The Great Depression 1929-1941

1. The Great Depression1929-1941 AP US History

2. Historical Unemployment

3. Business Cycle

4. Recession Recession Hits – economy slows, sales of homes and autos slow Car dealers order fewer cars, autoworkers laid off Fewer houses being built, less need for construction workers Auto production plant needs less steel, steelworkers laid off Fewer houses are being built, furniture makers are laid off Clothing sales/restaurant workers are laid off How do you stop the cycle?

5. Prelude to the Great Depression • Historical Panics: • 1819, 1837, 1857, 1873, 1893, 1906, 1921 • Panic/Depression v. Recession • Hoover’s Misnomer • Traditional Government Reaction

6. Causes of the Great Depression • Stock Crash of 1929 – Buying on Margin • Bank Failures • Overproduction/Overspeculation • Concentration of Wealth • Richest 1% of the nation had 59% of the wealth • Poorest 87% of the nation had 10% of the wealth • Buying on Credit • International Economy • Farm Problems • Federal Reserve (Fed) Policy • Tariff Policy • Environmental Problems – Dust Bowl

7. Discussion Question Does any one person or policy deserve the blame for the Great Depression? Who and/or why?

8. Unemployment

9. Impact of the Great Depression

10. Dust Bowl

11. Hoover’s Response (2/3/31) . . . This is not an issue as to whether the people are going hungry or cold in the United States. It is solely a question of the best method by which hunger and cold can be prevented. It is a question as to whether the American people on the one hand will maintain the spirit of charity and of mutual self-help through voluntary giving and the responsibility of local government as distinguished on the other hand from appropriations out of the Federal Treasury for such purposes. My own conviction is strongly that if we break down this sense of responsibility, of individual generosity to individual, and mutual self-help in the country in times of national difficulty and if we start appropriations of this character we have not only impaired something infinitely valuable in the life of the American people but have struck at the roots of self-government. Once this has happened it is not the cost of a few score millions, but we are faced with the abyss of reliance [trap of relying] in [the] future upon Government charity in some form or other. The money involved is indeed the least of the costs to American ideals and American institutions. . . .

12. Hoover’s Response to the Depression • Self Reliance/Rugged Individualism • Push for Balanced Budget • Hawley Smoot Tariff - 1930 • Reconstruction Finance Corporation (RFC)– 1932 • Bonus Army – 1932

13. Review How effective were Hoover’s responses to the Great Depression? What do you think the government should have done to help? Was Hoover liberal or conservative?

14. Franklin Delano Roosevelt • Background • Polio • Eleanor Roosevelt • Election of 1932

15. The New Deal Relief – immediate help to those who need it Recovery – fix the Great Depression Reform – prevent future depressions Alphabet Soup “Priming the Pump” Companies Expand Production/Hire More Workers Workers Buy Stuff Government Gives People Jobs/Provides Direct Relief

16. Emergency Banking Act FDR closed the nation’s banks by declaring a “bank holiday” The government would inspect the banks and reopen them Goal was to restore confidence in the US banking system

17. Public Works Administration Gave jobs to people working on large scale public projects like bridges, housing, hospitals, schools and aircraft carriers (Old Memorial Auditorium and Old Buffalo War Memorial)

18. Civilian Conservation Corps Gave jobs to 2.5 million young men working on conservation projects like planting trees, building parks, and flood control Lived in camps onsite and sent most of the money home

19. Works Progress Administration Jobs program to work on roads, bridges, airports, public buildings, playgrounds and golf courses; also offered money to artists, musicians, and writers Largest program, employed 25% nation’s workforce between 1935-43 (Old entrance to Buffalo Zoo and Connecticut Street Armory)

20. Tennessee Valley Authority Provided jobs building dams to prevent flooding and provide electricity Most criticized as it directly competed with private electrical companies

21. National Industry Recovery Act (NRA) Allowed industries to set up “codes of competition” to maintain prices, wages and hours Allowed workers to organize unions and collectively bargain Declared unconstitutional in 1935

22. Federal Housing Authority The federal government would insure bank mortgages Allowed people to get 20-30 year mortgages with only a 10% down payment

23. Agricultural Adjustment Act The government paid farmers not to grow excess crops and reduce the acres the planted in an attempt to increase prices Declared unconstitutional in 1936

