1. The Great Depression

2. “We in America today are nearer to the final triumph over poverty than ever before in the history of any land. The poorhouse is vanishing from among us.” Herbert Hoover, 1928
“A host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment.” FDR, 1933

3. Panic on Wall Street
People crowd Wall Street after the Stock Market Crash of Commissioner Whalen dispatched an extra detail of 400 police officers to guard the area.
People were buying on margin - $8.5 billion in loans to stock purchasers.
JP Morgan and other bankers bought $20 million of US Steel to try and restore confidence

4. The Great Depression Begins
By 1930:
over 4 million were out of work
banks collapsed
people lost their savings
farms were foreclosed
The crisis seemed to feed on itself as more and more people lost their jobs
Between 1929 and ,000 businesses failed
Corporate profits fell from $10 billion to $1 billion
In people died in NYC from starvation – many turned to soup kitchens and breadlines
Hoover did recognize that "depression" also had a psychological meaning. The country had lost confidence in the future. Hoover tried to encourage them to have faith, but he was unwilling to use the government as an effective tool to restore that confidence.
Hoover did authorize loans to banks and big business, but he was not willing to provide federal assistance at the state or local level, to the farmers directly. He believed this would make the federal government too powerful.

5. 1 in four people out of work at the worst time.
13 million workers and many more were underemployed

6. What causes the Depression?
Decade-long Drought
Overproduction by farm and factory
Technological advances limiting employment
Crash of Stock Market
Overexpansion of credit
Hawley-Smoot Tariff
Outproduced market or ability to pay for products
Too much money in the hands of a few wealthy people, who in turn invested it in factories and other agencies of production. Not enough in salaries and wages.
OO TT CD
DOT COT
COD TOT
During the Great Depression, people couldn’t even afford DOTted COTs. Everything was plain and practical.

7. Consequences of the Depression
Unemployment averaged 20% plus pay cuts
By 1933 over 13 million were out of work
Changes in lifestyle: housing, diet, leisure
Decline in birthrate in the 1930’s
Psychological impact: depression and suicide
Homelessness & migration (eg. “exodusters”)
Rise in racial tensions & nativism
Lack of safety net
BUT “life goes on” (eg. movies as affordable escapism)

9. The Election of 1932 The Republicans re-nominated Hoover
Hoover had won the election in 1928 by promising a “chicken in every pot”
The Democrats nominated Franklin D. Roosevelt (a distant cousin of Theodore)
Roosevelt was well-educated and well-spoken, he had also held many important positions in past administrations, but had suffered from polio which left him wearing leg braces
Hoover’s new slogan is “the worst is past” and “prosperity is just around the corner”
Believed that, “No president must ever admit he has been wrong.” – was booed and jeered.
Accused FDR of seeking destruction of capitalism
FDR
Cautious liberalism – will US turn to socialism as a solution?
Polio helped make him compassionate and a strength of will

10. He blamed Hoover and the Republicans for the Depression
During the campaign Roosevelt promised a New Deal for America, but did not elaborate
He blamed Hoover and the Republicans for the Depression
Roosevelt won the election
In the Winter of the situation continued to get worse
Offered a New Deal for the “forgotten man” and promised a balanced budget along with economic reforms.
Offers experimentation – DO SOMETHING!
Significant? Distinct shift of blacks from Lincoln’s Republican party. As the “last hired and first fired,” blacks were some of the worst sufferers.

11. Political Cartoon
Hoover encourages people to turn to community and church resources to meet needs (salvation army, red cross)
Dem’s slogan was “happy days are here again” which signaled Dem optimism in the face of economic problems
Dem’s support repeal of Prohibition and increase in federal relief.

12. FDR
Very experienced – NY legislature, governor of NY, nominated for VP, assistant secretary of the navy.
5th cousin to TR – more suave and conciliatory, but both colorful.
Strong orator, which benefited him in the era of radio.

