Chapters 23-24 The Great Depression and The New Deal
Causes of the Great Depression A. The Great Depression might have been caused by an overabundance of farm products and factory products. B. The nation s capacity to produce goods had clearly outrun its capacity to consume or pay for them.
C. By 1930, the depression was a national crisis, and hard-working workers had nowhere to work, thus, people turned bitter and also turned on Hoover. D. Villages of shanties and ragged shacks were called Hoovervilles and were inhabited by the people who had lost their jobs. They popped up everywhere.
Above Hooverville outside of NYC Right Hooverville outside of Seattle 1932
E. Hoover unfairly received the brunt of the blame for the Great Depression, but he also did not pass measures that could have made the depression less severe than it could have been. 1. Critics noted that he could feed millions in Belgium (after WWI) but not millions at home in America.
2. Charities and churches were overwhelmed by the urgent needs of many, and didn t have funding to care for them. The government had no welfare or public relief to offer. 3. As families incomes dropped they couldn t afford to feed and clothe older children, who had to fend for themselves. The Hobo lifestyle expanded
Hoover Battles the Great Depression 1. Hoover voted to provide $2.25 billion to start projects to alleviate the suffering of the depression. a. The Hoover Dam of the Colorado River was one such project.
Boulder, Hoover, and Grand Coulee dams were federally financed.
2. Early in 1932, Congress, responding to Hoover s appeal, established the Reconstruction Finance Corporation (RFC), which became a government-lending bank. a. This was a large step for Hoover away from laissez faire policies and toward policies the Democrats (FDR) would later employ. 3. However, giant corporations were the ones that benefited most from this, and the RFC was another one of the targets of Hoover s critics.
March of the Bonus Army 1. Many veterans, whom had not been paid their compensation for WWI, marched to Washington, D.C. to demand their bonus.
2. The Bonus Army erected unsanitary camps and shacks in vacant lots, creating health hazards and annoyance.
Children in one of the Bonus Army Camps
3. Riots followed after troops came in to intervene (after Congress tried to pass a bonus bill but failed), and people died. 4. Hoover falsely charged that the force was led by riffraff and Reds (communists), and the American opinion turned even more against him.
Women & Minorities in the Depression Men, traditional breadwinners were often adrift without jobs, or vocation. Birth and divorce rates decreased but abandonment rates increased. But no housewife lost her job in the depression. Instead women made do with what they had. Most people kept their jobs, but pay decreases were common. Women in the Paid Workforce, 1900-1940
The women know that life must go on and that the needs of life must be met and it is their courage and determination which, time and again, have pulled us through worse crises than the present one. Eleanor Roosevelt, It s Up to the Women
Women in Political Positions First Lady Eleanor Roosevelt was the most visible, but other ladies expressed their new public commitment like: Sec. of Labor Frances Perkins was the first female cabinet member Mary McLeod Bethune headed the Office of Minority Affairs in the NYA-- the Black Cabinet
African Americans in the Depression Nine African American teenagers, ages 13 to 19, were hoboing in Alabama and were accused of raping two White American women on a train in 1931. The landmark set of legal cases from this incident dealt with racism and the right to a fair trial.
Minorities faced lower standard of living than whites - they were hired last. Existing discrimination was reinforced Bread Lines
Election of 1932 President Herbert Hoover was unenthusiastically nominated again, and he campaigned saying that his policies prevented the Great Depression from being worse than it was.
Hoover and the Republicans promised that "The Worst is Past," and "Prosperity is Just Around the Corner" Though party platforms were remarkably similar, Democrats supported repeal of Prohibition and an increase in federal relief.
The Democrats nominated Franklin Delano Roosevelt. FDR had been stricken with polio in 1921, and during this time, his wife, Eleanor, became his political partner. Eleanor was to become the most active First Lady ever.
In the campaign, Roosevelt seized the opportunity to prove that he was not an invalid, and his campaign also featured an attack on Hoover s spending. The Democrats found expression in the airy tune Happy Days Are Here Again, and offered a New Deal for the "forgotten man" and promised a balanced budget along with economic reforms. I pledge you, I pledge myself, to a new deal for the American people.
