The Great Depression Unit 8 B AP U

The Great Depression Unit 8 B AP U. S. History

Fundamental Question ► To what extent did the Great Depression maintain continuity and foster change in America’s political and economic structures?

Causes of the Great Depression ► Political Policies § “The business of America is business. ” § Mellon’s Tax Bills § Fordney-Mc. Cumber Tariff § Dawes Plan and Post-WWI lending ► Financial Practices § Installment plans § “Buying on Margin” § Crash of 1929 ► Economic Situations § Agricultural overproduction and low prices § Welfare capitalism and consumer confidence ► Socioeconomic Conditions § Top 1% owned 35% of nation’s wealth § Bottom 20% owned 4% of nation’s wealth

The Stock Market and the Crash of 1929 ► Background § Speculation § “Buying on Margin” ► The Crash of 1929 § 381. 17 (9/3/29) § Concern over high stock prices led to massive sell-off § Thursday, October 24 ► 299. 50 § Monday, October 28 ► 260. 64 § Tuesday, October 29 ► 230. 07 § 41. 22 (7/8/32)

Herbert Hoover (R) (1929 -1933) ► ► ► “Given the chance to go forward with the policies of the last eight years, we shall soon with the help of God, be in sight of the day when poverty will be banished from this nation. ” - Inauguration, March 4, 1929 “There is no cause to worry. The high tide of prosperity will continue. ” Sec. Of Treasury Andrew Mellon, Sept. 1929 “While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. ” Pres. Hoover, May 1, 1930 “The worst is over without a doubt. ” Sec. Of Labor James Davis, June 29, 1930 Hoover’s Economic Philosophy § Promote volunteerism, restraint, and selfreliance, rugged individualism § “If we shall be called upon to endure more of this period, we must gird ourselves for even greater effort… The question is whether that history shall be written in terms of individual responsibility, and the capacity of the Nation for voluntary cooperative action, or whether it shall be written in terms of futile attempt to cure poverty by the enactment of law, instead of the maintained and protected initiative of our people. ” April 27, 1931 Hawley-Smoot Tariff (1930) ► Federal Farm Board ► Reconstruction Finance Corporation (RFC) ►

Depression by Numbers ► Dow Jones Industrial Average § § § ► 1929: 381. 17 1932: 41. 22 The average of stock prices dropped over 90% Price Indices ► § § § ► ► ► Toledo, OH: 90% 1929: $103. 6 B 1933: $56. 4 B wages down 60% § Farmers’ income declined 55% ► Industrial production § Down 26% in 1930; 51% by 1932 ► Investments § $10 B in 1929; $1 B in 1932 GDP § § Income ► Manufacturing Unemployment § 1929: 3. 2% § 1933: 24. 9% § Unemployment rates higher in specific regions, among different groups 1929: 659 banks ($200, 000) 1930: 1, 300 banks ($853, 000) 1931: 2, 294 banks ($1, 700, 000) § National income fell $80 B to $50 B § Salaries declined 40% § Consumer prices fell 25% § Wholesale prices fell 32% ► Bank Failures ► Fertility Rates § 1928: 93. 8 § 1933: 76. 3

Hoovervilles Displaced Americans set up shanty towns Came to be known as “Hoovervilles”

Public Reaction to Depression ► Bonus March § WWI veterans marched on D. C. demanding early payments of pensions § Federal troops sent in to break up Hoovervilles

Depression through Pictures

The Dust Bowl (1930 -1936) ► Causes Overgrazing Improper farming techniques § Increased cultivation § Drought in 1934 § § ► Effects § Dust storms § Black Sunday April 14, 1935 ► 300 million tons of topsoil blown across southern Plains region § Migration west ► “Okies” ► Mexican Repatriation

Dust Turns Day Into Night

Election of 1932 ► Franklin Delano Roosevelt (FDR) (D) § Campaign promise of a “new deal” and help for the “forgotten man” § New Deal Coalition Herbert Hoover (R) ► A Realignment Election ► § End of the Republican dominance of the Fourth Party System § Begin of the Democrat dominance of the Fifth Party System

