The Great Depression

The Great Depression

The 1930’s

The Crash

• Black Tuesday • Years of over speculation, deregulation

leads to market crash • Boom market>increased

speculation>great sell-off Oct ‘29• America enters the Great Depression

Causes

• Market crash – “playing the market”, buying on margin

• Uneven income distribution & overproduction>>easy credit

• Weak agricultural sector• Gov’t policies– Laissez Faire, dereg., high tariffs,

• Global problems– Interdependence, European debt, Reparations, Tariffs

Effects

• Bottoms out in ’32?• Full recovery took a decade• New Economic Theories – John Maynard Keynes

• Drop in GDP, 50% drop in income, 20% bank failure rate, bank runs, 25-30% unemployed by ’32

• End to Republican dominance• Reemergence of union movement & radicalism

The Depression Worsens

• Hoover’s Policies–Prosperity will return, part of the cycle–Relief should come from states and

localities–Voluntary action• No strikes, no wage cuts, increase in private

charities

Actions of Hoover

• Hawley-Smoot Tariff 1930 – highest in history to protect American manufacturers– Tariff war

• Debt Moratorium– Loan defaults

• Domestic programs– Federal Farm Board

• Hold surplus – too moderate to stabilize prices– Reconstruction Finance Corp

• Loans to RRs, banks, insurance cos • Trickle down

Protest• The Bonus Army– Summer of ’32– WWI vets march on Washington petitioning for army bonuses

– Hoover sent Gen McArthur to break the camp

– Tear gas, tanks, and the end of Hoover• Farmers rise up– Farm Holiday Association

• Stop the crop ‘32– Banded together to prevent evictions

• Hoovervilles

FDR & the NEW DEAL

• Franklin D. Roosevelt was elected in 1932 w/60% of pop vote

• Calls for a new deal• Gained support of some socialists

• Dem majorities in both Houses

New Deal• The 3 R’s–Relief, Recovery, Reform– The Brain Trust• Louis Howe• Professors & economists

– The 1st Hundred Days• Bank Holiday– Closed until reorganized

• Repeal of Prohibition• Fireside Chats

1st Hundred• Relief

– FERA (Federal Emergency Relief Administration)– PWA (Public Works)– CCC (Civilian Conservation Corps)– TVA (Tennessee Valley Authority)

• Financial Recovery Programs– Emergency Banking Relief Act– FDIC (Federal Deposit Insurance Corp)– HOLC (Home Owners Loan Corp)– Farm Credit Administration

1st Hundred

• Industrial recovery program– NIRA (National Industrial Recovery Act) > NRA (National Recovery Administration)

– Set wages, production levels– Unconstitutional (Schechter v U.S. 1935)

• Farm production control program– AAA (Agr. Adjustment Admin)– Subsidies for non-production– Unconstitutional

FERA / 1933FERA / 1933Federal Emergency Relief ActFederal Emergency Relief ActDistributed $500 million of direct aid to unemployed workers such as food, clothing and grants of

money to cities.

alphabet

RELIEFRELIEF: : Ease Suffering of the NeedyEase Suffering of the Needy

PWA / 1933 to 1943PWA / 1933 to 1943Public Works AdministrationPublic Works Administration

Employed 8.5 million workers in construction and other jobs, but

more importantly provided work in arts, theater, and literary projects.

alphabet

RELIEFRELIEF: : Ease Suffering of the NeedyEase Suffering of the Needy

CCC / CCC / 1933 to 19421933 to 1942Civilian Conservation CorpsCivilian Conservation Corps•Sent 3 million young men to work camps to build bridges, replant forests and other

conservation tasks. •Develop job skills and improve

environment.• Removed surplus of workers from cities,

provided healthy conditions for boys, provided money for families.

alphabet

RELIEFRELIEF: : Ease Suffering of the NeedyEase Suffering of the Needy

HOLC / 1933HOLC / 1933Home Owners Loan CorporationHome Owners Loan Corporation

Prevented mortgage foreclosures. US Govt. bought up mortgages

and refinanced them so that homeowners could pay their

mortgages.

alphabet

RELIEFRELIEF: : Ease Suffering of the NeedyEase Suffering of the Needy

NIRA / 1933NIRA / 1933 National Industrial Recovery ActNational Industrial Recovery Act

Called the National Recovery ActNational Recovery Act…..Created NRA to enforce codes of fair

competition and minimum wages.

alphabet

TVA / 1933TVA / 1933 Tennessee Valley AuthorityTennessee Valley Authority

Federal government built a series of dams to prevent flooding and

sell electricity in the South.

