1929WW II

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The Great Depression and the New Deal

• 1929-WW II

2
Herbert Hoover

• After the election of 1928, Hoover stated the
  future that It is bright with hope.
• Main problems overproduction about, especially
  for farmers

3
Black Tuesday

• Economy showed signs of slowing down in 1927
  based on a reduction in consumer spending, yet
  the stock market still rose!
• October 29, 1929- 16 million shares traded that
  day (3 million was considered a busy day)

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From Downright Bullish to Beary Bad
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1893 Depression
Imperialism
WW I
Depression
GNP Per Year
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The Country Reacts
Hoover

• Caution was the watchword
• Orders fell off
• wages decreased or ceased
• Declines in purchasing power brought further cuts
  to business
• Hundreds of factories and mines shut down
• Farms go into foreclosure
• Lax enforcement of antitrust laws encouraged
  monopolies and high prices

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Hoover Reacts

• Unlike his popular image, Hoover did NOT want to
  sit by and just let events take their course
• In fact, he did more than any previous president
  had ever done before in such dire circumstances
• Main problem he would not relinquish his belief
  that there needs to be limits on government
  involvement
• He hurried the building of public works to
  provide jobs
• Modest tax cut to help increase spending

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Built from 1931-1935. Total Bid 49,000,000
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Tariff

• Hawley-Smoot Tariff of 1930- established duties
  at an all time high
• Economists pleaded for him to veto bill
• Instead of helping, it hurt the farmers because
  it hurt export trade and raised consumer prices

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Hoover takes the Brunt

• People turned on the party in power
• Hoovervilles, Hoover Flags, Hoover Wagons
• 1930- Democrats gained the first national victory
  since Wilson, winning a majority in the House and
  major gains in the Senate

Hoover Blankets and random children
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Volunteerism, not Federal Relief
Hoover says, No soup for you!

• Hoover demanded that each community and state
  should work to relieve the distress
• He was totally against the dole or direct relief

12
Economics and Europe

• After a European economic panic based on a major
  bank failure, Hoover placed a one-year moratorium
  on reparations and war-debt payments this
  became permanent

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Hoover Finally Gives inSort of

• 1932- he agrees to use government resources to
  help financial institutions
• Reconstruction Finance Corporation loaned money
  to banks, insurance companies, farm mortgage
  associations and railroads

• It staves off bankruptcies, but Hoover received
  flack for favoring business
• Federal Home Loan Bank Act- created discount
  banks for home mortgages

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Farmers

• Statistics
• Bushel of Wheat in 1919 2.16
• 1929 .32
• Cotton in
• 1929 .17 a pound
• 1932 .05 a pound

• By 1931, relief had been abandoned when the govt.
  stopped buying surpluses
• Farmers net cash flow dropped by more than 55
• From 1930-1934 nearly one million farmers lost
  their farms to the bank

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Attempts to Fight Back

• Some farmers threatened to lynch judges who
  ordered foreclosure
• Others destroyed their crops or refused to
  deliver them to markets in need
• All failed some even joined the Communist party

16
Bonus Army

• 15,000 Unemployed veterans of WW I converged on
  Washington in 1932
• Wanted payment of bonus Congress had voted to be
  paid in 1945
• Hoover says no
• Many remain in the Capitol, creating shack towns
  or occupying abandoned government buildings
• Presence makes Hoover nervous orders buildings
  cleared

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Bonus Army Continued

• Shots go off two veteran killed
• Hoover sends in 700 soldiers under leadership of
  Eisenhower and Patton
• Chased the UNARMED veterans off, injuring many
  and killing a 11 week old baby
• Irony one of the men evicted had won an award
  for saving Pattons life in WW I
• Incident does not improve Hoovers public image

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http//us.history.wisc.edu/hist102/photos/html/112
9.html
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Bonus Army Dispersed by Tear Gas
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FDR Election of 1932

• In accepting the nomination, FDR commented
  Republican leaders not only have failed in
  material things, they have failed in national
  vision, because in disaster they have held out no
  hopeI pledge you, I pledge myself to a new deal
  for the American people.

