The Great Depression 1927

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The Great Depression 1927 1933The New deal
1933 - 1939

• Chapter 24 25

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Florence Leona Christi

• "I did not ask her name or her history. She told
  me her age, that she was 32.
• She said that they had been living on frozen
  vegetables from the surrounding fields and birds
  that the children killed.
• Dorthea Lange--Photographer

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Critical Mass

• 1920s optimism drives increase in expectations of
  a better way of life
• The Great Crash
• After 1929 despair sets inall classes
• The Dust Bowl
• Several Statesnorth to Canada
• Respiratory illnesses young and old
• The Great Depression
• Personal income, tax revenue, profits, prices
  international trade plunged by more than 50.
• Unemployment in the U.S. 25, --some countries
  33.

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• Between October 29 and November 13, over 30
  billion disappeared from the American economy. 
• Comparable to the total amount of money
  government spent to fight WW1

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The Crash

• http//www.youtube.com/watch?vnyAZGqFtVjwfeature
  related

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The Crash

• Investors purchase stock on the margin,
• put in 10 of the investment and borrow the
  remaining 90
• investors realized stock prices artificially high
  from mass investments from
• 1928--soaring stock prices attract individual,
  corporate investment
• 1929--stock market crashes
• directly affects 3 million
• credit crunch stifles business
• Businesses lay off workers
• Demand for consumer goods declines

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A "Bull Market"

• Five years prior to 1929, rising prices typified
  the stock market. 
• Stock prices out of proportion to actual profits
• During this period, American investors enjoyed an
  enormous "bull market."
• The opposite, a market characterized by falling
  prices, is called a "bear market."

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Black Thursday

• People began dumping stocks
• J.P. Morgan, others bought up stock to stop the
  panic and keep the market afloat
• Investors decided to sell whatever stock they
  still had as soon as the market opened on Monday.

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Black Tuesday October 29, 1929

• Single most devastating financial day in the
  history of the New York Stock Exchange
• Within the first few hours the stock market was
  open, prices collapsed and wiped out all the
  financial gains of the previous year.

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Unemployment, 1929-1942
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• Banks had little to no government regulations to
  abide by and lost many of their customers life
  savings
• Hundreds of banks failed
•  Herbert Hoover -- government shouldnt
  intervene with the economy.
• families could turn the economy around if
  theycontinue to work hard and rely on
  themselves.       

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Smoot-Hawley Tariff1930

• Increased the tariff rates on imported goods.
• Foreign nations boycott American products.
• This severely hurts  American producers who were
  in dire need of sales.

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Society and the Crash

• http//www.youtube.com/watch?vccNilnpvbJgfeature
  related

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The Jobless
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The Homeless
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The Hobos

• Migratory
• Homeless
• Poor/penniless
• Indigent workers
• Sometimes supporting others
• Unlike tramps, vagabonds who did not want to work

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The Rail Yard Hobos
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The MigrantsThe Arkies and the Okies
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Effects of the Depression

• Hardship affects all classes
• The middle class loses belief in ever-increasing
  prosperity
• Thousands of young homeless, jobless

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Fighting the Depression

• Republican attempts to overcome catastrophe
  flounder
• Depression gives Democrats opportunity to regain
  power

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Hoover and Voluntarism

• Hoover initially seeks solution through voluntary
  action, private charity
• Resists Democratic efforts to give direct aid to
  the unemployed
• perceived as indifferent to human suffering
• programs seen as incompetent--failure results in
  loss of election of 1932

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The Emergence of Roosevelt1933 - 1945

• Franklin Roosevelt
• born to wealth and privilege
• 1921--crippled by polio
• 1928--elected governor of New York
• talented politician
• 1932--defeats Hoover with farmer-
  worker-immigrant-Catholic coalition

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Roosevelt

• Bulldog determination to succeed
• Talent for surrounding himself with capable
  people and getting most out of them (the Brain
  Trust)
• Instill hope and courage in the people
• We have nothing to fear but fear itself
• http//www.youtube.com/watch?v3tyvvjWtc-

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The Hundred Days

• Several significant reforms in the first three
  months of his initial term.
• Banking system saved from collapse
• Fifteen major laws provide relief
• New Deal aims to reform and restore, not
  nationalize, the economy

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• Emergency Banking Relief Act, which permitted
  sound banks to reopen under direction of the
  Treasury Dept.
• First 'fireside chat,' Roosevelt told Americans
  it was safer to keep money in a reopened bank
  than under the mattress

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The Dust Bowl

• Tons of topsoil blown off barren fields
• --storm clouds for hundreds of miles.
• CO, KS, TX, OK eventually entire country was
  affected.
• 1932, 14 dust storms
• By 1934, 100 million acres of farmland had lost
  all or most of the topsoil to the winds.

