TOPIC 13 THE GREAT

DEPRESSION

13.1 Causes of the Depression

 HIDDEN PROBLEMS IN THE ROARING
20S

• Farmers
• Income gap
• Uneven distribution
• Credit
 HERBERT HOOVER

• Orphaned as a child
• Mining engineer
• Head of the Food Administration
• Stressed the importance of competition
• Labor & management
• March 1929
• U.S. economy- troubled
 FARMERS

• One forth of the American workforce

• After WWI
• had to increase harvest
• buy more land
• costly farm equipment
• Demand for crops fell
• Failing to sell their harvest and pay off
debt=rural depression
• World market
• natural disasters
• no cash, no consumer goods
• credit
POOR AND RICH More workers output- gradually Gap
higher wages
Industrial laborers vs. corporate profits
• Rich became richer and the poor, less
poor
 • Uneven
• 60% of Americans made less than 2,000 a year
• 24,000 of the wealthiest earned 100,000 a year
DISTRIB UTION OF
(50 times more than families)
WEALTH
• They could not buy enough to keep the
economy booming
 Hid the problem

RELYING ON
CREDIT

Debt
80% of radios and
60% of cars were Living beyond on
Stock
purchased on their means
installment
 September 3, 1929-
Too much money into
stock market began to
stock- did not have
fall
THE STOCK
MARKET HITS
BOTTOM
October 29, 1929-Black
October 24, 1929-
Tuesday- the bottom
Black Thursday,
fell out
investors started to sell
• Billions of dollars lost
for less
• The Great Crash
 T H E G R E AT
DEPRESSION
BEGINS

• Stock market crash

• 1929-1941
• Unemployment
• Chain reaction = collapse of
U.S. economy
 Everyone wanted to withdraw
everything
• Banks can’t survive

By 1931, 1,700 banks went under

BANK FAILURE
The “Fed”- cut interest rates (20s)
1929- supply of $= lending

Not enough money circulating

 • Decreasing demand
• Reduced consumer spending
• Production cutbacks (price levels) and layoffs
CONSUMER BUYING (payroll)
• Henry Ford- 75,000 ppl
• 1933- 25% laid off
 Protect American products
• Hawley-Smoot Tariff- raised
taxes on imports= could not
compete
RAISING • Damaged international trade
TARIFFS
• Depression across the globe
Other nations
• International economy had been
funded by American loans
• Europe
 • Milton Friedman & John Maynard
Keynes
• Money supply
• Lack of gov’t interference
CAUSES
• Ludwig von Mises & Frederich
von Hayek
• Poor economic planning
• Consumption
TOPIC 13

13.2 Americans Suffer

 Unemployment
• Hours cut, laid off, no work,
smaller meals, hunger, bread
line= human drama

ECONOMIC
HARDSHIPS

Homelessness
• Sold anything
• Evicted Poverty
• Hoovervilles- tents and
shacks on public land
• Newspapers as blankets
HARDSHIPS
 • Crop prices fell
• New debts
• Family farms lost
• 1 million farmers
• Public auction
• Tenant farmers
RURAL AMERICA
• The Dust Bowl- the Great Plains
• Over farming and grazing
• Drought and high winds
• Killed cattle, suffocated rivers and fish
• Moving for work
• Okies- California, Oregon, or Washington
• 2.5 million migrated
RURAL DEPRESSION
 HIT MOST AMERICANS

Families Minorities
• Some men deserted • The last to get hired and
their families the first to get fired
• Birthrates plummeted • Repatriation
• Disciplined declined • Restricted all
• Loneliness set in immigration
 TOPIC 13

13.3 Two Presidents Respond

 Business cycles-
No
natural interference
occurrences

HOOVER TRIES
Volunteerism
BUT FAILS

Federal Resources
 Wealthy to give

Join the fight

Persuasion= individual needs

VOLUNTARY
COOPERATION
FAILS Localism- no resources

No use of Federal Resources- Better

themselves
Crisis increased
 Reconstruction Finance Corporation-
trickle-down economics
• Railroads
• Large businesses
FEDERAL • Banks
RESOURCES • $ did not trickle down

