The Great Depression. The Great Crash ■An initial stock market crash on Oct 24, 1929 (Black Thursday) led to a catastrophic drop in stocks on Oct 29 (Black.

The Great Depression

The Great Crash■An initial stock market crash on

Oct 24, 1929 (Black Thursday) led to a catastrophic drop in stocks on Oct 29 (Black Tuesday)–Panicked investors sold stocks,

causing stock prices to plummet–Banks lent less money, factories

produced less, workers were fired or paid less → consumers had less money to spend → factories & businesses closed

This downward spiral continued for 4 years; By 1932 unemployment was at 25%

Unemployment, 1929-1942

Employment Agencies & Relief-Check Lines

These 4 potatoes are Christmas Dinner

Where’s daddy?

“Hoovervilles” & “Hoover Flags”

Hoover Struggles to Fight the Depression

Hoover and Voluntarism■Hoover’s initial response was to

reassure Americans that prosperity would return

■Hoover rejected bold gov’t action & called for volunteerism among charities, local gov’t, & business

■As the depression worsened, Hoover called for gov’t projects like the Reconstruction Finance Reconstruction Finance CorpsCorps (RFC) which loaned money to failing businesses

“Rugged individualism”

The Hoover administration initiated job-creation programs, like building the Hoover Dam

Hoover and Voluntarism■In 1932, President Hoover

suffered two final blows:–When 22,000 war veterans

marched to the capital to demand their WW1 bonus checks early, Hoover ordered this Bonus ArmyBonus Army to be forcibly removed

–The steady rise of bank failures led to a complete collapse of the U.S. banking system

Bonus Army

Douglas MacArthur Dwight

Eisenhower

Bank Failures, 1929-1933

Fighting the Depression■The inability of Republicans to

resolve the economic depression opened the door for a Democratic takeover in politics

■Once in power, Democrats succeeded in relieving some suffering, restored hope, & created an unprecedented level of gov’t intervention in the process

Franklin Roosevelt & the First New Deal

(1933-1935)

The Election of 1932■The depression made Hoover the

victim, but Franklin Roosevelt emerged as the “savior”:–In the 1932 election, FDR was

able to unite the rural & urban factions of the Democratic party & won a landslide victory

–FDR appealed to Protestants & Catholics, farmers & workers, native-born & immigrants

The Hundred Days■When FDR took over in 1933, the

U.S. economy was on the brink of collapse:–Unemployment was at 25%–38 states had total bank failure

■FDR requested from Congress broad executive power to begin his “New Deal” program of economic relief, recovery & reform

FDR asked for “broad executive power that would be given to me if we were in

fact invaded by a foreign foe.”

“Let me assert my firm belief that the only thing we have to fear is fear itself;the only thing we have to fear is fear itself; nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert

retreat into advance.”

New Deal

■Relief: for people cut off

■Recovery: for business and economy

■Reform: of American economics and institutions

The Hundred Days■In his 1st hundred days, FDR

began his 1st New Deal (1934-35)■FDR’s 1st order of business was

to restore confidence in banking: –Declared a 4-day bank holiday:

closed or funded weak banks & opened new gov’t-aided banks

–Glass-Steagall ActGlass-Steagall Act created the FDIC which guaranteed all bank deposits over $5,000

Banks were regulated (not nationalized); the economic system was reformed

(not drastically changed)

Emergency Banking Act of 1933

Now, the FDIC insures deposits up to $100,000

“Capitalism was saved in eight days”

Fireside Chats

The Hundred Days ■The greatest success of the First

New Deal was its ability to offer relief to unemployed citizens via the Reconstruction Finance Corps

–Modest relief checks were doled to 15% of Americans

–Federal Emergency Relief ActFederal Emergency Relief Act (FERA)(FERA) pumped $500 million into state welfare programs

The Hundred Days■Relief efforts of the First New Deal

created more “alphabet agencies”

–Civilian Conservation Corps Civilian Conservation Corps (CCC)(CCC) employed urban men

–Civilian Works Admin (CWA)Civilian Works Admin (CWA) hired 4 million men & women

–Agricultural Adjustment AdminAgricultural Adjustment Admin (AAA)(AAA) subsidized farmers

CCC workers paved roads, planted trees, built bridges

CWA

Creating drainage system for an airfield Dredging a lake

AAA

Percentage of American Families Accepting Government Relief in 1933

National Recovery Administration

The NRA ended up being too bureaucratic; business cooperation gave way to self-interest & greed

SEC (Securities and Exchange Commission)

■ The U.S. Securities and Exchange Commission is a federal agency which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets in the United States.

The Tennessee Valley Authority

Critics claimed the TVA was too socialistic; Competing electric companies attacked the

TVA for selling cheaper electricity & eliminating competition

The Dust Bowl (1931-1939) worsened the effects of the DepressionAreas Affected by the Dust Bowl drought“Okies” & “Arkies”

Franklin Roosevelt & the Second New Deal

(1935-1938)

Father Charles Coughlin

Dr. Francis Townsend

Challenges to FDR

■Louisiana Senator Huey Long proposed his Share the WealthShare the Wealth plan to:

–Take from the rich—a 100% tax on all personal income over $1 million

–Give to the poor—give every American $2,500 per year

Huey Long How many men ever went to a barbecue &

would let one man take off the table

what's intended for 9/10th of the people to

eat? The only way you'll ever be able to

feed the balance of the people is to make that

man come back & bring back some of

that grub that he ain't got no business with!

Now, how are you going to feed the

balance of the people? What's Morgan &

Baruch & Rockefeller & Mellon going to do

with all that grub? They can't eat it, they can't wear the clothes, they

can't live in the houses.

But when they've got everything on God's loving

earth that they can eat & they can wear & they can live in, & all that their children can live in

& wear & eat, & all of their children's children can use, then we've got to call Mr. Morgan & Mr. Mellon an Mr. Rockefeller back and say: “Come back here, put that stuff back on this table here that you took away from

here that you don't need. Leave something else for the

American people to consume.” “The Kingfish”

Huey Long threatened to run as a 3rd Party candidate but was assassinated in 1935

WPA Public Work ProjectWPA cared less about what got done as long as work was done: built hospitals, schools, airport fields… but also moved leaf piles & dug ditches

WPA Initiatives

WPA Health Initiatives

WPA Health Initiatives

WPA Arts Project

WPA Community Murals

Construction of the Damby William Gropper

WPA Music Projects

WPA Theater Projects

WPA Writers Projects

WPA Travel Guides

WPA Oral History Projects:

Interviews with former slaves

■Liberal critics argued that SS did not do enough

■Conservative critics argued that SS violated individualism & self-reliance

■Social Security created America’s 1st welfare program to help individuals

Success of the New Deal Programs?

Conclusions■The New Deal was made up of 3

parts: relief, recovery, & reform–New Deal was most successful

in providing immediate relief to ease economic suffering

–The New Deal did not bring economic recovery or an end to the depression

–The New Deal brought major reforms that changed America

For the 1st time, the gov’t used Keynesian

economics (deficit spending & gov’t

spending to stimulate the economy)

The gov’t assumed responsibility for the health of the nation's economy & citizens

The New Deal signaled the beginning of the

welfare state