Chapter Twenty-Four

1. Chapter Twenty-Four The Great Depression and the New Deal, 1929–1940

2. Section 1 Sit-Down Strike at Flint: Automobile Workers Organize a New Union

3. Sit-Down Strike at Flint In 1937, the community of Flint, Michigan, went on strike at the General Motors plant. The depression hit this auto-producing town very hard. The United Auto Workers attempted to take advantage of the Wagner Act and organize a union, but GM resisted them.

4. They used the tactic of sit-down strikes Strikers seized two GM plants and refused to leave. Supported by the governor, the strikers resisted efforts to eject them. The community rallied to support the strikers. GM gave in and recognized the UAW, a move that the other automakers soon followed.

5. Section 2 Hard Times Great Depression in America

6. The Bull Market and the Crash During the 1920s, stock prices rose rapidly. Investors were lured by easy-credit policies like buying on margin. The market peaked in early September 1929, drifted down until late October, and crashed on October 29.

7. Dow Jones Industrial Average: Average of stock prices of major industries • Timeline Leading up to Stock Market Crash • September 3,1929 • Dow Jones reaches all-time high (381) • Begins to fall after peak • Wednesday- October 23, 1929 • Dow Jones drops 21 points in 1 hour

8. Thursday-October 24,1929 (Black Thursday) • Investors begin to worry and sell their stock • Stock prices fall • Group of bankers pull their $ together to buy stock • Prices stabilize, but only for a few days

9. Tuesday-October 29, 1929 ( Black Tuesday) • 16.4 million shares sold ( average 4-8 million) • This leads to the Great Crash: the collapse of the stock market • Worst day • November 13, 1929 • Dow Jones=198.7 • Losses=$30 billion • Business cycle: economy grows, then contracts

10. By mid-November, the market had lost half of its value. Buyers on margin faced paying hard cash to the cover the loans they received for purchasing stock that sold well below what they had originally paid. Few people predicted that a depression would follow.

11. Underlying Weakness The crash did not cause the depression but revealed the underlying economic weakness. Industrial growth during the 1920s had not been accompanied by comparable increases in wages or farm income. The gap between rich and poor widened, as did that between production and consumption.

12. The weakness in the economy contributing to the Great Depression included • Failure of companies to pay wages commensurate with productivity • Rise in productivity had encouraged overproduction in many industries • Near depression in agriculture in the 20s

13. Mass Unemployment The stock market crash led manufacturers to decrease spending and lay off workers. Weak consumer demand and bank runs turned the slump into a depression. By 1933, nearly one-third of the labor force was out of work. Unemployment took a tremendous personal toll and undermined the traditional authority of the male breadwinner.

18. Hoover’s Failure • The enormity of the depression overwhelmed traditional sources of relief. • President Hoover seemed unable to accept the facts of the depression. He vetoed measures to aid the unemployed. • Hoover’s response to the Depression was to have the government help business to help themselves • That the business cycle would correct itself

19. His Reconstruction Finance Corporation failed to restore business confidence. Efforts to make government credit available saved banks but did not encourage business growth.

20. Policies under Hoover showed that private charities do not have the resources to meet massive social problems • Social unrest under the Hoover administration led to • Bonus Army marching on Washington • Farmers’ Holiday Association • Refused to sell produce to raise prices • Labor demonstration at Ford’s River Rouge Factory • Strike turned violent when police fired on crowd killing 4 and injuring 50

22. Protest and the Election of 1932 • In 1932, protests erupted throughout the country, including the Bonus Army of veterans in Washington. • Congress had promised a $1,000 bonus in the form of a bond that would not mature until 1945-to every WWI vet

23. The Democrats, led by Franklin D. Roosevelt, won a massive electoral victory. • He had accused Hoover of reckless spending

24. Section 3 FDR and the First New Deal

25. FDR the Man FDR came from aprivileged New York background. His rapid rise in politics came to a halt when he was stricken with polio. The experience changed him, allowing him personally to understand struggle and hardship.