The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something. The millions who are in want will not stand by silently forever while the things to satisfy their needs are within easy reach. We need enthusiasm, imagination and the ability to face facts, even unpleasant ones, bravely. We need to correct, by drastic means if necessary, the faults in our economic system from which we now suffer. FDR ~ 22 May 1932
Hoover's Humiliation in 1932 Hoover had been swept into the presidential office in 1928, but in 1932, he was swept out with equal force, as he was defeated 472 to 59. Noteworthy was the transition of the Black vote from the Republican to the Democratic Party. During the lame-duck period, Hoover tried to initiate some of Roosevelt s plans, but was met by stubbornness and resistance.
FDR and the Three R s: Relief, Recovery, and Reform On Inauguration Day, FDR asserted, The only thing we have to fear is fear itself.
Roosevelt Manages the Money On his first day in office, he proclaimed a bank holiday, and a day later he signed the Emergency Banking Act, which allowed inspectors to evaluate troubled banks and decide whether or not they could reopen.
After the bank holiday he commenced with his Three R s. The 3- R s 1. Relief - help people out in the short term 2. Recovery - get the economy back on its feet 3. Reform - keep this from ever happening again
The Hundred Days Congress passed
Then, Roosevelt settled down for the first of his thirty famous Fireside Chats with America and reassured people it was safer to put money in the bank than hidden in their houses.
The Federal Securities Act ( Truth in Securities Act ) required companies to provide their investors with information regarding the soundness of their stocks and bonds. It created the Securities and Exchange Commission (SEC) to be a stock watchdog agency. He helped make the beleaguered stock market more transparent and thus more trustworthy.
Federal Deposit Insurance Corporation (FDIC) which insured individual deposits up to $5000- hopefully eliminating the epidemic of bank failures and restoring faith in the banking system. He urged people to turn in gold for paper money and took the U.S. off the gold standard. FDR controlled inflation by ordering Congress to buy gold at increasingly higher prices with paper money. The Glass- Steagall Banking Reform Act:
Roosevelt used federal money to assist the unemployed. The Civilian Conservation Corps (CCC), provided employment in fresh-air government camps for about 3 million uniformed young men.
They reforested areas, fought fires, drained swamps, controlled floods, etc. However, critics accused FDR of militarizing the youths and acting as dictator.
One of the Hundred Days Congress s earliest acts was to legalize light wine and beer with an alcoholic content of 3.2% or less and also levied a $5 tax on every barrel manufactured. Prohibition was officially repealed with the 21st Amendment in 1933.
The Federal Emergency Relief Act looked for immediate relief rather than long-term alleviation, and its Federal Emergency Relief Administration (FERA) was headed by the zealous Harry L. Hopkins.
Paying Farmers Not to Farm The Agricultural Adjustment Administration (AAA), paid farmers to reduce their crop acreage to eliminate pricedepressing overproduction. AAA controlled the supply of seven "basic crops" corn, wheat, cotton, rice, peanuts, tobacco, and milk. The Supreme Court killed it in 1936, in United States v. Butler.
The Second Agricultural Adjustment Act of 1938 (2nd AAA) was a more comprehensive substitute that continued farm subsidy paymentsbut was funded directly by the federal governmentso it was accepted by the Supreme Court.
Legree was a cruel slave owner in Uncle Tom s Cabin by Stowe The South was deeply affected by the Depression, the average person was barely hanging on before the Depression.
The Civil Works Administration (CWA) was established late in 1933, and it was designed to provide temporary jobs during the winter emergency. Many of its projects were boondoggle tasks- designed solely for making jobs.
Industry and Labor The National Industrial Recovery Administration (NIRA), by far the most complicated of the programs, was designed to assist industry, labor, and the unemployed. maximum hours of labor minimum wages more rights for labor union members, Eventually, it was shot down by the Supreme Court with the Schechter Poultry Corp. v. United States case.
