The Great Depression

1. The Great Depression Period 7 Part 2 – 1920 to 1945

2. Think About It • To what extent did the Great Depression maintain continuity and foster change in America’s political and economic policies and structures?

3. Causes of the Great Depression • 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

4. 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)

5. Herbert Hoover (R) (1929-1933) • “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 volunteerism, restraint, and self-reliance, rugged individualism • “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)

6. Dow Jones Industrial Average 1929: 381.17 1932: 41.22 The average of stock prices dropped over 90% Price Indices Consumer prices fell 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 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 Depression by Numbers

8. Hoovervilles Displaced Americans set up shanty towns Came to be known as “Hoovervilles”

9. Depression through Pictures

10. 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 • Migration west • “Okies” • Mexican Repatriation

11. Dust Turns Day Into Night

12. Election of 1932 • Franklin Delano Roosevelt (FDR) (D) • Campaign promise of a “new deal” and help for the “forgotten man” • New Deal Coalition • Herbert Hoover (R) • A Realignment Election

13. Democrats New Deal Coalition Catholics Jews Blacks Progressive Intellectuals Urban Machines 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 Republicans Pro-business Economic conservatives Social conservatives Northeast, parts of the Midwest Realignment of voting blocs(1932-1968)

14. Franklin D. Roosevelt (D) (1933-1945) • Great Depression • New Deal • Good Neighbor Policy • Arsenal of Democracy • Pearl Harbor • World War II

15. FDR’s Message of Hope • FDR had no specific plan for the Depression • “Let us not confuse objectives with methods. Too many so-called leaders of the Nation fail to see the forest because of the trees. Too many of them fail to recognize the vital necessity of planning for definite objectives. True leadership calls for the setting forth of the objectives and the rallying of public opinion in support of these objectives. Do not confuse objectives with methods. When the Nation becomes substantially united in favor of planning the broad objectives of civilization, then true leadership must unite thought behind definite methods. 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.” - Address to Oglethorpe University, May 22, 1932 • Calming the nation • “… the only thing we have to fear is fear itself.” • Fireside chats • The Three R’s • Relief • Recovery • Reform • Brain Trust • Political and economic advisers to the President - Executive Office of the President (EOP)

16. 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)

17. 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

18. 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

19. The Second New Deal (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)

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

22. Federal One

23. New Deal Opposition • “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

24. Election of 1936 • Franklin D. Roosevelt (D) • Alfred Landon (R)

25. FDR and Court Packing • Supreme Court reversed several New Deal programs • “This is the end of this business of centralization, and I want you to go back and tell the president that we're not going to let this government centralize everything.“ – Justice Louis Brandeis • 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 • Six additional justices • Subsequent Supreme Court rulings in favor of New Deal • Social Security Act • Wagner Act • “President Roosevelt lost the Court-packing battle, but he won the war for control of the Supreme Court ... not by any novel legislation, but by serving in office for more than twelve years, and appointing eight of the nine Justices of the Court. In this way the Constitution provides for ultimate responsibility of the Court to the political branches of government. [Yet] it was the United States Senate - a political body if there ever was one - who stepped in and saved the independence of the judiciary ... in Franklin Roosevelt's Court-packing plan in 1937.” – Chief Justice William Rehnquist (2004)

26. New Deal and Labor • 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

27. 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? – Bing Crosby • Give a Man a Job – Jimmy Durante • Woody Guthrie • Radio • Comedies • Soap operas • Movies • The Wizard of Oz • Shirley Temple • Snow White and the Seven Dwarves • Marx Brothers

28. 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

29. End of the New Deal • Roosevelt Recession (1937-1938) • Cutback in deficit spending and elimination of some New Deal programs • Hatch Act (1939) • International Concerns • Totalitarian governments spawned defensive preparations