THE WALL STREET CRASH

The campaign

With the ill-feeling towards Hoover expressed by the hole country, Rooselvelt was confident of victory.

He attacked the attitude of Hoover and the Republicans

Rooselvelt plans were rather vague and general, but he realised people wanted action

In a campaign trip he made 76 speeches. He promised a 'New Deal'. Not only his policies attracted support, it was also his personality

he was warm and trustworthy

He made personal contact with american people and offer hope and a way out of the depression

Rooselvelt won

It was the worst defeat Republicans had ever suffered

How successful was the New Deal

The Hundred Days

In the first 100 days of Rooselvelt precidency, he worked round the clock with his advisers ('Brains Trust') to produce a big range of sweeping measures

Rooselvelt ordered all banks to close and to remain closed until government officials had checked them

Rooselvelt's advisers set some rules and regulations to prevent the speculation that contributed to the Wall Street Crash

The Emergency Banking Act and the Securities Exchange Comission gave americans a taste of hoe the New Deal was going to be

Rooselvelt sent 15 proposals to Congress and all of them were adopted

He took the time to explain to the people what he was doing and why

Every sunday he would bradcast on radio to the nation

'fireside chats'

The Federal Emergency Relief Administration tackled the need of the poor

The Civilian Conservation Corps was aimed at unemployed young men.

These plan helped around 2.5 million

The Agricultural Adjustment Administration tried to have a view of the long term problems farmers were facing

It set quotas ti reduce the farm productionin order to force prices gradually upwards

Help farmers to modernise

The final measure was the National Industrial Recovery Act. It set up two important organisations

The Public Works Administration used government money to build public institutions

The National Recovery Administration improved working conditions in industry and outlawed child labor. It also set out fair salaries and sensible levels of production.

The idea was to estimulate the economy by giving workers money to spend, without overproducing

firms that joined used the blue eagle as a symbol of presidencial approval

The Tenesse Valley Authority

It was a huge area that cut across 7 states.

The area had physical problems

The area had also great social problems

People lived in poverty

Most houses didn't gave electricity

Rooselvelt set up an independent organisation called the Tenesse Valley Authority

Impact of the Hundred Days

Restore confidence in government

The Second New Deal

By May 1935 Rooselvelt was facing lot of criticism

Tuesday, 14 May 1935, a key date. Rooselvelt met with a group of senators and close advisers who shared his views and aims

They convinced him to take radical steps to achieve his vision

One month later he prestented to the lides of the Congress a huge range of laws that he wanted passed.

This was known as the Second New Deal

The most significants aspects:

The Wagner Act

forced employers to allow trade unions in their companies and to let employers negotiate pay and conditions

The Social Security Act

Provided state pensions for the eldery and for widows

Allowed state governments to work with the federal government to provide help for the sick and the disabled

A scheme insurance, that was that employers made a small contribution to a special fund each week, if they became unenployed, they would receive a small amount to helped them until they found a job

The Works Progess Administration

Organisations whose aim was to create jobs and to extended works

The Ressettlement Administration

Helped smallholders and tenant farmers who didn't were helped by the AAA

Moved 500,000 families to better lands and houses

Built camps to provide decent living conditions and work for migrants

The farm security administration remplaced the RA in 1937

And it gave special loans to small farmers to helped them to buy lands

Opposition to the New Deal

Rooselvelt fight back

Rooselvelt was facing criticism and tactics against him

Big business and Republicans used a smear campaign

They said he was ill with a sexually transmitted disease rather than polio

Employers put notes into their workers' pay packets saying that New Deal Schemes would never happen.

He won the elections again with 27 million votes

The highest margin of victory ever achieved by a US president

Opposition from the Supreme Court

Roosevelt's problems continue after the election in 1936

Roosevelt the american supreme cort that were the republicans opposed to the new deal

Roosevelt was angry because that group of old republicans should deny democracy by throwing out laws that he had been elected to pass

The american public were alarmed because they saw that as a attack to the American system of government

Roosevelt's plan was rejected

Even so, his actions didin't were pointless

The supreme court had been shaken by Roosevelt's actions

Most of the main measures in Roosevelt's second new deal were approved by the court from 1937 onwards

The End of the New Deal

In 1937 prosperity seemed to be returning

Rooselvelt did what conservatives wanted: he cut the New Deal budget

He laid off many workers who had been employed by the New Deal's own organisations

Unemployment spiralled upwards once more

The recession damaged Rooselvelt

Middle class voters lost some confidence in him

In 1938, the Republicansdid well in the congressional elections

Now it was more difficult for Rooselvelt to push his reforms through the Congress

But he still was popular with most Americans

The problem was that USA was no longer united behind his New Deal as it had been in 1933

Impact of the New Deal

Impact on confidence in government

restored the faith of the Americans in the government

The New Deal handled billions of dollars of public money, but there was no corruption scandals

The New Deal divided the USA. Rooselvelt and his officials were accused of being communists and of undermining American values. Ickes and Hopkkins were both accused of being antibusiness because they supported trade unions

The New Deal undetermined local government

Impact on industrial workers

The NRA and the 2nd New Deal stregthened the position of labour unions

Rooselvelt's Government tried to support unions and make large corporations negotiate with them

Some unions combinated as the Committee for Industrial Organisation - large enough to bargain with big corporations

The Union of Automobile Workers was recognised by the two most anti-union corporations: General motors and Ford

Big business were still powerful in the USA despite being challenged by the government

Unions were still treated with suspicion by employers

Many strikes broke up with violence in 1930

Veredicts on the New Deal

It is difficult to say is the New Deal was a sucess or not. To answer that you have to take in count the reasons it was created

SPECULATION

In 1920 there were 4 million share owners but in 1929 there were 20 million

The stock market was an easy and
quick way to get rich

Speculators borrow money to buy some shares, then sell then sell them again at a higher price

600,000 new inventors were speculators

Women were involved in speculation

The 'petticoat line'

Banks got involved in speculation

In 1928 there were lot of demands for shares and prices were rising

Confidence was vital.

