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Problems of the Depression 5,000 banks fail 1929-32: wipes out $7 billion in depositors money Home Mortgages default:

1930- 150,000, 1931- 200,000, 1932- 250,000 State and city govtsno real estate=shrinking tax revenues default on their obligations scant social services cut payrolls and slash paychecks Problems of the Depression Business investment: 1929-$24 Billion, 1932- $ 3 Billion 1929-32 cut automobile production to 1/3 Iron and steel production cut 60% Residential, industrial construction cut 80% Farm income 1929-$6 Billion to 1932-$2 Billion 25%, 13 million workers out of job in 1933 Lost Economic Output of 1930s= $360 Billion Hoovers Response to the Depression Self help- Rugged Individualism Experience from WWI 1930- Hawley Smoot Tariff (agricultural) makes things worse globally Trickle Down Economics Public Works eventually The New Deal FDRs Plan very progressive (start of welfare state?) All we have to fear is fear itself relief, recovery & reform fireside chats First Hundred Days immediate action-FDR drives Congress Banking first: Pres. can regulate, FDIC, up gold reserve Pump Priming: CCC, FERA, CWA Relief: FCA, HOLC Beyond the 1st 100 WPA: response to critics, public buildings & roads (9m jobs) NRA: min. wage, max hrs, blue eagle PWA: $4b on 34,000 projects AAA pays not to farm TVA: test fairness of rates, brings employment & power to poor in area, later spread to Rockies FHA- small loans to householders And Beyond Social Security Act- benefits for elderly & disabled off a payroll tax (modeled from Europe) NRA gets toasted, NLRB protects labor, AFL-CIO Forms SC rejects parts of New Deal

FDR tries to pack court (15 justices) Outcomes of New Deal Govt responsibility for Agriculture, the aging, etc. govt regulation of financial institutions (banks, the stock market, etc.) Sets min. standards for life & labor govt participation in arts new levels of infrastructure (electricity, running water, etc.) regain control of our destiny Americans Look for Other Ways Out Socialism/Communism (USSR): workers control means of productionequal wealth = social & political equality Fascism (Germany & Italy): strong govt control, all work for benefit of state, very anti-communist Share the Wealth (1933-35) Coughlin: radio priest, anti-banker(Jews), anti-communist, anti-New Deal pressure on Congress Long: Senator from Louisiana, every family gets $5,000 (from rich), fascist? Townsend: $200 a month for all over age of 60 These critics push FDR toward 2nd New Deal Key Question Is redistribution of wealth a viable way to solve social problems? Social Problems: Crime, equal access to education, hunger, homelessness, equality before the law, equal healthcare, drug & alcohol abuse