The Public Works Administration (PWA) worked for industrial recovery and for unemployment relief. It aimed at long-range recovery by spending over $4 billion on some 34,000 projects that included public buildings, highways, and parkways.
The TVA & the Tennessee River The enormous electricpower industry attracted the attention of New Deal reformers; they accused it of gouging the public with excessive rates. The Tennessee Valley Authority (TVA) (1933) sought to discover exactly how much money it took to produce electricity and then regulate it.
It constructed dams on the Tennessee River and helped the 2.5 million extremely poor citizens of the area improve their lives and their conditions. Hydroelectric power in Tennessee would spur the building of hydroelectric dams in the West.
Dust Bowls and Black Blizzards After the drought of 1933, the wind blew the dust into the air, turning parts of Missouri, Texas, Kansas, Arkansas, and Oklahoma into the Dust Bowl and forcing many farmers to migrate west to California. The dust was hazardous to people s health and caused illnesses.
Farm auction, Derby, Conn Iowa farm family on the move
The Frazier-Lemke Farm Bankruptcy Act, passed in 1934, tried to suspend mortgage foreclosures for 5 years, but it was voided in 1935 by the Supreme Court.
In 1935, FDR set up the Resettlement Administration, charged with the task of removing nearfarmless farmers to better land. The long term effects of erosion still plague the Midwest.
Okies- displaced farmers John Steinbeck wrote one of the most influential books of the time about the agricultural migration around our country during the Depression, The Grapes of Wrath.
The Indian Reorganization Act of 1934 (the Indian New Deal ), which encouraged tribes to preserve their culture and traditions. Commissioner of Indian Affairs, John Collier, sought to reverse the forced-assimilation policies in place since the Dawes Act of 1887. Not all Indians liked it though, saying if they followed this back-to-the-blanket plan, they d just become museum exhibits. 77 tribes refused to organize under its provisions (200 did).
Housing Reform and Social Security To speed recovery and improve housing, FDR set up the Federal Housing Administration (FHA) in 1934 to stimulate the building industry through small loans to householders. It was one of the few alphabet agencies to outlast the age of Roosevelt. Congress bolstered the program in 1937 by authorizing the U.S. Housing Authority (USHA), designed to lend money to states or communities for low-cost construction. This was the first time in American history that slum areas stopped growing.
The Social Security Act of 1935 was the greatest victory for New Dealers, since it created a pension for workers. Later it added insurance for the old-aged, the blind, the physically handicapped, delinquent children, and other dependents by taxing employees and employers.
Republicans attacked this bitterly, as such government-knowsbest programs. They policies were communist-leaning and penalized the rich for their success. They said it opposed the pioneer spirit of rugged individualism.
Congress authorized the Works Progress Administration (WPA) in 1935, which put $11 billion into thousands of public buildings, bridges, and hardsurfaced roads and employed almost 9 million people during its 8-years of existence. It also found part-time jobs for needy high school and college students and for actors, musicians, and writers.
The Magna Carta of Labor A rash of walkouts occurred in the summer of 1934, and after the NIRA was axed, the Wagner Act (AKA, National Labor Relations Act) of 1935 took its place. The Wagner Act guaranteed the right of unions to organize and to collectively bargain with management!
The Wagner Act created the National Labor Relations Board, which helped unskilled laborers organize themselves into effective unions. The largest was the Committee for Industrial Organization (CIO) which became part of the AFL in 1935.
The new strategy: Sit-down strikes The CIO won victories against General Motors and against US Steel Company. Smaller steel companies struck back, resulting in such incidences as the Memorial Day Massacre of 1937 at the plant of the Republic Steel Company of Chicago in which police fired upon workers, leaving 10 dead and dozens injured.
In 1938, the Fair Labor Standards Act (AKA the Wages and Hours Bill ) was passed, setting up minimum wage and maximum hours standards and forbidding children under the age of 16 from working.