Boulder Dam (Hoover)

• Colorado River
• Jobs
 Acceptance of communism

• Capitalism was failing

• Freedom and dreams
• Fascist- dictators

PROTEST Bonus Army 1932- WWI

vets
• Compensation Act- 1945
• Bill defeated in the Senate
• General MacArthur- federal troops
• Forced out
• Tear gassed
 “New Deal”-active role

The Brain Trust- advice

FDR
Eleanor

Hundred Days- 15 bills

• Relief, recovery, reform

 ROOSEVELT BECOMES PRESIDENT

• “New Deal”
• Gov’t interference
• March 1933
 FORMING THE BRAIN TRUST

• Henry Wallace (R)- Secretary of Agri.

• Harold Ickes (R)- Secretary of Interior
• Frances Perkins- Secretary of Labor
• 1st women Cabinet member
• Depended on Eleanor
• Bonus Army
 Emergency Banking Bill-
extensive power
Four-day bank holiday
RESTORING
CONFIDENCE
Fireside chats
Reassured
Banks- safe place
 Financial System
REFORMING Federal Deposit Insurance
Corporation – insured deposits
(5,000)
Securities and Exchange
Commission- regulate stock
Gold fiat money
Agriculture
Agricultural Adjustment Act-
overproduction & prices
Tennessee Valley Authority
Dams- floods, power
Jobs
Forests
 Civilian Conservation National Recovery
Corps- jobs Administration- min. wages,
min prices

RELIEF AND
RECOVERY

Public Works
Administration- bridges,
dams, power plants,
infrastructure, jobs
 TOO MUCH OR NOT ENOUGH?

• Federal gov’t too powerful- main complaint

• National debt
• Destroying free enterprises
• Individual freedom
• American Liberty League- critics
• Saving banks & businesses
 POPULIST CRITICS

• Poor Americans
• Francis Townsend- $200 +60
• Father Charles Coughlin- radio show
• Huey Long – high taxes on wealthy, redistribution
• Assassinated
THE GREAT DEPRESSION AND
THE NEW DEAL

13.4 The New Deal Expands

 EXPANDING NEW DEAL PROGRAMS

• Second phase: elderly, poor, unemployed

• Long-term focus
 NEW JOBS PROGRAMS

Works Progress
Highways Harbors
Administration

Critics- pump
Jobs Debt
priming
 AIDING OLDER AMERICANS

• Social Security
• Pension system
• Retirees, unemployed, disabled, hurt on the job
• Payroll tax
• Flaws:
• Farmers
• African Americans
• Widows
 SUPPORTING AMERICAN FARMS

• Rural Electrification Administration

• Electricity to isolated areas
• 1950- 80%
• Farmers relationship with gov’t
• Price support
• Critics- free market, small farms, tenant farmers
• Farms prices stabilized
 WATER FOR EXPANDING WEST

• Development increased
• Central Valley- Cali. Irrigation system
• Bonneville Dam- flooding & electricity
 LABOR UNIONS THRIVE

• Mining industries
• Automobile industries
 WORKERS & OWNERS

• FDR- raising the standards

• Wagner Act (National Labor Relations Act)- right to join labor
unions
• Collective bargaining
• National Labor Relations Board
• Fair Labor Standards Act
• Minimum wage- gradually raise
• Child labor
 WORKERS ORGANIZE TO GAIN

• Congress of Industrial Organizations

• United Automobile Workers- General Motors sit-down strike
• 44 days- recognized
• 1940- 9 mill- unions
• Better wages
• Conditions
 OPPOSITION TO THE NEW DEAL

• Election of 1936- FDR

• Challenge the Supreme Court
 NEW DEAL FACE JUDICIAL SCRUTINY

• First hundred days

• Schechter Poultry v. United States
• Pres. could not regulate interstate commerce
• National Industrial Recovery Act= unconstitutional
• Agricultural Adjustment Act= unconstitutional
 ROOSEVELT’S COURT-PACKING
SCHEME

