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The Great Depression and the New Deal: A Comprehensive Overview

Explore the causes and impact of the 1929 stock market crash and the subsequent Great Depression. Discover how Franklin D. Roosevelt's New Deal programs aimed to provide relief, recovery, and reform during this time of economic crisis.

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The Great Depression and the New Deal: A Comprehensive Overview

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  1. Chapter 24 The Great Depression and the New Deal 1929-1939

  2. Introduction • Franklin D. Roosevelt • Elected president in 1932 • During the Great Depression • Dominated national politics until his death in 1945 • The New Deal • FDR’s programs • Aimed at relief, recovery, and reform

  3. Introduction (cont.) • The New Deal went through 2 phases • 1933-1935 • 1st New Deal • Attempted to unite all Americans • Relief and recovery measures • 1935 • 2nd New Deal • More radical • Impose greater govt. regulation • Introduced legislation to benefit workers, farmers, sharecroppers, and others at the bottom of the economic ladder

  4. Introduction (cont.) • 1.) What were the causes of the 1929 stock market crash and of the depression that followed? • 2.) What was the social and political impact of the crash and depression? • 3.) What strategy did the first New Deal employ, and what specific measures were passed to implement it? • 4.) Why did Roosevelt turn to a second New Deal in 1935, and what major legislation expressed the shift?

  5. Introduction (cont.) • 5.) How did the depression and New Deal affect farmers, workers, women, and minorities? • 6.) Which New Deal programs failed and why? Which programs still have an impact on the nation and why? • 7.) How did the economic hard times affect American arts and popular culture?

  6. Crash and Depression, 1929-19323 • Black Thursday and the Onset of the Depression • In 1928, a wave a wild speculation started • 9 million Americans played the market in hope of quick profits • This drive stock prices to dangerously inflated levels • Worse yet, they often speculated on borrowed $$$ • They bought on margin

  7. Black Thursday and the Onset of the Depression (cont.) • Factors contributed to the speculation: • Low taxes for the rich • Created by Sec. of Treasury Andrew Mellon • The easy-credit policy of the banks • The optimistic buyers ignored warning signs • Falloff of new construction

  8. Black Thursday and the Onset of the Depression (cont.) • Oct. 24, 1929 • Black Thursday • Speculative bubble bust • Stock prices plummeted • Panicked shareholders rushed to sell • On the following Tuesday, the plunge continued • History Channel video--Black Tuesday • This stock market crash trigged the worst depression in U.S. history • History Channel video--1920's economic troubles

  9. Black Thursday and the Onset of the Depression (cont.) • Between 1929 and 1933, the nation sank deeper and deeper into depression • Farm prices declined by 60% • 5,500 banks failed • Unemployment rose to 25%

  10. Black Thursday and the Onset of the Depression (cont.) • What were the causes of the Great Depression? • Structural vs. monetary policies • Many economists point to the structural weaknesses in the economy: • 1.) Workers’ wages did not rise sufficiently during the 1920’s to allow them to buy all of the consumer goods coming off the factory assembly lines • By 1929, there was an overproduction crisis • More houses, automobiles, electric appliances, etc. for sale than there were Americans who could afford to buy them

  11. Black Thursday and the Onset of the Depression (cont.) • 2.) The 1920’s depressed agricultural sector further weakened the economy. • 3.) The collapse of European economies under the weight of WWI debt repayments and the unfavorable balance of trade with the U.S.A. • This caused our foreign sales to fall sharply

  12. Black Thursday and the Onset of the Depression (cont.) • The monetarist school of economist claim it was the tight-money policy of the Federal Reserve Board in the early 1930’s that caused the Depression • Contracted credit denied businessmen the capital they needed to start new ventures and get the economy rolling again

  13. Hoover’s Response • President Hoover’s ideological commitment to private-sector initiative, limited govt. intervention, and balanced federal budges severely handicapped him in dealing with the Depression • Hoover asked business leaders not to: • lay off any more workers • impose further wage cuts • Business leaders initially agreed • They later broke their pledge because they could not sell their products

  14. Hoover’s Response (cont.) • Hoover preached that private charity and local govt. must handle relief for the jobless • Private philanthropy and city and county govts. were soon overwhelmed by the numbers needing help • Reconstruction Finance Corporation • Empowered to lend money failing business corporations • He held out until July 1932 in using any federal funds to assist states in helping the unemployed

  15. Hoover’s Response (cont.) • His pronouncements in favor of self-help and local initiative made him seem indifferent to the suffering of depression victims

  16. Mounting Discontent and Protest • Millions of people lost their jobs • They and their families often were unable to feed themselves or pay rent • They wandered the country looking for work • They often lived in shantytowns called “Hoovervilles” • “Hoover Valley” in Central Park was the most famous

  17. “Hoovervilles”

  18. “Hoovervilles” (cont.)

