The 1930s

the Crash, Great Depression, and the New Deal

The Crash

Onset of the Great Depression•Decline in

Farm Prices

•Industrial Output Lags

•Building boom to bust

•From 1925 to 1933 dropped 90%

•Weak Banking System

•Global Crisis

Gross National Product

(GNP)

1929: $104 billion

1932: $59 billion

Hoover’s Response

•Private efforts

“Every time we find solutions outside of government, we have not only strengthened character, but we have preserved our sense of real government.”—Herbert Hoover

•Called for income tax increase

•Hawley-Smoot TariffHawley-Smoot Tariff

•Federal Reserve failed to lower interest rates

Hoover’s Response•Bonus Army •WWI veterans demanded a bonus

payment (due in 1945) early to help ease the problems of the Depression

•They camped out in D.C.

•Hoover ordered them dispersed

The incident caused a personal rift between General Douglas MacArthur and his subordinate Dwight Eisenhower, who felt “Mac” was overly zealous in dispersing the WWI veterans

FDR and the New DealElection of 1932•FDR’s cabinet ranged from conservative Republicans to liberal Democrats

•FDR promised a different America in terms of government control of economics (was it different?)Eleanor

was a niece of former

President Theodore

Roosevelt. She was a progressiv

e that favored

minority rights.

Industry

Destitute

Farming

Stock MarketBanking

Agriculture

FDR’s New DealThe First Hundred Days•Emergency Banking Act

•CCC

•TVA

•NIRA (NRA, PWA)

FDR pushed for more legislation his first 100 days in office than any previous president. Today, a president’s first 100 days is his/her first report card.

Soup Kitchens (aka breadlines)

The federal government provided “welfare” assistance to Americans for the first time in its history. Public aid moved in to “share” with private charity

Tennessee Valley Authority (TVA)

Government-owned private company created to provide electricity and jobs to one of the poorest regions in the nation The TVA earned $11,260,000,000 in

2009 with its electricity-producing dams, nuclear power plants, and fossil fuel plants. It is a shining star to the New Deal and government expansion

Social Security Act, 1935Created the Social Security Administration

Purpose: 1.Assist widows in poverty2.Financially support parentless children3.Provide “retirement” benefits to the elderly

Quick FactPercent of Americans over age 65 in1935: 5.4%2010: 13.0%

Bank Holiday & the FDICThe Emergency Bank Act (Bank Relief Act),

1933•Closed all banks until approved by the Federal Reserve•Granted 100% insurance to deposits (up to a certain amount)

“FDIC Approved”

Fixing the “Crash” of 19291934, FDR pushed

for the creation of the Securities and Exchange Commission (SEC)

The SEC’s role in the U.S. is to enforce securities laws and the stock market exchanges

NO BUYING ON THE MARGIN

NO INSIDER TRADING

National Industrial Recovery Act,

1933

National Recovery Administration (NRA)Public Works Administration (PWA)

Hugh S. Johnson, one of the primary authors of NIRA, was Time magazine's Man of the Year for 1933.

Created at end of the Hundred Days to provide jobs projects and ease restrictions on monopoliesWEAKNESS: led to strikes and businesses were not supportive of government oversight and favoritismRuled

UNCONSTITUTIONAL by Hughes Court

Works Progress Administration (WPA)

Created by PWA to give unemployed, unskilled workers jobs

Wagner Act, 1935National Labor Relations Act, NLRA

Purpose:1.Promote collective bargaining2.Eliminate discrimination against strikers, workers (not racial, gender)Effect: pro-union (worker) law

The NLRA was written by Francis Perkins, the first woman to serve in the executive cabinet (seen standing behind FDR)

The Dust Bowl•Destroyed crops and ruined farmers already struggling

•Also led to a migration of Dust Bowl farmers to California

•“Okies” were mid-Westerners that migrated West looking for jobs

‘California Here We Come’

Agriculture & Environmentalism

Civilian Conservation Corps (CCC)

•Employed ~500,000 Americans (mostly young)•Focused on conservation issues of de-forestation and wildlife control

FDR’s New DealAgricultural Adjustment Act, 1933 (AAA, 1938)

•Government subsidies to farmers to leave land fallow

•Kill excessive livestock

PURPOSE: raise crop and livestock pricesFINAL RESULTS:1.Increased crop and livestock prices2.Improved environmental conditions (Dust Bowl issues)3.Favored large agricultural corporations and ultimately ended tenant farming in the United States

Alphabet AgenciesThe New Deal and Second New Deal created 38 new government organizations, all with an acronym. Several had the same acronym! It is the undisputable end of laissez-faire government in the United States

Fireside ChatsInformal speeches from FDR directly to the American people to “update” them on the progress of the New Deal

Presidents since FDR have continued the weekly chats. President Obama updated to radio and digital video (YouTube) so you can follow the recovery.

