Chapters 17, 18, and 19

THE 1920’S, THE GREAT DEPRESSION, AND THE NEW DEAL

Cause and Effect: Characteristics of the 1920’s caused by WWI• The flapper and increased women’s rights• Greater independence and gains for women—education,

employment, social restrictions• Birth control—Margaret Sanger• How related to WWI?

• Harlem Renaissance and African American Political Activism• Harlem Renaissance: artistic and cultural flourishing in the

African American community—Jazz, blues, literature (Langston Hughes, Claude McKay, Zora Neale Hurston)• Political Activism: Marcus Garvey and Black Nationalism• How different from earlier African American activism?

• NAACP• How related to WWI?

Cause and Effect: Characteristics of the 1920’s caused by WWI (Cont.)• Higher wages/better standard of living for ordinary workers• How related to WWI?

• Nativism and the revival of the KKK• Hatred of foreigners, immigrants, Jews, and Catholics• KKK—harrased African Americans (like before), but now

focused on “un-American” elements as well (anyone not a native born Protestant of north-western European ancestry)• Immigration Restrictions: Emergency Quota Act of 1921,

National Origins Act of 1924• How related to WWI?

• Organized crime/mobsters• How related to WWI?

Politics During the 1920’s: Pro-Business• Laissez Faire Capitalism: government pursued a “hands off” approach to the economy• how does this compare to the Progressive policies toward the

economy?

• Warren G. Harding (1920-1923)• Very pro-business• Members of his administration were involved in many scandals• Teapot Dome, Embezzlement from the Veterans Administration,

Bribes and Bootlegging

• Died of a stroke in 1923

• Calvin Coolidge (1923-1928)• Also very pro-business• “The man who builds a factory builds a temple, that the man

who works there worships there, and to each is due, not scorn and blame, but reverence and praise.”• “The business of America is business”

Problems Under the Surface: 1920’s Economy• Economy during the 20’s was booming but there were hidden structural problems• Farmers• 1 in 4 farmers defaulted on loan payments, had their farms

foreclosed on

• Tariff• High tariffs meant good business inside US, but no trade

outside of US

• Labor problems• Higher wages during the war, but then wages staid flat,

workers couldn’t afford to buy the products they were making

• Taxes• Lower taxes for wealthy meant a rise in income inequality• Wealthy began to invest extra money in the stock market

Election of 1928 Hoover vs. Smith• 1928 Republicans nominated Herbert Hoover• Secretary of Commerce under Harding and Coolidge, engineer

of the prosperity of the 1920’s• Successful head of the Food Administration during WWI

• Democrats nominated Al Smith• Machine Politician turned progressive reformer• First Catholic ever to run for President

• Smith’s Catholicism played a large role in the election--many feared a Catholic in the White House• Hoover won easily

Herbert Hoover’s Background and Political Philosophy• Born into poverty, self made man• Went to Stanford, became an engineer• Became wealthy working in the gold mines of Australia• Progressive reformer/humanitarian during WWI

• Hoover’s philosophy (A Tale of Two Hoovers) • Not the laissez faire capitalist that Coolidge was• Had progressive tendencies—have government and business

work together to promote efficiency and increase production• “Rugged Individualism”—individuals were responsible for

helping themselves without direct government aid—that’s what made America Great

The Great Depression: 1929-1941• Great Depression• Worldwide economic downturn• Began/ended at different times in different places: generally

speaking worst years were 1930-1936 just about everywhere• Unique for the breadth and depth of the economic downturn

• Beginning of the Great Depression in the US: Chain of Events• October 1929—US stock market crash• Investors had bought stock using borrowed money (buying on a

margin) stock market crash meant investors AND banks lost lots of money ($40 Billion)economic problems go from stock market to banks• Banks forced to call in loans to make up lost moneyproblems go

from banks to the general economy AND to Europe (international bank loans)• Businesses cut back/go out of business to repay loans, production

slows, workers laid off, underlying problems of the US and world economies exposed, Depression begins

Great Depression: Background Causes• Income inequality• Workers not paid enough, meant they couldn’t consume as many

goods as they were producing, lack of demand meant shutdown of businesses

• Overproduction of goods• Technological advances had made it easier to produce more goods

(both industrial and agricultural) eventually the country made more goods than it could consume

• High tariffs• High protective tariffs meant lack of international trade for US

businesses

• Problems with agriculture• Farmers had been stuck in a bad spot since the late 1800’s weak

agricultural sector couldn’t support the economy when industrial sector collapsed• Environmental problems—dust bowl—led to poverty/foreclosures in

the southern part of the Midwest (Oklahoma, etc.)

Hoover and the Depression• The two Hoovers battled it out over the response to the Depression• Rugged Individualism Hoover—didn’t want to ruin the American

character with handouts from the government• Humanitarian Progressive Hoover—wanted to help ease the massive

economic disaster using the government

• Hoover was slow to act, but eventually did more than any other president before him, but (in retrospect) not enough to fix the problem• New public works spending--$2.25 billion• Reconstruction Finance Corporation (RFC) 1932• Lent money to states, big businesses, railroads, banks, etc. – keep the big

companies from going under or else thousands more will lose their jobs

• Limits of Hoover’s efforts• No direct aid from Federal government to the poor/unemployed• No government corporations that could compete with private

businesses (viewed as socialistic)

Election of 1932: FDR emerges• Franklin Roosevelt (Democrat)• Distant cousin of Theodore Roosevelt, followed the same path

to success• Paralyzed from waist down due to polio

• Election of 1932: Roosevelt vs. Hoover• Roosevelt promised people a New Deal—never exact about

what that was, but he promised action• Hoover had a horrible record• Roosevelt won easily, Democrats took control of the Congress

The New Deal 1933-1941• New Deal: • President Roosevelt’s policies during the Great Depression to help

end the Depression and make sure another one didn’t happen again• Roosevelt used the Federal govt. to regulate the economy, and

Federal money to help jump start the economy• Massive increase in the power and role of the federal govt.

