The Great Depression and New Deal – A Visual Summary Causes 1. 2. 3. 4. 5. 6. Problems in agriculture and some industries (mining, textiles, railroads) Unequal distribution of income and wealth Too much inventory (consumer goods that did not get purchased) Too much debt (buying items on credit – installment buying) Stock market speculation and buying on margin Politicians believed that the growth of business should occur with little government interference (laissez-faire). Thus, the government took no action against unwise investing or overspeculation. Great Depression and its Effects • • • • • • Black Tuesday – October 29, 1929 – NYC Stock Market Crash Bank and business failures High unemployment Hunger and homelessness Farm foreclosures Bonus Army and Hoovervilles Hoover’s Response • • • • • More conservative approach Did not interfere in the economy Rugged individualism – people should rely on themselves, not the government for relief and recovery Encouraged charity Limited, late relief efforts A Hooverville FDR is Elected (1932) – The New Deal • • • • • More direct and aggressive government involvement and aid Relief for the hungry and jobless Recovery for agriculture and industry Reforms to change the way the economy worked Methods: Fireside Chats Hundred Days Alphabet Soup Agencies (i.e., CCC, TVA) Second New Deal Long-Term Effects • • • • • Fear of the future by Americans More influence by the Federal Government Increased presidential power Long-term government programs (i.e., Social Security & FDIC) Ongoing debate / conflict between conservatives and liberals (Republicans and Democrats)
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