FDR’s New Deal•Challenges to the New Deal from the “Right”Most “right-wingers” felt the government’s assistance would cripple Americans’ self-sufficiency and work ethic. A Republican would not win the Presidency again until 1952.

FDR’s New DealChallenges from the “Left”

Huey Long, the “Kingfish” began the Share Our Wealth program, promising to tax millionaires in order to redistribute American wealth. He planned on a 1936 run for President.

Huey Long Huey Long revived Populist sentiments that the government wasn’t doing enough. Long created his our plan, Share Our Share Our WealthWealth, which called for higher taxes on the wealthy, including a death tax of 100% on wealth over $1 million.

Challenges from the “Left”

Father Charles Father Charles Coughlin, the Coughlin, the “Radio Priest”“Radio Priest”, received over 80,000 letters weekly. The Catholic church had little ability to stop his message; FDR ultimately did in WWII

•Based his Radio “sermons” on economics and politics over religion during Great Depression•At first supported FDR, but soon became vocal opponent•Called global economic downturn a result of a Jewish banking conspiracy•Favored the policies of fascism over Marxism (often credited Hitler and Mussolini over FDR in terms of economic recovery•Created a group called National Union of Social Justice (NUSJ)•On several occasions it is believed one-third of the nation tuned in to his show

FDR’s Second New Deal•Election of 1936 (“Happy Days are Here Again”)

•Did the American people view FDR as a success or failure?

•FDR (D) 60.8% vs. Alfred Landon (R) 36.5%

•523-8 electoral votes

•Socialist party received under 200,000 votes

•Communist party 80,000

Eleanor Roosevelt•Franklin’s “Legs”

•In 1935 she began a regular

syndicated newspaper column, “My

Day”•Daughters of American Revolution

& Marian Anderson concert from

Lincoln Memorial•Women applauded Eleanor’s

strength and FDR’s initiatives of

social security, federal school-lunch,

and other family-strengthening

programs •Eleanor held a strong advisory

position with her husband like few

First Ladies

Court-Packing SchemeThe Hughes Court ruled the AAA and NIRA

unconstitutional

The “Scheme” to Pack the Court:

Justices over 70 ½ years old would be “assisted” by adding another, younger Justice (up to 15 total Justices)

vs.

Keynesian Economics•Governments had always operated on the idea of a balanced budget under all circumstances, even depressions (FDR promised a balanced budget in 1932)

•John Maynard Keynes advocated the idea of deficit spending

•His thesis was that economic cycles do not match political office tenures

RESULT: World Governments adopted the idea that during economic downturns it was the government’s role to STIMULATESTIMULATE the economy through DEFICIT DEFICIT SPENDINGSPENDING

Legacy of the New Deal•1932: unemployment peaked at 25%

•1939: unemployment still at 17%

•New Deal laid foundation for modern welfare state (capitalist nation with moderate socialist programs)

•The U.S. government would now oversee economic support of its people (progressivism becomes staple of the United States) The New Deal

reassessed who was responsible for the nation’s needy. The success of the New Deal is not in its ending of the Depression, but the role of government in people’s economic stability and success.

African Americans Change Parties•Overwhelmingly, union supporters and minorities turned

to the Democratic party

•1932: 67% of black votes went to Hoover

“turn Lincoln’s picture to the wall. That debt has been paid in full.”—editor’s quote found in black newspaper in 1933•1936: 75% of black votes went to FDR

Percent of Black Americans voting DEMOCRAT, 1948-19641948: 50% 1952: 79% 1956: 61% 1960: 68% 1964: 94%

Comparison: In 1964, 77% of union members voted Democrat, while 87% of Democrats voted Democrat!!

FDR’s tenure in office allowed him to re-shape the conservative Supreme Court into a liberal one that lasted long after his death (civil rights legislation dominated by FDR-appointed court)

•1861-1933: Republican control of White House

•Only Grover Cleveland and Woodrow Wilson were elected

•1933-1969: Democratic control of White House

•Only Dwight Eisenhower was electedThe Warren CourtRacial SegregationBrown v. Board of Education (1954)Rights of AccusedGideon v. Wainwright (1963)Miranda v. Arizona (1966)FeminismRoe v. Wade (1973)Discrimination/Affirmative ActionBakke v. UC-Regents (1978)

New Deal Legacy

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