• Themes of the New Deal: The three R’s• Reform: big business had been allowed to do whatever it wanted in

the 1920’s, business abuses had helped cause the Depression, Roosevelt wanted to pass laws to fix these abuses• Recovery: industry and agriculture had collapsed, by getting the

government involved Roosevelt hoped he could use the power of the Federal govt. to help rebuild the US’s industrial and agricultural economies• Relief: there were millions of people out of work who needed food,

housing, money and jobs right away, Roosevelt wanted to have the Federal govt. provide these people with money to stay alive as well as jobs so they could support themselves

The First New Deal 1933-1935• The Three R’s in Action• Reform:• Securities Exchange Commission (SEC) created to monitor business activity

and the stock markets especially• Federal Deposit Insurance Corporation (FDIC) insured money deposited in

banks• Glass-Steagall Banking Bill limited what banks could and couldn’t do (like

buying stocks on a margin)

• Recovery• National Recovery Administration (NRA) – tried to rebuild industry by using the

government to get employers, workers and business competitors to cooperate and work together

• Agricultural Adjustment Administration (AAA) – tried to get farmers to work together to grow less food in order to boost food prices

• Relief• Civilian Conservation Corps (CCC)—made jobs for unemployed young men• Civil Works Administration (CWA)—gave money and jobs to people in big cities• Public Works Administration (PWA)—spent billions of dollars to fund public

works projects around the country

The “Second” New Deal 1935-1941• First New Deal had not solved the Depression entirely• Some thought the New Deal had gone too far, some thought it hadn’t gone far enough• The Supreme Court had overturned some of the major elements of the first New Deal (NRA, AAA)• Roosevelt responded with 2nd New Deal• Works Progress Administration (WPA) billions for public works projects• $13.4 billion, employed 3 million people at its height

• Social Security Act—pensions for elderly/disabled Americans• 2nd Agricultural Adjustment Act• Wagner Act—gave unions the legal right to organize, established the

National Labor Relations Board to monitor workplace abuses by employers

• Question: which of the three R’s did Roosevelt focus most on during the 2nd New Deal?

Pros and Cons of the New Deal• Pros• Economy improved (although the country was still in a

depression)• Lots of people got relief that they needed to survive• Laws were put in place to curb some of the abuses that had

caused the Great Depression in the first place

• Cons• New Deal cost a lot of money—increased the national debt• New Deal greatly expanded the size and role of the federal

govt.• New Deal put limitations on what people could and couldn’t do

with their property

• Question: Did the pro’s of the New Deal outweigh the cons?

End of the Great Depression: WWII• 1st and 2nd New Deals improved the US Economy but didn’t totally fix the Depression• Unemployment only got as low as 10% (it had been around

25-30% before the New Deal)

• Massive government spending on military projects due to WWII finally ended the Great Depression• Example:• WPA spent a total of $13.4 billion on public works projects• During WWII the US spent $50.1 billion on military aid for other

countries (Lend Lease Act)• In total the US spent about 5 times as much money on WWII

as it did on the New Deal

• Massive government spending resulted in the end of the Depression

New Deal and Labor• NRA regulations, Wagner Act greatly aided unions • Roosevelt was the first President since Teddy Roosevelt not to be openly hostile to unions—first pro-union president• National Labor Relations Board—meant to monitor and prevent abuses against unions by management• Union membership began to grow during the Depression• Emergence of the CIO• Committee (eventually Congress) of Industrial Organization• Started out as a part of the AFL eventually became its own

entity 1938• Industrial union, not a trade union, different from the AFL• Used the sit-down strike in order to gain concessions• Became a major force by the end of the Depression—4 million

members• Eventually merged with the AFL in the 1950s (AFL-CIO)

New Deal and African Americans• African Americans and the New Deal• Many leaders of the New Deal were sympathetic to African

Americans (Eleanor Roosevelt for example)• Roosevelt appointed many African Americans to mid-level

positions in his administration (Black Cabinet)• Roosevelt mandated that 10% of all funds spent by the New

Deal be allocated to African Americans (African Americans constituted 10% of the total US population)• Many New Deal programs not specifically targeted to African

Americans helped African Americans• Limitations: no effort made by Roosevelt to end segregation in

the South (or anywhere else), some New Deal programs indirectly hurt African Americans (AAA)• Significance: major swing in African American loyalty from

Republican to Democratic party during the New Deal

New Deal and Women and Native Americans•Women• Roosevelt and other members of his administration were

sympathetic to the plight of women during the Depression• Roosevelt appointed the first ever female cabinet member

(Frances Perkins, Secretary of Labor)• New Deal programs specifically designed to aid women (some

elements of the WPA for example)

• Native Americans• Roosevelt formally reversed earlier government policies that

took reservation land away from Native American tribes• Returned control of land and Native American affairs to Native

American tribes• Appointed sympathetic director to head the Bureau of Indian

Affairs

Roosevelt and the New Deal Coalition• New Democratic Coalition• Old Democrats• Conservative southern Democrats

• “Ethnic” Americans—recent immigrants, children of immigrants• Catholics

• Jews

• Urban poor

• New Democrats• Labor unions

• African Americans

• Farmers

• New Deal would make the Democratic party the dominant political party in the US, possibly until the present day• New Deal Coalition weakness: diverse group of people, not easily united