1929-1939

Uneven distribution of income Gains in income were more for wealthy than working

class Top 2% of population controlled 40% of nation’s savings

Market Speculation Very wealthy purchase stocks and speculate on

future Buying stock “on the margin”

Excessive use of credit Installment buying for cars, refrigerators, vacuums

This prohibited families from buying other items such as food, clothing

Overproduction Weak farm economy: farm prices were highest

during WWI Farmers unable to payback installment loans on

equipment

The exuberant spending of the 1920’s caused people to buy beyond their means (“on the margin”: purchasing a stock for a percentage of its value)

This was true for consumer goods as well as fr stocks

This greatly inflated the price of stocks, far beyond actual value

When the market “crashed” it was actually stock prices returning to more reasonable levels

This left many in debt

1. Bank Closings Increased-banks had to close when farmers couldn’t repay the loans, and it trickled into the cities-5,000 banks failed with over $5 million in American savings

2. Income decreased for industrialists--invested heavily in the stock market & lost money when it crashed

3. Effect on the world-many European countries had loans in American banks-banks failing causes insecurity in these countries

Consumer Debt, 1921-1929GRAPH

Worldwide DepressionDIAGRAM

Bank FailuresGRAPH

# of Bank Failures by year

http://www.history.com/topics/great-depression/videos#the-great-depression

-not uncommon for 2 people to share a job, since many lost their jobs (25% unemployment rate) Women & minorities often 1st to lose jobs

Hoovervilles: settlements of scrap metal/lumber usually located on the outskirts of cities

Hobos riding on railroads (unemployed young people)

Dust Bowl: by the 1930s, many farms in OK, KS, NE, CO, TX were either ruined or abandoned due to drought & farmer loans

People moved to CA for work The Grapes of Wrath by John Steinbeck portrays this

Note the extensive wind erosion in the western Oklahoma panhandle region, which was dubbed the “Dust Bowl” in the 1930s. Mechanized farmers had “busted” the sod of the southern plains so thoroughly that they literally broke the back of the land. Tons of dust blew out of the Dust Bowl in the 1930s and blotted the sun from the skies as far away as New York. A Kansas newspaperman reported in 1935 that in his dust-darkened town, “Lady Godiva could ride through streets without even the horse seeing her.”

Hawley-Smoot Tariff (1930): imposed highest import tax in history; Europe responds with their own high tariffs; did little to help US economy

Voluntarism: Hoover encouraged Americans to donate as much as they could to charities during this time

Debt Moratorium: 1 year moratorium on WWI debts

1929 Agriculture & Marketing Act created the Federal Farm Board: created to stabilize prices & promote sale of agricultural products

Reconstruction Finance Corporation (1932): federal agency that gave money to banks to loan to railroads and businesses This was intended to spur economic growth Bonus Army, Summer of 1932: WWI vets march

to Washington ask federal govt for bonuses they were supposed to get in 1945

Hoover urged Senate to deny them the bonus nowHoover ordered them removed and Gen. Douglas MacArthur used tear gas to rid them from the White House

One of the worst years of the depression & also happened to be an election year

Roosevelt campaign pledged a “New Deal” for the American public

Roosevelt won nearly 60% of the popular vote

Both houses of Congress also went to the Democrats in the election

This would later be important as Roosevelt attempted to pass his recovery plan

Wealthy Sec. of Navy under Wilson, NY Governor Stricken with polio in 1921

Several biographies say this made him more sensitive to the people struggling

Married Eleanor Roosevelt Very active in NY state politics, especially reforms

for women

http://www.history.com/topics/great-depression/videos#fdr-a-voice-of-hope

Roosevelt used his first 100 days in office to implement a his new ideas Did something similar in NY & it was successful

The New Deal centered around 3 key ideas:Relief: the concept of helping people

immediately to get out of the misery of the Depression

Recovery: aimed at helping the business community and restarting the economy

Reform: trying to change the country so that a depression could never again have significant effects on the country

http://www.history.com/topics/great-depression/videos#the-new-deal-how-does-it-affect-us-today

Until this time, Economists believed the markets would adjust themselves (but they didn’t—Great Depression)

John Maynard Keynes Economist Demand-side/Keynesian Economics

Passed several programs to stimulate the economy & provide relief/jobs (Obama Administration)

The Bank Holiday: FDR orders all banks closed, US Treasury must OK bank reopening (part of the Emergency Banking Act, March 1933) ¾ of banks belonging to the Federal Reserve

System opened 3 days later Repeal of Prohibition

National Recovery Adm., declared unconstitutional Farm Controls

Agric. Adj. Adm. (AAA) offered subsidies to encourage production, also declared unconstitutional Paid farmers NOT to produce certain crops and

livestock

Tennessee Valley Authority (TVA): Authorized construction of a series of damns to provide electricity/flood control to those living in Tennessee River Valley

Financial Recovery FDIC insures bank deposits (today, up to $150,000), Home

Owners Loan Corp., Farm Credit Adm.

Federal Emergency Relief Adminstration (unemployment relief)

Public Works Administration (PWA): Schools, highways, hospitals were built

More than twenty dams were constructed on the river’s tributaries as part of a massive project to control flooding, generate hydroelectric power, and revitalize the Tennessee Valley region, while also creating jobs for the unemployed. The shaded area represents the area served by TVA electric power.

The Tennessee Valley Authority contributed to making electricity available to almost all Americans by 1960. African American leader Andrew Young later claimed that the TVA created the economic underpinnings of the civil rights movement: “It was the presence of the cheap electricity, lower interest rates, water projects, that laid the foundation for the New South.”

