The Great DepressionThe Great Depression

AP U.S. HistoryAP U.S. History

Fundamental QuestionFundamental Question

►To what extent did the Great To what extent did the Great Depression maintain continuity and Depression maintain continuity and foster change in America’s political foster change in America’s political and economic structures?and economic structures?

Causes of the Great DepressionCauses of the Great Depression► Political PoliciesPolitical Policies

““The business of America is The business of America is business.”business.”

Mellon’s Tax BillsMellon’s Tax Bills Fordney-McCumber TariffFordney-McCumber Tariff Dawes Plan and Post-WWI Dawes Plan and Post-WWI

lendinglending► Financial PracticesFinancial Practices

Installment plansInstallment plans ““Buying on Margin”Buying on Margin” Crash of 1929Crash of 1929

► Economic SituationsEconomic Situations Agricultural overproduction Agricultural overproduction

and low pricesand low prices Welfare capitalism and Welfare capitalism and

consumer confidenceconsumer confidence► Socioeconomic ConditionsSocioeconomic Conditions

Top 1% owned 35% of nation’s Top 1% owned 35% of nation’s wealthwealth

Bottom 20% owned 4% of Bottom 20% owned 4% of nation’s wealthnation’s wealth

The Stock Market and the Crash of The Stock Market and the Crash of 19291929

► BackgroundBackground SpeculationSpeculation ““Buying on Buying on

MarginMargin””

► The Crash of 1929The Crash of 1929 381.17 (9/3/29)381.17 (9/3/29) Concern over high Concern over high

stock prices led to stock prices led to massive sell-offmassive sell-off

Thursday, October Thursday, October 2424► 299.50299.50

Monday, October 28Monday, October 28► 260.64260.64

Tuesday, October 29Tuesday, October 29► 230.07230.07

41.22 (7/8/32)41.22 (7/8/32)

Herbert Hoover (R) (1929-Herbert Hoover (R) (1929-1933)1933)► ““Given the chance to go forward with the policies of Given the chance to go forward with the policies of

the last eight years, we shall soon with the help of the last eight years, we shall soon with the help of God, be in sight of the day when poverty will be God, be in sight of the day when poverty will be banished from this nation.” - Inauguration, March 4, banished from this nation.” - Inauguration, March 4, 19291929

► ““There is no cause to worry. The high tide of There is no cause to worry. The high tide of prosperity will continue.” Sec. Of Treasury Andrew prosperity will continue.” Sec. Of Treasury Andrew Mellon, Sept. 1929Mellon, Sept. 1929

► ““While the crash only took place six months ago, I am While the crash only took place six months ago, I am convinced we have now passed the worst and with convinced we have now passed the worst and with continued unity of effort we shall rapidly recover.” continued unity of effort we shall rapidly recover.” Pres. Hoover, May 1, 1930Pres. Hoover, May 1, 1930

► ““The worst is over without a doubt.” Sec. Of Labor The worst is over without a doubt.” Sec. Of Labor James Davis, June 29, 1930James Davis, June 29, 1930

► Hoover’s Economic PhilosophyHoover’s Economic Philosophy Promote voluntarism, restraint, and self-Promote voluntarism, restraint, and self-

reliancereliance ““If we shall be called upon to endure more of this If we shall be called upon to endure more of this

period, we must gird ourselves for even greater period, we must gird ourselves for even greater effort… The question is whether that history shall effort… The question is whether that history shall be written in terms of individual responsibility, be written in terms of individual responsibility, and the capacity of the Nation for voluntary and the capacity of the Nation for voluntary cooperative action, or whether it shall be written cooperative action, or whether it shall be written in terms of futile attempt to cure poverty by the in terms of futile attempt to cure poverty by the enactment of law, instead of the maintained and enactment of law, instead of the maintained and protected initiative of our people.” April 27, 1931protected initiative of our people.” April 27, 1931

► Hawley-Smoot Tariff (1930)Hawley-Smoot Tariff (1930)► Federal Farm BoardFederal Farm Board► Reconstruction Finance Corporation (RFC)Reconstruction Finance Corporation (RFC)

Depression by NumbersDepression by Numbers► Dow Jones Industrial Dow Jones Industrial

AverageAverage 1929: 381.171929: 381.17 1932: 41.221932: 41.22 The average of stock The average of stock

prices dropped over 90%prices dropped over 90%► Price IndicesPrice Indices

Consumer prices feel Consumer prices feel 25%25%

Wholesale prices fell Wholesale prices fell 32%32%

► UnemploymentUnemployment 1929: 3.2%1929: 3.2% 1933: 24.9%1933: 24.9% Unemployment rates Unemployment rates

higher in specific higher in specific regions, among different regions, among different groupsgroups► Toledo, OH: 90%Toledo, OH: 90%

► GDPGDP 1929: $103.6B1929: $103.6B 1933: $56.4B1933: $56.4B

► Bank FailuresBank Failures 1929: 659 banks ($200,000,000)1929: 659 banks ($200,000,000) 1930: 1,300 banks (853,000,000)1930: 1,300 banks (853,000,000) 1931: 2,294 banks ($1,700,000,000)1931: 2,294 banks ($1,700,000,000)

