Introducton to American History
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1104_AmericanHistoryComb_9e_25.pptxChapter 25: The Great Depression
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Learning Objectives
Understand the causes of the Great Depression.
Explain the criticisms of Hoover’s approach to the New Deal.
Discuss the effects of the Depression on the American people.
Discuss political unrest during the Great Depression, including the Bonus Army and the Farm Holiday Association.
Explain the banking crisis of 1933 and how FDR restored confidence in the banks.
Explain the Agricultural Adjustment Act, National Industrial Recovery Act, and the Tennessee Valley Authority.
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Learning Objectives (Continued)
Discuss the role of public works programs during the Great Depression.
Explain the Social Security Administration and its impact.
Discuss the rise of the AFL and the CIO during the Great Depression.
Explain the federal government’s policies toward Native Americans and blacks during the Great Depression.
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25.1a Increasing Force of the Depression
Hoover was elected just before the Depression began.
Farming and industry suffered from overproduction.
The stock market crash was abrupt, but the Depression began more gradually.
Secretary of the Treasury Andrew Mellon saw nothing to warrant “pessimism;” he believed the worst was over.
Hoover was initially optimistic and didn’t seem to grasp the gravity of the crisis.
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25.1b Hoover’s Active Conservatism
Hoover tried several measures to alleviate the Depression.
Hoover signed the Smoot-Hawley tariff— against advice of economists.
Europeans retaliated with tariffs; and international trade declined, hindering European debt repayment.
The US stayed on the gold standard while Europe abandoned it.
The US raised interest rates to prevent a drain on gold supplies.
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25.1c Initiation of the Welfare State
The Welfare State initiated with the Reconstruction Finance Corporation (RFC), January 1932.
The RFC made loans to banks and companies to prevent bankruptcy.
Banks and railroads got the most; they were “essential” to the economy.
Aid to individuals was rejected.
Critics denounced the RFC as the “breadline for big business.”
The RFC was slow to spend its money.
The Glass-Steagall Act liberalized the lending policies of banks and made available $750 million in government gold to business.
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25.1d Effects of the Depression
The Depression got progressively worse from 1929-1932.
Things got worse in 1932, and thousands of refugees roamed the countryside.
Farmers burned crops for fuel.
Landlords ceased evictions to protect property.
Immigration officials deported Mexican aliens.
Those suffering became sullen and resentful, but not ready to fight for a new order.
Communist Party parades drew 50,000 people.
Communists diminished after the right to collective bargaining was established.
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25.1d Effects of the Depression (Continued)
Farmers were not counted among unemployed; neither were those who gave up looking for work or those who were students.
One-industry towns were completely paralyzed.
Families disintegrated; people started drifting as ”migrants of despair.”
By fall of 1931, most charities were bankrupt.
Food sources included recipes for weeds, and there were rabbit and snake hunts.
College attendance, marriage and birth rates—all declined.
GNP, investment, and prices declined while unemployment rises.
Southern sharecroppers suffered most of all.
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25.1e Farm Holiday Association
Farmers were increasingly desperate.
Farm strikes occurred in Iowa and surrounding areas.
The Bonus Army—veterans—marched on Washington.
Hoover dispersed Bonus Army with the US Army, but he received bad press.
Election of 1932: Franklin Roosevelt was the only candidate offering a more progressive approach.
The platforms were much the same: Candidates talked about cutting taxes and balancing the budgets.
Roosevelt won 22,800,000 to 15,879,000; Norman Thomas had 881,951.
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25.1f Bonus March
Veterans of World War I were supposed to be paid a $1,000 bonus in 1945.
They began to push for immediate payment of the bonus to help them through the Depression.
The “Bonus Army” camped out in downtown Washington, DC, to pressure Congress.
Hoover sent in troops to dispel the Bonus Army.
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25.1g The Election of 1932
Franklin Roosevelt was elected by a landslide.
