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The Greatdepression 25 The Great Depression and the New Deal 1929–1939 One American Journey e are bringing order out of the old chaos with a greater certainty of labor at a reasonable wage and of more business at a fair profit. These governmental and industrial devel- Wopments hold promise of new achievements for the nation. Our first problem was, of course, the banking situa- tion because, as you know, the banks had collapsed. Some banks could not be saved but the great majority of them, either through their own resources or with government aid, have been restored to complete public confidence. This has given safety to millions of depositors in these banks. The second step we have taken in the restoration of normal business enterprise has been to clean up thoroughly unwholesome conditions in the field of investment… . The country now enjoys the safety of bank savings under the new banking laws, the careful checking of new securities under the Securities Act and the curtailment of rank stock specula- tion through the Securities Exchange Act. I sincerely hope that as a result people will be discouraged in unhappy efforts to get rich quick by speculating in securities. The average person almost always loses. Only a very small minority of the people of this country believe in gambling as a substitute for the very old philosophy of Benjamin Franklin that the way to wealth is through work. LEARNING OBJECTIVES 25.1 25.2 25.3 25.4 25.5 25.6 What How did What were How did the Why did the How did triggered Herbert the goals of major accomp- New Deal lose Roosevelt the Great Hoover the early New lishments of momentum respond Depression? respond Deal? p. 25-43 the Second after 1936? to the rise Extraordinarily popular, President p. 25-33 to the New Deal affect p. 25-59 of fascism Franklin D. Roosevelt reached depression; America’s social in Europe? out to ordinary Americans in his why did his and economic p. 25-60 political campaigns and use of policies fail? life? p. 25-48 the radio in his “fireside chats,” promising a “new deal” that would p. 25-40 provide the “greatest good for the greatest number of citizens.” Listen to Chapter 25 on MyHistoryLab M25_GOLD8528_07_SE_C25.indd 31 12/31/12 3:15 PM 25.1 Watch the Video Series on MyHistoryLab Learn about some key topics related to this chapter with the 25.2 MyHistoryLab Video Series: Key Topics in U. S History 25.3 The Great Depression & The New Deal: 1929 – 1940 This introductory video provides an overview of key events 1 of the Great Depression of the 1930s, which was the most severe economic challenge that the United 25.4 States has ever endured. On the heels of the 1929 stock market crash, a three-year spate of bank failures further weakened the nation’s financial system while 25.5 the Dust Bowl plunged the middle of the country into an agricultural crisis. Watch on MyHistory Lab 25.6 The Great Depression This video probes deeper into the hardships facing the nation during the 1930s. In the 1920s, the United States avoided the general malaise that had afflicted the international economy following the conclusion of World War I. However, with the Stock Market Crash of 1929, the 2 “Roaring 20s” gave way to an economic depression that quickly spread across the United States and led to widespread unemployment. Watch on MyHistory Lab Presidential Responses to the Depression This video explains how President Herbert Hoover’s response to the nation’s economic woes differed from Franklin Delano Roosevelt’s promise of a “New Deal” for 3 America. When elected President in 1932, FDR brought renewed hope to a country that sorely needed it. Watch on MyHistory Lab The New Deal President Roosevelt set out immediately to address an ailing nation. This video chronicles FDR’s presidency from its first 100 days and the rise of New Deal programs, such as the Civilian Conservation Corps (CCC) and Tennessee Valley Authority (TVA), to a successful bid for re-election in 4 1936 and the second wave of New Deal initiatives that followed. Watch on MyHistory Lab Those, fortunately few in number, who are frightened by boldness and cowed by the neces- sity for making decisions, complain that all we have done is unnecessary and subject to great risks. Now that these people are coming out of their storm cellars, they forget that there ever was a storm. [But] nearly all Americans are sensible and calm people. We do not get greatly excited nor is our peace of mind disturbed, whether we be businessmen or workers or farmers, by awesome pronouncements concerning the unconstitutionality of some of our measures of recovery and relief and reform. We are not frightened by reactionary lawyers or political editors. All these cries have been heard before. I still believe in ideals. I am not for a return to that definition of Liberty under which for many years a free people were being gradually regimented into the service of the privileged few. I pre- fer and I am sure you prefer that broader definition of Liberty under which we are moving for- ward to greater freedom, to greater security for the average man than he has ever known before in the history of America. Franklin D. Roosevelt Presidential Library. Excerpted from President Franklin D. Roosevelt’s radio address entitled “On Moving Forward to Greater Freedom and Greater Security,” September 30, 1934. 25-32 M25_GOLD8528_07_SE_C25.indd 32 12/31/12 3:15 PM Personal Journeys Online 25.1 • Letter from Eleanor Roosevelt to Walter White, 1936. Roosevelt writes against lynching. • Paul Taylor, “Again the Covered Wagon,” Survey Graphic, July 1935. Article on the 25.2 migration of “Okies” to California during the Dust Bowl. 25.3 s President Franklin D. Roosevelt acknowledges in this 1934 radio address, the A U.S. economy had utterly collapsed. Men, women, children everywhere saw their families and dreams shattered, watched their life savings vanish in faulty banks, and 25.4 felt the sting of humiliation as they stood in bread lines or begged for clothes or food scraps. The winter of 1932–1933 had been particularly cruel: unemployment soared and stories of malnutrition and outright starvation made headlines in newspapers 25.5 throughout the nation. The election of Franklin D. Roosevelt in 1932 had, however, lifted the spirits and hopes of jobless Americans throughout the nation. They enthusiastically responded to his 25.6 “new deal for the American people” and particularly embraced his use of the radio to address the nation. In these “fireside chats,” the president offered reassurance about the economic crisis, compassionately explaining his decisions and policies, as he did in this 1934 address. And he promised a brighter future, charting a new journey, he predicted, that would restore confidence among despairing Americans and provide greater eco- nomic security for the nation’s citizens. “Among our objectives,” Roosevelt insisted, “I place the security of the men, women, and children of the Nation first.” The leadership of Franklin and Eleanor Roosevelt and the programs of the New New Deal The economic and Deal connected Americans to the White House as never before. To be sure, FDR’s political policies of the Roosevelt bold rhetoric occasionally outdistanced his legislative agenda, and certain programs administration in the 1930s. hardly worked against what he termed the “privileged few.” Moreover, his policies often failed to challenge the racism and sexism that precluded a new deal for all Americans. Still, the unprecedented federal activism of the 1930s effectively restored confidence to many Americans and permanently transformed the nation’s responsibility for the welfare of its citizens. Hard Times in Hooverville 25.1 What triggered the Great Depression? he prosperity of the 1920s ended in a stock market crash that revealed the flaws honeycombing the economy. As the nation slid into a catastrophic depres- sion, factories closed, employment and incomes tumbled, and millions lost their T homes, hopes, and dignity. Some protested and took direct action; others looked to the government for relief. Crash! The buoyant prosperity of the New Era, more apparent than real by the summer of 1929, collapsed in October, when the stock market crashed. During the preceding two years, the market had hit record highs, stimulated by optimism, easy credit, and specu- lators’ manipulations. But after peaking in September, it suffered several sharp checks, and on October 29, “Black Tuesday,” panicked investors dumped their stocks, wiping out the previous year’s gains in one day. Confidence in the economy disappeared, and the slide continued for months, and then years. The market hit bottom in July 1932. By then, the stock of U.S. Steel had plunged from $262 to $22, Montgomery Ward from 25-33 M25_GOLD8528_07_SE_C25.indd 33 12/31/12 3:15 PM $138 to $4. Much of the paper wealth of America had evaporated, and the nation sank 25.1 Great Depression The nation’s into the Great Depression. worst economic crisis, extending The Wall Street crash marked the beginning of the depression, but it did not throughout the 1930s, producing cause it. The depression stemmed from weaknesses in the New Era economy. Most unprecedented bank failures, 25.2 unemployment, and industrial damaging was the unequal distribution of wealth and income. Workers’ wages and and agricultural collapse and farmers’ incomes had fallen far behind industrial productivity and corporate profits; prompting an expanded role for by 1929, the richest 0.1 percent of American families had as much total income as the the federal government. 25.3 bottom 42 percent (see Figure 25.1).
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