The Great Depression and the New Deal 1929-1939 Chapter 24 The Great Depression and the New Deal 1929-1939

Introduction Franklin D. Roosevelt The New Deal Elected president in 1932 During the Great Depression Dominated national politics until his death in 1945 The New Deal FDR’s programs Aimed at relief, recovery, and reform

Introduction (cont.) The New Deal went through 2 phases 1933-1935 1935 1st New Deal Attempted to unite all Americans Relief and recovery measures 1935 2nd New Deal More radical Impose greater govt. regulation Introduced legislation to benefit workers, farmers, sharecroppers, and others at the bottom of the economic ladder

Introduction (cont.) 1.) What were the causes of the 1929 stock market crash and of the depression that followed? 2.) What was the social and political impact of the crash and depression? 3.) What strategy did the first New Deal employ, and what specific measures were passed to implement it? 4.) Why did Roosevelt turn to a second New Deal in 1935, and what major legislation expressed the shift?

Introduction (cont.) 5.) How did the depression and New Deal affect farmers, workers, women, and minorities? 6.) Which New Deal programs failed and why? Which programs still have an impact on the nation and why? 7.) How did the economic hard times affect American arts and popular culture?

Crash and Depression, 1929-19323 Black Thursday and the Onset of the Depression In 1928, a wave a wild speculation started 9 million Americans played the market in hope of quick profits This drive stock prices to dangerously inflated levels Worse yet, they often speculated on borrowed $$$ They bought on margin

Black Thursday and the Onset of the Depression (cont.) Factors contributed to the speculation: Low taxes for the rich Created by Sec. of Treasury Andrew Mellon The easy-credit policy of the banks The optimistic buyers ignored warning signs Falloff of new construction

Black Thursday and the Onset of the Depression (cont.) Oct. 24, 1929 Black Thursday Speculative bubble bust Stock prices plummeted Panicked shareholders rushed to sell On the following Tuesday, the plunge continued History Channel video--Black Tuesday This stock market crash trigged the worst depression in U.S. history History Channel video--1920's economic troubles

Black Thursday and the Onset of the Depression (cont.) Between 1929 and 1933, the nation sank deeper and deeper into depression Farm prices declined by 60% 5,500 banks failed Unemployment rose to 25%

Black Thursday and the Onset of the Depression (cont.) What were the causes of the Great Depression? Structural vs. monetary policies Many economists point to the structural weaknesses in the economy: 1.) Workers’ wages did not rise sufficiently during the 1920’s to allow them to buy all of the consumer goods coming off the factory assembly lines By 1929, there was an overproduction crisis More houses, automobiles, electric appliances, etc. for sale than there were Americans who could afford to buy them

Black Thursday and the Onset of the Depression (cont.) 2.) The 1920’s depressed agricultural sector further weakened the economy. 3.) The collapse of European economies under the weight of WWI debt repayments and the unfavorable balance of trade with the U.S.A. This caused our foreign sales to fall sharply

Black Thursday and the Onset of the Depression (cont.) The monetarist school of economist claim it was the tight-money policy of the Federal Reserve Board in the early 1930’s that caused the Depression Contracted credit denied businessmen the capital they needed to start new ventures and get the economy rolling again

Hoover’s Response President Hoover’s ideological commitment to private-sector initiative, limited govt. intervention, and balanced federal budges severely handicapped him in dealing with the Depression Hoover asked business leaders not to: lay off any more workers impose further wage cuts Business leaders initially agreed They later broke their pledge because they could not sell their products

Hoover’s Response (cont.) Hoover preached that private charity and local govt. must handle relief for the jobless Private philanthropy and city and county govts. were soon overwhelmed by the numbers needing help Reconstruction Finance Corporation Empowered to lend money failing business corporations He held out until July 1932 in using any federal funds to assist states in helping the unemployed

Hoover’s Response (cont.) His pronouncements in favor of self-help and local initiative made him seem indifferent to the suffering of depression victims

Mounting Discontent and Protest Millions of people lost their jobs They and their families often were unable to feed themselves or pay rent They wandered the country looking for work They often lived in shantytowns called “Hoovervilles” “Hoover Valley” in Central Park was the most famous

“Hoovervilles”

“Hoovervilles” (cont.)

“Hoovervilles” (cont.)

“Hoovervilles” (cont.)