Roosevelt was a New York aristocrat and former governor of New York.
He lacked a concrete plan for addressing the Depression, but adopted a “try anything” approach.
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25.1h Bottom of the Depression
The Depression reached its lowest point just before Roosevelt’s inauguration.
FDR pledged a New Deal for the American people.
Bank panic led to banks closing in several states.
Thousands of banks closed down, mainly because of fraud.
Fascist organizations attempted to gain public support.
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25.2a The Honeymoon
“Relief, Recovery, and Reform” became the slogan.
FDR restored confidence in banks with his fireside chats.
Economy Act cut federal salaries, but its impact worsened the Depression.
FDIC was established to insure bank deposits.
By end of the “Hundred Days,” the Federal Emergency Relief Administration, Civilian Conservation Corps, and repeal of Prohibition were in effect.
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25.2b The Spirit of the New Deal
The administration took an unprecedented, innovative approach to governing.
Eleanor Roosevelt symbolized the administration’s spirit.
It reached out to African Americans, coal miners, and the dispossessed.
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25.2c Farm Relief
Farmers were the hardest hit of any occupational group.
In June 1933, the Agricultural Adjustment Act passed.
Government should pay farmers not to grow as much.
Money for subsidies was to come from tax on food processors.
It led to sharecropper unemployment and declines in production.
The public reacted negatively to waste of agricultural products in a time of need.
The Supreme Court struck down the act as unconstitutional.
Soil Conservation and Domestic Allotment Act replaced the Agricultural Adjustment Act.
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25.2d Mortgage Refinancing
Government attempted to take care of hundreds of thousands of defaulted mortgages.
Government offered long term mortgage refinancing at low interest.
Federal Housing Act of 1934 introduced uniform monthly mortgages.
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25.2e Regional Development
Roosevelt wanted to modernize the South.
Tennessee Valley Authority (TVA) built 20 dams and improved 5 others.
It provided regional planning in poorest area of the country, and it provided cheap electricity.
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25.2f Industrial Recovery
Roosevelt’s attempt to shore up industry, the National Industrial Recovery Act, was passed.
Each industry would write a code of fair competition.
Public Works Administration (PWA) got $3.3 billion for public works.
Limiting production had a negative impact on employment.
PWA discriminated against blacks and was slow to spend its resources.
The Supreme Court declared codes unconstitutional in 1935.
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25.2g Devaluing the Dollar
Roosevelt hoped that controllable inflation would raise farm prices and improve the economy in general.
Senator Key Pittman undermined global economic conference with erratic drunken behavior.
The Gold Reserve Act allowed the president to arbitrarily set the price of gold.
Prices rose slightly, but not as much as expected.
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25.2h Rise of Conservative Opposition
Greater regulation of business and banking led to strong conservative opposition.
Federal Deposit Insurance (FDI) was created in 1933.
Stricter regulation of banking created intense opposition among business leaders and also fought creation of Securities and Exchange Commission.
Government was condemned for creating vast new bureaucracy.
Government also was criticized for taking away individual freedom and increasing national debt.
The Liberty League formed in August 1934.
Two-thirds of major metropolitan newspapers opposed the New Deal.
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25.2i Reliance Upon the Masses
Business opposition lacked a positive philosophy.
General public did not trust a self-regulating economy.
25.2j Public Works
Massive public works programs were created to give people work. The Civil Works Administration provided public works employment.
The Works Progress Administration (WPA) was created; and it had spent $11 billion by WWII, from mixing concrete to painting murals and completing many other art projects.
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25.2k Social Security
Roosevelt considered Social Security the most important legislation of his administration.
Unemployment insurance, aid to the disabled, and old-age pensions passed.
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25.2l The Supreme Court: Challenge and Response
The Supreme Court was frequently hostile to New Deal programs.
The Court declared the National Industrial Recovery Act (NIRA) unconstitutional in 1935.
The Court invalidated AAA in 1936.