26. He served two terms as governor of New York where he: • established a reputation as a reformer • put together the “brain trust” to help him implement changes • His “brain trust” believed in government business cooperation

27. Restoring Confidence • To restore confidence, on his first full day as president, FDR called for a four-day “bank holiday.” • Temporarily closing all the banks • In his fireside chat a week later, he told Americans of the steps he had taken, strengthening public faith in his ability to help • Congress passed legislation that strengthened the banking system, helping to avert the immediate banking crisis.

29. The Hundred Days • FDR called a special “hundred days” session of Congress to enact his program to revive industry and agriculture while providing emergency relief. • Relief, Recovery & Reform

30. In the First 100 Days programs that were established were • FERA • TVA • CCC • AAA • NIRA

31. NIRA • Self-Regulating industrial codes to revive economic activity • Sparked union organization • TVA • Economic development and cheap electricity for the Tennessee Valley • CCC • Provided work for jobless young men in protecting and conserving the nations natural resources • FERA • Direct federal $ for relief, funneled through state and local governments

32. AAA • Established parity prices for basic farm commodities • Displaced sharecroppers by reducing production • Try to raise farmers purchasing power

33. Section 4 Left Turn and the Second New Deal

34. Roosevelt’s Critics • More troublesome for FDR were critics who claimed the New Deal had been too timid including: • Charles E. Coughlin denounced a conspiracy of Jews, international bankers and the New Deal • Upton Sinclair lost the California gubernatorial election race in which he called for a government-run production system.

35. Francis Townsend called for providing $200 monthly payments to all persons over 60. • Huey Long, who served as governor and then as senator for Louisiana, called for a “Share Our Wealth” program to redistribute wealth. Long’s assassination in 1936 ended his probable third-party candidacy.

36. Problems of the New Deal • Accusations of socialism by businessman and some Democrats • Loud criticism by a Catholic priest • Protest marches by the unemployed councils and the communists

37. The Second Hundred Days • FDR responded by shifting leftward. • Programs included the • WPA • Community service programs that employed thousands of jobless artists, musicians, actors and writers • Resettlement Administration • Relocation of poor rural families • Reforestation and social erosion projects

38. Wagner Act also called National Labor Relations Act • Federal guarantee of right to organize trade unions and collective bargaining • Social Security Act • Federal old-age pension and unemployment insurance • Mutual- aid program

39. Labor’s Upsurge: Rise of the CIO A militant group within the AFL formed the Committee for Industrial Organization (CIO), later the Congress of Industrial Organizations, to organize mass-production workers. Led by John Lewis & Sidney Hillman of the United Mine Workers, the CIO drew upon communists and other radicals to engage in the dangerous task of building industrial unions The success at the Flint GM plant led to victories in other industries.

40. The New Deal Coalition at High Tide • FDR easily won re-election in 1936 • His supporters included: • traditional white southern Democrats • Industrial workers of all races • trade unionists • depression-hit farmers • First and second-generation Catholic immigrants

41. Section 5 The New Deal in the South and West

42. Southern Farming and Landholding In 1930, less than ½ of all southern farmer owned their land; over ¾ of the region’s African-American farmers and nearly ½ of its white farmers were sharecroppers or tenants The Agricultural Adjustment Administration (AAA) was able to boost prices by paying farmers to “plow under—take their land out of production

43. Many of the subsidies went to large landowners who used the money to buy labor-saving machinery, which put many out of work Those who were put out of work were forced to migrate to industrial centers such as Memphis, Chicago, Birmingham, and Detroit.

44. The programs that helped primarily the South and the West • Federal Emergency Relief Administration • Tennessee Valley Authority • Resettlement Administration

45. The Dust Bowl The Dust Bowl, caused by farmers’ methods that stripped the landscape of its natural vegetation and left nothing behind to hold down the topsoil, swept through parts of the region

46. The Government and the Dust Bowl • Farmers were encouraged to plant soil-enriching crops. • The Soil Conservation Service provided assistance to farmers engaged in conservation work • The AAA provided • subsidies to farmers who reduced their acreage. • Led to an increase in evictions of sharecroppers and tenant farmers • Inspire the founding of the Southern Tenant farmers Union in protest

47. As landowners reduced acreage by evicting their tenants and sharecroppers, these families became part of a stream of “Okies.” Responding to rising racial hostility, officials carried out an aggressive deportation campaign against Mexicans and Mexican Americans regardless of their citizenship status