► IncomeIncome National income fell $80B to $50BNational income fell $80B to $50B Salaries declined 40%Salaries declined 40%

► Manufacturing wages down 60%Manufacturing wages down 60% Farmers’ income declined 55%Farmers’ income declined 55%

► Industrial productionIndustrial production Down 26% in 1930; 51% by 1932Down 26% in 1930; 51% by 1932

► InvestmentsInvestments $10B in 1929; $1B in 1932$10B in 1929; $1B in 1932

► Fertility RatesFertility Rates 1928: 93.81928: 93.8 1933: 76.31933: 76.3

► Suicide RatesSuicide Rates 1920-1928: 12.11920-1928: 12.1 1929: 18.11929: 18.1 1930-1940: 15.41930-1940: 15.4

HoovervillesHoovervilles

Displaced Americansset up shanty townsCame to be known as“Hoovervilles”

Public Reaction to Public Reaction to DepressionDepression

►Bonus MarchBonus March WWI veterans WWI veterans

marched on D.C. marched on D.C. demanding early demanding early payments of payments of pensionspensions

Federal troops sent Federal troops sent in to break up in to break up HoovervillesHoovervilles

Depression through PicturesDepression through Pictures

The Dust BowlThe Dust Bowl (1930-1936) (1930-1936)► CausesCauses

OvergrazingOvergrazing Improper Improper

farming farming techniquestechniques

Increased Increased cultivationcultivation

Drought in Drought in 19341934

► EffectsEffects Dust stormsDust storms Black Sunday - Black Sunday -

April 14, 1935April 14, 1935► 300 million 300 million

tons of topsoil tons of topsoil blown across blown across southern southern Plains regionPlains region

Migration westMigration west► ““Okies”Okies”► Mexican Mexican

Repatriation-Repatriation-deporting for deporting for jobsjobs

Dust Turns Day Into NightDust Turns Day Into Night

Election of 1932Election of 1932► Franklin Delano Franklin Delano

Roosevelt (FDR) (D)Roosevelt (FDR) (D) Campaign promise Campaign promise

of a “new deal” and of a “new deal” and help for the help for the “forgotten man”“forgotten man”

New Deal CoalitionNew Deal Coalition► Herbert Hoover (R)Herbert Hoover (R)► A Realignment A Realignment

ElectionElection End of the End of the

Republican Republican dominance of the dominance of the Fourth Party SystemFourth Party System

Begin of the Begin of the Democrat Democrat dominance of the dominance of the Fifth Party SystemFifth Party System

Fifth Party System (1932-Fifth Party System (1932-1968)1968)

► DemocratsDemocrats New Deal CoalitionNew Deal Coalition

► CatholicsCatholics► JewsJews► BlacksBlacks► Progressive IntellectualsProgressive Intellectuals► Urban MachinesUrban Machines► Populist FarmersPopulist Farmers► White SouthernersWhite Southerners► Labor UnionsLabor Unions► Low-IncomeLow-Income► ImmigrantsImmigrants

PhilosophyPhilosophy► Social liberalism/social democracySocial liberalism/social democracy► Social justiceSocial justice► Keynesian economicsKeynesian economics

Dominated Congress and Dominated Congress and American public for the next 36 American public for the next 36 yearsyears

► RepublicansRepublicans Pro-businessPro-business Economic conservativesEconomic conservatives Social conservativesSocial conservatives Northeast, parts of the Northeast, parts of the

MidwestMidwest

Franklin D. Roosevelt (D) (1933-1945)

►Great Depression►New Deal►Good Neighbor Policy►Arsenal of

Democracy►Pearl Harbor►World War II

FDR’s Message of HopeFDR’s Message of Hope► FDR had no specific plan for FDR had no specific plan for

the Depressionthe Depression► Calming the nationCalming the nation

“… “… the only thing we have the only thing we have to fear is fear itself.”to fear is fear itself.”

Fireside chatsFireside chats► The Three R’sThe Three R’s

ReliefRelief RecoveryRecovery ReformReform

► Brain TrustBrain Trust Capable advisers ordered Capable advisers ordered

to experiment, be to experiment, be pragmaticpragmatic

““Do something.”Do something.”