alphabet

Regulated stock market and restricted margin buying, and frauds.

alphabet

REFORMREFORM:: Prevent Another Depression Prevent Another Depression

SEC / 1934SEC / 1934 Securities and Exchange Securities and Exchange

CommissionCommission

Glass-Steagall Act created federally insured bank deposits ($2500 per investor at first) to

prevent bank failures.

alphabet

REFORMREFORM:: Prevent Another Depression Prevent Another Depression

FDIC / 1933FDIC / 1933Federal Deposit Insurance CorporationFederal Deposit Insurance Corporation

The Dust Bowl

• The Dust Bowl - farmers crops literally blown away or buried

• OK, KS, CO• Okies head west but find few jobs (fruit picking, odd jobs)

• Grapes of Wrath – John Steinbeck

•

Life During the Depression

• Women – lower pay, more working, family strain

• African Americans – hardest hit, excluded from relief programs, increase in lynchings, little support from FDR– Improvements – some relief provided, support from Eleanor, Fair Employment Practices Committee 1941(A.Phillip Randolph)

Continued

• Mexican Americans – Discrimination in society & ND, increase in white migrant labor, some return to Mexico

• N. Americans – John Collier (BIA) brought CCC to reservations, NA included in WPA– Indian Reorganization Act 1934

• Repealed Dawes, NA culture ok, no real NA control

2nd New Deal• WPA (Work Progress) 1935 – Harry Hopkins, bridges, roads, pub buildings

• Resettlement Admin – loans to small/sharecroppers, housing for migrants

• Nation Labor Relations Act (Wagner) 1935

• REA (Rural Electrification)• Increased taxes on wealthy• Social Security Act 1935

Reaffirmed labor's right to unionize, prohibited unfair

labor practices, and created the National Labor Relations

Board. alphabet

REFORMREFORM:: Prevent Another Depression Prevent Another Depression

Wagner Act / 1935Wagner Act / 1935National Labor Relations ActNational Labor Relations Act

It provided retirement pensions, unemployment

insurance, aid to blind, deaf, disabled, and dependent

children. alphabet

REFORMREFORM:: Prevent Another Depression Prevent Another Depression

SSA / 1935SSA / 1935 Social Security ActSocial Security Act

Response to critics (Dr.Townsend and Huey Long),

it provided pensions, unemployment insurance, aid to blind, deaf, disabled, and

dependent children. alphabet

REFORMREFORM:: Prevent Another Depression Prevent Another Depression

SSA / 1935SSA / 1935 Social Security ActSocial Security Act

Election of 1936

• Alf Landon – progressive Rep• Landslide win for FDR• New Deal Coalition 1930’s-60’s– Solid south, ethnic workers, African Americans (in northern cities), Midwest farmers, labor unions

Critics of The New Deal

• Liberals – too much for business• Conservatives – socialism!!!• Demagogues – Father Coughlin (National Union for Social Justice)

• Dr. Francis Townsend – the Townsend Plan > SS

• Huey Long “Share the Wealth”– Assassinated will running for Pres

100 days

Criticisms of New DealCriticisms of New DealUS government and President too powerfulViolated laissez faireSupreme Court declared NIRA and AAA unconstitutionalCritics:

Father Charles CoughlinDr. Francis TownsendHuey Long

Deficit spending: Govt. spends $$$ to stimulate the economy and help people even if it means US Govt. goes into debt.Welfare state----Created a population of Americans who relied on the US Govt. to live

Successes of New DealSuccesses of New Deal

100 days

AMERICANS IN 1939 WHO WANTED THE NEW NEW DEALDEAL TO CONTINUE WAS 55%55%….. ….. 37%37% REGARDED IT AS A BAD INFLUENCE AND

WANTED A NEW PRESIDENT…………...

Stimulated the economy

Put people back to work….

Improved morale and self-confidence of the people

US Govt’s. role changes and became directly involved in helping people

WWII ended the Great Depression not FDR’s New Deal

•Spending all $200 would also be required to boost economic demand.

•Townsend Clubs created all over the nation.

•Influenced FDR’s creation of Social SecuritySocial Security

•He wanted the government to help older citizens.

•Retired California Physician.

•Suggested a $200 per month $200 per month pensionpension for people over 60.

(This is socialismThis is socialism)

•Open jobs for the younger unemployed.

alphabet

Part of FDR’s New Deal……Agencies

created by the US Govt. to bring

about the 3 R’s……Relief, Relief, Recovery, and Recovery, and

ReformReform.