Unit 8: Great Depression and the New Deal
The Great
Depression: The
period from 1929
to 1940 where
the economy
plummeted &
unemployment
skyrocketed
Summary:
Causes of the Great Depression
Problems of the 1920s
Key industries in trouble
Railroads, textiles, steel, mining, lumber
New industries competing
Decreased demand for goods after the war
Plight of Farmers
WWI had increased demand
Planted more, took out loans
Demand fell after war →Crop prices fell so…
Farmers increased production → further decreases in price
Farmer default on loans → lose land
Rural banks fail
Congress tries to pass the McNary-Haugen bill to help
President Coolidge vetoed 2x
Consumer Spending
Late 1920s consumer spending decreased due to
rising prices
stagnant wages (don’t change)
unbalanced distribution of income
overbuying on credit
Stock Market Fever
Ordinary Americans invested in the stock market
“Bull Market” period of rising stock prices
Speculation: buying for quick profit without considering risks
Buying on Margin: pay small percentage of stock’s price & borrow rest
The Market’s Collapse
Price of stock didn’t reflect value of companies, over inflated
Margin call: people couldn’t pay off the loans
Black Tuesday October 29, 1929
Financial Collapse
Banks & businesses fail
Gross National Product
1929: $104 billion
1932: $59 billion
Unemployment
1929: 3% 1.6 million workers
1932: 25% 13 million workers
US Compounds Global Depression
US demands Allies pay war debts
US passes Hawley-Smoot Tariff Act in 1930 & world trade fell by 40%
Factors of GD
Tariffs & war debt policies
Farm crisis
Easy Credit
Unequal distribution of wealth
Unit 8: Great Depression and the New Deal
Great Depression affects on lives & Government’s initial actions
Depression in the Cities
Lost jobs & evicted
Shantytowns: Hoovervilles
Soup kitchens & bread lines
Worse for African Americans & Latinos
Unemployment rates higher
Paid less
Increased racial violence with unemployed white workers
People of Mexican descent returned to Mexico by choice or were
deported
Depression in Rural Areas
400,000 farms foreclosed from 1929 to 1932
Dust Bowl
Overuse & misuse of Great Plains land
Route 66 to California
Okies
Children in the GD
Health problems develop due to malnutrition
School year shortened or schools closed
Return to children working
“Wild boys” seeking to escape poverty
Social & Psychological Impact
Suicide rate rose more than 30% from 1929 to 1932
3times as many people admitted to mental hospitals
Stopped going to Drs & dentists
No college
Put off marriage or families
Financial security becomes life time obsession, hording, saving & thriftiness
Families & neighborhoods banded together to help
People helped each other
Hoover’s in-action
Thought Americans needed to be optimistic about economy & continue on
Opposed any direct federal welfare as harmful to American self-esteem
Aid need to come from public
Urged business leaders to solve problem
Congressional Election of 1930
Anti-Hoover stance helped Democrats gain seats in Congress
By 1932 tries to use trickle down economics to solve the problem
Hoover delayed too long, too little, & too late to help
Bonus Army
1932 WWI vets went to Washington D.C. to receive bonus due in 1945 now
Bill defeated in Congress & Hoover order vets to leave
~2,000 stayed, Hoover orders army into force them to leave
Public reaction was negative to the forced removal of veterans & the resulting
injuries and deaths
Summary:
Unit 8: Great Depression and the New Deal
New Deal:
FDR’s plan to fix the
country
Hundred Days:
Massive amount of
legislation passed
during 1st 100 days in
office
Summary:
New Deal p1
Democratic Victory in 1932
Franklin Delano Roosevelt elected president
23 million votes to Hoover’s 16 million
472 electoral votes
Senate: near 2/3 majority
House: near 3/4 of seats
New Deal
Three goals known as the 3 R’s