• Adding 6 new Justices to a 9 member court

• Constitution- did not specify
• Justices- elderly & overworked
• Critics- court-packing
• “switch in time to save nine”
 ECONOMIC SETBACKS HELP
CONSERVATIVE CANDIDATES

• Economic conditions- improved

• Unemployment was falling
• FDR cur back on federal spending
• Federal Reserve Board- interest rates
• Unemployment soared
• Democrats suffered
• 1938 congressional election
• ReformsWWII
THE GREAT DEPRESSION AND
THE NEW DEAL

13.5 Effects of the New Deal

 WOMEN PLAY INCREASINGLY
SIGNIFICANT POLITICAL ROLES

• Eleanor Roosevelt- First Lady role action

• Toured the nation
• Farms
• Reservations
• Coal mine
• “My Day”
• Causes:
• Advancing public health
• Education
• Arts in rural
• Flood control
• Molly Dewson- access to the Pres.
• Frances Perkins- Social Security, Fair Labor Standards Act
• Workplace- discrimination
 STRONGER POLITICAL VOICE FOR
AFRICAN AMERICANS

• First to lose jobs

• 50%- twice the average
• Southern Conference on Human Welfare
• Eleanor
• The Black Cabinet- unofficial
• Department of Interior
• Robert Weaver- federal judge
• William Hastie-1st Cabinet member (1960s)
• Mary McLeod Bethune- access to the White House
• FDR- antilynching laws
• No civil rights reforms
• Farmer payments- evicted
• Equal wages
• Social Security- exempted domestic workers
 NEW DEAL LEGISLATION FOR NATIVE
AMERICANS

• Dawes Act (1887)

• 138 mill 48 mill
• John Collier- Commissioner of Indian Affairs
• landless
• Indian New Deal- assistance and control
• Indian Civilian Conservation Corps.-schools and hospitals
• Bureau of Indian Affairs- encourage
• Indian Reorganization Act- tribal control
• Navajo Livestock Reduction program
 A NEW POLITICAL COALITION
EMERGES

• FDR- 4 terms
• New Deal Coalition- unity
• Voting patterns
• Arthur W. Mitchell (D)- Congress
• Democrats- majority both houses
• Social and ethnic division
• Immigrant communities
 NEW DEAL LEGISLATION EXPANDS
THE HISTORICAL ROLE OF
GOVERNMENT

• More experience
• Restore the economy
 ROLE PROMOTING ECONOMIC
GROWTH

• Interference
• Businesses
• Federal Housing Authority- low interest loans
• Wagner Act- unions
• Min. wage
• Child labor laws
• Compensation laws
• Unemployment insurance
• Rural Americans
• Irrigation
• Electricity
 FEDERAL SAFETY NET

• A welfare state
• Direct benefits
• Responsibilities of the federal gov’t
• Role in private lives
• Liberals v. conservatives
 CONSERVATION EFFORTS PRODUCED
MIXED RESULTS

• A lot of good
• String of dams- upset aquatic life
• Displacement
• Native Americans
 AN EXPANSION OF EXECUTIVE POWER

• More power
• Style of the presidency
• Media
• Communicator
• Wartime authority
• 22nd Amendment- 2 terms
 TOPIC 13

13.6 Culture During the Depression

 TEMPORARY RELIEF

• Movies
• Wizard of Oz
• Snow White
• Frankenstein
• Gone With the Wind
 SOCIAL ISSUES

• Distrust- big bus and gov’t

• Public Enemy
• G-Men- New Deal
• Strength of common men
 Popular shows

The Lone Ranger

RADIO’S The Shadow

Fireside chats

War of the Worlds

Diversio
Swing
n

MUSIC
Ethnic-
Latin-
hardship
rumba
s
 FUNDING FOR THE ARTS

• Federal Art Project- jobs

• Murals
• Photographers
 Working-class heroes

The Grapes of Wrath

LITERATURE
Of Mice and Men

Native son- African

American
• Flash Gordon
• Superman- ordinary citizens COMICS