The Depression and New Deal. The Stock Market Crash and Underlying Causes of the Depression Why does...
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The Depression and New Deal
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The Stock Market Crash and Underlying Causes of the Depression
• Why does the 20s bull market collapse?– Inflated stock values– Borrowing to buy stocks – Stock Market Crash – October 1929
• Underlying economic weaknesses– Durable goods and construction – Corporate profits vs. wages– Consumer indebtedness– Banking and stock-brokerage– Agricultural sector weakness– High Tariffs
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Ecological Disaster
• The “Dust Bowl”
• Agricultural prices (1929-1932)
• Foreclosures and farm abandonment“The farmers are all in the same class. Broke—financially, underfeed.[sic] —under clothed, all have the blues and
disgusts.” --John A. Garner
• Hitting the Road – “Okies”
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Minorities and the Depression
• Mexican-Americans– Unemployment rates– Forced repatriation
• African-Americans– Unemployment rates– Lynchings “create vacancies”
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Contrasting Approaches to National Emergency
Herbert Hoover and voluntarism”
Franklin Delano Roosevelt
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Roosevelt’s New Deal
• Bank Holiday and Emergency Banking Act
• Agricultural Adjustment Act (AAA)
• Federal Emergency Relief Administration
• Civilian Conservation Corps
• National Youth Administration
• Works Progress Administration
• Social Security Act
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Assessing the New Deal
• Expansion of Federal Spending
• Transformation of State Bureaucracies
• Establishment of a welfare state
• Maintenance of American income levels
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Expansion of Government
• Government spending on public aid (all levels)– 1913-- $21 million
– 1932-- $208 million
– 1939-- $4.9 billion
• Public Aid as percentage of all government expenses– 1913-- 1%
– 1933-- 6.5%
– 1939-- 27.1%
• Per Capita spending on public aid (all levels of government)– 1913-- $.22
– 1939-- $37.80
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Unemployment and Wages
Year Pct.
1929 3.2%
1930 8.7%
1931 15.9
1932 23.6%
1933 24.9%
1934 20.1%
1935 16.9%
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Going West
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Civilian Conservation Corps (CCC)
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FERA canning operation
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Waiting for Relief Checks