Chapter 23


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Chapter 23

  1. 1. The Great Depression and the New Deal
  2. 2. Hoover and the Crash
  3. 3. Signs of Weakness Older industries declining  Coal mining, railroads, & clothing manufactures Agriculture in prolonged downturn Stock prices soared  Margin buying: people bought stocks at ta fraction of the cost at the outset & owing the balance  Gambled that prices would be higher when they were ready to sell
  4. 4. The Stock Market Crashes May 1928-September 1929  Industrial stocks doubled Wednesday October 23rd  6 million shares of stock changed hands  Falling prices caused losses of $4 billion  Brokers who lent $ for people to buy on margin now recalled their loans  Investors who could not pay had to sell their stocks  Caused prices to drop even more October 29, 1929  Black Tuesday  Stock market crumbled completely  Panicked traders rushed to sell (there were no buyers)  Investors who thought they had valuable stock had worthless pieces of paper (millionaires lost their fortunes overnight)  Stock prices plunged over the next 2 weeks
  5. 5. The Great Depression Begins Stock markets crash marked the start of a 12-year economic & social disaster
  6. 6. Troubled Industries Major cause of the Great Depression  Overproduction: a situation in which the supply of manufactured goods exceeds the demand  Factories produced more than people bought (prices for goods increased) Housing & automobile manufacture were in decline  Supports prosperity during 1920s  Between 1926-1929 spending on construction fell from $11 billion to $9 billion  1st nine months of 1929 car sales dropped by more than 1/3
  7. 7. Crisis in Banking Nationwide banking crisis contributed to depression Struggling farmers could not repay loans  When farms failed, banks also went out of business City banks also invested in the stock market or loaned $ to speculators  When market crashed people rushed to banks to withdraw their savings  More than 5,500 banks closed between 1930 & 1933  Many depositors were left penniless
  8. 8. The Downward Spiral W/ people unable to buy factory products, many factory workers lost their jobs  Had less $ to make purchases  Led to declining sales, which led to more factories closings & layoffs  Many companies forced into bankruptcy (financial failure caused by a company’s inability to pay its debts)  These caused even more layoffs Worldwide Issue  European countries defaulted on their loans owed to the U.S. from WWI due to decline in international trade  As crisis worsened, investors cut back loans to Europe  Process of production cuts, layoffs, & bankruptcies repeated in Europe
  9. 9. The Unemployed 1929-1933  Unemployment went from 3% to 25%  13 million people nationwide  Toledo, Ohio: 4 out of 5 workers had no work  Those that had jobs had hours & wages cut
  10. 10. Growing Poverty Spirits crushed because of poverty Jobless waited in long lines for food Communities of rundowns shack built on outskirts of big cities  Called Hoovervilles (blamed President Hoover for failing to solve the crisis)
  11. 11. Impact on Families Many fathers left families in search of work  Others were too ashamed to be apart of the family & left Marriages were less common  Also had fewer children if married Children faced hardships & uncertainty  Suffered lifelong health problems  Education suffered  1 million rural children under the age of 13 did not attend school
  12. 12. Hoover Responds Hoover’s advisers wanted him to do nothing  Hoover disagreed Government Aid  Hoover wanted business leaders & local gov’t to take the lead  Encouraged city & state gov’t to create public works projects  Urged private charities to et up soup kitchens 1932  Voluntary action was not enough  Reconstruction Finance Corporation formed  RFC gave $ to local gov’ts to fund public –works projects  Economic situation did not improve
  13. 13. The Bonus Army June 1932  Protest began that would end Hoover’s career 8 years earlier Congress approved a bonus of $1,000 for every vet of WWI  Vets demanded payment as Depression grew worse  Was not paid until 1945  Hoover refused & 20,000 vets marched to Washington  Congress also refused (many marchers left)  2,000 stubbornly remained in tents or abandoned buildings  Gov’t forces used tear gas, tanks, & machine guns  1 killed, 100 injured (Americans were outraged)
  14. 14. Roosevelt & The New Deal