The daughter of ex-slaves and founder of a college in Florida, Bethune became the highest-ranking African American in the Roosevelt administration when she was appointed director of the Office of Minority Affairs in the National Youth Administration (NYA). From this base she organized the “Black Cabinet” to make sure blacks benefited from the New Deal programs along with whites. Here she is picketing against segregated hiring practices at the Peoples Drug Store chain, one of the earliest targets of the black civil rights movement.

Civilian Conservation Corp (CCC): work in forest /conservation programs

Fireside chats Radio addresses to explain the immediate problems facing the country Felt as though he was in your living speaking to you Roosevelt’s “brain trust” cabinet

National Industrial Recovery Act (NIRA): attempted to stop prices from falling

More involved unions & collective bargaining National Recovery Administration (NRA):

President sets minimum wage, working hours Declared unconstitutional in Schechter vs. US

(1935) Congress can not give the power to legislate to

the President

Located in central Washington State, the Grand Coulee Dam was one of the most ambitious projects of the New Deal’s Public Works Administration. It is the largest concrete structure in the United States and the central facility in the Columbia Basin Project, which generates electricity for the Pacific Northwest and provides irrigation for half a million acres of Columbia Valley farmland—services that have transformed the life of the region.

The first part of the New Deal was aimed largely at reliefWealthy did not support New Deal programsResettlement Administration: many farms were still being foreclosed

This offered loans to small farmers who faced foreclosure

Helps migrant farmers find work Workers Progress Administration (WPA): people benefitting

from FERA & employed them 30-35 hours per week

-approximately 2,000,000 per month employed by WPA-unemployed artists, musicians, actors benefitted

Wagner Act: gave workers the right to organize/form unionsNational Labor Relations Board: reported unfair working conditions here

After generations of struggle, organized labor made dramatic gains in membership and bargaining power during the New Deal years.

The Pedestrian Scene, painted on a wall of Coit Tower in San Francisco, was one of a series of murals commissioned by the federal government to employ artists during the Great Depression.

The first woman cabinet member, Perkins served as secretary of labor under Roosevelt. She was subjected to much undeserved criticism from male businessmen, laborites, and politicians. They sneered that FDR “kept her in labor” for many years.

Creation of a retirement plan for those over 65 Workers & employers pay into Included unemployment insurance funded by

payroll tax (employers with more than 8 employees)

AFDC Disabled Officially called OASDI

It is now the job of the federal government to take care of those who could not take care of

themselves

Campaign speeches rallied against businessHe said they opposed his policies so they could continue to get richRan against Governor Alfred Landon of KSLandslide victory of 523 to 8 (ME & VT) Electoral College votes

: Dems major party in America throughout the rest of 1930s-1980s (Reagan)

White urban dwellers support Democrats Whites in south had largely voted Dem.

Since the 1800s Now labor unions/blacks/farmers join

coalition DRAMATIC shift as most blacks had voted

Republican since Emancipation)

People called him a socialist/communist Wealthy thought he was a traitor People felt neither party was trying to

help average Americans American Liberty League: wealthy

Americans including prominent members of the DuPont family Disliked 1935 Revenue Act which raised the

income tax rate for those making over $50,000 Referred to it as Bolshevism

Old Age Revolving Pension Plan National sales tax would pay for a pension of

$200 per month for all retired Americans Created by Francis Townsend of CA (who ran

for governor of CA in 1934 against Upston Sinclair & won)

Dr. Charles Coughlin On Coughlin’s radio show, referred to

Roosevelt as a liar and betrayer Very anti-semitic feelings/statements, praised

Mussolini/Hitler Church pulled him off the air during WWIILA Sen. Huey Long

“Share the Wealth” program allowed no Americans to make over $1,000,000/per year (anything over would be payment to the govt in taxes)

From this tax $$, give every American family $5,000 immediatelyWanted to run against FDR in 1936 but was assassinated in 1935

1937 Justice Reorganization Bill US Supreme Court had said several New

Deal programs were unconstitutional Would have allowed FDR to appoint a new

justice for every justice over 70 years of age Nothing in constitution saying only 9 justices Could pack the court with 6 new justices

Said to help older justices with their workload Democrats & Republicans said trying to push his

agenda Did not pass Several justices retired in few years after bill and

Roosevelt still packed the court

Large recession hit mid-1937 Factories had major layoffs New Deal critics blamed Roosevelt

program for recession

Wagner Act permanently legitimizes labor unionsSit-down strikes: Dec. 1936, GM plant in Flint, MI most famous

By Feb. 1937 management had to give in to demands

Congress of Industrial Organizations (CIO): lead by John L. Lewis, represent unskilled factory/textile workers

By 1938 represented 4 million workers

Strikers like these sometimes kept their spirits up with the song “Sit Down”:When the boss won’t talkDon’t take a walk;Sit down, sit down.

Women forced to work meager jobs to make ends meet

Blacks often first fired from jobs Relief programs in south often excluded blacks Lynchings Scottsboro Trial: 9 black men were accused of

raping 2 young white women on a train Got help from Communist Party, in end, some

convictions were overturned Blacks supported FDR as they felt he was

responsive to their needs

Zora Neale Hurston wrote Their Eyes Were Watching God (about growing up black in a small southern town)

Studs Lonigen by James T. Farrell shows lives of Irish in Chicago

Erskine Caldwell’s Tobacco Road about suffering of sharecroppers in GA

Gone with the Wind by Margaret Mitchell a romanticized tale from Civil War period

1930s radio offers soap operas, comedies, dramas, symphonic music/operas

70% of all adults went to the movies once a week Mr. Smith Goes to Washington Shirley Temple movies Theaters designed to look like palaces, air

conditioned