The Great Depression

1
The Great Depression The New Deal

• 1929-1939

2
Roots of the Great Depression

• Uneven distribution of income
• Gains in income were more for wealthy than
  working class
• Top 2 of population controlled 40 of nations
  savings
• Market Speculation
• Very wealthy purchase stocks and speculate on
  future
• Buying stock on the margin
• Excessive use of credit
• Installment buying for cars, refrigerators,
  vacuums
• This prohibited families from buying other items
  such as food, clothing
• Overproduction
• Weak farm economy farm prices were highest
  during WWI
• Farmers unable to payback installment loans on
  equipment

3
The Stock Market Crash

• The exuberant spending of the 1920s caused
  people to buy beyond their means (on the
  margin purchasing a stock for a percentage of
  its value)
• This was true for consumer goods as well as fr
  stocks
• This greatly inflated the price of stocks, far
  beyond actual value
• When the market crashed it was actually stock
  prices returning to more reasonable levels
• This left many in debt

4
How the Crash Caused the Great Depression

• Bank Closings Increased
• -banks had to close when farmers couldnt repay
  the loans, and it trickled into the cities
• -5,000 banks failed with over 5 million in
  American savings
• Income decreased for industrialists
• --invested heavily in the stock market lost
  money when it crashed
• Effect on the world
• -many European countries had loans in American
  banks
• -banks failing causes insecurity in these
  countries

5
Graph Consumer Debt 1921-1929
Consumer Debt, 1921-1929
GRAPH
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Diagram Worldwide Depression
Worldwide Depression
DIAGRAM
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Graph Bank Failures
Bank Failures
GRAPH
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of Bank Failures by year
10
Great Depression video

• http//www.history.com/topics/great-depression/vid
  eosthe-great-depression

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Social Impact of the Great Depression

• -not uncommon for 2 people to share a job, since
  many lost their jobs (25 unemployment rate)
• Women minorities often 1st to lose jobs
• Hoovervilles settlements of scrap metal/lumber
  usually located on the outskirts of cities
• Hobos riding on railroads (unemployed young
  people)
• Dust Bowl by the 1930s, many farms in OK, KS,
  NE, CO, TX were either ruined or abandoned due to
  drought farmer loans
• People moved to CA for work
• The Grapes of Wrath by John Steinbeck portrays
  this

12
An Okie Family Hits the Road in the 1930s to
Escape the Dust Bowl
13
The Extent of Erosion in the 1930s

• Note the extensive wind erosion in the western
  Oklahoma panhandle region, which was dubbed the
  Dust Bowl in the 1930s. Mechanized farmers had
  busted the sod of the southern plains so
  thoroughly that they literally broke the back of
  the land. Tons of dust blew out of the Dust Bowl
  in the 1930s and blotted the sun from the skies
  as far away as New York. A Kansas newspaperman
  reported in 1935 that in his dust-darkened town,
  Lady Godiva could ride through streets without
  even the horse seeing her.

14
Dust Bowl Videohttp//www.history.com/topics/gr
eat-depression/videosamerica-black-blizzard
15
The Policies of Hoover

• Hawley-Smoot Tariff (1930) imposed highest
  import tax in history Europe responds with their
  own high tariffs did little to help US economy
• Voluntarism Hoover encouraged Americans to
  donate as much as they could to charities during
  this time
• Debt Moratorium 1 year moratorium on WWI debts

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The Policies of Hoover cont.

• 1929 Agriculture Marketing Act created the
  Federal Farm Board created to stabilize prices
  promote sale of agricultural products
• Reconstruction Finance Corporation (1932)
  federal agency that gave money to banks to loan
  to railroads and businesses
• This was intended to spur economic growth
• Bonus Army, Summer of 1932 WWI vets march to
  Washington ask federal govt for bonuses they were
  supposed to get in 1945
• Hoover urged Senate to deny them the bonus now
• Hoover ordered them removed and Gen. Douglas
  MacArthur used tear gas to rid them from the
  White House

17
The Election of 1932

• One of the worst years of the depression also
  happened to be an election year
• Roosevelt campaign pledged a New Deal for the
  American public
• Roosevelt won nearly 60 of the popular vote
• Both houses of Congress also went to the
  Democrats in the election
• This would later be important as Roosevelt
  attempted to pass his recovery plan

18
FDR

• Wealthy
• Sec. of Navy under Wilson, NY Governor
• Stricken with polio in 1921
• Several biographies say this made him more
  sensitive to the people struggling
• Married Eleanor Roosevelt
• Very active in NY state politics, especially
  reforms for women