1936
American attitudes in 1933
To New Deal or not to New Deal The New Deal had its supporters as well as very loud critics. One early FDR supporter was Father Coughlin, a Catholic priest in Michigan who later disliked the New Deal because he said FDR was cutting deals with bankers. He voiced his opinions on a weekly radio show. Dr. Francis E. Townsend of California attracted the trusting support of almost 5 million senior citizens with his pension plan- Each senior would $200 a month, provided that all of it would be spent within the month. It was not a realistic plan, but will influence the start of the Social Security Program.
Senator Huey P. Long of Louisiana was popular for his Share the Wealth program. Proposing every man a king, each family was to receive $5000. The wealthy would be taxed heavily to generate the funds. The math of the plan was ludicrous.
Share the Wealth Speech 1. To limit poverty: One third of the average wealth to the family, or $5,000, is a fair limit to the depths we will allow any one man's family to fall. None too poor, none too rich. 2. To limit fortunes: The lowest estimate is that 4 percent of the people own 85 percent of our wealth. 3. Old-age pensions: We propose that, at the age of 60, every person should begin to draw a pension from our Government of $30 per month. 4. To limit the hours of work: 5. To balance agricultural production with consumption: 6. To care for the veterans of our wars: 7. Taxation: Taxation is to be levied first at the top for the Governments support and expenses. Swollen fortunes should be reduced principally through taxation.
1936 Election The Republicans nominated Kansas Governor Alfred M. Landon to run against FDR in 1936. Landon was weak on the radio and weaker in person, and while he criticized FDR s spending, he also favored enough of FDR s New Deal to be ridiculed by the Democrats as an unsure idiot.
Roosevelt won in a huge landslide, getting 523 electoral votes to Landon s 8.
Franklin D. Roosevelt's Second Inaugural Address January 20, 1937 But here is the challenge to our democracy: In this nation I see tens of millions of its citizens--a substantial part of its whole population--who at this very moment are denied the greater part of what the very lowest standards of today call the necessities of life.
I see millions of families trying to live on incomes so meager that the pall of family disaster hangs over them day by day. I see millions whose daily lives in city and on farm continue under conditions labeled indecent by a socalled polite society half a century ago.
I see millions denied education, recreation, and the opportunity to better their lot and the lot of their children. I see millions lacking the means to buy the products of farm and factory and by their poverty denying work and productiveness to many other millions. I see one-third of a nation ill-housed, illclad, ill-nourished.
It is not in despair that I paint you that picture. I paint it for you in hope--because the Nation, seeing and understanding the injustice in it, proposes to paint it out. We are determined to make every American citizen the subject of his country's interest and concern; and we will never regard any faithful law-abiding group within our borders as superfluous. The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.
Packing the Courts FDR controlled Congress, but the Supreme Court kept blocking his programs. He proposed a plan that would add a member to the Supreme Court for every existing member over the age of 70, for a maximum possible total of 15 total members. Congress voted against him because it did not want to lose its power. Roosevelt was harshly criticized for trying to become a dictator.
The End of the New Deal During Roosevelt s first term, the depression did not disappear, and unemployment, although down from 25% in 1932, was still at 15%. The New Deal tried public works, farm subsidies, and other devices to reduce unemployment, but Roosevelt never completely gave up trying to balance the budget. In 1937, the economy took another brief downturn, the Roosevelt Recession, caused by cutting government programs and repeal of a number of New Deal laws. Unemployment, 1920-1945
By 1937 FDR embraced the policies of British economist John Maynard Keynes. Cure the Depression through planned deficit spending.
New Deal or Bad Deal? Opponents of the New Deal condemned its waste, citing that it didn t fix the economy. Critics were shocked by the try anything attitude of FDR, who had increased the federal debt from $19.5 billion in 1932 to $40.4 billion in 1939. It took WWII to really lower unemployment. But, the war also created a heavier debt than before.
New Deal advocates claim the New Deal alleviated the effects of the Great Depression on the citizens. FDR provided bold reform without revolution. Soup Kitchens
The Great Depression s impact on America The hardships of the Great Depression turn a whole generation of Americans into saver and conservers. The New Deal programs expanded the size of the government and the number of social programs that the government funds. The relationship between the American people and government changes. The people expect and accept a larger federal role in their lives and economy.