  19. “Hoovervilles” (cont.)

  20. “Hoovervilles” (cont.)

  21. Mounting Discontent and Protest (cont.) • Everywhere banks foreclosed on farmers and homeowners who could not meet mortgage payments • The spreading mood of despair and confusion resulted in an expanded suicide rate

  22. Mounting Discontent and Protest (cont.) • As conditions worsened, protests escalated • Midwestern farmers tried to raise agricultural prices by halting the shipment of food to cities • Destitute veterans marched on Washington demanding immediate cash payment of their bonuses for WWI service • Hoover ordered the army to remove the “bonus marchers” from the capital • The sight of armed troops expelling peaceful veterans convinced the public of Hoover’s callousness

  23. Mounting Discontent and Protest (cont.) • Writers in the early thirties reflected the despair and disillusionment with life in capitalist America • John Dos Passos • The 42nd Parallel • James T. Farrell • Young Lonigan • Jack Conroy • The Disinherited

  24. The Election of 1932 • Republicans nominated Hoover • Stuck by his failed antidepression measures • Democrats nominated Franklin D. Roosevelt • Not clear on how he would fight the Depression • The anti-Hoover sentiments of the people carried FDR and the Democrats to lopsided victories in the presidential and congressional elections • History Channel speech--FDR inaugural address

  25. The New Deal Takes Shape, 1933-1935 • Roosevelt and His Circle • The promise of govt. action and the mood of optimism in FDR’s inaugural address lifted peoples’ spirits • New Deal • Relief, recovery, and reform measures • “brain trust” • A circle of Roosevelt’s advisers • Devised broad programs of “federal economic planning”

  26. Roosevelt and His Circle (cont.) • Eleanor Roosevelt • Along with her social worker and women reformer friends • Pushed for legislation to assist the economically disadvantage and minority groups

  27. Roosevelt and His Circle (cont.) • Old-time Progressives, university professors, and able young lawyers joined the Roosevelt administration to contribute ideas and administer new programs

  28. The Hundred Days • March 9 and June 16, 1933 • The administration introduced and Congress passed an unprecedented volume of legislation • These laws had the overall effect of greatly increasing federal involvement in the economy

  29. The Hundred Days (cont.) • Federal Deposit Insurance Corporation • FDIC • Insured bank accounts up to $5,000 • Civilian Conservation Corps • CCC • Employed jobless young men on conservation projects • Home Owners Loan Corporation and the Farm Credit Administration • Refinanced mortgages • Saved homes and farms of millions

  30. The Hundred Days (cont.) • Other important laws imposed regulation on the stock market • Tennessee Valley Authority • TVA • Electricity to rural America • Public Works Administration • PWA • Construction of public projects/improvements

  31. The Hundred Days (cont.) • Federal Emergency Relief Administration • FERA • Federal $$$$ for relief efforts • Agricultural Adjustment Act • AAA • Aimed at reviving agriculture • Guaranteed prices for agricultural produce • Paid farmers for not growing crops that were in surplus

  32. The Hundred Days (cont.) • National Recovery Administration • NRA • Aimed at reviving businesses • Helped business draft and enforce codes to eliminate cutthroat competition, price-cutting, and the use of child labor • Management promised to bargain with the unions chosen by their employees

  33. Problems and Controversies the Early New Deal • Complaints concerning the NRA multiplied • Management resented govt. regulation • Small businesses claimed that the codes helped only the big farms • The NRA was bogged down in supervising code making in every possible industry • In 1935, the Supreme Court ruled that the NRA was unconstitutional

  34. Problems and Controversies the Early New Deal (cont.) • Overall farm income rose by 50% between 1933 and 1937 • Drought • the AAA payment not to grow surplus crops • The AAA did nothing for landless farm laborers • It hurt tenants and sharecroppers • Landlords kicked many tenants and sharecroppers off their property • Landlords pocketed the govt. subsidy checks

  35. Problems and Controversies the Early New Deal (cont.) • Poor farmers also fell victim to the vast dust storms that rolled over the Upper South and the Great Plains • Destroyed the crops in their paths • History Channel video--Dust Storm • History Channel speech--Dust storms • Many poor farmers, tenants and sharecroppers headed for CA • They struggled to survive as migratory farm laborers