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FDR video

• http//www.history.com/topics/great-depression/vid
  eosfdr-a-voice-of-hope

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The New Deal

• Roosevelt used his first 100 days in office to
  implement a his new ideas
• Did something similar in NY it was successful
• The New Deal centered around 3 key ideas
• Relief the concept of helping people immediately
  to get out of the misery of the Depression
• Recovery aimed at helping the business community
  and restarting the economy
• Reform trying to change the country so that a
  depression could never again have significant
  effects on the country

21
New Deal video

• http//www.history.com/topics/great-depression/vid
  eosthe-new-deal-how-does-it-affect-us-today

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New Deal Keynesian Economics

• Until this time, Economists believed the markets
  would adjust themselves (but they didntGreat
  Depression)
• John Maynard Keynes
• Economist
• Demand-side/Keynesian Economics

23
The First 100 Days

• Passed several programs to stimulate the economy
  provide relief/jobs (Obama Administration)
• The Bank Holiday FDR orders all banks closed, US
  Treasury must OK bank reopening (part of the
  Emergency Banking Act, March 1933)
• ¾ of banks belonging to the Federal Reserve
  System opened 3 days later
• Repeal of Prohibition
• National Recovery Adm., declared unconstitutional
• Farm Controls
• Agric. Adj. Adm. (AAA) offered subsidies to
  encourage production, also declared
  unconstitutional
• Paid farmers NOT to produce certain crops and
  livestock

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FDRs 1st 100 days cont.

• Tennessee Valley Authority (TVA) Authorized
  construction of a series of damns to provide
  electricity/flood control to those living in
  Tennessee River Valley
• Financial Recovery
• FDIC insures bank deposits (today, up to
  150,000), Home Owners Loan Corp., Farm Credit
  Adm.
• Federal Emergency Relief Adminstration
  (unemployment relief)
• Public Works Administration (PWA) Schools,
  highways, hospitals were built

25
TVA Area

• More than twenty dams were constructed on the
  rivers tributaries as part of a massive project
  to control flooding, generate hydroelectric
  power, and revitalize the Tennessee Valley
  region, while also creating jobs for the
  unemployed. The shaded area represents the area
  served by TVA electric power.

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Occupied Households with Electric Service

• The Tennessee Valley Authority contributed to
  making electricity available to almost all
  Americans by 1960. African American leader Andrew
  Young later claimed that the TVA created the
  economic underpinnings of the civil rights
  movement It was the presence of the cheap
  electricity, lower interest rates, water
  projects, that laid the foundation for the New
  South.

28
Mary McLeod Bethune (18751955)

• The daughter of ex-slaves and founder of a
  college in Florida, Bethune became the
  highest-ranking African American in the Roosevelt
  administration when she was appointed director of
  the Office of Minority Affairs in the National
  Youth Administration (NYA). From this base she
  organized the Black Cabinet to make sure blacks
  benefited from the New Deal programs along with
  whites. Here she is picketing against segregated
  hiring practices at the Peoples Drug Store chain,
  one of the earliest targets of the black civil
  rights movement.

29
1st 100 days cont.

• Civilian Conservation Corp (CCC) work in forest
  /conservation programs
• Fireside chats
• Radio addresses to explain the immediate problems
  facing the country
• Felt as though he was in your living speaking to
  you
• Roosevelts brain trust cabinet
• National Industrial Recovery Act (NIRA)
  attempted to stop prices from falling
• More involved unions collective bargaining
• National Recovery Administration (NRA) President
  sets minimum wage, working hours
• Declared unconstitutional in Schechter vs. US
  (1935)
• Congress can not give the power to legislate to
  the President

30
Grand Coulee Dam Under Construction on the
Columbia River, 1939

• Located in central Washington State, the Grand
  Coulee Dam was one of the most ambitious projects
  of the New Deals Public Works Administration. It
  is the largest concrete structure in the United
  States and the central facility in the Columbia
  Basin Project, which generates electricity for
  the Pacific Northwest and provides irrigation for
  half a million acres of Columbia Valley
  farmlandservices that have transformed the life
  of the region.

31
The Second New Deal (1935)

• The first part of the New Deal was aimed largely
  at relief
• Wealthy did not support New Deal programs
• Resettlement Administration many farms were
  still being foreclosed
• This offered loans to small farmers who faced
  foreclosure
• Helps migrant farmers find work
• Workers Progress Administration (WPA) people
  benefitting from FERA employed them 30-35 hours
  per week
• -approximately 2,000,000 per month employed by
  WPA
• -unemployed artists, musicians, actors
  benefitted
• Wagner Act gave workers the right to
  organize/form unions
• National Labor Relations Board reported unfair
  working conditions here

32
Labor Triumphant

• After generations of struggle, organized labor
  made dramatic gains in membership and bargaining
  power during the New Deal years.

33
WPA Mural, by Victor Arnautoff 1934

• The Pedestrian Scene, painted on a wall of Coit
  Tower in San Francisco, was one of a series of
  murals commissioned by the federal government to
  employ artists during the Great Depression.

