The Great Depression SolutionPresentation Transcript
The Great Depression Solution A Social Studies Fair project By: Catalina Trigo Mr. Bryant
How did the U.S. economy return from the economic disaster in the Great Depression?
Military spending in World War 2 ended the economic crisis in our country, AFTER it had ended.
The Roaring Twenties
This term refers to the period in the U.S. before the Great Depression. During this time the growth of the entertainment industry, mass media growth, and women’s right to vote in the nineteenth amendment. Jazz, the model-T, and 5 dollar work days became part of American Society.
CRASH!!! In 1929
The great crash of 1929 had three phases. Black Thursday, Black Monday, and Black Tuesday. The initial crash began on Thursday October 24, 1929. The damage done on the following Monday and Tuesday however, was far greater. Wether this crash signified the begining of the depression is still a debated subject, to be left for another day.
Since stocks had only gone up during the roaring twenties, investors were in shock. That crash supposedly led to the depression, which in order not to scare the people, was called a depression instead of a panic, the former name for economic turmoil. Since the depression was the largest and most important in the 20th century, it was then called the Great Depression. Now the problem had to be solved. The only question : HOW?
Was it…. The New Deal?
The New Deal was implemented by President Franklin Delano Roosevelt. During his 1932 campaign he promised “A new deal for the American people.” Soon after his inauguration in 1933, work began on this new deal. This plan believed that the power of the federal government was needed to save the depression.
When Franklin took office, the unemployment in industrial fields reached 25%. In agriculture, located in the Dust Bowl, things were worse due to a drought. Nobody could get a bank loan. Based on Roosevelt’s belief, the first days of his term were filled with passing banking reform laws, emergency relief programs, work relief programs, and agricultural programs. This was known as the “first new deal.”
First New Deal
The first new deal concentrated on rebuilding the economy from the top down. The Agriculture Adjustment Act paid farmers to produce less. Needless to say, this met much criticism. Suspension of enforcement on anti-monopoly laws, and support of price-fixing were also part of this first new deal.
More on the first New Deal
The National Industrial Recovery Act set up a frame for the new deal. They discouraged cut-throat prices because of their short lived effects on business success. There was stabilizing of wages as well, but eventually the same problem was always there: weak consumer demand.
The last of the first new deal
The last of the first New Deal involved the Tennessee Valley Authority. This authority used millions of dollars to reform seven states along the Tennessee River, creating many new jobs with high-wages. The plan included dam-building, electric power generation, and flood and erosion control.
The Second New Deal
During the second phase of Franklin’s plan, also known as the second new deal, recovery and relief plans continued. In addition, social and economic legislation was created to benefit the mass people. Its purpose was to do the opposite of the First New Deal. Instead of fixing the economy at the top first, they would begin at the bottom.
More on the Second New Deal
In 1935, social security was created, and the National Youth Administration as well as the Works Projects Administration were set up. The youth administration worked on getting unemployed youth part time jobs, and later on training them for war jobs. The Works Projects Administration also worked at getting employment rates up. In order to restart mass consumption he would have to revive the masses ability to consume.
The National Labor Relations act of 1935 was a great part of the second New Deal. Senator Robert Wagner of New York sponsored this act, so it is sometimes known as the Wagner act. It attempted to stop employers from using intimidation to break up unions. This worked magnificently and wages rose.
As soon as the war began, the New Deal was ended. Since all those programs, the New Deal couldn’t have possibly ended the depression. Right?
The question is still, WOULD the New Deal have ended the Depression without war?
We must remember that some of the programs of the New Deal are still part of American Life, such as the Social Security.
So….is it done?
Most Historians will argue that at this point, the New Deal wasn’t helping, and that 1941, the year that the U.S. joined the fighting in the second World War marked the end of the Great Depression.
$$ Increase in Spending $$
The War was a big spending spree. Technically an intensification of what Roosevelt had been doing. Responding to foreign threats, the government and Roosevelt spent all the money necessary to win the war. The country worked again and more money was in circulation.
Why the New Deal didn’t Work
The New Deal failed because of investment. The Problem in the Depression was lack of investment enthusiasm and buying. Before the depression, the value on the New York Stock Exchange was 89 billion dollars. In 1933, during the Depression, that value had plummeted to 19 billion. New Deal programs decreased investor confidence. Thus, the New Deal actually prolonged the depression instead of ending it.
YET… on the War
While the war effort spending seemed to have solved most economic problems, American spending and investment decreased. So when did the Depression actually end? After the war.
Might the New Deal have eventually worked? Who knows? Either way, it was stopped and wasn’t the reason that the U.S. economy recovered. The Military spending was much greater and thus put the economy back in its place, but full recovery only occurred after the war was over.
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Works Cited Images
* Great Depression Era people in front of store. Photograph.
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*Protesters on the street. Photograph. 22 Mar. 2009
* Food Line . Photograph. nuwireinvestor.com . 22 Mar. 2009