  15. 15. Franklin D. Roosevelt Nominated by Democrats to run against Hoover in 1932  known as FDR  was a wealthy New Yorker & distant relative of Theodore Roosevelt  had served as assistant secretary of the navy & nominated as VP in 1920  got polio in 1921 & relied on steel leg braces to help him stand  never allowed photographers to take his picture in a wheel chair 1928 elected governor of New York selected to run for President 4 years later
  16. 16. A Voice of Hope Pledged “a new deal for the American people”  Later it would describe his entire political program FDR beat Hoover by a margin of 472 electoral votes to 59  Received 57.4% of the popular vote On March 4, 1933w/ the help of his son, he took the oath of office
  17. 17. Bank Holiday Day after taking office  Declared a bank holiday (4 day closing of the nation’s banks)  Goal was to halt nationwide epidemic of bank failures  Gave FDR time to propose an Emergency Banking Relief Act (provided more careful gov’t regulations of banks) FDR restored Americans’ confidence in their banks by delivering a fireside chat (radio talks; gave many during his presidency)  When banks reopened many Americans re-deposited money
  18. 18. Relief for the Jobless FDR conferred w/ his advisors over what legislation to send to Congress  They were nicknamed the “brain trust” because many of them were college professors During the 1st 100 days of FDR’s administration Congress passed & the President signed 15 new bills New Deal measures had 3 goals  Relief for the jobless  Economic recovery  Reforms to prevent futures depressions
  19. 19. Unemployment Relief Some measures provided financial assistance Federal Emergency Relief Administration  Granted funds to states so they could reopen shuttered relief agencies
  20. 20. Providing jobs Civilian Conservation Corps (CCC)  Hired city dwellers to work in America’s national parks, forests, wilderness areas, & countryside  Planted trees, built reservoirs, constructed parks, & dug irrigation canals CCC created jobs & protected the nation’s natural resources The Works Progress Administration (WPA)  Put people to work building or repairing public buildings  Schools, post offices, & gov’t offices  Paved 650,000 miles of roads, raised more than 75,000 bridges, & built more than 800 airports  Paid artists to paint murals in post offices & gov’t buildings  Hired writers to write stories, state guides, & histories
  21. 21. Promoting Economic Recovery FDR needed to help industry & agriculture recover National Recovery Administration  Aimed to keep prices stable while boosting employment & buying power  Most of major industries agreed to pay workers a minimum wage, to stop hiring young children, & to keep wages and prices from falling too low  NRA succeeded in raising prices  Some critics charged them w/ favoring large businesses  Also failed to improve the economy
  22. 22. Public Works Administration PWA  Was granted more than $3 billion to build large public- works projects  Improved the nation’s infrastructure & employed many people  New York’s Lincoln Tunnel, Florida’s Key West Hwy, & the Grand Coulee Dam in Washington  Nearly every county in the nation could boast at least one PWA project  Even so, the Great Depression continued
  23. 23. Tennessee Valley Authority Formed in 1933 TVA  Built giant dams along Tennessee River  Dams could control flooding, provided cheap electricity, & increase jobs and prosperity in one of nation’s poorest rural areas 1945  Power from TVA plants lit thousands of farms that never had electricity  Failed to relieve region’s poverty  Conservatives criticized TVA for driving some property owners off their land  Also argued it was unfair for gov’t to compete w/ private power companies  Other argued TVA disrupted the natural environment (increased air pollution)
  24. 24. Reforming the Economic System Truth-in-Securities Act  Required corporations to inform the public fully about their stocks  Corrected one condition that caused stock market to crash Federal Deposit Insurance Corporation (FDIC)  Protected bank depositors  Guaranteed individual deposits up to $2,500.00 Other agencies set fairness & safety standards for various industries Federal Power Commission (FDC)  Helped control the oil & gas industries Food & Drug Administration powers were also increased
  25. 25. Obstacles to the New Deal FDR was re-elected in 1936  Americans were enthusiastic about the New Deal New deal faced challenges in the Supreme court