34
Frances Perkins at the Site of the Golden Gate
Bridge Project, 1935

• The first woman cabinet member, Perkins served as
  secretary of labor under Roosevelt. She was
  subjected to much undeserved criticism from male
  businessmen, laborites, and politicians. They
  sneered that FDR kept her in labor for many
  years.

35
Social Security Act (1935)

• Creation of a retirement plan for those over 65
• Workers employers pay into
• Included unemployment insurance funded by payroll
  tax (employers with more than 8 employees)
• AFDC
• Disabled
• Officially called OASDI

36
Goal of New Deal Programs

• It is now the job of the federal government to
  take care of those who could not take care of
  themselves

37
Presidential Election of 1936

• Campaign speeches rallied against business
• He said they opposed his policies so they could
  continue to get rich
• Ran against Governor Alfred Landon of KS
• Landslide victory of 523 to 8 (ME VT) Electoral
  College votes

38
New Deal Coalition Political Party Shift

• Dems major party in America throughout the rest
  of 1930s-1980s (Reagan)
• White urban dwellers support Democrats
• Whites in south had largely voted Dem. Since the
  1800s
• Now labor unions/blacks/farmers join coalition
• DRAMATIC shift as most blacks had voted
  Republican since Emancipation)

39
FDR New Deal Opponents

• People called him a socialist/communist
• Wealthy thought he was a traitor
• People felt neither party was trying to help
  average Americans
• American Liberty League wealthy Americans
  including prominent members of the DuPont family
• Disliked 1935 Revenue Act which raised the income
  tax rate for those making over 50,000
• Referred to it as Bolshevism

40
More Opponents

• Old Age Revolving Pension Plan
• National sales tax would pay for a pension of
  200 per month for all retired Americans
• Created by Francis Townsend of CA (who ran for
  governor of CA in 1934 against Upston Sinclair
  won)

41
More opponents

• Dr. Charles Coughlin
• On Coughlins radio show, referred to Roosevelt
  as a liar and betrayer
• Very anti-semitic feelings/statements, praised
  Mussolini/Hitler
• Church pulled him off the air during WWII
• LA Sen. Huey Long
• Share the Wealth program allowed no Americans
  to make over 1,000,000/per year (anything over
  would be payment to the govt in taxes)
• From this tax , give every American family
  5,000 immediately
• Wanted to run against FDR in 1936 but was
  assassinated in 1935

42
Last Years of New Deal

• 1937 Justice Reorganization Bill
• US Supreme Court had said several New Deal
  programs were unconstitutional
• Would have allowed FDR to appoint a new justice
  for every justice over 70 years of age
• Nothing in constitution saying only 9 justices
• Could pack the court with 6 new justices
• Said to help older justices with their workload
• Democrats Republicans said trying to push his
  agenda
• Did not pass
• Several justices retired in few years after bill
  and Roosevelt still packed the court

43
Last Years of New Deal cont.

• Large recession hit mid-1937
• Factories had major layoffs
• New Deal critics blamed Roosevelt program for
  recession

44
Effects of the New Deal

• Wagner Act permanently legitimizes labor unions
• Sit-down strikes Dec. 1936, GM plant in Flint,
  MI most famous
• By Feb. 1937 management had to give in to demands
• Congress of Industrial Organizations (CIO) lead
  by John L. Lewis, represent unskilled
  factory/textile workers
• By 1938 represented 4 million workers

45
General Motors Sit-down Strikers, Flint,
Michigan, 1937

• Strikers like these sometimes kept their spirits
  up with the song Sit Down
• When the boss wont talk
• Dont take a walk
• Sit down, sit down.

46
Cont.

• Women forced to work meager jobs to make ends
  meet
• Blacks often first fired from jobs
• Relief programs in south often excluded blacks
• Lynchings
• Scottsboro Trial 9 black men were accused of
  raping 2 young white women on a train
• Got help from Communist Party, in end, some
  convictions were overturned
• Blacks supported FDR as they felt he was
  responsive to their needs

47
New Deal Culture

• Zora Neale Hurston wrote Their Eyes Were Watching
  God (about growing up black in a small southern
  town)
• Studs Lonigen by James T. Farrell shows lives of
  Irish in Chicago
• Erskine Caldwells Tobacco Road about suffering
  of sharecroppers in GA

48
New Deal Culture cont.

• Gone with the Wind by Margaret Mitchell a
  romanticized tale from Civil War period
• 1930s radio offers soap operas, comedies, dramas,
  symphonic music/operas
• 70 of all adults went to the movies once a week
• Mr. Smith Goes to Washington
• Shirley Temple movies
• Theaters designed to look like palaces, air
  conditioned