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Hoover and the Great Depression

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Hoover and the Great Depression

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  1. Hoover and the Great Depression

  2. AP Outline • Depression, 1929-1933 • Wall Street crash • Depression economy • Moods of despair • Agrarian unrest • Bonus march • Hoover-Stimson diplomacy; Japan

  3. Hoover Key Terms • Great Depression • Stock Market Crash • Hoover's Response to The Crash • Chain Reaction-Unemployment-Bank Failures • Massive Suffering

  4. Causes of the Depression • Uneven Distribution of income • Stock Market Speculation- • Excessive Credit • Buying Stock on Margin • Over Produciton of Farm Goods

  5. Great Depression Suffering

  6. Okies and “Hooverville”

  7. Hoover’s Response • Hoover’s Initial Reaction: • Conservative Republican • Thought the poor economy would improve… • Just another temporary down turn • Government’s Reaction Made the Depression worse • Idea- Government cuts (spending) expenditures to balance the budget • Raised taxes • Cut spending • Significance-problematic action it took $ out of the economy

  8. Hoover Responses • No government interferencein the economy- • “The Dole corrupts society” no governments help in relief of unemployment • Volunteerism-private charities should help the needed • People should give to charity • Called bankers to bolster financial market • Called industrialist not to lower wages • “Bank Relief” • (RFC) Reconstruction Finance CorporationHoover did try to help and support banks and corporations by offering loans that would spur the economy. • No government deficit spending (he changes his mind in 1933 and begins deficit spending)

  9. Veterans of World War I Demonstrate, protest, camp out in Washington DC Hoover orders Army to remove protestors MacArthur and tanks are finally used The “Bonus March”

  10. FDR and The “New Deal”

  11. New Deal • Franklin D. Roosevelt • Background, ideas • Philosophy of New Deal • 100 Days; "alphabet agencies" • Second New Deal • Critics, left and right • Rise of CIO; labor strikes • Supreme Court fight • Recession of 1938 • American people in the Depression • Social values, women, ethnic groups • Indian Reorganization Act • Mexican American deportation • The racial issues

  12. Who is Franklin Delano Roosevelt? • Huge personality • Energetic • Self confident • Charismatic • Consummate politician • New York, Wealthy Family • Cousin to TR, Harvard Educated • VP Candidate 1920 • 1921 stricken with Polio- wheel chair • Under Secretary of the Navy, Wilson • Governor of New York 1928 thru 32

  13. Democratic Nomination • Gains nomination by bringing diverse groups together- • Steals the Nomination from Smith • # 1 factor in the election is ECONOMY

  14. Election of 1932 • FDR believed in Progressive ideals • The Government serves the people • Truly sympathetic to the disadvantaged • Government needs to reform business

  15. FDR pledged a new deal for America • "I pledge you, I pledge myself, to a new deal for the American people." FDR Democratic National Convention 1932 • “The Country demands bold persistent experimentation.” FDR • But never said what it would be or how it would work…

  16. Election of FDR

  17. Election Map of 1932

  18. FDR and Democrats win • Immediately Roosevelt calls together experts November –January • The “Brain Trust”- political, business and Intellectuals/Academics

  19. Key Idea • The New Deal represents the greatest expansion of Federal power in the history of the country. • The Federal Government will now take on the role of supporting Americans through regulation of economy= banking, labor supports, Securities and Exchange Commission, and Social Insurance= Social Security, Unemployment, Aid to Families with Dependent Children,

  20. What is the New Deal? • The “Brain Trust” created a series of programs created by the Federal Government that provided for changes to: • Aid economic development (Recovery) • Help citizens (Relief) • Prevent another depression from occurring again. (Reform)

  21. Three “R”s • Relief for the people out of work • Recovery for business and economy • Reform of American economic institutions

  22. First 100 Days • Inaugural speech March 4, 1933 • “The only thing we have to fear is fear itself.” • Offered the American public hope! • Emergency Session of Congress to approve and enact new laws to aid the economy. First item: Bank Holiday- Emergency Banking Act

  23. John Maynard Keynes • Keynesian Economics • Father of deficit spending • Advocated the use of Government spending to mitigate the problems of Capitalism in an effort to spur and stabilize the economy • See reading