24. Glass Steagall Act Created the Federal Deposit Insurance Corporation to insure bank deposits up to $5000 Separated investment banks from commercial banks

25. Securities and Exchange Commission Created the Securities and Exchange Commission to regulate the stock market and financial advisors

26. Social Security Act • Provides insurance and/or public assistance for people who are • Elderly • Unemployed • Handicapped • Paid for by taxes collected from workers and employers

27. National Labor Relations Act (Wagner Act) Guaranteed the right for workers to form unions and collectively bargain

28. Fair Labor Standards Act Set up a minimum wage (originally .25 cents) and maximum hours (44 hours); outlawed child labor

29. Review How effective were FDR’s responses to the Great Depression? Do you think FDR’s actions were appropriate measures for the government to take? Was FDR liberal or conservative?

30. Impact of the New Deal Critics The New Deal & Labor The New Deal & Court Packing The New Deal & Politics The Outcomes of the New Deal

31. Discussion Questions • Was the New Deal successful? List arguments for and against the position. • Write a thesis. • Compare and contrast the Progressive Era and the New Deal. • Similarity (specific for each) • Difference (specific for each)

32. Critics of the New Deal • Liberals – not enough done to help the economy and reign in big business • Conservatives – way too much government intervention, too expensive, too much • Critics • Huey Long – “everyman a king” • Father Coughlin – social justice > anti-Semitic rants • Dr. Francis Townsend – old age pensions

33. New Deal Support for Labor • Unionization and Strikes: Pressure on FDR • Many big strikes (SF, Minnesota, Flint) • New Deal Laws • NRA - unconstitutional • Wagner Act • Fair Labor Standards Act • CIO: Auto, Steel, Textile Workers • John Lewis By 1941, 25% of the workplace was unionized.

34. Court Packing • Conservative rejection of New Deal Programs • Schechter Poultry v. US - NRA • Butler v. US - AAA • Court Packing Plan (1937) • Reaction • Long Term Outcome • no other New Deal programs are declared unconstitutional • ending of the New Deal

35. The New Deal Democratic Coalition Election of 1936 Solid South – conservative whites immigrants farmers labor unions African Americans (North) urban areas liberals Dominates national politics until the late 1960s/1970s.

36. Economic Impact of the New Deal Impact • Unemployment • Economic Performance Cost, Size, Scope of Government - 2 • Creation of the “Safety Net” • creates long term entitlements • Deficit Spending • John Maynard Keynes (Keynesian Economics) • deficits and debts

37. 1920s Stock Market - Dow

38. Bank Failures

39. Fed Policy - Money Supply

40. Long, Coughlin, Townshend

41. Government Spending

42. Impact of the Great Depression Federal Spending: 1930: 3.3 B 1934: 4.6 B 1936: 8.2 B 1937: 7.6 B 1939: 9.1 B 1942: 35.1 B Debt as % of GDP: 1930: 15.9% 1934: 44.1% 1936: 42.8% 1937: 40.2% 1939: 47.2% 1942: 47.8%

43. Schechter Poultry v. US (1935) • Background: • The NRA gave the president the power to create industrial codes regulating hours, wages, and child labor. • Legal Question(s): • Did the NRA give too much power to the president? (Was the law constitutional?) • Legal Decision: • Yes (No) (9-0) • Impact: • The NRA and the AAA being declared unconstitutional inspired Roosevelt’s court packing plan.

44. Court Packing Plan . . . Last Thursday I described the American form of Government as a three horse team provided by the Constitution to the American people so that their field might be plowed. The three horses are, of course, the three branches of government—the Congress, the Executive and the Courts. Two of the horses are pulling in unison today; the third is not. Those who have intimated [suggested] that the President of the United States is trying to drive that team, overlook the simple fact that the President, as Chief Executive, is himself one of the three horses. . . . What is my proposal? It is simply this: whenever a Judge or Justice of any Federal Court has reached the age of seventy and does not avail himself of the opportunity to retire on a pension, a new member shall be appointed by the President then in office, with the approval, as required by the Constitution, of the Senate of the United States. . . . - FDR, March, 1937

45. Criticism of the Plan

46. John Maynard Keynes

47. Economic Recovery in Great Depression

48. Historical Deficits

49. Historical Debt