Mounting Discontent and Protest (cont.) Everywhere banks foreclosed on farmers and homeowners who could not meet mortgage payments The spreading mood of despair and confusion resulted in an expanded suicide rate

Mounting Discontent and Protest (cont.) As conditions worsened, protests escalated Midwestern farmers tried to raise agricultural prices by halting the shipment of food to cities Destitute veterans marched on Washington demanding immediate cash payment of their bonuses for WWI service Hoover ordered the army to remove the “bonus marchers” from the capital The sight of armed troops expelling peaceful veterans convinced the public of Hoover’s callousness

Mounting Discontent and Protest (cont.) Writers in the early thirties reflected the despair and disillusionment with life in capitalist America John Dos Passos The 42nd Parallel James T. Farrell Young Lonigan Jack Conroy The Disinherited

The Election of 1932 Republicans nominated Hoover Stuck by his failed antidepression measures Democrats nominated Franklin D. Roosevelt Not clear on how he would fight the Depression The anti-Hoover sentiments of the people carried FDR and the Democrats to lopsided victories in the presidential and congressional elections History Channel speech--FDR inaugural address

The New Deal Takes Shape, 1933-1935 Roosevelt and His Circle The promise of govt. action and the mood of optimism in FDR’s inaugural address lifted peoples’ spirits New Deal Relief, recovery, and reform measures “brain trust” A circle of Roosevelt’s advisers Devised broad programs of “federal economic planning”

Roosevelt and His Circle (cont.) Eleanor Roosevelt Along with her social worker and women reformer friends Pushed for legislation to assist the economically disadvantage and minority groups

Roosevelt and His Circle (cont.) Old-time Progressives, university professors, and able young lawyers joined the Roosevelt administration to contribute ideas and administer new programs

The Hundred Days March 9 and June 16, 1933 The administration introduced and Congress passed an unprecedented volume of legislation These laws had the overall effect of greatly increasing federal involvement in the economy

The Hundred Days (cont.) Federal Deposit Insurance Corporation FDIC Insured bank accounts up to $5,000 Civilian Conservation Corps CCC Employed jobless young men on conservation projects Home Owners Loan Corporation and the Farm Credit Administration Refinanced mortgages Saved homes and farms of millions

The Hundred Days (cont.) Other important laws imposed regulation on the stock market Tennessee Valley Authority TVA Electricity to rural America Public Works Administration PWA Construction of public projects/improvements

The Hundred Days (cont.) Federal Emergency Relief Administration FERA Federal $$$$ for relief efforts Agricultural Adjustment Act AAA Aimed at reviving agriculture Guaranteed prices for agricultural produce Paid farmers for not growing crops that were in surplus

The Hundred Days (cont.) National Recovery Administration NRA Aimed at reviving businesses Helped business draft and enforce codes to eliminate cutthroat competition, price-cutting, and the use of child labor Management promised to bargain with the unions chosen by their employees

Problems and Controversies the Early New Deal Complaints concerning the NRA multiplied Management resented govt. regulation Small businesses claimed that the codes helped only the big farms The NRA was bogged down in supervising code making in every possible industry In 1935, the Supreme Court ruled that the NRA was unconstitutional

Problems and Controversies the Early New Deal (cont.) Overall farm income rose by 50% between 1933 and 1937 Drought the AAA payment not to grow surplus crops The AAA did nothing for landless farm laborers It hurt tenants and sharecroppers Landlords kicked many tenants and sharecroppers off their property Landlords pocketed the govt. subsidy checks

Problems and Controversies the Early New Deal (cont.) Poor farmers also fell victim to the vast dust storms that rolled over the Upper South and the Great Plains Destroyed the crops in their paths History Channel video--Dust Storm History Channel speech--Dust storms Many poor farmers, tenants and sharecroppers headed for CA They struggled to survive as migratory farm laborers

Challenges from Right and Left, 1934-1935 When the first phase of FDR’s New Deal did not end the Depression, frustration with and criticism of Roosevelt began In 1934, there were thousands of strikes Some led by communists American Liberty League Created by business leaders and conservatives Charged that the New Deal was radical and socialistic Wanted to defeat New Dealers at the polls

Challenges from Right and Left, 1934-1935 (cont.) FDR and policies retained the support of most Americans In the 1934 midterm congressional elections the Democrats greatly increased their majorities in the House and Senate