  26. 26. Supreme Court 1935 & 1936  Supreme Court declared several New Deal measures, including NRA, to be unconstitutional  FDR proposed appointing up to six new Supreme Court justices  Was opposed by conservatives (saw FDR’s plan to gain a majority of justices)  Congress defeated FDR’s plan  He was able to win backdoor way  1937 a conservative justice resigned & FDR appointed a liberal one in his place
  27. 27. New Deal Critics Conservatives  Thought New Deal went too far in regulating businesses & restricting individual freedom Liberals  Some thought New Deal did not go far enough in helping the poor Biggest critics  Huey Long: Democratic senator from Louisiana; argue d gov’t could end Depression immediately; proposed to tax the wealthy & distribute their wealth to the poor (Share Our Wealth plan)  Francis Townsend: called for a system of gov’t pensions (retirement payments); retired Americans over the age of 60 would receive $200 each month as long as they pledged to spend all the money; plan was never approved by Congress, but later helped set the stage for the Social Security system  Charles Coughlin: used radio to attract followers; Catholic priest from Michigan; distrusted FDR’s policies on banking & money; called for gov’t to take over banks  Supporters of the “Big Critics” joined forces to back a third-party candidate in 1936 (were not strong enough to combat FDR’s popularity
  28. 28. Life in the Great Depression
  29. 29. Women in the Depression Many Americans felt women should stay at home During the Depression women had to help support their families By the end of the Depression more women were working outside of the home than before the Depression
  30. 30. Women in the Workplace 2 advantages for women in the workplace  Female salesclerks & secretaries faced little competition from men  Jobs of women less likely to disappear, unlike factory jobs Most women w/ jobs still struggled  Women trained in certain professions (teachers, librarians, etc.) had to compete against men who had lost their jobs  Women factory workers were more likely to lose their jobs or have wages cut  Maids, seamstresses, & housekeepers lost their jobs because people could not afford their services  African American women suffered the most because they held the majority of domestic jobs To save money more women found themselves sewing clothes, canning fruits & vegetables, & baking bread instead of buying
  31. 31. An Active First Lady Eleanor Roosevelt  Most famous working lady  After FDR was stricken w/ polio she began to speak & travel on his behalf  Transformed the role of First Lady  She served as the Presidents eyes & ears  In 1933 alone she logged 40,000 miles including a trip down into a WV coal mine  Also made frequent radio speeches & wrote a daily newspaper column  Used her position to fight for women’s rights
  32. 32. African Americans in theDepression Hit hard by the depression Suffered more unemployment, homelessness, illness, & hunger than whites
  33. 33. South & North South  Plunging cotton prices forced African American sharecroppers off their land  Move to southern cities (found traditional jobs done by blacks (i.e. cleaning streets) were now done by jobless whites)  1932 more than ½ African Americans in South were unemployed North  African Americans migrated north  Still hard to find work  Were last hired & first fired from jobs  In New York 50% of blacks were jobless
  34. 34. FDR’s Mixed Record Most blacks backed FDR despite his mixed record on civil rights  Example: FDR failed to support a federal antilynching bill W/ his wife’s prodding, FDR appointed at least 100 blacks to gov’t posts  Mary McLeod Bethune, a friend of Eleanor’s, became top ranking African American in gov’t  Member of FDR’s “Black Cabinet”; advised FDR on African American issues (William Hastie also a member of cabinet, later became 1st black federal judge)
  35. 35. A Symbolic Moment 1939  Daughters of the American revolution (DAR) refused to allow African American singer Marian Anderson to perform at their hall  Eleanor resigned as a member of DAR in protest  Arranged for Anderson to sing on the steps of the Lincoln Memorial on Easter Sunday (drew crowd of 75,000; became a symbol of the struggle for civil rights)
  36. 36. Mexican Immigrants Are Deported Mexican immigrants  Lived in SW as migrant workers  Welcomed during good time by farmers (worked for low pay & harsh conditions)  Whites flooded the area during the Depression looking for work  American wanted gov’t to force Mexican out of the country  They rounded up 100s of thousands of people & deported them (some were actual U.S. citizens born in the U.S.)
