THE GREAT DEPRESSION

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THE GREAT DEPRESSION

• Unit VIB
• AP U.S. History

2
Fundamental Question

• Analyze how the Great Depression changed
  Americas political and economical structures.

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Past Major American Recessions

• Panic of 1807
• MAJOR CAUSE Embargo Act of 1807
• Panic of 1819
• MAJOR CAUSES End of War of 1812 and First Bank
  of U.S. not rechartered
• MAJOR LEGACY Second Bank of U.S. chartered,
  first example of business cycle contraction
• Panic of 1837
• MAJOR CAUSES Second Bank of U.S. not rechartered
  and Specie Circular
• Panic of 1873
• MAJOR CAUSES Land and railroad speculation
• Panic of 1893
• MAJOR CAUSES Railroad speculation and Sherman
  Silver Purchase Act
• MAJOR LEGACY J.P. Morgan bailed out government
  with 65 million in gold bullion
• Panic of 1907
• MAJOR CAUSES Stock market speculation and bank
  runs
• MAJOR LEGACY Led to Federal Reserve System
• Depression of 1920-1921
• MAJOR CAUSES War economy to peace economy,
  influx of laborers, overproduction in
  agricultural sector

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Republican Policies of 1920s

• Harding-Coolidge-Hoovers laissez-faire policies
• Banks and corporations increased questionable or
  corrupt financial tactics
• Mellons Tax Bill
• Revenue Acts of 1824, 1826, 1828 decreased tax
  rates
• Inspired massive consumer and investment spending
• Fordney-McCumber Tariff (1922)
• Heavily favored industries and factories
• Farmers suffered with limited foreign markets

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A Boom Economy during 1920s

• Mass Consumerism
• Scientific management and assembly lines spurred
  production
• Welfare capitalism led to wage increases and
  consumer confidence
• Installment plans led to consumer debt
• 1920s Socioeconomics
• Socioeconomic gap widened further than Gilded Age
• 5 wealthy class owned 33 of income
• Top 1 owned over 35 of the nations wealth
• Bottom 20 owned 4 of the nations wealth
• Agricultural Sector
• Overproduction
• Price decreases after World War I
• Increased farming resulted in poor environmental
  conditions

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The Stock Market and the Crash of 1929

• Background
• Speculation
• Buying on Margin
• The Crash of 1929
• 381.17 (9/3/29)
• Concern over high stock prices led to massive
  sell-off
• Thursday, October 24
• 299.50
• Monday, October 28
• 260.64
• Tuesday, October 29
• 230.07
• 41.22 (7/8/32)

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Causes of the Great Depression

• Unequal Distribution of Wealth
• Industrial Overproduction
• Agricultural Crisis
• Overextension of Credit
• Bank Failures
• Stock Market Crash of 1929
• High Tariffs
• Dawes Plan and Foreign Loans

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Hoover and the Republicans

• Given the chance to go forward with the policies
  of the last eight years, we shall soon with the
  help of God, be in sight of the day when poverty
  will be banished from this nation. -
  Inauguration, March 4, 1929
• There is no cause to worry. The high tide of
  prosperity will continue. Sec. Of Treasury
  Andrew Mellon, Sept. 1929
• While the crash only took place six months ago,
  I am convinced we have now passed the worst and
  with continued unity of effort we shall rapidly
  recover. Pres. Hoover, May 1, 1930
• The worst is over without a doubt. Sec. Of
  Labor James Davis, June 29, 1930
• Hoovers Economic Philosophy
• Promote voluntarism, restraint, and self-reliance
• Limited federal government involvement
  facilitate with business sector and banking
• Hawley-Smoot Tariff (1930)
• Historical increase in tariff rates to protect
  domestic industries
• EPIC FAIL - since foreign nations enacted high
  tariff rates on U.S. goods
• Federal Farm Board
• Increased power to temporarily hold crop
  surpluses to curb overproduction
• FAIL - since government would not limit
  production
• Reconstruction Finance Corporation (RFC)
• Government-backed private corporation to offer
  loans to banks, corporations, insurance
  companies, and railroads
• FAIL - did not offer relief to individual
  Americans

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Depression by Numbers

• Bank Failures
• 1929 659 banks (200,000,000)
• 1930 1,300 banks (853,000,000)
• 1931 2,294 banks (1,700,000,000)
• Income
• National income fell 80B to 50B
• Salaries declined 40
• Manufacturing wages down 60
• Farmers income declined 55
• Industrial production
• Down 26 in 1930 51 by 1932
• Investments
• 10B in 1929 1B in 1932
• Fertility Rates
• 1928 93.8
• 1933 76.3
• Suicide Rates
• 1920-1928 12.1
• 1929 18.1

