Great Depression & the New Deal

Great Depression & New DealCauses of G.D. * Economic downturn starts in 1927 * Spent faster than wages rose, bought on credit, manufactures cut back * Stock Market Crash o $30 Billion lost overnight o Exposed weakness in the economy o Farm products sold at low cost o RRs and Coal industries went into bankruptcy o Unequal distribution of wealth * Impact on Banks o Invested Private money in the market o Closed their doors Aftermath of the Crash * GDP fell, consumption dropped o 9,000 banks failed; 100,000 businesses went under * Hawley-Smoot Tariff; highest protective tariff ever o International and national economy shut down o Worldwide depressionPresident Hoover * His "Final triumph over poverty" o Volunteerism o Maintain wages and production * Failures of the Hoover administration o "American Way" Direct relief verse private charity o Reconstruction Finance Corporation (RFC) Too cautious, Dem's against o Federal Farm Board o "Bonus Army"FDR and the New Deal * FDR Elected in 1932 * 20th Amendment; moved inauguration to January (because of Hoover) * From classical to regulatory, to "Social Welfare" liberalism o Financial and bureaucratic resources of the state and federal government to help individuals and business o New Deal and the "Hundred Days" * First action: The Banks o Temporarily closed all banks; Bank Holiday o Emergency Banking Act: Inspected all the banks o Glass-Stegall Act created the federal deposit insurance corporation (FDIC) * 21st Amendment; repeals Prohibition * FDIC * CCC: Roosevelt's answer to the environmental and economic challenges facing the country * TVA: Southern Dem's and Progressives * AAA: Agricultural legislation was "the key to recovery" * NIRA and the NRA * FERA * PWA * CWA * SECAttacks of FDR & New Deal * From Republicans o "Liberty League" Lobbied against all the spending of the "Socialist" new deal * From Democrats o FDR not going far enough o Francis Townsend and Old Age revolving pension plan o Francis Charles Coughlin, the "Radio Priest" wanted to nationalize banking * From Supreme court o NIRA Unconstitutional o Struck down by AAASecond New Deal * Revenue act of 1935 o Increase taxes on corporate profits and wealthy citizens o Put money in hands of consumers * Wagner Act * Social Security Act * Works Progress Administration