The Great Depression and New
Deal, 1930-1939
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Outline
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Learning Objectives: Consider
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Causes
Social effects
Hoover administration
First New Deal
The second New Deal
The causes and course of the Great Depression
The course and effects of the New Deal
Causes
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Lack of diversity in economy
Laissez faire
Market saturation
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Decreased production
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Over extended banks
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International trade
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Overproduction in agriculture and industry
Lay offs meant less consumption
Risky loans
End of loans to Germany
Extent of depression
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Stock market crash triggers:
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Bank failures
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9,000 between 1930-1933
Loss of 2.5 billion in deposits
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Industry
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Federal Reserve Bank
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GNP dropped 25% 1929-1932
Unemployment
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Production cuts
Raised interest rates affecting dollar and credit
Officially 25%; may have been 35%
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Highest in cities: Cleveland 50%, Toledo 80%
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Relief systems inadequate
Homeless
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Displaced by whites
400,000 head north
Mexican Americans
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33% of all farms foreclosed
Consecutive years of draught
Dust Bowl
African Americans
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2 million men wander
Shantytowns - Hoovervilles
Rural
2 million
Deportations without regard to citizenship
Women
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Public sentiment
Men seek jobs in teaching, social work, nursing, offices
In pictures
The Dust Bowl
Ruined Crops, 1936
Dust Storm, 1935
Breadline, New York
City
Homeless man
“Okies” on their way to
California
“Okie” mother and children
Hooverville
Oakland, California
Portland, Oregon
Culture
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Values
Self reliance
Blame
Still dreaming
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How to win friends and influence people
Dale Carnegie (Carnegey)
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Realism
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Richard Wright
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Erskine Caldwell
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John Steinbeck
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John Dos Passos
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Native Son (1940)
Tobacco Road (1932)
The Grapes of Wrath
USA Trilogy (1930)
Radio
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escapism
Amos ‘n Andy
Superman
„ Dick Tracy
„ The Long Ranger
„ Soap operas
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Socialization
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Live broadcasting
Shared experiences
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Baseball
Political conventions
disasters
May 6, 1937
Movies
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Color introduced in 1930s
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Studio system
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Social issues
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Gangster films
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Epics
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Hoover Administration
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Initial response
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$432 for public works
Tax increase - 1932
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1932 election
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January 1932
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Volunteerism
Cut spending
Refused to provide relief
Reconstruction Finance Corporation
June 1932
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Bonus Army
1924
$1000 to all veterans of WWI beginning 1945
MacArthur, Eisenhower, Patton
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Cavalry
tanks
Not successful but embarrassing
Franklin Delano Roosevelt
1932 Election
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The First New Deal, 9 March-16 June
1933
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Purposes
Economic recovery
Reform to prevent future crises
„ Relief
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Roosevelt prepares for
“fireside chat,” March 1933
Initial Actions – 1933-35
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1933
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Emergency Banking Relief Act
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Economy Act
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Cut federal salaries and veterans benefits 15%
New beer tax
Agricultural Adjustment Act
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More money and federal supervision
Reduced crop production – federal subsidies
Agricultural Adjustment Administration - AAA
1935
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Resettlement Administration
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Farm Security Administration 1937
Relocated farmers to better land with grants and
loans at low interest
Rural Electrification Administration
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Public utility corporations
Low cost energy
Industrial recovery
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National Industrial Recovery Act 1933
National Recovery Administration
Business, government and labor
„ Fair prices and working conditions
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Organized labor and collective bargaining
Regional Recovery
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Tennessee Valley Authority – TVA
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Public development of electricity by water
power
Built dams, sold cheap electricity
Improved water transportation, reduced
flooding, provided electricity, other companies
forced to lower prices
Banks and financing
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Ends Gold Standard
Glass-Steagall Act – 1933
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Federal oversight to curb speculation
Federal Deposit Insurance Corporation – FDIC
Deposits federally insured up to $2,500
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Truth in Securities Act – 1933
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Securities and Exchange Commission – 1934
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Honest reports to stockholders
Policy stock market
Federal Relief
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Federal Emergency Relief Administration
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Civil Works Administration – CWA
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1933
Cash grants to state relief agencies
1933
Temporary work projects
Schools, parks, roads
Civilian Conservation Corps – CCC
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1933
Men
Rural work projects
Civilian Conservation Corps
Workers
Critics and alternate proposals
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Upton Sinclair
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State ownership of idle factories and land
Lost election for governor of California in 1934
Dr. Francis E. Townsend
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Old age pensions
Following of 5 million
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Father Charles E. Coughlin
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Huey P. Long, senator from Louisiana
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Early supporter
Radical wealth redistribution
“Share our wealth”
assassinated
Huey P. Long
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The second New Deal, 1935-8
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1936 election
1936 Election
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Wagner Act – 1935
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National Labor Relations Board
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Force firms to accept unions
Industrial unionism
Skilled workers
Organized based on job, not skill
„ John L. Lewis – Unied Mine Workers
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Congress of Industrial Organization – 1936
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Membership by 1941: over 10 million
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Social Security Act - 1935
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Elderly receive monthly payment of $15
New payroll tax
Excluded many: self-employed, farms, domestics,
professionals and didn’t cover the disabled
Unemployemtn Insurance
Works Progress Administration – WPA 1935
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Renovation of schools, post offices, airports
Roads and bridges
Cultural workers
„ Federal Writers Project
„ Federal Arts Project
„ Federal Music Project
„ Federal Theater project
WPA art: Fletcher Martin, Mine
Rescue, 1939
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Supreme Court Battle
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Failed to add 6 new justices
Existing justices “get the message” and moderate views
New Deal effects
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Not a full economic recovery
Ameliorated social consequences
Increased employment
Did not end segregation, but alleviated African-American
poverty
Increased role of federal government in economic regulation
Welfare state
Recession
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Mid 1937
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Fears of inflation
WPA layoff of 1.5 million
4 million unemployed
Fair Labor Standards Act – 1938
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Minimum wage
40 hour work week
Limits on child labor
Elsewhere
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Just as FDR was weaker politically
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Court problems
Slow ending recession
World events took center stage
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Europe – on the brink of war, again . . .