Fifth Party System (1932 -1968) ► Democrats § New Deal Coalition Catholics ► Jews ► Blacks ► Progressive Intellectuals ► Urban Machines ► Populist Farmers ► White Southerners ► Labor Unions ► Low-Income ► Immigrants ► § Philosophy Social liberalism/social democracy ► Social justice ► Keynesian economics ► § Dominated Congress and American public for the next 36 years ► Republicans § § Pro-business Economic conservatives Social conservatives Northeast, parts of the Midwest

Franklin D. Roosevelt (D) (1933 -1945) ► Great Depression ► New Deal ► Good Neighbor Policy ► Arsenal of Democracy ► Pearl Harbor ► World War II

FDR’s Message of Hope ► FDR had no specific plan for the Depression § ► “Let us not confuse objectives with methods. Too many so-called leaders of the Nation fail to see the forest because of the trees. Too many of them fail to recognize the vital necessity of planning for definite objectives. True leadership calls for the setting forth of the objectives and the rallying of public opinion in support of these objectives. Do not confuse objectives with methods. When the Nation becomes substantially united in favor of planning the broad objectives of civilization, then true leadership must unite thought behind definite methods. The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something. ” - Address to Oglethorpe University, May 22, 1932 Calming the nation § “… the only thing we have to fear is fear itself. ” § Fireside chats ► The Three R’s § § § ► Relief Recovery Reform Brain Trust § Political and economic advisers to the President Executive Office of the President (EOP)

Self-Help Is the Best Response to Unemployment; Self-Help Is Not Enough Henry Ford – “On Unemployment” (1932) ► When all possible devices for providing employment have been used and fall short, there remains no alternative but self-help or charity. I do not believe in routine charity. I think it is a shameful thing that any man should have to stoop to take it, or give it…What we call charity is a modern substitute for being personally kind, personally concerned and personally involved in the word of helping others in difficulty. . . Methods of self-help are numerous and great numbers of people have made the stimulating that they need not depend on employers to find work for them – they can find work for themselves. I have more definitely in mind those who have not yet made that discovery, and I should like to express certain convictions I have test. The land! That is where our roots are. There is the basis of our physical life. The farther we get away from the land , the greater our insecurity. From the land comes everything that supports life. The land has not collapsed or shrunk in either extent or productivity. It is there waiting to honor all the labor we are willing to invest in it, and able to tide us across any dislocation of economic conditions. Charles R. Walker – “Down and Out in Detroit” (1932) ► ► ► The office then stated that this was not a lay-off, but, as Boris had expressed it, ‘finish. ’ ’I haf’ no money now, ’ he cried, ‘lose my home quick, what I do chil’ren, what I do doctor? Fourteen years!’ he returned to his original cry, ‘I work Henry Ford!’ The employment man looked at him, ’That is a long time; you should have saved money, Boris, to take care of you in your old age. ’ Boris trembled. ‘You say dat to me!’ he cried, struggling for possession of himself. ‘I give up my strength to you; I put in all my young days work good for Henry Ford – you can’ do dis to me now!’ ‘Why did you spend all your money? Asked the employment man. ‘For why? I tell you. I spen’ money for house, ’ replied John Boris, ‘to raise fam’ly, to sen’ my chil’ren school, to buy foods, dat’s how I spen’ money-’ ► ‘Your children are your own business, ’ said the other, ‘not Henry Ford’s. ’

The First New Deal (1933 -1934) FDR’s First Hundred Days “Alphabet Soup” Emergency Banking Act (Bank Holiday) ► Federal Emergency Relief Administration (FERA) ► § Civil Works Administration (CWA) Civilian Conservation Corps (CCC) ► Agricultural Adjustment Administration (AAA) ► National Industrial Recovery Act (NIRA) ► § Public Works Administration (PWA) § National Recovery Administration (NRA) ► Tennessee Valley Authority (TVA)