FDR as a young man in 1917
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Campaign Song in 1932 Happy Days Are Here Again
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Election Results 1932
23
FDR Comes to Office

• Big difference between Hoover and Roosevelt is
  that Roosevelt was willing to incur deficits to
  prevent starvation and dire want
• Supported the repeal of Prohibition
• Takes office March 4th, 1933

• 20th Amendment- delay time as lame duck president
  now presidents take office on January 20th and
  newly elected Congress on January 3rd

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Roosevelt Declares War

• Orders a four day bank holiday to slow rate
  people are withdrawing funds to stop other banks
  from failing. Emergency Banking Relief Act- banks
  that were sound could reopen after 4 days those
  still in trouble were assigned managers. He
  renews confidence in banking through his first
  fireside chat banking crisis was over!
• I shall ask Congress for the remaining
  instrument to meet the crisis broad executive
  power to wage a war against the emergency as
  great as the power that would be given me if we
  were in fact invaded by a foreign foe.
• Roosevelts three step program Relief
  (immediate), Recovery (get back to time before
  Depression), Reform (measures to stop it from
  happening again)

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FDRs philosophy Take a method and try it. If
it fails admit it frankly and try another.
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Roosevelt Quick to Act

• December 5, 1933 21st Amendment repeals
  Prohibition
• Hundred Days- this is what Roosevelt asked of
  Congress and the people in order to put the
  country on the path of relief
• Congress enacted 15 major proposals unlike
  anything seen before

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Let the Recovery and Reform Begin

• Home Loan Act- home owners could refinance for
  lower monthly payment reduce foreclosures
  (continuation from Hoover)
• Glass-Steagal Banking Act creates the Federal
  Deposit Insurance Corporation (FDIC) to guarantee
  bank deposits up to 5,000 (today, 100,000)

30
Gold is Gone

• On April 19, 1933 the government abandoned the
  gold standard and made all contracts payable in
  legal tender
• Gold Reserve Act- authorized the president to
  impound all gold in the Federal Reserve

31
Alphabet Soup

• Alphabet soup is phrase used to describe FDRs
  numerous New Deal programs
• Civilian Conservation Corps (CCC)- designed to
  provide jobs to unmarried and unemployed men
  between 18 to 25. Worked in parks, forests, etc.
  Paid 30 a month but 25 had to go home to their
  family
• Racially segregated
• In Texas, blacks were told they were ineligible
  so they would not compete with whites for these
  jobs

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CCC Farming in Maryland 1933
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CCC Planting out West
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• Federal Emergency Relief Act- gave money to
  states through grants rather than loans
• wanted localities to create work rather than
  the dole most just went with dole because it
  was easier

Squatter, Arkansas 1935
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Agricultural Adjustment Act 1933

• Gave money to farmers to cut back on production
• Pay farmers to destroy livestock and crops

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Wheres the Bacon?

• Agriculture Secretary Henry Wallace it was
  troubling to see the spectacle of 6 million
  little ink pigs slaughtered before they could
  reach the full hogness of their hogdom.

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The Dust Bowl

• 1932-1935- devastating drought in the plains
• Caused great displacement and many headed west as
  seen in Steinbecks novel The Grapes of Wrath
• Impacted Mexican-Americans and African-Americans
  greatly
• Mexicans- not citizens, so they could not receive
  New Deal benefits
• African-Americans were sharecroppers and
  usually first to lose their land because need
  less land cultivated under the AAA

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Okies

• Dust Bowl refugees (a.k.a. migrant workers) were
  lumped together and called Okies
• Approximately 800,000 left their states and
  headed West, especially to California
• California was no paradise a lot of local
  competition from Mexicans and Asians for jobs

• Met a lot of social prejudice from Native
  Californians
• Steinbeck Okie usta mean you was from
  Oklahoma. Now it means youre a
  dirty-son-of-a-b. Okie means youre scum.
  Dont mean nothing in itself, its the way they
  say it.

