The Great Depression

Hoover and FDR’s Handling of the Crisis

The Stock Market

Dow-Jones Industrial Average: measures values of 30 widely held stocks on the New York Stock Exchange.

New York Stock Exchange: can be traced back to 1789 when George Washington called for the sale of $80 million in bonds. The exchange is where approximately 1700 of the nations top companies, such as General Electric and General Motors.

Bull Market: Prices are going up in market-seller’s market

Bear Market: Prices decline and a buyer’s market.

The Crash in 1929

Black Thursday, October 24, 13 million shares sold Monday, October 28, J.P. Morgan and others buy

stock to try and stop slide. Black Tuesday, October 29, 16 million shares sold. Within 2 weeks there had been a loss of $30 billion.

This equals the total amount of wages for the entire U.S. in 1929!!!!!!!!!!!!

1.5 million investors were in the stock market. RCA $101 in 1929 and $2.50 in 1932! Many lost

everything and some profited from lower prices. Impact of the Crash????

Herbert Hoover 1929-1933

Special Session of Congress:Farm relief & tariff (April 1929)

Agricultural Marketing Act Agricultural Coops and stabilization corporations $500m loans; limit production 1931 ends purchasing & 1933 terminated $180m

Decentralized work relief: National voluntary self-help programs “individual & local responsibility” $100-150m public works construction

Herbert Hoover’s Views

The Rugged Individual Welfare was a local and a private matter Free enterprise capitalism was best Direct handouts from the government could cause a

loss of self-respect He vetoed Garner-Wagner Act which would have

provided direct relief and the Norris Bill which would have sold electricity in competition with private companies

First elected office was president!

Hoover (cont.)

Hoover and the 18th Amendment Bonus for Veterans (1924) Hoover veto (Congress

overrides) government economy and issue of need by all Reconstruction Finance Corporation: Loans to banks and

railroads check deflation in agriculture and industry debt to $2b and pump priming principal

Relief and Construction Act RFC debt $3b $1.5b loans public works All public works had to generate revenue, e.g., dams for electricity or roads with tolls. $300m loan states for relief

Hoover (cont.)

Hawley-Smoot Tariff: Increase from Fordney-McCumber. Economists call for veto. Hoover signs it and 25 nations raise their rates. Some U.S. corporations move overseas to sell goods without tariff.

Federal Home Loan Bank Act reduce foreclosures, push housing construction, and encourage home ownership $125m

Democrats win control of the House of Representatives in 1930.

Bonus Army: Douglas MacArthur disregards Hoover’s orders

Election of 1932

FDR and the New Deal and the Democrats (472) and both houses!

From “Great” to Greater” as national income went from $81 billion to $41 billion.

20th Amendment & lame-ducks Economic crisis 1930-March 1933 5,054 banks ($3.5b) shut

down Toledo, Ohio provides meals for 2 cents-New York City

provides welfare for a family for $2.39 a week! Apples sold for 5 cents as surplus of apples in Northwest sell basket 100-120 apples for $1.75. Demand for selling apples results in price increase to $2.25 a crate. Now need to sell ½ of apples to make profit.

March 4 FDR gives his inaugural address. “The only thing we have to fear is fear itself.”

FDR’s First Inaugural Address

FDR & New Deal

100 days

FDR & the New Deal

Banking Holiday 4 days within week 75% fed. Reserve banks reopen…stocks up 15%

1st Fireside Chat Mar 12

Special Session Mar 9 The 100 Days

Relief & recovery Emergency Banking Relief Act

Economy Act 15% cut in govt. salaries & pensions and govt reorg.

Beer-Wine Revenue Act 4% $5 tax

1st New Deal

Civilian Conservation Corps 18-25 $1 diem

Federal Emergency Relief Act $500m $1 fed for $3 state/local grant NOT loan

Agricultural Adjustment Act (1)subsidy principle + processing tax

Tennesse Valley Authority electricity, fertilizers& explosives Muscle Shoals WW1 power plants & munitions $145m Construct 9 dams and develop economic and social well being of Tenn, KY, NC, VA, Miss, & GA

Public Works Administration roads, public bldg $4.2b 34,000 projects – pump priming

Glass-Steagall Act FDIC $5000 insurance

National Industrial Recovery Act industrial self-regulation and competition codes Section 7a labor’s right to organize for collective bargaining

Commodity Dollar $.66 gold fixed at $.59 Gold Reserve At

Civil Works Administration 4m employed ends 1934 180,000 projects $933m-$740 to salaries

21st Amendment ends 18th Securities Exchange Act & SEC Communications Act & FCC Home Owners Loan Corp:refinance $2b

bonds

The Fireside chats

2nd Phase New Deal (1935-1936) Works Progress Administration

8.5m, 1.4m projects $11b Construction & arts

Resettlement Administration homesteads & greenbelt towns Greenhills, OH

Rural Electrification Administration Lend $ 3% build electrical plants

Social Security Act Townsend/Long influence: unemployment, pension $10-$85 mos, grants for homeles and disabled

National Labor Relation over 50% union recog.

Revenue Act 75% $5m+ National youth Administration

(16-25) work relief for non school youth and part time for students

Re-election 1936

Supreme Court & FDR

Schecter v U.S. NIRA “intrastate” and executive power over legislative (1935)

Butler v U.S. AAA “processor’s tax”Judiciary Reorganization Act Justice 70

add 1 up to 6 “packing” the court

The Supreme Court

The court packing plan

Opponents to the New Deal

Dr. Townsend “Ham & Eggs” $200 month spend it all (2% tax)

Rev. Charles Coughlin “Radio Priest” attack international bankers, communists, and Jews and favor fascism and Hitler

Huey Long “Share Our Wealth Movement” $2,000 income & homestead or $6,000 for home nationalize banks no one over $10m Assassinated Sept 10, 1935

New Deal Phase 3 1938

AAA (2) “parity payment” fed govt $

Fair Labor Standards Act Minimum wage $.40 interstate work week = 44 hours children under 16 not work

END TO NEW DEAL

Reasons: Court packing, conservative, Europe & Asia

IMPACTS??