  24. Mass Media: RADIO • “Fireside Chats” • 60 million people • Offer confidence and hope • People begin to trust and look to him for help

  25. Repeal Prohibition: 21st Amendment Revenue Act- Tax Alcohol Agricultural Adjustment Act (AAA) (NRA) National Recovery Administration (NIRA) National Industrial Recovery Act (PWA) Public Works Administration (TVA) Tennessee Valley Authority (FDIC) Federal Deposit Insurance Corporation (CCC) Civilian Conservation Corps (FERA) Federal Emergency Relief Administration Harry Hopkins- leader New Deal Legislation (100 Days)

  26. Other New Deal programs • (SEC) Security and Exchange Commission • (FCC) Federal Communications Commission

  27. Right American Liberty League-big business Raskob Chairman of GM Left Critics of FDR

  28. 2nd New Deal • Goals to create more jobs • Security against old age-unemployment, and illness • Improve slums and housing • Social Security-(1935) • Unemployment Insurance • Wagner Act- National Labor Relations Act

  29. Labor Rises under the New Deal • After 1933 Union Membership expands- normally this is not the case • The New Deal allowed for labor protections: • First under the National Recovery Administration- (NRA) • Set wages and prices in effort to create jobs • NRA is found unconstitutional by Supreme Court- • Schechter Poultry vs United States

  30. FDR Was Pro-UnionWagner Act • The National Labor Relations Act gave workers the right to negotiate through unions of their choice. • It also prevented employers from interfering with union activities

  31. John L. Lewis and the CIO • Charismatic Leader • President of the United Mine Workers • Began as VP of American Federation of Labor • Wanted to include mass production workers in AFL (UNSKILLED WORKERS) • When AFL resists- he forms CIO • Congress of Industrial Organizations

  32. CIO vs. General Motors • GM employed 240,000 workers • Detroit/Flint Michigan area • The first use of “Sit Down Strike” is seen • Workers go to work, peaceful demonstration, refuse to work. • Government sides with labor and no national guard and strike violence

  33. GM Gives In • GM gave in to strikers demands • United Auto Workers is recognized • Auto Workers and Steel Workers join the CIO- • 1937- 200,000 Auto Workers • 300,000 steel workers • Membership grows 4 million • Represents- pro-union stance of New Deal • However- some violence still exist in labor disputes- Chrysler, Ford, and Republic steel

  34. How does FDR end up with a “friendly” Supreme Court?

  35. FDR and the Court • Second Term- 1937 • Economy growing but New Deal still needed • Supreme Court was limiting the effectiveness of programs • They reflected conservative- Right Wing views= pro-business, reduce government interference

  36. The Court in 1937 • Older Generation • Had different vision of society • 9 Judges- 7 appointed by Republicans • 80% of Judges in lower Fed courts • Roosevelt was Frustrated: • FDR proposed to add up to six new judges to the Supreme Court and up to 44 judges to lower federal tribunals. His scheme was advertised as court reform.

  37. FDR tries to Circumvent the Court • FDR was afraid that the court would continue to limit New Deal reforms- like AAA and National Recovery Administration NRA • Proposal sent to Congress: • Face value- appoint more judges to make courts more efficient • Truth: add more liberal judges to manipulate the process- pro-New Deal judges • FDR is widely criticized

  38. FDR’s Plan Backfires • Public outcry and criticism reduces plan ton defeat • Court becomes more moderate • Social Security Act upheld • National labor Relations Board vs. Jones and Laughlin Steel: • Wagner Act is upheld- (Pro Labor Decision)

  39. “A Shift in Time Saves Nine” • Rational for Majority Decision- NLRB v Jones and Laughlin Steel • “Unions served to maintain labor peace and prevent the disruption of interstate commerce; it was thus Constitutional for the Federal Government to promote Unionization through the mechanisms created in the Wagner Act.”

  40. Liberal Judges Appointed • Justices Hugo Black • Justices Frank Murphy • Justices Felix Frankfurter • Will have lasting impact on American Government

  41. Recession 1938 • New Deal is coming to an end • 1937- 2 new pieces of legislation enacted • 1938- Farm Bill = similar AAA-compensating farmers- controlling supply and pricing • Fair Labor Standards Act- • Prohibition of child labor • Minimum wage= .40 cents hour • 40 hour work week