13. Inauguration Speech
Roosevelt claimed in his inauguration: “the only thing to fear is fear itself”
“This great nation will endure as it has endured, will revive, and prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself-nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance…"

14. Women in the Administration
First Lady Eleanor Roosevelt
“conscience of the New Deal”.
Most active first lady in US history.
Lobbied for her husband, gave speeches, wrote a newspaper column, fought for the impoverished and oppressed.
Secretary of Labor Frances Perkins
First woman cabinet member

15. The Gameplan His plan – the 3 R’s:
Relief: Relieve the conditions of the unemployed
Recover: Stimulate industry and economy
Reform: prevent another such depression
The three goals of the New Deal were relief, recovery, and reform.
Relief came first and was aimed at all Americans.
Recover would then stimulate the economy and bring the country out of depression.
Reform would prevent another such depression from ever happening again.

16. Game Plan Specifics
Focus on the first two years for relief and recovery
Long term goals to reform current abuses which had produced the boom or bust
Return to Progressive ideas side-tracked by WWI and the 1920’s:
Unemployment insurance
Old-age insurance
Minimum wage regulations
Conservation and development of natural resources
Restrictions on child labor
Some advancement on the state level, but behind western Europe – needed social welfare

17. Banks need immediate attention
Roosevelt called Congress to meet for a special session and then closed the banks for a four day holiday
Congress passed the Emergency Banking Relief Act which allowed sound banks to reopen and provided managers for those in trouble
The extraordinary amount of work in such a short amount of time had an immediate positive effect on the country psychologically. Americans felt they were finally getting a new start along with their New Deal.

18. Bank Rushes
A "bank run" in Detroit, Panicking customers rushed to withdraw savings.
Between 1929 and 1933, over 6,000 banks failed with over 9 million savings accounts lost ($2.5 billion)
Banks had either closed or put restrictions on how much you could withdraw

19. Fireside Chats
On March 12, Roosevelt talked to the nation in the first of his “fireside chats”
He told the people to keep their money in the banks and reassured the nation that he was working to solve the problem
35 million listeners – banks opened their doors and people began to put money back in.

20. Cleaning Up Wall Street (1932)
In April the country abandoned the gold standard
The Federal Securities Act required full disclosure of information about stocks and bonds
The Glass-Steagall Banking Act created the Federal Deposit Insurance Corporation to guarantee bank deposits up to $5,000. It also increased the power of the Federal Reserve to regulate credit
Took the nation off of the gold standard and order private holding to ge surrendered to the Treasury in exchange for paper currency – bought at a higher price, which helped increase the amount of dollar in circulation as holders of gold cashed it in.
Ended the gold-buying scheme in 1934, when FDR returned the nation to a limited gold standard for the purposes of international trade.

21. Securities & Exchange Commission
For the first time, the business of buying and selling shares in companies was regulated, and the bank accounts of ordinary people were insured. The SEC and FDIC were established by the New Deal. These two agencies – the Securities and Exchange Commission and the Federal Deposit Insurance Corporation
Banks could no longer buy stocks with depositors' money. Companies that wanted to sell shares to the public to raise money had to disclose a host of financial information to potential investors. For the first time, investors could find out if a company was worth the stock price it was asking. The SEC also regulated the major stock exchanges, the brokers and dealers, mutual funds and investment advisors.

22. The First Hundred Days
From March 9 to June 16 was known as the Hundred Days
Congress received and enacted 15 major pieces of legislation
After solving the banking problems the administration focused on RELIEF for workers and unemployed
Even more significantly, when voters had elected Roosevelt in November, they had also swept the Democrats into majorities in both the House and the Senate. Roosevelt's fellow Democrats were ready to work with him to pass sweeping new legislation to meet this emergency. The president called for a special session of Congress to begin on March 9. It would last until June 16, exactly 100 days. During The Hundred Days, Congress passed numerous New Deal programs.
Every president since has been judged by their first 100 days.