• Dow Jones Industrial Average
• 1929 381.17
• 1932 41.22
• The average of stock prices dropped over 90
• Price Indices
• Consumer prices feel 25
• Wholesale prices fell 32
• Unemployment
• 1929 3.2
• 1933 24.9
• Unemployment rates higher in specific regions,
  among different groups
• Toledo, OH 90
• GDP
• 1929 103.6B
• 1933 56.4B

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Hoovervilles
Displaced Americans set up shanty towns Came to
be known as Hoovervilles
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Public Reaction to Depression

• Blame and Needs
• Hoover and Republicans suffer public backlash
• Public demands direct government action and
  intervention
• Farmers Holiday Association
• Bonus March
• WWI veterans marched on D.C. demanding early
  payments of pensions
• Federal troops sent in to break up Hoovervilles
• Burned down shacks and displaced veterans and
  families
• Public backlash on Hoover increased due to
  perceived apathy by Hoover

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Depression through Pictures
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The Dust Bowl (1930-1936)

• Causes
• Overgrazing
• Improper farming techniques
• Increased cultivation
• Drought in 1934
• Effects
• Dust storms
• Black Sunday - April 14, 1935
• 300 million tons of topsoil blown across southern
  Plains region
• Plight for farmers
• Migration west
• Okies

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Dust Turns Day Into Night
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Election of 1932

• Republicans
• Herbert Hoover
• Blamed and criticized for causing and
  exacerbating Depression
• Democrats
• Franklin Delano Roosevelt (FDR)
• Campaign promise of a new deal and help for the
  forgotten man
• Repeal Prohibition
• Cut government spending and provide direct
  assistance for unemployed rather than businesses

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Legacy of Election of 1932

• Realignment election leading to the Fifth Party
  System
• Twentieth Amendment (1933)
• Lame-duck amendment
• FDR expanded intervention and influence of the
  executive branch
• Eleanor Roosevelt exemplified First Lady as more
  than just a hostess

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Fifth Party System (1932-1968)

• Democrats
• New Deal Coalition
• Catholics
• Jews
• Blacks
• Progressive Intellectuals
• Urban Machines
• Populist Farmers
• White Southerners
• Labor Unions
• Low-Income
• Immigrants
• Dominated Congress and American public for the
  next 36 years
• Increased government involvement in economy and
  society
• New Deal
• Great Society
• Civil Rights

• Republicans
• Pro-business
• Northeast
• Conservatives
• Economic
• Social

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John Maynard Keynes

• Before the New Deal
• Classical economics
• Supply and demand, laissez-faire
• Economies will naturally recover in the long-run
• Says Law
• products are paid for by products
• Keynesian Economics
• In the long-run we are all dead.
• Criticized Says Law supply creates its own
  demand
• Strong aggregate demand drives economies
• Mixed Economies
• Some intervention from public sector to stimulate
  economy
• Fiscal policy
• Government spending/deficit spending
• Monetary policy
• Fed increasing or decreasing the money supply

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FDRs Message of Hope

• FDR had no specific plan for the Depression
• Calming the nation
• the only thing we have to fear is fear
  itself.
• Fireside chats
• The Three Rs
• Relief
• Recovery
• Reform
• Brain Trust
• Capable advisers ordered to experiment, be
  pragmatic
• Do something.

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First New Deal - Alphabet Soup

• Civil Conservation Corps (CCC)
• Agricultural Adjustment Act (AAA)
• Federal Emergency Relief Act (FERA)
• Tennessee Valley Authority (TVA)
• Homeowners Refinancing Act (HRA)
• National Industrial Recovery Act (NIRA)
• National Recovery Administration (NRA)
• Public Works Administration (PWA)
• Federal Deposit Insurance Corporation (FDIC)
• Glass-Steagall Act
• Securities Exchange Commission (SEC)
• Federal Housing Administration (FHA)

• First Hundred Days
• Bank Holiday
• Emergency Banking Relief Act
• Farm Credit Act
• Gold Reserve Act
• 21st Amendment (1933)
• 18th Amendment and Prohibition repealed

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The Second New Deal (1935-1938)

• Resettlement Administration (RA)/Farm Security
  Administration (FSA)
• Resettled poor farmers economic and educational
  programs for farmers
• Revenue Act of 1935
• Increased tax rates on wealthy, capital gains,
  gifts, inheritance
• Works Progress Administration/Works Projects
  Administration (WPA)
• National labor project for infrastructure and
  humanities
• National Youth Administration (NYA)
• Rural Electrification Administration (REA)
• Public-private effort to electrify farms and
  rural areas
• Social Security Act (1935)
• Tax on employee income to be used for retired
  persons, disabled, dependents, unemployed
• Wagner Act (1935)
• National Labor Relations Board
• Fair Labor Standards Act (1938)
• Established national minimum wage
• Maximum 40 hour workweek and overtime
• Child labor under 16

