The Great Depression

1
The Great Depression
2
The Hoover Administration

• Background
• raised in Iowa by aunt and uncle
• Stanford graduate
• engineer self-made millionaire
• believed in rugged individualism and
  laissez-faire economy
• made reputation with Belgian Relief Fund and
  Food Administration Secretary of Commerce under
  Harding and Coolidge

3
Causes of the Depression

• Economic depression had several causes
• Overuse of credit many people went bankrupt when
  jobs were lost.
• Overproduction of goods, caused by credit buying
  when buying stopped, inventories built up and
  people were laid off.
• Buying on the margin buying stock with only
  10 down when market fell, loans could not be
  repaid
• Suspect banking practices, leads to bank failures
  when market crashes

4
Causes of the Depression (cont.)

• Too little money put into circulation by the
  Federal Reserve.
• Massive farm problems prices too low,
  foreclosures high
• Tariffs too high between US and Europe could not
  trade excess goods
• Expectations of a downturn in the economy when
  market started going down, people overreacted.

5
October, 1929

• Black Thursday- Oct. 24th, market falls at a
  record pace
• Black Tuesday Oct. 29th, market falls almost
  to zero billions of lost, millions lost life
  savings

6
The Depression Begins

• Characteristics of the Depression
• homelessness, unemployment, despair
• Unemployment reaches 25

7
The Depression Begins

• Hoover sticks to laissez-faire as the depression
  worsens blamed for inaction

Unemployed line up for few available jobs
8
Hoovervilles
Charity lines
9
Hoovers Inaction

• Hoover opposes all government aid, favors private
  charity why?
• Seen as uncaring and aloof
• Nation begins to demand action from government

10
The Reconstruction Finance Corporation

• Hoover finally responds by creating the
  Reconstruction Finance Corp. (RFC) first New
  Deal style agency
• Designed to aid banks, businesses, and local
  govts. with low interest loans to generate
  activity
• RFC first agency designed to aid businesses a
  prototype for FDRs New Deal agencies later

11
The Bonus Army

• July, 1932 WW I veterans march on Washington to
  demand early payment of promised war bonuses
  Hoover rejects their demands. Why?

12
The Bonus Army
Army ordered to leave DC
Marchers refuse to leave, camp out in Capitol
13
The Bonus Army

• Hoover orders Gen Douglas MacArthur to remove
  Bonus Army camps riots follow
• Hoover blamed for the violence

14
1932 Election

• Hoover reluctantly renominated Democrats
  nominate NY governor Franklin D. Roosevelt

15
1932 Election

• FDR campaigns on optimism and govt. action on
  economy wins in a landslide, worst defeat for an
  incumbent ever

16
Franklin D. Roosevelt

• Background
• TRs 5th cousin and nephew-in-law
• former state legislator, asst. Secretary of the
  Navy
• 1920 VP candidate
• NY governor

17
FDR and Polio

• Contracted polio in 1921 left paralyzed spent
  rest of life in rehab

Created illusion of walking by leaning on
people, podiums, etc. Why?
18
The Hundred Days

• March 4, 1933 the inaugural speech of FDR

This is pre-eminently the time to speak the
truth, the whole truth, frankly and boldly. Nor
need we shrink from honestly facing conditions in
our country today. This great nation will endure
as it has endured, will revive and will
prosper. So first of all let me assert my firm
belief that the only thing we have to fear. . .is
fear itself. . . nameless, unreasoning,
unjustified terror which paralyzes needed efforts
to convert retreat into advance.
19
The Hundred Days

• Emergency powers granted to FDR employed the
  brain trust to take on problems of the
  Depression

First crisis the failure of the banks and
bank runs
20
The Hundred Days

• FDR declares a Bank Holiday, closes banks for a
  week to stop the bank runs
• First fireside chat to explain govt. actions
• Bank runs end
• Glass-Steagall Act
• creates the FDIC

21
The First New Deal (1933 35)

• No set plan, experimented with new programs to
  solve the Depression
• Relief, Recovery, Reform
• Focused on jobs and
• temporary relief

22
The New Deal
CWA

• First New Deal Programs
• Civilian Works Administration
• Civilian Conservation Corps
• Public Works Administration

CCC
PWA
23
The New Deal

• Economic Reforms
• The Securities and Exchange Commission
• The Wagner Act

Joseph P. Kennedy, first head of the SEC
Strike at Ford Motor Co, 1937
24
The New Deal