23. The Workers

24. Relief for the People
Congress created the Civilian Conservation Corps (CCC) which was intended to create work for the unemployed and unmarried men between 18 and 25.
Employed nearly 3 million young men and paid about $30 a month and spent their time building roads, campgrounds, and planting trees
CCC - Most popular of the “alphabet agencies”
Type of jobs? Reforestation, firefighting, flood control, swamp drainage.
FERA – first major effort by Congress to deal with million of unemployed
$3 billion for direct individual payments of wages on work projects.

25. Relief for the People
The Federal Emergency Relief Administration (FERA) sent money through state agencies in the form of grants to create education programs as well as direct cash payments to individuals
CCC - Most popular of the “alphabet agencies”
Type of jobs? Reforestation, firefighting, flood control, swamp drainage.
FERA – first major effort by Congress to deal with million of unemployed
$3 billion for direct individual payments of wages on work projects.

27. The first federal attempt at work relief was through the Civil Works Administration
Roosevelt advocated giving people jobs as opposed to financial hand-outs
Provided federal jobs for those who could not find work.
Dissolved in the spring of 1934, but immediately afterwards the number of unemployed skyrocketed
In 1935 Roosevelt asked Congress for $4.8 billion in the Emergency Relief Appropriation Act to pay for the programs
The goal was to put unemployed people to work building projects like highways, airfields, public buildings, planting trees and doing rural rehabilitation. Workers were paid $15 to $90 a month, depending on the job.
During its eight-year life from 1935 through 1943, the WPA employed 8.5 million workers. They worked on 1.4 million projects, including 651,087 miles of roads, 124,031 bridges, 125,110 public buildings, 8,192 parks and 853 airport landing fields.
When the WPA was established, its director Harry L. Hopkins and his staff argued that writers, artists, musicians and theatre people were out of work as well as laborers and farmers. They got Congress to agree to allocate seven percent of WPA funding to employ those groups.
The Federal Arts Project hired unemployed artists to decorate hundreds of post offices, schools and other public buildings with murals, canvases and sculptures.
The Federal Music Project hired musicians to perform with symphony orchestras and community singing concerts.
The Federal Theatre Project experimented with new forms of theatre in New York City. Touring companies traveled the back roads with a variety of old and new plays.
And the Federal Writers Project (FWP) published state and local guidebooks, organized archives, indexed newspapers and collected folklore and oral history interviews.
The Writers Project had perhaps the greatest impact of the three WPA Arts projects. Fortune Magazine said that the project produced "a sort of cultural revolution in America" by documenting America for Americans. The main result of this effort was a series of guide books that were written for each state and several localities.

28. Congress created the Works Progress Administration (WPA) to manage the programs
In 1935 Roosevelt asked Congress for $4.8 billion in the Emergency Relief Appropriation Act to pay for the programs
The goal was to put unemployed people to work building projects like highways, airfields, public buildings, planting trees and doing rural rehabilitation. Workers were paid $15 to $90 a month, depending on the job.
During its eight-year life from 1935 through 1943, the WPA employed 8.5 million workers. They worked on 1.4 million projects, including 651,087 miles of roads, 124,031 bridges, 125,110 public buildings, 8,192 parks and 853 airport landing fields.
When the WPA was established, its director Harry L. Hopkins and his staff argued that writers, artists, musicians and theatre people were out of work as well as laborers and farmers. They got Congress to agree to allocate seven percent of WPA funding to employ those groups.
The Federal Arts Project hired unemployed artists to decorate hundreds of post offices, schools and other public buildings with murals, canvases and sculptures.
The Federal Music Project hired musicians to perform with symphony orchestras and community singing concerts.
The Federal Theatre Project experimented with new forms of theatre in New York City. Touring companies traveled the back roads with a variety of old and new plays.
And the Federal Writers Project (FWP) published state and local guidebooks, organized archives, indexed newspapers and collected folklore and oral history interviews.
The Writers Project had perhaps the greatest impact of the three WPA Arts projects. Fortune Magazine said that the project produced "a sort of cultural revolution in America" by documenting America for Americans. The main result of this effort was a series of guide books that were written for each state and several localities.