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Election of 1936

• Democrats
• Popularity of New Deal
• New Deal Coalition
• Republicans
• Alfred Landon, Governor of Kansas
• Pro-business and conservative criticism of New
  Deal

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Federal government used posters, songs,
advertisements, literature to promote and support
FDRs New Deal programs among the American public
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New Deal Reactions

• Majority of Americans approved of FDRs programs
• Business leaders and corporations called him
  traitor or fascist or communist
• Boondoggles
• American Liberty League
• Father Charles Coughlin
• Radio broadcasts attacking FDR
• Pro-fascist and anti-Semitic remarks
• Huey Long Kingfish
• Share the Wealth
• 5000 for every family, 2,000 annually
• Heavily tax wealthy

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FDR and Court Packing

• Supreme Court reversed several New Deal programs
• United States v. Butler
• AAA unconstitutional
• Schecter Poultry Corp. v. United States
• NIRA unconstitutional
• Justice Reorganization Bill
• Appoint new justices for every justice over 70
• 6 additional justices
• Most of Congress defeated bill
• Designed to pressure Supreme Court to approve New
  Deal programs
• Compared FDR to fascists in Europe

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New Deal and Labor

• AFL strengthened by union-backed New Deal
  legislation
• National Labor Relations Act/Wagner Act
• Fair Labor Standards Act
• Congress of Industrial Organizations (CIO)
• Organize unskilled laborers in major industries
• Industrial unionism
• Strikes
• Auto industry recognized United Auto Workers due
  to sit-down strikes
• Republic Steel violent strike helped recognize CIO

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End of the New Deal

• Roosevelt Recession (1937-1938)
• Contractionary monetary policy in lieu of
  economic expansion
• FDR blamed big business
• Midterm Election of 1938
• GOP gained seats in House and Senate Democratic
  majority preserved
• Recession of 1937-1938
• FDRs controversial court-packing
• Congress began to limit or eliminate spending for
  New Deal programs
• Hatch Act of 1939
• Limited politicians and campaign contributions
• People who received federal assistance could not
  use money for campaign contributions
• International Concerns
• Totalitarian governments spawned defensive
  preparations

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Women and Depression

• Men left their families in search of work or
  worked more than one job
• Limited income and absence of fathers placed
  intense pressures on mothers
• Female labor force increased for female-based
  jobs
• Wages remained low compared to men
• Suffered backlash as a competitive workforce

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Minorities and the Depression

• Blacks
• Suffered extreme poverty compared to other groups
  due to racism and worsening conditions
• No jobs for niggers until every white man has a
  job! rally cry in South
• FDR and New Deal
• Lower wages in NRA AAA evicted thousands of
  blacks from tenant farms
• WPA hired 1 million blacks in construction and
  educational projects
• Mary McLeod Bethune in NYA
• Scottsboro Boys Trial (1931)
• Nine blacks youths accused of raping two white
  girls on a train in Alabama
• Appeals showed lack of fair trial, impartial
  jury, fair sentencing, effective counsel
• Natives
• Indian Reorganization Act (1934)
• Repeal of Dawes Act (1887) eliminating
  assimilation programs, return of native
  sovereignty, preservation of native cultures
• Immigrants
• Immigration was reduced by restrictive policies
  of 1920s
• Suffered discrimination and prejudice with
  worsening economic conditions
• Mexican Repatriation
• With farming jobs limited, white Americans
  migrated west and policies established to push
  out Mexican immigrants

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Federal One

• Part of the WPA
• Federal Writers Project
• Federal Theatre Project
• Negro Theatre Project
• Federal Music Project
• Federal Art Project
• Historical Records Survey

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EscapismGreat Depression in Arts and
Entertainment

• Literature
• John Steinbeck
• The Grapes of Wrath
• Of Mice and Men
• Photography
• Dorothea Lange
• Music
• Brother, Can You Spare a Dime?
• Woody Guthrie
• Radio
• Comedies
• Soap operas
• Movies
• The Wizard of Oz
• Shirley Temple
• Snow White and the Seven Dwarves
• Marx Brothers

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EscapismGreat Depression in Sports and Recreation

• Sports
• WPA
• Athletic facilities
• Athletic educational programs
• Innovation, consolidation, and sacrifice of
  professional and college sports
• College bowl games
• NFL playoffs
• Recreation
• Games and Monopoly
• Gambling
• Rodeos
• Dance halls and jazz