Challenges from Right and Left, 1934-1935 (cont.) In 1935, Roosevelt proposed a second burst of reform, relief, and recovery legislation Hoped to lessen the discontent and steal the thunder of the extremists

The New Deal Changes Course, 1935-1936 Introduction Roosevelt took a swing to the left He proposed to Congress a new package of reform measures “Second New Deal” Emphasis on aiding the disadvantaged rather than trying to appeal to all classes

Expanding Federal Relief Emergency Relief Appropriation Act Congress passed in 1935 Granted nearly $5 billion Expanded work-relief programs Works Progress Administration WPA Headed by Harry Hopkins Received the largest amount of $$$ from the Emergency Relief Appropriation Act

Expanding Federal Relief (cont.) WPA (cont.) 1935-1943 Employed over 8 million people Construction Clerical Professional Arts endeavors Thousands of roads, bridges, schools, hospitals, post offices, and other public facilities were constructed or repaired Millions of Americans enjoyed free or low-cost plays and concerts, saw murals and paintings, and received instruction in the arts

Expanding Federal Relief (cont.) National Youth Administration Another new agency Provided part-time jobs for students Allowed thousands of young people who otherwise could not have afforded to go to or remain in college The PWA also shared in the $$$$ Used for major construction projects

Expanding Federal Relief (cont.) The large amounts of money spent on these work- relief programs caused mounting federal budget deficits British economist John Maynard Keynes Said such deficit spending was a positive way to pump funds into the economy and combat the Depression Called Keynesian economics

Aiding Migrants, Supporting Unions, Regulating Business, and Taxing the Wealthy The massive relief programs and other laws of the 2nd New Deal were not intended to please all social classes They openly aimed at serving the needs of labor and the rural and urban poor Resettlement Administration May 1935 Resettled and/or made loans to small farmers, tenants, and sharecroppers to turn them into farm owners on productive land Agriculture as a whole suffered a blow when the Supreme Court declared the AAA as unconstitutional (1936)

Aiding Migrants, Supporting Unions, Regulating Business, and Taxing the Wealthy (cont.) Wagner Act Aka: National Labor Relations Act July 1935 Pro-union Stimulated the growth of organized labor Required employers to recognize their employees’ unions Employers also must bargain with those unions Established the National Labor Relations Board Acts as a watchdog in labor-management relations

Aiding Migrants, Supporting Unions, Regulating Business, and Taxing the Wealthy (cont.) Revenue Act 1935 Boosted taxes on corporations and upper-income Americans Wealthy called it the “Soak the Rich” law

The Social Security Act of 1935; End of the Second New Deal Created by Frances Perkins Secretary of Labor The Social Security Act provided: Old-age pensions Survivors’ benefits for families of deceased workers Unemployment insurance Aid to dependent mothers and children Aid to handicapped The 1935 law did not cover farmers and domestic workers

The Social Security Act of 1935; End of the Second New Deal (cont.) Roosevelt’s New Deal now concerned itself more fairly with the needs of other segments of the population (besides business): Workers Farmers Poor mothers and children Sharecroppers

The Social Security Act of 1935; End of the Second New Deal (cont.) FDR’s vigorous leadership also had the long-term effect of strengthening the powers of the presidency He also broadened the Americans’ expectations of the role that the nation-state should play in society

The 1936 Roosevelt Landslide and the New Democratic Coalition Republicans nominated Alfred Landon Democrats renominated FDR Roosevelt swept every state but ME and VT The Democrats increased their large majorities in Congress

The 1936 Roosevelt Landslide and the New Democratic Coalition (cont.) The victories resulted from a new Democratic coalition that had emerged It consisted of: The South Urban immigrants Industrial workers Farmers African-Americans Women

The 1936 Roosevelt Landslide and the New Democratic Coalition (cont.) African-American voters were attracted to the Democratic party by Roosevelt’s aid to the poor and his stepped-up appointments of African-Americans to responsible govt. positions The Roosevelt administration also made careful efforts to cultivate women’s votes

The Environment and the West The New Deal achieved an impressive record in conservation The CCC built hiking trails, thinned forests, and planted thousands of trees The Departments of Agriculture and the Interior taught farmers soil-conservation practices and stopped overgrazing on public lands The TVA’s dams controlled earth-eroding floods