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Back to the Soup

• National Industrial Recovery Act (NIRA)- focus on
  recovery through public works
• Public Works Administration (PWA)- building
  permanent improvements while providing jobs.
  Built Miami to Key West Bridge and the Chicago
  Subway System

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National Recovery Administration (NRA)

• Goals (membership voluntary, no membership
  unpatriotic)
• Stabilize business with codes of fair competitive
  practice (codes did not include farmers)
• more purchasing power by providing jobs, defining
  labor standards and raising wages
• Congress passed legislation that set a 40 hour
  week for clerical workers, a 36 hour week for
  industrial workers, a minimum wage of 40 cents an
  hour, abolished child labor and a guaranteed the
  right that trade unions could organize and
  exercise the right of collective bargaining.
  Declared unconstitutional in 1935.

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• However, violations of codes became common. and
  attempts were made to use the courts to enforce
  the NRA. In 1935 the Supreme Court declared the
  NRA as unconstitutional.
• The reasons given were that many codes were an
  illegal delegation of legislative authority and
  the federal government had invaded fields
  reserved to the individual states.

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Tennessee Valley Authority (TVA)

• Plan for an entire watershed to be used primarily
  for generating power, flood prevention and
  generating industry
• Built dams
• Brought cheap power to this area, especially to
  many farms that had never had electricity
• Electric lights and modern appliances made life
  easier and farms more productive. Electricity
  also drew industries into the region, providing
  desperately needed jobs.

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TVA Map
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New Deal Critics Huey Kingfish Long

• Senator from Louisiana
• Share Our Wealth Program- wanted to spread
  wealth equally throughout the country address
  the issue of wealth distribution

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Father Charles E. Coughlin

• Founded the National Union for Social Justice
• radio priest
• Favored coining silver and attacked bankers with
  comments that often bordered anti-Semitic
• Both Long and Coughlin pushed FDR to do more
  reform

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Second New Deal Programs

• Wagner act- workers given the right to bargain
  through unions of their own choice
• Social Security Act of 1935- (cornerstone of
  New Deal) pension fund for those over 65,
  established unemployment insurance programs, and
  began a broad range of social-welfare activities
  based on assumption that unemployables would
  remain a state responsibility while the national
  government would provide work for the able bodied

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Social Security Problems

• Took money out of paychecks, therefore out of
  pockets, so could not be spent
• Initially excluded farmers (surprise!), domestics
  and self-employed

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Works Progress Administration (WPA)

• This replaced the Federal Emergency Relief
  Administration- this provided money to help the
  unemployed find work in public works and the arts
• The WPA program in the arts led to the creation
  of the National Foundation for the Arts and the
  National Endowment for the Humanities.
• "I THINK THAT WE SHALL NEVER SEE / A PRESIDENT
  LIKE UNTO THEE . . . POEMS ARE MADE BY FOOLS LIKE
  ME, / BUT GOD, I THINK, MADE FRANKLIN D."
• http//www.pbs.org/wgbh/amex/dustbowl/peopleevents
  /pandeAMEX10.html

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Election of 1936
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Election of 1936

• For the first time since the 15th amendment, a
  majority of political active blacks voted
  Democratic
• One person claimed that their debt to Lincoln
  had been paid.

• Many believed Roosevelt would lose
• Critics complained that the economy had become
  too centralized and threatened both individualism
  and American liberty
• He won in a landslide

55
Court Packing Plan

• The Court had ruled against 7 of FDRs programs,
  mostly based on too extensive a use of executive
  power
• FDR feared for his Second New Deal programs they
  were more radical than the first New Deal
• Congress, not the Constitution determined number
  of justices FDR wanted more
• FDR wanted to increase the of Supreme Court
  justices from 9 to 16 and decrease power of
  judges who had served for ten or more years

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• Even Democrats fought over the implications of
  the plan
• It blew up in Roosevelts face never went
  through
• Yet, the court never struck down another New Deal
  Program
• In 1938 he appointed Hugo Black to the court a
  former Klan member

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Great Depression Ends

• Finally, in 1938, FDR asked for 33 billion to
  dump into both the PWA and WPA to help increase
  spending and reverse the once again declining
  economy
• His failure to adopt an even greater amount of
  government spending, as called for in pure
  Keynesian economic theory, retarded the economies
  ability to fully recover
• Recovery to pre-1929 levels would occur during WW
  II