Depression and the New Deal - USA 1929-41

How serious was the Depression for the American people?
1. Background
  1. Import and export
    1. Tariff war
      1. Other countries raised tariffs to protect own economies
    2. Gold Standard
      1. Links exchange rate of a country's currency to the amount of gold in that country.
      2. Countries abandoned Gold Standard because exchange rates were ridiculously high
        Helped foreign economies by making American goods more expensive
        Damaged USA's economy
        Pound fell from $4.86 to $3.50
  2. Collapse of business and industry
    1. US exports fell - $10bn in 1929 to $3bn in 1932
    2. Industrial production fell 40%, 1/3 of farmers lost their farms
    3. Sales fell 50%, wages 60%
    4. Unemployment rose from 1.6m in 1929 to 12.1m in 1932 (2.3% fo the workforce to 23.6%)
  3. Timing
    1. Key weaknesses in economy
      1. Overproduction
      2. Unequal distribution of wealth
      3. Tariff policy
      4. Financial speculation
  4. Indebtedness of the economy
    1. Shares had been bought 'on the margin'
      1. Businesses which had lost money sacked people
        They defaulted on loan payments
        Banks went bankrupt
        Banks called in loans, especially overseas
        American depression became global depression
        Global imports fell from $125bn in 1929 to $35bn in 1933
        Other countries were dependent on American loans
        1924-1928 $6bn lent abroad
2. Human effects of the Depression
  1. Unemployment
    1. Reached 25% in 1933
    2. Black people hit worst
      1. In Charleston on 1931, 70% of black people of working age were unemployed. It was 75% in Memphis.
    3. Many people became hobos.
  2. Homelessness
    1. No dole payments
    2. In 1932, 1/4m people became homeless
    3. Set up shanty towns called 'Hoovervilles'
  3. The Bonus Army
    1. The army had been promised a 'bonus' in 1945 after WW1.
      1. In 1932, 20,000 war veterans set up a Hooverville outside the White House to protest against the governmen's refusal to pay up front.
        Troops used tanks and tear gas to clear them, and killed 2
        About 1000 injured
  4. Help from charities
    1. Al Capone provided food in Chicago
    2. Soup kitchens, bread kitchens, or cheap food centres
  5. Farmers
    1. Because no-one was buying, prices dropped so low it wasn't profitable to harvest
    2. 1930 dust bowl due to overfarming
    3. Many moved to California
  6. Limits to the Depression
    1. Empire State Building - 1931
      1. Hoover Dam -1936
        Golden Gate Bridge - 1937
    2. 'New Industries' prospered
3. Hoover and the Depression
  1. The 1932 presidential election
  2. Rugged Individualism
    1. Hoover did, however, try to help
      1. 1930 - taxes cut
      2. 1932 - Emergency Relief Act to help unemployed
How did Roosevelt deal with the Great Depression?
1. The New Deal
  1. The 'Hundred Days'
  2. Ending the banking crisis
  3. Agriculture
  4. Industry
  5. Unemployment
  6. The young
  7. Other measures of the New Deal
  8. The Tennessee Valley Authority
How far was the New Deal successful in ending the Depression in the USA?
1. Opposition to the New Deal
  1. The Supreme Court
  2. More opponents
2. The Second New Deal
3. Was the New Deal a success?
  1. The Second World War

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Depression and the New Deal - USA 1929-41

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