The First New Deal (1933-1934) FDR’s First Hundred Days

“Alphabet Soup”► Emergency Banking Act

(Bank Holiday)► Federal Emergency Relief

Administration (FERA) Civil Works Administration (CWA)

► Civilian Conservation Corps (CCC)► Agricultural Adjustment

Administration (AAA)► National Industrial Recovery Act

(NIRA) Public Works Administration

(PWA) National Recovery Administration

(NRA)► Tennessee Valley Authority (TVA)

First New Deal (1933-1934)► Banking Act of 1933

Glass-Steagall Act Federal Deposit Insurance

Corporation (FDIC)

► Gold Reserve Act► Farm Credit

Administration (FCA)► Securities and Exchange

Commission (SEC)► National Labor Relations

Board (NLRB)► Federal Housing

Administration (FHA)► Indian Reorganization

Act

21st Amendment (1933)

►18th Amendment repealed Only Amendment to be

ratified by state conventions

►End of Prohibition►Reasons

Development of black market for alcohol

Increased violence due to rise in organized crime

Loss of revenue, industry, and employment

Speakeasies replaced saloons

The Second New Deal (1935-The Second New Deal (1935-1938)1938)

► Resettlement Administration Resettlement Administration (RA)(RA)

► Works Progress Administration Works Progress Administration (WPA)(WPA) National Youth Administration National Youth Administration

(NYA)(NYA) Federal OneFederal One

► Federal Writers ProjectFederal Writers Project► Federal Theatre ProjectFederal Theatre Project► Federal Music ProjectFederal Music Project► Federal Art ProjectFederal Art Project► Historical Records SurveyHistorical Records Survey

► Rural Electrification Rural Electrification Administration (REA)Administration (REA)

► Social Security Act (1935)Social Security Act (1935)► Wagner Act (1935)Wagner Act (1935)► Fair Labor Standards Act (1938)Fair Labor Standards Act (1938)

Federal government used posters, songs, advertisements, literature to promote and support FDR’s New Deal programs among the American public

Federal OneFederal One

New Deal OppositionNew Deal Opposition► ““New Deal is doing too New Deal is doing too

much.”much.” Republicans and Republicans and

economic/fiscal economic/fiscal conservativesconservatives

““Boondoggles”Boondoggles”

► “New Deal is not doing enough.” Father Charles CoughlinFather Charles Coughlin Senator Huey Long – Senator Huey Long –

“Kingfish”“Kingfish”►Share the WealthShare the Wealth

$5000 for every family, $5000 for every family, $2000 annually$2000 annually

Heavily tax wealthyHeavily tax wealthy

Election of 1936Election of 1936► Franklin D. Franklin D.

Roosevelt (D)Roosevelt (D)► Alfred Landon Alfred Landon

(R)(R)

FDR and FDR and Court PackingCourt Packing► Supreme Court reversed Supreme Court reversed

several New Deal several New Deal programsprograms Schechter Poultry Corp. v. Schechter Poultry Corp. v.

United StatesUnited States (1935) (1935)► NIRA unconstitutionalNIRA unconstitutional

United States v. Butler United States v. Butler (1936)(1936)► AAA unconstitutionalAAA unconstitutional

► Justice Reorganization Justice Reorganization BillBill Appoint new justices for Appoint new justices for

every justice over 70every justice over 70► 6 additional justices6 additional justices

► Subsequent Supreme Subsequent Supreme Court rulings in favor of Court rulings in favor of New DealNew Deal Social Security ActSocial Security Act Wagner ActWagner Act

New Deal and LaborNew Deal and Labor► American Federation of American Federation of

Labor (AFL)Labor (AFL) Strengthened and Strengthened and

increased membershipincreased membership

► Congress of Industrial Congress of Industrial Organizations (CIO)Organizations (CIO) Organize unskilled Organize unskilled

laborers in major laborers in major industriesindustries

Industrial unionismIndustrial unionism

► United Automobile United Automobile Workers (UAW)Workers (UAW) Used sit-down strikes to Used sit-down strikes to

earn recognitionearn recognition

EscapismEscapismGreat Depression in Arts and Great Depression in Arts and

EntertainmentEntertainment► LiteratureLiterature

John SteinbeckJohn Steinbeck► The Grapes of WrathThe Grapes of Wrath► Of Mice and MenOf Mice and Men

► PhotographyPhotography Dorothea LangeDorothea Lange

► MusicMusic Brother, Can You Spare a Dime?Brother, Can You Spare a Dime? Woody GuthrieWoody Guthrie

► RadioRadio ComediesComedies Soap operasSoap operas

► MoviesMovies The Wizard of OzThe Wizard of Oz Shirley TempleShirley Temple Snow White and the Seven DwarvesSnow White and the Seven Dwarves Marx BrothersMarx Brothers

EscapismEscapismGreat Depression in Sports and Great Depression in Sports and

RecreationRecreation► SportsSports

WPAWPA► Athletic facilitiesAthletic facilities► Athletic educational Athletic educational

programsprograms Innovation, consolidation, Innovation, consolidation,

and sacrifice of and sacrifice of professional and college professional and college sportssports► College bowl gamesCollege bowl games► NFL playoffsNFL playoffs

► RecreationRecreation Games and MonopolyGames and Monopoly GamblingGambling RodeosRodeos Dance halls and jazzDance halls and jazz

End of the New DealEnd of the New Deal►Roosevelt Recession Roosevelt Recession

(1937-1938)(1937-1938) Cutback in deficit Cutback in deficit

spending and spending and elimination of some elimination of some New Deal programsNew Deal programs

►Hatch Act (1939)Hatch Act (1939)► International International

ConcernsConcerns Totalitarian Totalitarian

governments spawned governments spawned defensive preparationsdefensive preparations