  36. Challenges from Right and Left, 1934-1935 • When the first phase of FDR’s New Deal did not end the Depression, frustration with and criticism of Roosevelt began • In 1934, there were thousands of strikes • Some led by communists • American Liberty League • Created by business leaders and conservatives • Charged that the New Deal was radical and socialistic • Wanted to defeat New Dealers at the polls

  37. Challenges from Right and Left, 1934-1935 (cont.) • FDR and policies retained the support of most Americans • In the 1934 midterm congressional elections the Democrats greatly increased their majorities in the House and Senate

  38. Challenges from Right and Left, 1934-1935 (cont.) • In 1935, Roosevelt proposed a second burst of reform, relief, and recovery legislation • Hoped to lessen the discontent and steal the thunder of the extremists

  39. The New Deal Changes Course, 1935-1936 • Introduction • Roosevelt took a swing to the left • He proposed to Congress a new package of reform measures • “Second New Deal” • Emphasis on aiding the disadvantaged rather than trying to appeal to all classes

  40. Expanding Federal Relief Emergency Relief Appropriation Act Congress passed in 1935 Granted nearly $5 billion Expanded work-relief programs Works Progress Administration WPA Headed by Harry Hopkins Received the largest amount of $$$ from the Emergency Relief Appropriation Act

  41. Expanding Federal Relief (cont.) • WPA (cont.) • 1935-1943 • Employed over 8 million people • Construction • Clerical • Professional • Arts endeavors • Thousands of roads, bridges, schools, hospitals, post offices, and other public facilities were constructed or repaired • Millions of Americans enjoyed free or low-cost plays and concerts, saw murals and paintings, and received instruction in the arts

  42. Expanding Federal Relief (cont.) • National Youth Administration • Another new agency • Provided part-time jobs for students • Allowed thousands of young people who otherwise could not have afforded to go to or remain in college • The PWA also shared in the $$$$ • Used for major construction projects

  43. Expanding Federal Relief (cont.) • The large amounts of money spent on these work-relief programs caused mounting federal budget deficits • British economist John Maynard Keynes • Said such deficit spending was a positive way to pump funds into the economy and combat the Depression • Called Keynesian economics

  44. Aiding Migrants, Supporting Unions, Regulating Business, and Taxing the Wealthy • The massive relief programs and other laws of the 2nd New Deal were not intended to please all social classes • They openly aimed at serving the needs of labor and the rural and urban poor • Resettlement Administration • May 1935 • Resettled and/or made loans to small farmers, tenants, and sharecroppers to turn them into farm owners on productive land • Agriculture as a whole suffered a blow when the Supreme Court declared the AAA as unconstitutional (1936)

  45. Aiding Migrants, Supporting Unions, Regulating Business, and Taxing the Wealthy (cont.) • Wagner Act • Aka: National Labor Relations Act • July 1935 • Pro-union • Stimulated the growth of organized labor • Required employers to recognize their employees’ unions • Employers also must bargain with those unions • Established the National Labor Relations Board • Acts as a watchdog in labor-management relations

  46. Aiding Migrants, Supporting Unions, Regulating Business, and Taxing the Wealthy (cont.) • Revenue Act • 1935 • Boosted taxes on corporations and upper-income Americans • Wealthy called it the “Soak the Rich” law

  47. The Social Security Act of 1935; End of the Second New Deal • Social Security Act of 1935 • Created by Frances Perkins • Secretary of Labor • The Social Security Act provided: • Old-age pensions • Survivors’ benefits for families of deceased workers • Unemployment insurance • Aid to dependent mothers and children • Aid to handicapped • The 1935 law did not cover farmers and domestic workers

  48. The Social Security Act of 1935; End of the Second New Deal (cont.) • Roosevelt’s New Deal now concerned itself more fairly with the needs of other segments of the population (besides business): • Workers • Farmers • Poor mothers and children • Sharecroppers

  49. The Social Security Act of 1935; End of the Second New Deal (cont.) • FDR’s vigorous leadership also had the long-term effect of strengthening the powers of the presidency • He also broadened the Americans’ expectations of the role that the nation-state should play in society

  50. The 1936 Roosevelt Landslide and the New Democratic Coalition • Republicans nominated Alfred Landon • Democrats renominated FDR • Roosevelt swept every state but ME and VT • The Democrats increased their large majorities in Congress

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