Relief for the needy
Economic Recovery
Financial Reform
“Brain Trust”
Hundred Days
Reform Banking & Finance
Bank Holiday & the Emergency Banking Relief Act
Fireside Chat March 12th
Explained banking system in simple terms
Next day banks reopen and people deposited money
Glass-Steagall Act
FDIC: Federal Deposit Insurance Corporation
Federal insurance for deposit up to $5,000
Federal Securities Act
Corporations required to provide complete & acurate information
Securities & Exchange Commission
Regulate the stock market
No more insider trading or “rigging” of market
Direct Relief
Rural assistance
Agricultural Adjustment Act
(AAA) raise crop prices by lowering production
Pay farmers not to plant
Paid farmers to plow over crops & slaughter animals
Upset public
Work Projects
Civilian Conservation Corps
(CCC) young men 18 to 25
Building roads, developing parks, planting trees, helping in
soil-erosion & flood-control projects
Paid $30 a month- $25 was automatically sent home to their
families
Free food, uniforms & lodging in work camps
National Industrial Recovery Act (NIRA)
Public Works Administration
$ for states for jobs building schools & community
buildings
Unit 8: Great Depression and the New Deal
New Deal p2
Civil Works Administration
1933-1934: 4 million jobs created,
built 40,000 schools & paid 50,000 rural teachers salaries
Built more than ½ a million roads
National Recovery Administration (NRA)
Set prices of products to ensure fair competition, established
standards for working hours, and banned child labor
Tried to promote recovery by stopping trend of wage cuts,
falling prices & layoffs
Fair business codes
Limited production & established prices
Section passed guaranteeing workers’ rights to unionize &
bargain collectively
Housing & Mortgage
Home Owners Loan Corporation (HOLC)
Government loans to homeowners who faced foreclosure
National Housing Act
Created the Federal Housing Administration (FHA)
Loans for home mortgages and repairs
Direct Relief to Needy
Federal Emergency Relief Administration (FERA)
Funded by $500 million
½ to states for direct relief of food & clothing
½ to states to support state work relief programs
Summary:
Unit 8: Great Depression and the New Deal
Challenges to the New Deal
Supreme Court struck down the NIRA & the AAA as unconstitutional
FDR proposes a court reform bill
“Court Packing” would have allowed FDR to appoint 6 new Supreme Court
justices
Caused controversy over separation of powers
Major miscalculation by FDR who saw his approval ratings drop for 1st time
Many saw it as an attempt to get more power for the executive branch
1937 justices began to retire & FDR was able to appoint more liberal justices
to the court (7 in 4 years!)
American Liberty League
Formed in 1934 opposed to the New Deal
Believed violated respect for the rights of individuals and property
Critics appealing to the poor
Father Charles Coughlin
Guaranteed annual income & nationalization of banks
Dr. Francis Townsend
Pension plan for the elderly
Senator Huey Long
Share-Our Wealth plan: nationwide social program- “Every Man a
King”
Summary:
Unit 8: Great Depression and the New Deal
2nd 100 Days
Further Farm Help
Soil Conservation and Domestic Allotment Act
Second Agricultural Adjustment Act
Resettlement Administration
Farm Security Administration
nd
2 100 Days Work Programs
Works Progress Administration (WPA) (Recovery)
1935-1943 $11 billion to create 8 million jobs
Built 850 airports
Constructed or repaired 651,000 miles of roads & streets
Jobs based on people’s skills and interests
Built more than 125,000 public buildings
Sewing groups made 300 million garments for needy
Wrote guides for cities, collected slave narratives, painted murals, and
performed in theater groups
National Youth Administration (NYA) (Recovery)
Provided education, jobs, counseling, and recreation for young
people.
