Bonneville Dam
The Bonneville Dam, a WPA project
[audio]Government's Response to a Worsening Economy

  • At first, many government officials thought that the depression would end soon.
  • President Hoover did not think that the government should get involved with the economy. He and his advisors also thought that people would depend too much on the government if it helped them. They would stop trying to work for themselves.
  • Hoover said that people, organizations, and city and state governments should try to help the poor, but they did not have enough money to do this.

The Bonus Army

  • Veterans gathered in Washington, D.C. in 1932 to demand the money that the government promised them. They were called the Bonus Army.
  • When Hoover refused to listen to the Veterans, they organized protests. Eventually, Hoover ordered troops, led by General Douglas MacArthur, to make them leave. They set fire to the veterans' campsites and used tear gas to force them out. Many veterans were hurt, and two were killed.

[audio]Some government help

  • In 1932, Hoover created federal jobs, such as road and airport building. He also set up the Reconstruction Finance Corporation, which aided city and state governments, banks, and railroads.

Raising money for the government

  • To earn money for the government, the Hoover administration raised tariffs on imports, but foreign governments raised their tariffs as well, so American companies had a hard time exporting products.
  • Hoover and Congress also tried to increase government funds by raising income taxes. This effort further decreased Americans's money. The New Deal's three goals were relief, recovery, and reform.
  • The New Deal was the first time that the U.S. government took a central role in solving major economic problems.

Relief, Recovery, and Reform

  • Relief:
    1) provided money for the unemployed and the poor, and
    2) helped get more money into the economy
  • Recovery:
    1) created jobs, and
    2) helped agriculture and industry.
  • Reform: prevented later economic problems by regulating the stock market, banks, and labor organization.

[audio]New Deal Relief Efforts

Civilian Conservation Corps
Offered work to young people.
Men and women cleaned parks, rivers, etc.
Some of their money was sent home.
Federal Emergency Relief Administration
Offered federal funds to city and state governments to help their relief efforts.
People were hired to do maintenance work around the cities.
The organization also donated over 900 million dollars for necessities such as food and clothing.
Public Works Administration
Gave people jobs.
Congress allowed PWA to join with local governments and private companies to make buildings, roads, airports, and other public responsibilities.
Civil Works Administration
Put many people to work repairing schools, working in parks, and completing other civil jobs.
Farm Credit Administration gave farmers long-term, low-interest loans.
Home Owners Loan Corporation
Gave low-interest loans to families.
Because of the HOLC, many people could keep their homes.


[audio]New Deal Reform Efforts

Federal Deposit Insurance Corporation If a bank collapsed, the FDIC would pay back the people who lost money.
Federal Trade Commission Made stockbrokers tell the truth to people buying and selling stock.
Securities and Exchange Commission Said that all stock must be registered, companies must report the amount of stock they sold. The SEC also made sure that stock prices were not manipulated unfairly.


[audio]Second New Deal Relief Efforts

Works Progress Administration The government would start a big public works effort (In earlier relief programs, private companies employed workers).
The Wagner Act Said workers could choose to form a union. Also, workers and managers had to discuss salaries and working conditions. Unions could report unfair companies to the National Labor Relations Board.
Social Security Act Gave monthly payments to retired and disabled workers, as well as their orphans and widows. Workers and employers had to pay a small amount, which would go toward social security.


[audio]More Second New Deal Relief Efforts

National Housing Act The U.S. Housing Authority would give cities money for low-income housing.
Fair Labor Standards Act 1) set a minimum wage of 40 cents an hour
2) said that companies that dealt with interstate commerce could not make employees work longer than 40 hours a week. Workers and employers had to agree upon higher wages for overtime hours.
2nd Agricultural Adjustment Act 1) established a parity system for farmers
2) paid farmers to limit the acres they farmed
3) got rid of a special tax for companies that processed farm products.


The Overall Effect of the New Deal

  • 1) With the New Deal, the government started to take responsibility for the poor.
  • 2) With the New Deal, the government had more control over economy. It could control interest rates and loans, wages, work hours, and stock trading, among other things.
  • 3) With the New Deal, it was accepted that the government may have deficits in difficult times.