First New Deal (1933 -1934) ► Banking Act of 1933 § Glass-Steagall Act § Federal Deposit Insurance Corporation (FDIC) ► ► ► Gold Reserve Act Farm Credit Administration (FCA) Securities and Exchange Commission (SEC) National Labor Relations Board (NLRB) Federal Housing Administration (FHA) Indian Reorganization Act

21 st Amendment (1933) ► 18 th Amendment repealed § Only Amendment to be ratified by state conventions ► End of Prohibition ► Reasons § Development of black market for alcohol § Increased violence due to rise in organized crime § Loss of revenue, industry, and employment § Speakeasies replaced saloons

The Second New Deal (1935 -1938) ► ► Resettlement Administration (RA) Works Progress Administration (WPA) § § National Youth Administration (NYA) Federal One ► Federal Writers Project ► Federal Theatre Project ► Federal Music Project ► Federal Art Project ► Historical Records Survey Rural Electrification Administration (REA) ► Social Security Act (1935) ► Wagner Act (1935) ► Fair Labor Standards Act (1938) ►

Federal government used posters, songs, advertisements, literature to promote and support FDR’s New Deal programs among the American public

Federal One

New Deal Opposition ► “New Deal is doing too much. ” § Republicans and economic/fiscal conservatives § “Boondoggles” ► “New Deal is not doing enough. ” § Father Charles Coughlin § Senator Huey Long – “Kingfish” ► Share the Wealth § $5000 for every family, $2000 annually § Heavily tax wealthy

Redistributing America’s Wealth Would Solve the Depression; Long’s “Share-Our-Wealth” Plan Is Impractical Huey Long – ‘U. S. Senate Speech” (1934) ► To share our wealth by providing for every deserving family to have one third of the average wealth would mean that, at the worst, such a family could have a fairly comfortable home, an automobile, and a radio, with other reasonable home conveniences, and a place to educate their children… There is nothing wrong with the United States. We have more food than we can eat. We have more clothes and things out of which to make clothes than we can wear. We have more houses and lands than the whole 120 million can use if they all had good homes. So what is the trouble? Nothing except that a handful of men have everything and the balance of the people have nothing if their debts were paid. There should be every man a king in this land flowing with milk and honey instead of lords of finance at the top and slaves and peasants at the bottom. Hamilton Basso – “Huey Long and His Background” (1935) ► The [Share-Our-Wealth] plan proposes, first of all, to liquidate all fortunes of more than “three or four million” dollars. The possessors of such fortunes will be required, not to sell their holdings, but to transfer ownership to the United States Treasury. Long declares that this will return to the government some $170, 000, 000. It next proposes (with considerable vagueness as to how it is to be done) to give every family in the United States a home, an automobile, and a radio; representing an approximate value of $5, 000. To do this…it is necessary to spend about $100, 000, 000. The plan further proposes a minimum wage intended to give each family a cash income of not less than $2, 500 a year. . . With the $70, 000, 000 left over. . . the plan proposes to give every child in the country a college education. . . Old-age pensions will also be provided. . . Mr. Long is an economic ignoramus. . . He takes no cognizance of the instruments of production – mines, railroads, factories - by which wealth is produced. . . The problem is not one of merely redistributing the poker chips which symbolize dollars and cents but of producing income.

