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The Great Depression Begins
There are many factors as to why the Great Depression started. Many believe that the Stock Market Crash of 1929 is the main reason and indeed it did set off the Great Depression, but the failure of banks, widespread drought (Dustbowl), reduction of spending, and tariff policies that reduced trade with European countries made the US very weak economically. -
FDR Wins the Presidential Election
Franklin Delano Roosevelt, the Democratic candidate, defeats Republican President Herbert Hoover. FDR receives 472 electoral votes while Hoover receives 52. Hoover is defeated in the popular vote as well. FDR won due to his promises of “I pledge you, I pledge myself, to a new deal for the American people.” -
Emergency Banking Relief Act (1st New Deal)
The Emergency Banking Relief Act was the first act of the New Deal. It allowed for the inspection of and reopening banks. The banks had to be deemed financially secure by examiners before they could be reopened. This act was one of recovery. It sought to strengthen the economy, and it began to restore the people's trust in Wall Street. -
Civilian Conservation Corp (1st New Deal)
The CCC was established to combat high levels of unemployment. The program mainly targeted young, unskilled workers, army veterans, and those on government assistance. Native Americans and African Americans also worked. Men who enlisted were paid $30 per month and enlisted for a minimum of six months. Their work focused on conservation efforts. They planted trees, made Trailways through national parks, maintained forest roads, and fought forest fires.
This act was a relief effort. -
Agricultural Adjustment Act (1st New Deal)
The AAA would give subsidies to farmers who planted a limited number of crops. This law was meant to combat overproduction, so that crop prices could increase which in turn would allow farmers to make money.
This was a Relief Act as well as a Recovery Act. -
Homeowner's Refinancing Act (1st New Deal)
Due to the stock market crash and the subsequent Great Depression; mortgages were not being paid (unemployment; shortage of income). Not only were people losing their homes but lenders faced investment losses. The Homeowners Refinancing Act was enacted to combat this. The HOLC made loans to assist homeowners and financial institutions. These loans could be paid over a long period of time and had low-interest rates.
This was a Relief Act as well as Reform -
National Industrial Recovery Act (1st New Deal)
The NIRA called for the “alliance of industries”. Rather than compete with each other, companies would have antitrust laws suspended, companies had to write “codes of fair competition”. The codes of fair competition fixed prices/wages established production quotas and made restrictions of entry to other companies into the alliances. The codes of fair competition were subject to public hearings. The NIRA was an attempt to fix the economy by eliminating industrial competition.
Recovery Act -
Soil Conservation Act (2nd New Deal)
The Dust Bowl was a key contributor to the Great Depression. It caused many crops to fail and made land unusable. The Soil Conservation Act sought to protect the resources of the land from soil erosion. Farmers were given subsidies in exchange for planting crops that helped the soil rather than ones that depleted it.
Reform (land resource reform) & Relief (immediate help of the land). -
Resettlement Administration (2nd New Deal)
The Resettlement Administration aimed to resettle poor farmers/rural families and address environmental problems and make loans to help farmers. The RA gave financial aid to farmers through the use of loans and reduced debt for some. Conservation was also a big focus of the effort seeing as the land had been destroyed by the dust and erosion caused by overfarming.
Reform Act & Relief Act -
Works Progress Administration (2nd New Deal)
The WPA aimed for unemployment assistance and financial system reform. The WPA provided work for unskilled workers in building public infrastructure i.e hospitals, schools, etc. It also provided work for artists, writers, painters, etc by giving them work doing murals and opening art community centers.
Relief Act -
Social Security Act (2nd New Deal)
The Social Security Act was enacted to ensure money for the elderly, as well as victims of accidents, unemployment insurance, aid for children and mothers, and the physically disabled. Prior to the Social Security Act, states would figure out a pension for the elderly themselves. The Social Security Act sought to help the disadvantaged population avoid poverty.
Reform & Relief -
Fair Labor Standards Act (2nd New Deal)
The Fair Labor Standards act gave a minimum wage of 25 cents per hour, overtime pay for working more than 40 hours, the minimum age to work was set to 16 years old, and children were limited to a 44-hour workweek. FDR was an avid supporter of the FLSA. “Do not let any calamity-howling executive with an income of $1,000 a day… tell you… that a wage of $11 a week is going to have a disastrous effect on all American industry.”
Reform -
New Deal Comes to An End
The New Deal began to lose steam when the US was hit with a recession in 1937. This recession was caused by FDR's attempt to cut government spending and balance it out. FDR also lost support from Congress. In addition, attention began to drift to the other side of the world as Europe entered World War 2 in 1939. The US would enter it not too long later. WW2 is given credit as the event that took the US out of the depression.