• The Dust Bowl agriculture in the Midwest and
  Plains catastrophic foreclosures, drought cause
  dust storms

Hardest hit states Kansas. Oklahoma, Texas.
Nebraska
25
The New Deal

• Thousands move west
• The migration of the Okies
• Impact on economy
• Passage of the
• Agricultural Adjustment Act (AAA)
• Designed to aid farmers by paying some not to
  plant/limit livestock

26
The New Deal

• The center of the New Deal
• the National Industrial Recovery Act

27
The National Industrial Recovery Act (NIRA)

• Most ambitious overhaul of the economy since WW
  I used similar methods
• Attempt to organize economy into partnerships of
  management, labor, and govt.
• Creates Codes of Fair Competition
• Administered by the National Recovery
  Administration

28
The National Industrial Recovery Act (NIRA)

• The Codes
• anti-laws suspended, allows for cooperation
  within industries to set prices, wages, and
  production
• creates National Labor Relations Board to
  mediate disputes
• minimum wage set
• bans child labor
• allows for unionization
• sets maximum hours to 32 per week

29
The New Deal
Small businesses were exempt but encouraged to
show their participation by posting the NRA sign
govt. uses WW I-style propaganda campaign to
promote Act
30
Problems with the Act

• Act fell short of accomplishing goal
• some businesses did not maintain the Code
• hurt smaller businesses, could not compete
• many saw it as socialism and too pro-labor
• May 1935 Supreme Court declares it
  unconstitutional

31
The End of the First New Deal

• Reforms have mixed results on the economy
• Positive
• some improvement in employment, economy
• relief to most in need
• optimism returns as government attempts aid to
  people
• Negative
• depression still present
• growing opposition from liberal and
  conservative forces
• Supreme Court strikes down many New Deal
  programs i.e. NIRA, AAA

32
Opponents of FDR

• Father Charles Coughlin radio priest,
  criticized FDR for being too socialist
• Dr. Francis Townsend advocated 2,000 annual
  pension for elderly led to creation of Social
  Security Act (1935)
• Beginning of the Second New Deal

33
Opponents of FDR

• Sen. Huey Long (D-LA)
• criticized FDR for not going far enough in
  reforms
• Share Our Wealth confiscate all fortunes over
  1m and redistribute it to all guarantee of
  5,000 yearly income
• Assassinated in Baton Rouge, Sept, 1935

34
The Second New Deal (1935 -37)

• Focused on reforms and long-term security
• i.e. Social Security the Wagner Act
• Centerpiece
• the Works Progress Administration (WPA)
• Designed to create large-scale public works
  projects and provide employment to thousands
• Largest peacetime govt. expenditure

35
The WPA

• Major works projects
• Largest program to date
• Employed thousands

36
Examples of WPA Projects
37
WPA and the Arts

• Art, literature, and music projects included in
  the WPA first govt. support for the arts

Kansas Cityfrom Politics, Farming, the
Law Thomas Hart Benton,1936
38
WPA and the Arts
The Annual Moveby Otis Dozier, 1936
39
Construction of the Damby William Gropper
40
Women of Flint, MIby Joseph Varak
41
(No Transcript)
42
(No Transcript)
43
Travel Guides sponsored by the WPA
44
(No Transcript)
45
Role of Eleanor Roosevelt
Acted as FDRs eyes and ears major influence
on New Deal proposals
Led to inclusion of blacks in govt. programs
also created the WPA programs supporting the arts
Controversial First Lady due to her active role
in FDR administration
46
1936 Election

• FDR beats Alf Landon of Kansas like a red-headed
  step-child

47
FDR vs. the Court

• 
  

Nine old men
Supreme Court biggest obstacle in implementing
New Deal legislation
FDR tries to add six more Justices to create a
Court more favorable to his proposals
48
FDR vs. the Court
Public reacts very unfavorably to plan FDR loses
popularity
FDR stays with plan despite loss of support
49
FDR vs. the Court

• FDR eventually withdraws plan, but too late to
  regain support for more New Deal plans
• Court begins to support New Deal programs, but
  the New Deal era comes to an end

50
The Legacy of the New Deal

• Positive
• provided relief and temporary jobs for millions
• kept US from embracing radical movements
  restored confidence in America
• ended laissez-faire as govt. policy

• Negative
• only partially solved the Depression
• led to govt. deficits in peacetime
• led to growth of Big Govt.