If people believed that prices would rise there would be more buyers than sellers. But if people believed that prices might stop rising there would be more sellers. That is what happened in 1929

Roosevelt's characteristics

Frankin Roosevelt was the opponent of Hoover in 1932 elections

He was democrat

His main characteristics as a politician

Not radical but he believed in 'active government'

Plans to spend public money on getting people back to work

Not afraid to ask for advice from experts

The 1932 presidential election

Hoover's failings

'Do-nothing' president

He tried to restart the economy in 1930 and 1931 with tax cuts

Set up the Reconstruction Finance Company

helped banks to stop them going to bankrupt

He put money into public work programmes

hoover dam on the colorado river

Hoover and most republicans were very reluctant to change their basic policies. They said that business should be left alone to bring back prosperity.

Government help was not needed

Hoover tried little to help people

that was worse for his reputation

He believed that social security was not the responsability of the government

The bonus marchers

Hoover's reputation was demaged by an event in June 1932

Thousands of servicemen who had fought in the WWI marched on Washington asking for their war bonuses to be paid early

They camped outside of the white house and sang patriotic songs

Hoover refused to meet them and said to the general Douglas MacArthur to handle the situation

General Douglas MacArthur conviced himself with no evidence that they were communist agitators so he ignored Hoover's instructions of treat marchers with respect and with troop and the police burned the marchers' camps with tear gas

The human cost of the Depression

In the countryside

People in agricultural areas were the hardest hit by the depression

As farm income fell, large numbers of farmers coulnd't afford their mortgages

Some farmers organised themselves to resist banks to take their homes

Most farmers had to pack their things and live in the road

They picked up work where they could

Black farmers were worse than white farmers

They lost their land and farms first

There was lot of hunger. Kids were ill and died from malnutrition

Wheat and fruit were left to rot

animals killed because farmers couldn't take them to the market

In Southern and Midwest states over-farming and drought caused a topsoil to turn to dust

In the towns

Unemployment rose rapidly

People had to sell their houses or were kicked out because they couldn't pay rent.

Many ended up on the streets

Some people did queued for bread and soup dished out by charity workers

A big number of men travelled from one place to another on railway freight wagons seeking work

Many children lived in wagons or tents next to the tracks.

Every town had a HOVERVILLE

This was a shanty towns samshackle huts were the migrants lived while they were looking for work

Downward Spiral

banks had less money to give for loans to business or to people as mortgages on homes.

banks started to demand business repay loans

business that coulnd't afford to do so went bankrupt

some others reduced production and salaries

A downward spiral was firmly established

Between 1928 and 1933 production fell by 40% and salaries 60%

Workers were laid off or paid less, they bought less

In 1933 the USA was in the worst economic depression the world ever seen

Farm prices were already low before the crash . People in towns coulnd't afford to but much food so prices went into a freefall. Then the prices for transporting the animals was higher than the price of the animal it self.

International trade collapsed

Banking crisis

659 banks failed in 1929

So people stopped trusting them and lost their savings

1352 banks went bankrupt in 1930

Including the NY bank, that had 400,000 depositors, a lot of immigrants and new yorkers

The worst failure in the American history

2294 banks went bankrupt in 1931

Problems in the European banks affect the USA

People felt that hard currency was the only security

The economic consequences of the wall street crash

Large speculators were ruined

The rich lost most because they had invested most

Theere was a downturn in spending because rich had always been the main buyers of American goods

Many others borrowed money in order to buy shares that were worthless

People were unable to pay back their loans to the banks and insurance companies

They went bankrupt

President Hoover reassured the nation that prosperity was "just around the corner"

The worst of the depression because the crash had destroyed the one thing that was crucial to the properity of the 1920's

The CONFIDENCE

Hoover cut taxes to encourage people to buy more goods

Production was rising again slightly and there was hope that the situation was more settled, in the middle of 1931

THE WALL STREET CRASH, OCTOBER 1929

By summer 1929 weakness begin to show

In june 1929 the official figures showed fall

Speculators became nervous and started to sell

Many investors had borrowed money to buy shares and couldn't afford to have shares worth less value than their loan.

On Tuesday 29 October 1929 it was clear to speculators that banks were not going to intervene to support the price of shares

Speculators tried desesperatly to get rid of of 13 million shares at a fraction of the price they paid

It was the worst day for the Wall Street

Weakness in US economy

The construction industry had started its downturn

Unequal distribution of wealth and the precarious state of banks

More than 500 banks had failed each year

Mainly small banks

American industries producing more of the goods than they could sell

The market for the goods was largely the rich and the middle classes

The majority of americans who were poor couldn't pay goods with any method

Companies tried high-pressure advertising

They spent 3 billion dollars in magazine advertising in 1929

But with workers wages not rising and prices not falling, demand decreased