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Black SundayApril 14, 1935

• April 1935 -- weeks of dust storms,
• Cloud appeared on the horizon
• Winds were clocked at 60 mph. Then it hit.

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The Dust Bowl

• http//www.youtube.com/watch?vzZQbhc-H3JE

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Roosevelt and Recovery

• National Recovery Administration 1933
• Codes eliminate cut-throat competition, ensure
  labor peace
• favor big business,
• 1935--NRA ruled unconstitutional infringement on
  separation of powers
• Many provisions later reappears in Wagner Act

• Agricultural Adjustment Act of 1933
• farmers paid to take land out of cultivation
• prices increase
• sharecroppers, tenant farmers dispossessed

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Roosevelt and Relief

• 1933-- Reconstruction Finance Committee (RFC) to
  direct aid to unemployed
• 1934--The Federal Deposit Insurance Corporation
  created to insure consumers deposits in
  FDIC-enrolled financial institutions up to
  5000
• 1935--Works Progress Administration (WPA) place
  unemployed on federal payroll

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1933--Civilian Conservation Corps provides
employment to youth
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Roosevelt and Relief

• 1935--Works Progress Administration (WPA)
• place unemployed on federal payroll

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Roosevelt and Reform

• 1933-34--focus on immediate problems
• 1935--shift to permanent economic reform

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The Tennessee Valley Authority

• Water Navigation
• Flood Control
• Electricity
• Use Federal funds to modernize region

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Social Security

• 1935--Social Security Act passed
• Criticisms
• too few people would collect pensions
• unemployment package inadequate
• Establishes pattern of government aid to poor,
  aged, handicapped

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Labor Legislation

• 1935--Wagner Act
• allows unions to organize
• outlaws unfair labor practices
• 1938--Fair Labor Standard Act
• maximum hour
• minimum wage

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Rise of Organized Labor

• 1932--National Recovery Act spurs union
  organizers
• Congress of Industrial Organization (CIO) formed
  by John L. Lewis
• CIO unionizes steel, auto industries
• 1940--CIO membership hits 5 million, 28 of labor
  force unionized

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Challenges to FDR

• Francis Townsend
• Elderly - over 60 200/month but had to be spent
  in 30 days as a way to stimulate the economy
• More than ½ the national income to less than 10
  of the population scares, frustrates economists

• Signs of discontent everywhere in 1935
• Upton Sinclair almost won the governor of
  California
• Violent strikes in textile industry in 20 states

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Huey Long Share the Wealth

• Seize fortunes of more than 5 million dollars and
  a 100 tax in individuals earning more than
  1million dollars
• Take from the rich and redistribute the wealth to
  make every man a king
• Every American guaranteed a home worth 5000
  thousand and yearly income of 2500
• Threatened to run for presidential candidate
• Democrats fear that he could swing the republican
  ticket
• Assassinated in Louisiana late 1935

http//www.youtube.com/watch?vhphgHi6FD8k
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Father Coughlin

• Stood strong against capitalism and its
  foundations,
• Warning against the dangers of communism
  regularly.
• For the good of the people,
• against all things government." 
• sympathetic to fascist Nazi, Italian regimes
• National Union of Social Justice
• FDR administration eventually shut down his broad
  casts

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End of the New Deal

• 1936--New Deal peaks with Roosevelts reelection
• Congress resists programs after 1936
• Least assistance for women, ethnics groups and
  laborers

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Pros and Cons

• Did not end Depression
• Failed as formula for economic recovery
• Businessmen and financiers did not support New
  Deal caused federal government increase

• Rural Electrification Social Security
• Insurance of bank accounts, protection for labor
  unions
• Federal controls over the economy gave others
  sense of security

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The Election of 1936

• FDRs campaign
• attacks the rich
• promises further reforms
• defeats Republican Alf Landon
• Democrats win both houses of Congress
• FDR coalition South, cities, labor, ethnic
  groups, African Americans, poor

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The Supreme Court Fight

• Supreme Court blocks several of FDRs first-term
  programs
• 1937--FDR seeks right to "pack" Court
• Congressional protest forces retreat
• FDRs opponents emboldened

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The New Deal in Decline

• 1936--cutbacks for relief agencies
• 1937--severe slump hits economy
• Roosevelt blamed, resorts to huge government
  spending
• 1938--Republican party revives

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The New Deal and American Life

• New Deals limitations
• depression not ended
• economic system not fundamentally altered
• little done for those without political clout
• Achievements
• Social Security, the Wagner Act
• political realignment of the 1930s