  37. 37. The Indian New Deal 1924  Native Americans were granted citizenship When Depression hit, 170,000 Indians lived in poverty on reservations administered by the gov’t John Collier  Commissioner of Indian Affairs  A white man who lived among Pueblo Indians of New Mexico  Developed a program called Indian New Deal  w/ federal agency funding: NA hired to build schools, hospitals, & irrigation systems  Also wanted reservations under Indian control, stop sales of their lands, & encouraged schools to teach Native American history & the arts 1934  Congress approved part of the Indian Reorganization Act (IRA)  Did restrict tribal land sales, but failed to bring self-gov’t or education promotion
  38. 38. The Dust Bowl 1930  Little rain fell, drought caused crop failure & dust storms  Lasted 5 years, 100 million acres of farmland became a wasteland
  39. 39. Black Blizzards Modern farming contributed to Dust Bowl  Large plots of land containing native grasses & sod was removed by farmers (this held the soil in place)  Little rain caused rootless soil to blow away like powder Dust Storms were called Black Blizzards  Made noon seem like midnight, buried fences, houses, & killed people and animals
  40. 40. Okies Head West Ruined farm families abandoned their dusty homes to seek work elsewhere  In some areas 1 in 3 families left  Became known as Okies because many came from Oklahoma  Conditions not better in California  Not able to buy land, they had to compete w/ local workers to pick crops  Police closed some roads into California, but migrants kept coming
  41. 41. Arts & Media of the Depression John Steinbeck  Captured miseries of the Dust Bowl in The Grapes of Wrath  Tells the story of the Joads, Okies who seek a better life in California
  42. 42. Visual Arts Photographers & painters used the Depression as a theme Under a New Deal program called the Farm Security Administration, photographer Dorothea Lange recorded the experiences of the Dust Bowl migrants  Photograph remains the symbol the Depression  WPA hired artists to paint murals on public buildings
  43. 43. Movies & Radio During the Depression  Movies: dealt realistically w/ social problems  The Grapes of Wrath & The Public Enemy  Also helped people forget about their problems  Mickey Mouse, King Kong, & Shirley Temple  Radio: used to broadcast FDR’s fireside chats  Popular bands & comedians, continuing dramas sponsored by soap companies (soap operas)
  44. 44. Legacy of the New Deal
  45. 45. Social Security 1935  FDR signs Social Security Act  Provided federal gov’t a major & lasting role in providing for the needy Social Security Act  Old-Age Insurance: key part of SSA  Guaranteed retired people a pension  Funded by a payroll tax (a tax that removes money directly from workers’ paychecks  Matching contributions were required by employers  Business leaders opposed Old-Age Insurance
  46. 46.  SSA included Aid to Dependent Children (ADC)  Helped children whose father s were dead, unemployed, or not living w/ the family  Granted federal $ to states to help mothers stay home to raise their children SSA also provided for disabled & gave states $ to make temporary payments to the unemployed At SSA excluded some categories of labor  Agriculture & domestic workers not required to pay  Many African Americans, migrant workers, & poor rural whites did not benefit from SS
  47. 47. Lasting Labor Reforms Frances Perkins  Member of FDR’s committee who drafted the SSA  1st woman to serve in the Cabinet  Back major labor reform
  48. 48. New Laws Favor Workers 1935  Congress passed the National Labor Relations Act  Became known as Wagner Act  Guaranteed workers’ rights to organize into unions & prohibited unfair business practices  Upheld collective bargaining (right of a union to negotiate wages & benefits for all its members)  National Labor Relations Board  Required employers to participate in collective bargaining w/ unions
  49. 49.  1938  Fair Labor Standards Act  Set minimu wages at $.25 per hour & max weekly work hours at 44  Established time and a half payment for overtime work & put an end to child labor in some businesses
  50. 50. A Powerful New Union John L. Lewis  Head of the United Mine Workers  Formed Industrial Organization renamed later the Congress of Industrial Organizations (CIO CIO  Umbrella organization consisting of many other unions  Differed from the older American Federation of Labor (AFL)  AFL combined workers based on skills  CIO combined all workers in particular industry (skilled & non-skilled)  Opened union membership to more women & African Americans
  51. 51.  1936  United Auto Workers  Members of CIO  Launched sit-down strike (workers stay in the factory but stop production) @ nation’s largest auto factory  After 6 weeks the strikers won their demands for higher wages & shorter hours  Supreme Court later ruled sit-down strikes illegal
  52. 52. Scorecard on the New Deal SSA & other reforms permanently enlarged the role of the federal gov’t  Not everyone agreed gov’t should take such an active approach to social problems
  53. 53. Arguments Against the New Deal Critics say New Deal gave too much power to the federal gov’t Federal gov’t threaten individual freedom & free enterprise  Favor a return to the tradition of laissez faire  Gov’t should interfere w/ the economy as little as possible Worried about a massive increase in the nation’s debt New Deal failed to fulfill its most fundamental goal  Did not end the Great Depression  Full recovery would not come until 1941 when the U.S. began producing goods in preparation for WWII
  54. 54. Arguments for the New Deal Employed millions of jobless people Ended banking crisis Reformed stock market Save poor families from losing their homes Improved working conditions Built dams & bridges, preserved 12 million acres of national parkland, brought electricity to rural America, & sponsored the creation of lasting works of art For many the New Deal also restored peoples faith in the gov’t