The Great Depression and the New Deal 1929-WW II
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1 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 2
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, million shares traded that day (3 million was considered a busy day) 3
4 From Downright Bullish to Beary Bad
5 1893 Depression Imperialism WW I GNP Per Year Depression
6 The Country Reacts 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 H o o v e r
7 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 7
8 Built from Total Bid: $49,000,000
9 Tariff Hawley-Smoot Tariff of 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 9
10 Hoover takes the Brunt Hoover Blankets and random children People turned on the party in power Hoovervilles, Hoover Flags, Hoover Wagons Democrats gained the first national victory since Wilson, winning a majority in the House and major gains in the Senate 10
11 Volunteerism, not Federal Relief Hoover demanded that each community and state should work to relieve the distress He was totally against the dole or direct relief Hoover says, No soup for you! 11
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
13 Hoover Finally Gives in Sort of 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 13
14 Farmers Statistics Bushel of Wheat in 1919= $ = $.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 nearly one million farmers lost their farms to the bank 14
15 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 15
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 16
17 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 Patton s life in WW I Incident does not improve Hoover s public image 17
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19 Bonus Army Dispersed by Tear Gas
20 FDR: Election of 1932 FDR as a young man in 1917 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 hope I pledge you, I pledge myself to a new deal for the American people.
21 Campaign Song in 1932: Happy Days Are Here Again
22 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 4 th, th Amendment- delay time as lame duck president now presidents take office on January 20 th and newly elected Congress on January 3rd 23
24 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. Roosevelt s three step program: Relief (immediate), Recovery (get back to time before Depression), 24 Reform (measures to stop it from happening again)
25
26
27 FDR s philosophy: Take a method and try it. If it fails admit it frankly and try another.
28 Roosevelt Quick to Act December 5, st 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 28
29 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) 29
30 Gold is Gone On April 19, 1933 the government abandoned the gold standard and made all contracts payable in legal tender Gold Reserve Actauthorized the president to impound all gold in the Federal Reserve 30
31 Alphabet Soup Alphabet soup is phrase used to describe FDR s 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 31
32 CCC Farming in Maryland 1933
33 CCC Planting out West
34 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
35 Agricultural Adjustment Act 1933 Gave money to farmers to cut back on production Pay farmers to destroy livestock and crops 35
36 Where s 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.
37 The Dust Bowl devastating drought in the plains Caused great displacement and many headed west as seen in Steinbeck s 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 37
38
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40 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 us ta mean you was from Oklahoma. Now it means you re a dirtyson-of-a-b****. Okie means you re scum. Don t mean nothing in itself, it s the way they say it. 40
41
42 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 Back to the Soup 42
43 National Recovery Administration (NRA) Goals (membership voluntary, no membership = unpatriotic) 1. Stabilize business with codes of fair competitive practice (codes did not include farmers) 2. 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
44 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.
45 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. 45
46 TVA Map
47 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 47
48 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 48
49 Second New Deal Programs Wagner act- workers given the right to bargain through unions of their own choice Social Security Act of ( 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 49
50 Social Security Problems Took money out of paychecks, therefore out of pockets, so could not be spent Initially excluded farmers (surprise!), domestics and selfemployed 50
51
52 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." EX10.html 52
53 Election of 1936
54 Election of 1936 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 For the first time since the 15 th amendment, a majority of political active blacks voted Democratic One person claimed that their debt to Lincoln had been paid. 54
55 Court Packing Plan The Court had ruled against 7 of FDR s 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 55
56 Even Democrats fought over the implications of the plan It blew up in Roosevelt s 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 56
57 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 57
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