The Great Depression 1927 – 1933 The New deal Chapter 24 & 25

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

Critical Mass 1920s optimism drives increase in expectations of a better way of life The Great Crash ▫After 1929 despair sets in—all classes The Dust Bowl ▫Several States—north 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%.

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

The Crash w&feature=relatedhttp:// w&feature=related

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 soaring stock prices attract individual, corporate investment stock market crashes ▫ directly affects 3 million ▫ credit crunch stifles business Businesses lay off workers Demand for consumer goods declines

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."

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.

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.

Unemployment,

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 shouldn’t intervene with the economy. families could turn the economy around if they continue to work hard and rely on themselves.

Smoot-Hawley Tariff 1930 Increased the tariff rates on imported goods. Foreign nations boycott American products. This severely hurts American producers who were in dire need of sales.

Society and the Crash &feature=relatedhttp:// &feature=related

The Jobless

The Homeless

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

The Rail Yard Hobos

The Migrants The “Arkies” and the “Okies”

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

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

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

The Emergence of Roosevelt Franklin Roosevelt  born to wealth and privilege  crippled by polio  elected governor of New York  talented politician defeats Hoover with farmer- worker- immigrant-Catholic coalition

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“

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

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

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.

Black Sunday April 14, 1935 April weeks of dust storms, Cloud appeared on the horizon Winds were clocked at 60 mph. Then it hit.

The Dust Bowl H3JEhttp:// H3JE

Roosevelt and Recovery N a tional Recovery Administration 1933 ▫ Codes eliminate cut-throat competition, ensure labor peace ▫ favor big business, ▫ 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

Roosevelt and Relief Reconstruction Finance Committee (RFC) to direct aid to unemployed The Federal Deposit Insurance Corporation created to insure consumers’ deposits in FDIC-enrolled financial institutions –up to $ Works Progress Administration (WPA) place unemployed on federal payroll

1933--Civilian Conservation Corps provides employment to youth

Roosevelt and Relief Works Progress Administration (WPA) place unemployed on federal payroll

Roosevelt and Reform focus on immediate problems shift to permanent economic reform

The Tennessee Valley Authority Water Navigation Flood Control Electricity Use Federal funds to modernize region

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

Labor Legislation Wagner Act  allows unions to organize  outlaws unfair labor practices Fair Labor Standard Act  maximum hour  minimum wage

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

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

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 v=hphgHi6FD8k

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

End of the New Deal New Deal peaks with Roosevelt’s reelection Congress resists programs after 1936 Least assistance for women, ethnics groups and laborers

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

The Election of 1936 FDR’s 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

The Supreme Court Fight Supreme Court blocks several of FDR’s first- term programs FDR seeks right to "pack" Court Congressional protest forces retreat FDR’s opponents emboldened

The New Deal in Decline cutbacks for relief agencies severe slump hits economy Roosevelt blamed, resorts to huge government spending Republican party revives

The New Deal and American Life New Deal’s 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