1935: Wagner Act created the National Labor Relations Board and upheld the workers’ right to join unions.
Tax bill increased taxes (slightly) on rich and was denounced as “communistic.”
Father Charles Coughlin viewed the New Deal as an international communist conspiracy involving the Illuminati, Jews, and Masons.
Huey Long began promoting “every man a king” and that increased tax on the rich would provide every family with a house, a car, and radio.
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25.2m The Election of 1936
The election was a referendum on the New Deal.
Roosevelt won by a landslide.
Alfred Landon carried only two states.
FDR attacked “economic royalists.”
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25.3a Battle over the Court
In 8 of 10 major New Deal cases, the Court ruled against the New Deal.
Roosevelt proposed increasing the size of the Court to 15 members.
The “Court-packing” Plan was defeated.
The Court changed anyway, however, because of retirement, death, and changes in attitude.
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25.3b A Government-Protected Labor Movement
Increasing pressure to secure rights for workers
John Lewis organized Congress of Industrial Organizations (CIO) in 1937.
Section 7 (a) gave organized labor the right of collective bargaining.
Sit-down strikes began in auto industry in 1936.
Union strength increased from 1936 to 1939.
Union membership reached its peak in 1939 (9 million).
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25.3c Women in the Depression
Women made few gains during the Depression.
AFL was not inclined to accept women, but the CIO would.
In twenty states, women were not considered equals of men.
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25.3d The Survival of the American Indian
Indian Citizenship Act passed in 1924.
Indians suffered from disease, poverty, infant mortality, alcoholism, suicide, and despair.
John Collier and the American Indian Defense Association fought for reform.
Education for Native Americans improved.
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25.3e Black America
On the whole, Roosevelt was not prepared to battle Southern Congressmen over civil rights.
The Scottsboro Trial demonstrated racist attitudes.
FDR appointed race-relations counselors for many agencies.
Mary M. Bethune became Director of Negro Affairs of the National Youth Administration.
Robert C. Weaver was the advisor to Department of Interior.
Federal district court in Virginia ordered equal pay for teachers (1941).
Most blacks remained impoverished.
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25.3f Mexican Americans
Poor Mexican Americans were especially hard-hit by the Depression.
Most were agricultural workers.
Mexicans and Mexican Americans (500,000) repatriated to Mexico.
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25.3g The Dust Bowl Migration
The Dust Bowl was the result of a catastrophic, ten-year-long drought.
Severe drought and heat waves created massive dust storms; these, combined with locusts, left many farms bankrupt.
One-third of the farms in Dust Bowl were deserted.
“Okies” migrated to California (300,000).
In California, the Okies met hostility and violence.
John Steinbeck wrote The Grapes of Wrath.
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25.3h Return to Depression
Roosevelt was convinced that it was time for a retreat from government spending.
FDR promised a balance budget in 1937.
The Federal Reserve tightened money supply.
The sharpest business decline in American history began in July 1937.
Unemployment increased to 20 percent (10 million).
FDR reversed course and instituted Public Works spending.
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25.3i New Policies
Renewal of the Depression forced the government to institute new policies.
The Fair Labor Standards Act passed.
It prohibited child labor (under age 16).
Minimum wage was set at 25 cents per hour.
The 44-hour work week was created.
Federal expenditures on public works and defense rose 25 percent.
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25.3j Assessing the New Deal
The New Deal brought mixed results.
There was improved stability and security, but the New Deal did not bring recovery.
Government failed to spend at a level necessary to promote recovery.
How could a healthy economy be assured in time of peace?
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25.3k Lasting Effects of the New Deal
The New Deal greatly expanded the size and role of the government.
The New Deal set the precedent for federal intervention into the economy.
It established the right to collective bargaining.
It increased the regulatory functions and scope of the US government.
It created the beginnings of the federal welfare state.
The president became the foremost policy leader.
Democrats were the dominant political policy until 1994.
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