The Environment and the West (cont.) The West was the region perhaps most aided by New Deal projects Highways linked it to the rest of the nation were repaired and upgraded Western dams provided the West with hydroelectric power, flood control, irrigation, and soil conservation Boulder (Hoover), Shasts, Grand Coulee, etc. History Channel speech--Hoover Dam

The Environment and the West (cont.) The PWA and WPA also supplied western states with thousands of public structures Ranged from bridges to post offices to ski lodges

The New Deal’s End Stage, 1937-1939 FDR and the Supreme Court In Feb. 1937, FDR proposed a court reform bill that would allow the president to appoint a new Supreme Court justice to serve alongside each member of the Court who had reached 70 years old and would not retire “court-packing” plan The reason Roosevelt requested this change was because the aging, conservative majority on the Supreme Court had been declaring reform and recovery laws unconstitutional NRA AAA

FDR and the Supreme Court (cont.) The Supreme Court also seemed likely to invalidate the Social Security and Wagner Acts FDR did influence a number of the elderly, conservative judges to modify their views or retire Between 1937-1939, FDR was able to fill 4 Court vacancies with liberal New Dealers The Supreme Court upheld the Wagner Act

The Roosevelt Recession Aug. 1937 The economy turned sharply downward The causes: 1.) a reduction in consumer spending power because of social-security deductions 2.) a tightening of money supply when the Federal Reserve Board raised interest rates 3.) cutbacks in New Deal work and relief programs to try to balance the budget

The Roosevelt Recession (cont.) Roosevelt had to ask Congress for new appropriations to revive and expand the PWA, WPA, and other programs Because of rising unemployment and slumping industrial output This restarted economic recovery

Final Measures; Growing Opposition In Roosevelt’s 2nd term, Congress passed only a few reforms Housing Act of 1937 Fair Labor Standards Act 1937 Farm Tenancy Act Replaced the Resettlement Administration with the Farm Security Administration A 2nd Agricultural Adjustment Act

Final Measures; Growing Opposition A coalition of conservative, southern Democrats and Republicans blocked further reform Roosevelt attempted to break up this anti-New Deal coalition by asking voters to defeat conservatives in the 1938 election The people instead elected more conservatives FDR then switched his attention to foreign affairs He proposed no additional domestic reform The New Deal ended

Social Change and Social Action in the 1930s The Depression’s Psychological and Social Impact The Depression imposed tremendous suffering The unemployment rate never fell much below 14% during the thirties A quarter of all farm families had to accept relief to survive 1 million elderly accepted relief The hard times brought physical and emotional distress The Depression stamped on many living through it a “a dull misery in the bones.”

The Depression’s Psychological and Social Impact (cont.) Women workers: suffered about 20% unemployment rate Were often displaced by men in teaching, social work, and librarianships Usually were paid less than men Were often told if that if they married, they would be fired Some women workers were helped by unions and by the Fair Labor Standards Act But many of the occupations which women held were not covered by either

The Depression’s Psychological and Social Impact (cont.) Despite all these disadvantages, the proportion of women in the labor force continued to grow Hard times brought changes in family life and population trends Marriage and birthrates declined Desertion increased Population growth slowed

The Depression’s Psychological and Social Impact (cont.) The Depression broke some families up It also produced in other families a greater solidarity The Depression also promoted a spirit of cooperation among people

Industrial Workers Unionize In 1933, fewer than 3 million workers belonged to unions Management in the steel, automobile, textile, and other mass-production industries had defeated all previous attempts to organize their employees In the 1930’s, there was a renewed interest in unions: the combination of hard times the prolabor attitude of the govt.

Industrial Workers Unionize (cont.) Workers that remained unorganized: Textile workers in the South Agricultural laborers Domestics Most women Most African-Americans Recent immigrants

Industrial Workers Unionize (cont.) Union membership rose to more than 8 million Powerful corporations gave in to unionization because: Of workers’ militancy The refusal of the New Dealers to put the power of govt. on the side of business against the strikers

Industrial Workers Unionize (cont.) Labor unity in the 1930’s, was more apparent than real Many of the union leaders were radicals They wished to get rid of capitalism The rank-and-file members just wanted improved wages, hours, and conditions

African-and Hispanic-Americans Resist Racism and Exploitation The Depression slowed the movement of African-Americans to cities and to the North By 1940, 75% of the 12 million African-Americans lived in the South African-Americans in agriculture and industry had high rates of displacement unemployment Often denied equal protection of the law Lynchings, etc.

