The Great Depression and New Deal, 1930-1939

OutlineCausesSocial effectsHoover administrationFirst New DealThe second New Deal

Learning Objectives: ConsiderThe causes and course of the Great DepressionThe course and effects of the New Deal

CausesLack of diversity in economyLaissez faireMarket saturation

Overproduction in agriculture and industryDecreased production

Lay offs meant less consumptionOver extended banks

Risky loansInternational trade

End of loans to Germany

Extent of depression

Stock market crash triggers:Bank failures

9,000 between 1930-1933Loss of 2.5 billion in deposits

IndustryProduction cuts

Federal Reserve BankRaised interest rates affecting dollar and credit

GNP dropped 25% 1929-1932Unemployment

Officially 25%; may have been 35%Highest in cities: Cleveland 50%, Toledo 80%

Relief systems inadequateHomeless

2 million men wanderShantytowns - HoovervillesRural

33% of all farms foreclosedConsecutive years of draughtDust Bowl

African AmericansDisplaced by whites400,000 head north

Mexican Americans2 millionDeportations without regard to citizenship

WomenPublic sentimentMen seek jobs in teaching, social work, nursing, offices

In picturesThe Dust Bowl

Ruined Crops, 1936

Dust Storm, 1935

Breadline, New York City

Homeless man

“Okies” on their way to California

“Okie” mother and children

Hooverville

Oakland, California

Portland, Oregon

Culture

ValuesSelf relianceBlameStill dreaming

How to win friends and influence peopleDale Carnegie (Carnegey)

Realism

Richard WrightNative Son (1940)

Erskine CaldwellTobacco Road (1932)

John SteinbeckThe Grapes of Wrath

John Dos PassosUSA Trilogy (1930)

Radioescapism

Amos ‘n AndySupermanDick TracyThe Long RangerSoap operas

SocializationLive broadcastingShared experiences

BaseballPolitical conventionsdisasters

May 6, 1937

Movies

Color introduced in 1930s

Studio system

Social issues

Gangster films

Epics

Hoover Administration

Initial responseVolunteerismCut spendingRefused to provide relief

$432 for public worksTax increase - 1932

1932 election

January 1932Reconstruction Finance Corporation

June 1932Bonus Army1924$1000 to all veterans of WWI beginning 1945MacArthur, Eisenhower, Patton

Cavalrytanks

Not successful but embarrassing

Franklin Delano Roosevelt

1932 Election

The First New Deal, 9 March-16 June 1933

PurposesEconomic recoveryReform to prevent future crisesRelief

Roosevelt prepares for “fireside chat,” March 1933

Initial Actions – 1933-35

1933Emergency Banking Relief Act

More money and federal supervision

Economy ActCut federal salaries and veterans benefits 15%New beer tax

Agricultural Adjustment ActReduced crop production – federal subsidiesAgricultural Adjustment Administration - AAA

1935Resettlement Administration

Farm Security Administration 1937Relocated farmers to better land with grants and loans at low interest

Rural Electrification AdministrationPublic utility corporationsLow cost energy

Industrial recovery

National Industrial Recovery Act 1933National Recovery AdministrationBusiness, government and laborFair prices and working conditions

Organized labor and collective bargaining

Regional Recovery

Tennessee Valley Authority – TVAPublic development of electricity by water powerBuilt dams, sold cheap electricityImproved water transportation, reduced flooding, provided electricity, other companies forced to lower prices

Banks and financing

Ends Gold StandardGlass-Steagall Act – 1933

Federal oversight to curb speculationFederal Deposit Insurance Corporation – FDICDeposits federally insured up to $2,500

Truth in Securities Act – 1933Honest reports to stockholders

Securities and Exchange Commission – 1934Policy stock market

Federal Relief

Federal Emergency Relief Administration1933Cash grants to state relief agencies

Civil Works Administration – CWA1933Temporary work projectsSchools, parks, roads

Civilian Conservation Corps – CCC 1933MenRural work projects

Civilian Conservation Corps Workers

Critics and alternate proposalsUpton Sinclair

State ownership of idle factories and landLost election for governor of California in 1934

Dr. Francis E. TownsendOld age pensionsFollowing of 5 million

Father Charles E. CoughlinEarly supporter

Huey P. Long, senator from LouisianaRadical wealth redistribution“Share our wealth”assassinated

Huey P. Long

The second New Deal, 1935-8

1936 election

1936 Election

Wagner Act – 1935National Labor Relations Board

Force firms to accept unions

Industrial unionismSkilled workersOrganized based on job, not skillJohn L. Lewis – Unied Mine Workers

Congress of Industrial Organization – 1936Membership by 1941: over 10 million

Social Security Act - 1935Elderly receive monthly payment of $15New payroll taxExcluded many: self-employed, farms, domestics, professionals and didn’t cover the disabledUnemployemtn Insurance

Works Progress Administration – WPA 1935Renovation of schools, post offices, airportsRoads and bridgesCultural workers

Federal Writers ProjectFederal Arts ProjectFederal Music ProjectFederal Theater project

WPA art: Fletcher Martin, Mine Rescue, 1939

Supreme Court BattleFailed to add 6 new justicesExisting justices “get the message” and moderate views

New Deal effectsNot a full economic recoveryAmeliorated social consequencesIncreased employmentDid not end segregation, but alleviated African-American povertyIncreased role of federal government in economic regulationWelfare state

Recession

Mid 1937Fears of inflationWPA layoff of 1.5 million4 million unemployed

Fair Labor Standards Act – 1938Minimum wage40 hour work weekLimits on child labor

Elsewhere

Just as FDR was weaker politicallyCourt problemsSlow ending recession

World events took center stageEurope – on the brink of war, again . . .