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)