African-and Hispanic-Americans Resist Racism and Exploitation (cont.) The NAACP battled against lynchings, segregation, and disenfranchisement “don’t shop where you can’t work” campaigns Harlem in 1935 A major race riot Caused by resentment against employment and other types of discrimination

African-and Hispanic-Americans Resist Racism and Exploitation (cont.) The Depression was equally hard on more than 2 million Hispanics Many of the Mexican immigrants were migratory farm laborers Competed for jobs with “Okies” arriving in the Southwest Employers and relief officials put pressure on Hispanics to return to Mexico Surplus of farm workers About 500,000 did so during the 1930s

African-and Hispanic-Americans Resist Racism and Exploitation (cont.) Those who remained either drifted to barrios of southwestern cities or worked for miserably low wages on large farms Mexican-Americans struck for better pay and were sometimes successful

African-and Hispanic-Americans Resist Racism and Exploitation (cont.) Asian-American farmers and agricultural workers also suffered from discrimination and efforts to remove them from the country

A New Deal for Native Americans Poorest of all Americans By 1933, they had lost 2/3rds of their land to the whites John Collier FDR’s commissioner of Indian affairs He used New Deal agencies to create jobs and build much-needed facilities on Indian reservations

A New Deal for Native Americans (cont.) Collier also proposed legislation: To end the Dawes Act Stop all further sale of Indian lands Grant self-govt. to the tribes Encourage the revival of Native American culture

A New Deal for Native Americans (cont.) Indian Reorganization Act 1934 Reversed the steady loss of Indian lands Restored tribes as legal entities Set the stage for later law suits by Native Americans to regain rights and land promised in long-violated treaties

The American Culture Scene in the 1930s Avenues of Escape: Radio and the Movies Listening to the radio was a very popular activity Gave people an escape from bleak economic reality Comedy of Jack Benny, George Burns, Soap operas Mass culture became even more standardized than it had been in the twenties

Avenues of Escape: Radio and the Movies (cont.) Movies were also extremely popular Most films offered escape from a troubled world Little Caesar (gangster movie) Gold Diggers of 1933 (musical) Marx Brothers comedies Hollywood films of the thirties presented most characters as stereotypes

The Later 1930s: Opposing Fascism; Reaffirming Traditional Values (cont.) Cultural nationalism was on the rise: 1.) rise of aggressive fascism abroad Threatened all the democratic and humanitarian values the U.S.A. claimed to uphold 2.) the Communists (from 1935-1939) praised New Deal American and advocated a Popular Front against fascism Spanish Civil War (1936-1939)--loyalists vs. fascist rebels led by Francisco Franco

The Later 1930s: Opposing Fascism; Reaffirming Traditional Values (cont.) Novels that paid tribute to the endurance of America’s rural poor: The Grapes of Wrath John Steinbeck Let Us Now Praise Famous Men James Agee and Walker Evan Composers used American folktales and racial minorities in their works Aaron Copland George Gershwin

The Later 1930s: Opposing Fascism; Reaffirming Traditional Values (cont.) American jazz and swing music blossomed Regional writers and artists depicted their home sections Zora Neal Hurston William Faulkner Thomas Hart Benton American folk art and historical museums became popular Novels became popular to the masses

Streamlining and a World’s Fair: Corporate America’s Utopian Vision Change by American businesses Hoped to boost sales Making identical objects over and over The World’s Fair was in NYC in 1939 Belief in science and technology as a means to economic prosperity and personnel freedom Americans gained hope and optimism for their society in the future Many Americans experienced growing apprehension about the gathering war clouds in Europe

Conclusion Economists believe the Great Depression was caused by weaknesses in the 1920’s economy: Low farm prices Uneven income distribution Tight credit Contracted money supply The Depression affected different groups in different ways but it touched all aspects of American life

Conclusion (cont.) Roosevelt’s New Deal did not fully lift the country out of the Depression The New Deal did bring about major reforms: Social Security Wagner Act Introduced tougher regulation of big business The New Deal set a precedent for greatly expanded federal govt. involvement in the economy and society FDR’s experimental approach and determined optimism served the nation well during one of it’s darkest times