Student aid to high school, college and graduate students
Students worked part time at school
Or provided part-time jobs on highways, parks & grounds of public
buildings
Labor & the New Deal
National Labor Relations Act/ Wagner Act (Reform)
Reestablished collective bargaining & rt to join union
Prohibited unfair labor practices
Established National Labor Relations Board
Fair Labor Standards Act (1938) (Reform)
Max hrs: 44 hrs a week (in 2 years changed to 40)
Minimum wage: 25¢ per hr
Increasing to 40¢ by 1945
Set rules for employees under 16 & banned hazardous work for those
under 18
Social Security Act (Reform)
Old-age insurance for retirees 65 or older & spouse
Unemployment compensation system
Aid to families w/ dependent children & the disabled
Utility Reform
Executive Order: Rural Electrification Administration (REA)
1935: 12.6% of rural w/ electricity
1945: 45% & 1949: 90%
Public Utility Holding Company Act
Outlawed ownership of utilities by multiple holding companies
Summary:
Unit 8: Great Depression and the New Deal
Impact of New Deal p1
Liberal critics:
not enough to socialize the economy
Didn’t eliminate social inequalities or economic inequalities
Conservative critics:
made government too large
government too powerful
stifled free enterprise & individual initiative
Supporters: FDR struck a balance between unregulated capitalism & overregulated
socialism
Other Impacts
Expanded the role of the federal government
Expanded the role of the president
Increased federal deficit
Protected workers rights
Established policies protecting the public in banking & the stock market
Established the Social Security System
Farm subsidies & rural electrification
Conservation projects & environmental protection
Impact on women
Appointed to government positions
Frances Perkins: Secretary of Labor (1st female in cabinet)
Discriminated against in workplace
Federal wage codes set women’s wages lower
FERA & CWA hired few women, the CCC none
Increased # of married women worked outside of home.
Impact on African-Americans
100 African-Americans appointed to government positions
Mary McLeod Bethune
Helped organize “Black Cabinet”
Advised FDR’s administration on racial issues
Eleanor Roosevelt
Reformer & influenced husband to appoint both women & minorities
Resigned from the Daughters of the American Revolution when they
refused to allow an African-American singer to perform in D.C.
FDR did not support civil rights for African Americans
Refused to support federal anti-lynching law & an end to poll taxes
African-Americans formed groups to support farmers & workers
Mexican-Americans
Supported New Deal policies but received few benefits
~400,000 people of Mexican decent were deported to Mexico in the
1930s (many were US CITIZENS)
Migrant workers without permanent addresses (hint…) were ineligible
for programs like the CCC & WPA
Native-Americans
Indian Reorganization Act of 1934
Summary:
Unit 8: Great Depression and the New Deal
Impact of New Deal p2
Moved away from assimilation
Restored some native land to tribal ownership
Act mandated changes in economic, cultural & political areas
New Deal Coalition
A cohesive element of the Democratic Party from 1930s to the 1960s
Alignment of diverse groups dedicated to supporting the New Deal
Labor Unions Benefit
Union members had better working conditions & bargaining power
Union membership grew to over 10 million by 1941
Labor Splits
American Federation of Labor
Most members opposed industrial unions
Key leaders formed the Committee for Industrial Organization opening
it to skilled & unskilled workers
committee expelled from AFL & changed name to the Congress of
Industrial Organizations (CIO)
Split remains until 1955
Labor Disputes
Labor’s new tactics- Sit-down strike
Memorial Day Massacre
Republic Steel in Chicago
10 killed, 84 wounded
NLRB ordered Republic Steel to negotiate w/ the union
Culture in the 1930s & impact of the New Deal
Movies
25¢ provided escape from reality
Fred Astaire, Ginger Rogers & other stars
Hollywood, Ca
Radio
In nearly 90% of homes
Families spent hours together listening to the radio
“Fireside chats”
War of the Worlds: Orson Welles
Art, music & literature was sober & serious but also trying to promote positive images
WPA funded the Federal Art Project paying artists to produce art & the
Federal Theater Project to have actors perform plays
Woody Guthrie
Folk singer & songwriter captured hardships of America
Traveled country in order to learn from the experiences of hobos and
the homeless
Songs about hard times & hopes become popular
Wrote “This Land is Your Land”
WPA’s the Federal Writers’ Project
Writers examined the difficulties of the 1930s but also celebrated the
American culture
Summary: