TheThe GreatGreat DepressionDepression FundamentalFundamental QuestionQuestion

▶ ToTo whatwhat extentextent diddid thethe GreatGreat DepressionDepression maintainmaintain continuitycontinuity andand fosteredfostered changechange inin AmericaAmerica’’ss politicalpolitical andand economicaleconomical structures?structures? CausesCauses ▶ Political Policies . “The business of America is business.” . Mellon’s Tax Bills . Fordney-McCumber Tariff . Dawes Plan and Post-WWI lending ▶ Financial Practices . Installment plans . “Buying on Margin” . Crash of 1929 ▶ Economic Situations . Agricultural overproduction and low prices . Welfare capitalism and consumer confidence ▶ Socioeconomic Conditions . Top 1% owned 35% of nation’s wealth . Bottom 20% owned 4% of nation’s wealth StockStock MarketMarket CrashCrash OfOf 19291929

▶ 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) HerbertHerbert HooverHoover (R)(R) (1829-1933)(1829-1933)

▶ “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 ▶ Hoover’s Economic Philosophy . Promote voluntarism, restraint, and self-reliance . “If we shall be called upon to endure more of this period, we must gird ourselves for even greater effort… The question is whether that history shall be written in terms of individual responsibility, and the capacity of the Nation for voluntary cooperative action, or whether it shall be written in terms of futile attempt to cure poverty by the enactment of law, instead of the maintained and protected initiative of our people.” April 27, 1931 ▶ Hawley-Smoot Tariff (1930) ▶ Federal Farm Board ▶ Reconstruction Finance Corporation (RFC) DepressionDepression ByBy NumbersNumbers ▶ Dow Jones Industrial ▶ Bank Failures Average . 1929: 659 banks ($200,000,000) . 1929: 381.17 . 1930: 1,300 banks (853,000,000) . 1932: 41.22 . 1931: 2,294 banks ($1,700,000,000) . The average of stock prices ▶ Income dropped over 90% . National income fell $80B to $50B ▶ Price Indices . Salaries declined 40% . Consumer prices feel 25% ▶ Manufacturing wages down 60% . Wholesale prices fell 32% . Farmers’ income declined 55% ▶ Unemployment ▶ Industrial production . 1929: 3.2% . Down 26% in 1930; 51% by 1932 . 1933: 24.9% ▶ Investments . Unemployment rates higher . $10B in 1929; $1B in 1932 in specific regions, among ▶ Fertility Rates different groups . 1928: 93.8 ▶ Toledo, OH: 90% . 1933: 76.3 ▶ GDP ▶ Suicide Rates . 1929: $103.6B . 1920-1928: 12.1 . 1933: $56.4B . 1929: 18.1 . 1930-1940: 15.4

HoovervillesHoovervilles

Displaced Americans set up shanty towns Came to be known as “Hoovervilles” PublicPublic ReactionReaction toto DepressionDepression ▶ BonusBonus MarchMarch . WWI veterans marched on D.C. demanding early payments of pensions . Federal troops sent in to break up Hoovervilles DepressionDepression ThroughThrough PicturesPictures TheThe DustDust BowlBowl (1930-1936)(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 . Migration west ▶ “Okies” ▶ Mexican Repatriation DustDust TurnsTurns DayDay IntoInto NightNight ElectionElection ofof 19321932

▶ Franklin Delano Roosevelt (FDR) (D) . Campaign promise of a “” and help for the “forgotten man” . ▶ (R) ▶ A Realignment Election . End of the Republican dominance of the Fourth . Begin of the Democrat dominance of the Fifth Party System FifthFifth PartyParty SystemSystem (1932-1968)(1932-1968)

▶ Democrats ▶ Republicans . New Deal Coalition . Pro-business ▶ Catholics . Economic conservatives ▶ Jews ▶ Blacks . Social conservatives ▶ Progressive Intellectuals . Northeast, parts of the ▶ Urban Machines Midwest ▶ Populist Farmers ▶ White Southerners ▶ Labor Unions ▶ Low-Income ▶ Immigrants . Philosophy ▶ Social liberalism/social democracy ▶ Social justice ▶ Keynesian economics . Dominated Congress and American public for the next 36 years Franklin D. Roosevelt (D) (1933-1945)

▶ ▶ New Deal ▶ Good Neighbor Policy ▶ Arsenal of Democracy ▶ Pearl Harbor ▶ World War II FDRFDR’’ss MessageMessage ofof HopeHope

▶ 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 R’s . Relief . Recovery . Reform ▶ Brain Trust . Capable advisers ordered to experiment, be pragmatic . “Do something.” The First New Deal (1933-1934) FDR’s First Hundred Days “Alphabet Soup”

▶ Emergency Banking Act (Bank Holiday) ▶ Federal Emergency Relief Administration (FERA) . Civil Works Administration (CWA) ▶ Civilian Conservation Corps (CCC) ▶ Agricultural Adjustment Administration (AAA) ▶ National Industrial Recovery Act (NIRA) . Public Works Administration (PWA) . National Recovery Administration (NRA) ▶ Tennessee Valley Authority (TVA) First New Deal (1933-1934)

▶ Banking Act of 1933 . Glass-Steagall Act . Federal Deposit Insurance Corporation (FDIC) ▶ Gold Reserve Act ▶ Farm Credit Administration (FCA) ▶ Securities and Exchange Commission (SEC) ▶ National Labor Relations Board (NLRB) ▶ Federal Housing Administration (FHA) ▶ Indian Reorganization Act 21st Amendment (1933)

▶ 18th Amendment repealed . Only Amendment to be ratified by state conventions ▶ End of Prohibition ▶ Reasons . Development of black market for alcohol . Increased violence due to rise in organized crime . Loss of revenue, industry, and employment . Speakeasies replaced saloons TheThe SecondSecond NewNew DealDeal (1935-1938)(1935-1938) ▶ Resettlement Administration (RA) ▶ Works Progress Administration (WPA) . National Youth Administration (NYA) . Federal One ▶ Federal Writers Project ▶ Federal Theatre Project ▶ Federal Music Project ▶ Federal Art Project ▶ Historical Records Survey ▶ Rural Electrification Administration (REA) ▶ Social Security Act (1935) ▶ Wagner Act (1935) ▶ Fair Labor Standards Act (1938)

Federal government used posters, songs, advertisements, literature to promote and support FDR’s New Deal programs among the American public

NewNew DealDeal OppositionOpposition ▶ “New Deal is doing too much.” . Republicans and economic/fiscal conservatives . “Boondoggles” ▶ “New Deal is not doing enough.” . Father Charles Coughlin . Senator Huey Long – “Kingfish” ▶ Share the Wealth . $5000 for every family, $2000 annually . Heavily tax wealthy ElectionElection ofof 19361936 ▶ Franklin D. Roosevelt (D) ▶ Alfred Landon (R) FDRFDR andand CourtCourt PackingPacking ▶ Supreme Court reversed several New Deal programs . Schechter Poultry Corp. v. United States (1935) ▶ NIRA unconstitutional . United States v. Butler (1936) ▶ AAA unconstitutional ▶ Justice Reorganization Bill . Appoint new justices for every justice over 70 ▶ 6 additional justices ▶ Subsequent Supreme Court rulings in favor of New Deal . Social Security Act . Wagner Act NewNew DealDeal andand LaborLabor

▶ American Federation of Labor (AFL) . Strengthened and increased membership ▶ Congress of Industrial Organizations (CIO) . Organize unskilled laborers in major industries . Industrial unionism ▶ United Automobile Workers (UAW) . Used sit-down strikes to earn recognition EscapismEscapism GreatGreat DepressionDepression inin ArtsArts andand EntertainmentEntertainment ▶ 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 EscapismEscapism GreatGreat DepressionDepression inin SportsSports andand RecreationRecreation

▶ 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 EndEnd ofof thethe NewNew DealDeal

▶ RooseveltRoosevelt RecessionRecession (1937-1938)(1937-1938) . Cutback in deficit spending and elimination of some New Deal programs ▶ HatchHatch ActAct (1939)(1939) ▶ InternationalInternational ConcernsConcerns . Totalitarian governments spawned defensive preparations