The Great Depression and the New Deal

How the greatest economic crisis in American history shaped American

politics, culture and society

I. The Stock Market Crash

• Republican responsibility for the economy

• Stock market outraces real economic growth

• The problem of buying stock “on margin”

• Public concern over the stock market by 1929

II. The Great Depression

• Initial governmental optimism

• Catastrophic unemployment figures

• Urban poverty, especially for immigrants, is the worst

• State and local governments as well as private charities can do little

II. The Great Depression

• Corporate failures• Drop in farm income• Even the wealthy had

problems--Howard Johnson restaurant chain

• “Riding the rails” looking for work

(Basically, men hopped on trains and searched for work all over the country.)

III. Contributing Causes to this Economic Catastrophe

• American farmer in trouble

• Unstable American foreign trade

• The Gold standard forsaken in Europe

• Weak and vulnerable American banks

• Large individual debt• Corporate profits enriched

only a few

IV. The Response of the Hoover Administration

• Positive statements aggravate the Depression crisis

• HOOVER = HANDS OFF POLICY

• Creation of the Reconstruction Finance Corporation (1932)

• Trickle Down Solutions(And no. It’s not what Peter

said. Coins don’t rain down like a waterfall.)

IV. Hoover’s Response (cont.)

• Unemployment continued and farm prices dropped dramatically

• Violent farm protests by 1932

• Hoover was limited by his own governmental philosophy (HANDS OFF)

• Hoover championed “voluntarism” as a solution

IV. Hoover’s Response (cont.)• Growing inability to

compromise with Congress

• Hoover’s unpopularity grows

• His name becomes synonymous with the Depression

• Economic and Political blunders

• The Bonus March (Summer of 1932)

Hoovervilles

(Not to be confused with Velociraptorvilles.)

V. The Election of 1932

• Democrats nominated Franklin Roosevelt

• He was Senator of New York for a short time then served as the Secretary of the Navy.

• Republicans nominated Hoover

• FDR projects the image that he will take action as President, unlike Hoover.

VI. “The New Deal”: A “Revolution”?

• Contrast with progressivism

• Major success = restoration of confidence

VI. The “New Deal”: A “Revolution”? (cont.)

• Bi-partisan support for FDR publicly and in Congress

• How revolutionary was the “New Deal”?

• “New Deal” may have prevented a revolution

• Really not a revolution in the truest sense

VII. Changes Made

• Federal government directly provided services to the American people -- “welfare state”

• Vast centralization of national power

• Increase in power of the presidency

• Democratic party becomes majority party

• Blacks vote for Democrats

VIII. Franklin Delano Roosevelt: The Man

• Strong president who enjoyed leading

• Great politician• Used the radio effectively

-- “fireside chats”• Not a systematic thinker• Great ability to project

empathy• Many Americans think of

FDR as part of the family• More loved and hated than

any other president

IX. First Lady Eleanor Roosevelt

• Creates model for the active first lady

• Activist, especially for Blacks and women

• Real concern for the poor

• FDR’s “eyes and legs”• Reputation for being

constantly on the go

The Social Security Act (1935)

• Myth of poor being lazy exposed

• 13 weeks of unemployment insurance

• Pension fund for retired people over 65

• Funds also for disabled and single parent families

• Response to more radical schemes

The Culture of the 1930s

• Return to political and social concern in ‘30’s literature--John Reed Clubs

• John Dos Passos-- U.S.A. (1938)

• John Steinbeck--Grapes of Wrath (1939)

• Richard Wright--Native Son (1940)

XV. The Culture of the 1930s (cont.)

• I’ll Take My Stand (1930)• Thomas Wolfe• William Faulkner

--Absalom! Absalom! (1936)• James Agee and Walker

Evans--Let Us Now Praise Famous Men (1941)

• 1930’s Movies-- “The Wizard of Oz”--The Marx Brothers

Roosevelt’s Second Term (1937-1941)

• Election of 1936• FDR vs. Alf Landon (R-

Kan)• Biggest landslide since

1820• The “Roosevelt

Recession” of 1937-1938

• Harsh CIO strikes

XVIII. Summary of the Results of the “New Deal”

• Did not end the Depression• Many agricultural problems unsolved, especially for

southern blacks and tenant farmers• Did restore national hope• Controls were built into the economy to avert future

crises--Federal Securities Act of 1933 and SEC (1934)

• The Government as “broker state”• Restoration of confidence in U.S. government and

economy—but both different than before 1932

Great Depression in a Nutshell

• The Great Depression (1929-39) was the deepest and longest-lasting economic downturn in the history of the Western industrialized world.

• In the United States, the Great Depression began soon after the stock market crash of October 1929, which sent Wall Street into a panic and wiped out millions of investors.

• Over the next several years, consumer spending and investment dropped, causing steep declines in industrial output and rising levels of unemployment as failing companies laid off workers.

• By 1933, when the Great Depression reached its nadir, some 13 to 15 million Americans were unemployed and nearly half of the country’s banks had failed.

• Though the relief and reform measures put into place by President Franklin D. Roosevelt helped lessen the worst effects of the Great Depression in the 1930s, the economy would not fully turn around until after 1939, when World War II kicked American industry into high gear.

• When the Great Depression began, the United States was the only industrialized country in the world without some form of unemployment insurance or social security. In 1935, Congress passed the Social Security Act, which for the first time provided Americans with unemployment, disability and pensions for old age.

(From History.com)