represented by this index.

Dow Jones in the 1920s
  • There were 30 stocks represented by the index in
    1928, the height of the Roaring Twenties.
  • This time period was seen as a Bull Market or a
    time when investors confidence in the market is
    good and so investors buy stocks hoping for later
  • A lot of money was invested into the stock market
    and the New York Stock Exchange was the largest
    stock market in the world.

Thursday, October 24, 1929
  • Stock market goes into a panic selling mode.
  • High volumes of trading occurred leading up to
    this day.
  • Following the trading, recovery and high prices
  • The market was incredibly unstable.

Black Tuesday
  • Occurred on October 29, 1929.
  • 16 million shares of stock were sold that day.
  • The market dropped 40 points.
  • This equals approximately a 14 billion loss in
    one day. At the end of this week the market had
    lost 30 billion dollars.

What happened next?
  • It was not just individuals who invested in the
    stock market. Banks as well had invested in the
    stock market, and with the crash these banks lost
    all of their depositors money.
  • Many peoples life savings, retirement funds,
    etc. were all lost due to the crash.

  • When the public discovered that many banks were
    going under, people ran to their banks in mass
    numbers and withdrew all their funds. This added
    to the problem for the overall market.
  • Some people dealt with this by burring money in
    their backyard, others (primarily the
    aristocracy) by committing suicide by jumping off
    of buildings.

Hoover problems
  • President Hoover believed in a belief of
    economics that if the market were left alone, it
    would adjust itself.
  • He did not feel government intervention into
    private businesses was the answer to the problem.

Bonus Marchers
  • WWI vets secured a bonus calculated at 1 a day
    for stateside vets and 1.25 a day for overseas
    vets for each day they served. This maxed out at
    500 stateside and 625 for overseas vets.
  • Vets were not supposed to get this bonus until
    1945, but vets decided they wanted it now to help
    ease their Depression woes.

Bonus March
  • Beginning in May of 1932, marchers from across
    the country began their quest for Washington.
  • They traveled by train, bus, car, or any means
    they had to get there.
  • By mid-June approximately 20,000 veterans and
    their family members in D.C.

What happened?
  • The senate refused to pay the marchers.
  • The marchers lived in shanty huts, called
    Hoovervilles, and refused to leave.
  • On July 29, 1932 federal troops stormed the
    hooverville camps and burned them down and
    removed the marchers by force.
  • One veteran died and many more were injured.

Burning Hooverville
Farm Holiday Association
  • Hoover initiated a program to insure the prices
    of food would stay high enough for farmers to
    afford to keep their farms.
  • This program called for farmers to burn the
    surplus of their crops.
  • Needless to say, the starving and unemployed were
    outraged at this idea.
  • This program in effect had no outcome on food

How did things change?
  • In the 1932 presidential election Franklin Delano
    Roosevelt, or FDR, was elected by a large
    majority of votes. Everyone was fed up with
    Hoover not doing enough to help the nation. FDR
    came into office in March of 1933 with a plan he
    called The New Deal.
  • The New Deal Video!

Its time to change
  • The American people needed answers and change.
  • By the time FDR came into office in March of 1933
    there were approximately 13,000,000 people
    unemployed in America and many banks had closed.

First 100 Days
  • In FDRs first 100 days as president he and
    congress began to enact many programs to lift the
    country out of the Great Depression.
  • These programs have been referred to as an
    alphabet soup of programs since most are known by
  • Lets look at some of these programs

Bank Holiday
  • FDR called for an emergency session of congress
    upon taking office.
  • FDR proposes and passes a bank holiday were all
    banks close for 7 days.
  • During this time banks had to organize their
    books and restructure themselves.

Tennessee Valley Authority (TVA)
  • The TVA was one of FDRs biggest achievements,
    and it is still in place today.
  • It used 4 billion to make hydroelectric dams and
    help the Tennessee Valley area to create and sell
  • TVA is a self-sustaining organization, meaning it
    pays for itself.

Civilian Conservation Corps. (CCC)
  • FDR promised 250,000 jobs by July with this
    program and exceeded it.
  • Young men got jobs in the CCC planting trees and
    doing work in state parks, doing many outdoor
    construction, forest firefighting, building
    schools, post offices and other municipal city
    buildings in communities across the country.

  • In the CCC young men earned 30 a month, and were
    made to send 25 home to their families.
  • Over 72 million dollars went into this program.
  • A CCC camp in a community raised approximately
    5,000 a month that would go into the community
    from the young workers spending money. There was
    at least one CCC camp in each state.

Agricultural Adjustment Act (AAA)
  • Put in place to solve farming crisis.
  • Paid farmers not to overgrow crops.
  • It allowed for the government to buy the surplus
    of crops and for farmers to afford their land.
  • This was a very popular program with farmers,
    however it was not very popular with others.

Public Works Administration (PWA)
  • Gave jobs to build schools, post offices,
    hospitals, roads, bridges, and tunnels.
  • The PWA is the biggest of the programs in the
    first 100 days. 3.3 billion went into this

Security Exchange Commission (SEC)
  • Created to watch the stock market and to regulate
  • This program made the stock market transparent
    and under control.

Federal Deposit Insurance Corporation (FDIC)
  • Protected depositors for up to 100,000 of their
  • The FDIC guaranteed deposits in commercial banks
    and helped restore the faith of Americans to use
    banks again.

So, did The New Deal help?
  • Yes, but it wasnt 100 effective. It got people
    working, banks organizing, and provided relief
    for farmers.
  • It took until 1955 (26 years) for the Dow Jones
    to surpass its 1929 high before the crash.
  • With the New Deal programs and the onset of WWII
    the country was able to begin its journey out of
    financial downturn.

Some things to study
  • New Deal programs the bank holiday, TVA, CCC,
    PWA, FDIC, and SEC.
  • Differences between the way Hoover handled the
    Depression vs. how FDR did.
  • How the crash of the stock market was a precursor
    to the Great Depression.

Sites Used
  • The History Place. "Presidential Portraits." The
    History Place. Available from http//www.historypl
    Internet accessed 22 October 2007.
  • "Stock Market Crash." Available from
    Internet accessed 22 October 2007.
  • "The Sad Tale of the Bonus Marchers." Available
    from http//
    Internet accessed 22 October 2007.
  • YouTube. "The New Deal." YouYube. Available from
    Internet accessed 22 October 2007.