1. 1930’s and The Great Depression
Lecture Notes

2. Misleading Prosperity
Consumerism was driven by credit
“installment plans” led to debt
Uneven distribution of wealth
wealthiest 5% earned over 30% of national income
Stock market boom was driven by speculation
“buying on margin”
Herbert Hoover elected in 1928
defeated Alfred E. Smith (D-NY)

3. The Crash “Black Tuesday”- October 29, 1929
panicked investors dump stocks
Confidence in the economy disappears
thousands of banks failed
Businesses failed, unemployment rose

4. Causes of the Great Depression
Unstable Economy:
National wealth unevenly distributed
More goods than consumers want (overproduction)
Many workers didn’t see the economic benefits
Made economic recovery difficult

5. Causes of the Great Depression
Overspeculation:
Buying stocks with borrowed money
Used stocks as collateral to buy more stock
Stock market based on borrowed money rather than actual value

6. Causes of the Great Depression
Government Policies:
Federal Reserve cut interests rates to boost economic growth.
1929: worry about speculation cause FED to limit the money supply (discourage lending)
Too little money in circulation to help economy recover after crash.

7. Depression Humor People blamed President Hoover for the economy
Hoovervilles
Hoover-blankets (newspapers)
“Chicken in every pot”
Rise in dark-humor

8. The Government Acts Agricultural Marketing Act (1929) –Pre crash
Relief for farmers & stabilize crop prices
Failure, sent prices falling
Hawley-Smoot tariff (1930)
Highest import tax in history
Europe raises their own tariffs
Halts international trade
Reconstruction Finance Corporation (RFC)
Gave government credit to large industries and insurance companies
Lent money to banks (for loans)

9. The Dust Bowl Environmental catastrophe struck the Midwest
drought, high winds
“Okies” fled westward to California (Route 66)
Struggles of migrant workers detailed in arts
Dorothea Lange’s photography
Woody Guthrie’s Dust Bowl Ballads
John Steinbeck’s The Grapes of Wrath

10. The New Deal

11. Relief vs. Recovery vs. Reform
Relief: to provide Americans with immediate assistance to help them with basic necessities of life, including food, direct monetary payments and employment.
Recovery: A policy or program that has its primary goal to promote growth in the American economy.
Reform: A policy or program that was designed to ensure that effects of the Great Depression did not occur again.

12. The “Hundred Days” FDR took immediate action
national bank holiday (Emergency Banking Act)
“Fireside Chats”
Federal Deposit Insurance Corporation (FDIC)
AAA, NIRA, CCC, TVA all passed in first 100 days

13. Creating Jobs Civil Works Administration (CWA)
Short term job creation program to build roads, airports, etc.
Tennessee Valley Authority (TVA)
dams to control floods, generate power

14. Protecting Workers National Recovery Administration (NRA)
codes to help business and labor
“Wagner Act” (1935)
guaranteed workers the right to collective bargaining
Child labor, minimum wage, and overtime laws passed

15. Helping Farmers Agricultural Adjustment Administration (AAA)
subsidized farmers who restricted production
ruled unconstitutional
new laws preserved farm subsidies

16. Challenges from the Right and Left
Conservatives attacked the New Deal for being “socialistic”
American Liberty League
Liberals claimed that the New Deal did not do enough
Francis Townshend campaigned for elderly
Father Charles Coughlin
Huey Long (Share-Our-Wealth Society)

17. The “Second New Deal”
Social Security Act provided unemployment, old-age pensions
Revenue Act of 1935 reinstated a graduated tax system
Works Progress Administration (WPA)
schools, post offices, hospitals, parks, bridges, roads, Federal Art Project
National Youth Administration (NYA)
gave part-time jobs to high school and college students
The Second New Deal focused more on reform, whereas the first had focused on relief and recovery.

18. Challenging the Court
Supreme Court had declared some programs unconstitutional
AAA, NRA
FDR proposed “court packing” scheme
additional justices for each over 70 years old
Congress rejected the plan

19. More Hard Times Recession hit in 1937
federal spending had been cut
unemployment rose
Roosevelt adopted Keynesian principles
deficit spending to encourage growth
The New Deal era ends around 1939
Concerns shift to Europe

20. American Cultural Scene of the 1930s
Movies and radio plays were popular during the Depression
Mr. Smith Goes to Washington, Gone with the Wind, Marx brothers, War of the Worlds (1938)
New Deal promoted American art, theatre, photography
Regionalism, folk art
Swing music became popular
Benny Goodman, Count Basie, Duke Ellington