Election of 1936 ► Franklin D. Roosevelt (D) ► Alfred Landon (R)

FDR and Court Packing ► Supreme Court reversed several New Deal programs § “This is the end of this business of centralization, and I want you to go back and tell the president that we're not going to let this government centralize everything. “ – Justice Louis Brandeis § Schechter Poultry Corp. v. United States (1935) ► NIRA unconstitutional § United States v. Butler (1936) ► AAA unconstitutional ► Justice Reorganization Bill § Appoint new justices for every justice over 70 ► Six additional justices ► Subsequent Supreme Court rulings in favor of New Deal § Social Security Act § Wagner Act “President Roosevelt lost the Court-packing battle, but he won the war for control of the Supreme Court. . . not by any novel legislation, but by serving in office for more than twelve years, and appointing eight of the nine Justices of the Court. In this way the Constitution provides for ultimate responsibility of the Court to the political branches of government. [Yet] it was the United States Senate - a political body if there ever was one - who stepped in and saved the independence of the judiciary. . . in Franklin Roosevelt's Court-packing plan in 1937. ” – Chief Justice William Rehnquist (2004)

New Deal and Labor ► American Federation of Labor (AFL) § Strengthened and increased membership ► Congress of Industrial Organizations (CIO) § Organize unskilled laborers in major industries § Industrial unionism ► United (UAW) Automobile Workers § Used sit-down strikes to earn recognition

Escapism Great Depression in Arts and Entertainment ► Literature § John Steinbeck ► ► ► The Grapes of Wrath Of Mice and Men Photography § Dorothea Lange ► Music § § § ► Brother, Can You Spare a Dime? – Bing Crosby Give a Man a Job – Jimmy Durante Woody Guthrie Radio § Comedies § Soap operas ► Movies § § The Wizard of Oz Shirley Temple Snow White and the Seven Dwarves Marx Brothers

Escapism Great Depression in Sports and Recreation ► Sports § WPA ► Athletic facilities ► Athletic educational programs § Innovation, consolidation, and sacrifice of professional and college sports ► College bowl games ► NFL playoffs ► Recreation § § Games and Monopoly Gambling Rodeos Dance halls and jazz

End of the New Deal ► Roosevelt Recession (1937 -1938) § Cutback in deficit spending and elimination of some New Deal programs ► Hatch Act (1939) ► International Concerns § Totalitarian governments spawned defensive preparations

Historiography ”The New Deal: Revolution or Restoration? ” William Leuchtenburg – The Achievement of the New Deal (1985) ► What then did the New Deal do? It gave far greater amplitude to the national state, expanded the authority of the presidency, recruited university-trained administrators, won control of the money supply, established central banking, imposed regulation on Wall Street, rescued the debt-ridden farmer and homeowner, …made federal housing a permanent feature, fostered unionization of the factories, reduced child labor, ended the tyranny of company towns, wiped out many sweatshops, mandated minimal working standards, enabled tenants to buy their own farms, built camps for migrants, introduced the welfare state with old-age pensions, unemployment insurance, and aid for dependent children, provided jobs for millions of unemployed, created a special program for the jobless young and for students, subsidized painters and novelists, …gave birth to the impressive Tennessee Valley Authority, . . . sent the Civilian Conservation Corps boys into the forests, . . . lighted up rural America, gave women greater recognition, made a start toward breaking the pattern of racial discrimination and segregation, put together a liberal party coalition, changed the agenda of American politics, and brought about a Constitional Revolution. . . Indeed, it is hard to think of another period in the whole history of the republic that was so fruitful or of a crisis that was met with as much imagination. Alan Dawley – Struggles for Justice (1991) ► Ironically, the rebirth of social movements at the grass roots was in part the consequence of elite activities in Washington. The corporate planners and Brain Trusters of the early New Deal had found it necessary to penetrate ever deeper into the daily lives of ordinary Americans … For the more the Roosevelt administrationalized banking, industry, and agriculture, the more it raised expectation for government aid among workers, retirees, and the unemployed. . . What was especially distinctive about democracy in the 1930 s was that it came with a social twist. When social movements spilled over into electoral politics behind southern populists, midwestern progressives, and the occasional leftist, it became advantageous for politicians all the way up to the president to support social-democratic reforms such as the Wagner Act and Social Security. Roosevelt may have saved liberalis; he may have saved capitalism; but grass-roots social movements were the saviors of democracy.