30. Industrial Relief Two parts to The National Industrial Recovery Act:
Economic recovery through the National Recovery Administration (NRA)
NRA symbol was the “Blue Eagle” with the words “We do our part”
The legislation was terminated by the Supreme Court in 1935 because it was deemed unconstitutional in the Schechter Poultry Corporation v. United States case
Public Works Administration (PWA)
The NIRA also created the controversial National Recovery Administration (NRA) to help businesses by setting wages and prices and to create more jobs

31. Congress’ Response
With NRA terminated by the courts, the Congress passed the Wagner Act of 1935 (National Labor Relations Act)
Created a new National Labor Relations Board
Reasserted the right of labor to organization and bargain collectively through representatives of their choosing.
Led to unskilled workers organizing – led by John. Lewis
Formed the Committee for Industrial Organization (CIO) within the AFL – eventually broke away
Used the sit-down strike – to stop strikebreakers being used – in Flint with GM

32. More Reform for Labor Fair Labor Standards Act (Wages and Hours Bill)
Minimum wage (.40 an hour)
Maximum hour levels (40 hours a week)
No labor by children under 16
Excluded agricultural service and domestic workers
Minorities and women did not benefit

33. The Farmers

34. Relief for Farmers
With the drop in farm commodities prices, many farmers could not afford to plant crops
The Agricultural Adjustment Act (AAA) of 1933 planned to pay farmers to destroy their crops in an attempt to raise prices
Eventually animals were slaughtered as well as crops destroyed
The decline in supply did increase the prices, but the shortage was as much due to the “dust bowl” which wiped out many farms on the Great Plains between 1932 and 1935
Slaughtering of animals was condemned while people were hungry, but much of it did go to relief.
In 1936 the Supreme Court ruled in United States v. Butler the AAA’s tax on food processors as unconstitutional and ended the AAA
Congress responded by passing the Soil Conservation and Domestic Allotment Act which removed quotas, but still provided funds for farmers who took land out of production
In 1938 Congress passed the Second Agricultural Adjustment Act

35. One Farmer’s balance sheet
1928 Income
1932 Income
Cream Sales for full year $
$ 6.45
Egg Sales for full year
161.07
1.85
Wheat, in March sold 614 $1.21/bu. & Sept /bu.
920.24
Wheat, in May sold 226 $.42/bu.
68.75
Corn, in August sold /bu.
361.80
Corn, in August sold and .26/bu.
231.50
Livestock, throughout the year he sold a steer, 26 hogs, an "old cow" and bull calf.
608.74
Livestock, in July he sold one bull
25.00
"Western land rent" on wheat land Otto owned near Hayes Center, Nebraska, in Dec.
238.50
"Western land rent" in March .

36. Parity
Gov’t studies showed that farmers’ costs were “on par” with the crop prices in
AAA states the gov’t goal to keep prices need parity
Parity was a statistical model that was used during the 30s to try to find out if farm income was keeping up with farm costs. Here's how it worked.
After some study, economists for the U.S. government decided that during the time from 1910 to 1914, the prices that farmers got for their crops and livestock were roughly in balance with the prices they had to pay for goods and services they used in the production of crops and livestock and family living. In other words, a farmer's earning power was on a par with his or her purchasing
But in the 30s, prices for both livestock and cash crops dropped to rock bottom. In 1925, corn had sold at $1.07 per bushel. By November and December 1932, corn was selling for only 13-cents per bushel.

37. RELIEF for Farmers Review
Name of Act
Year Passed
Summary
Upheld by the Courts?
Agricultural Adjustment Administration AAA
1933
Artificial scarcity and parity
No – struck down in 1936
Soil Conservation and Domestic Allotment Act
1936
Allow land to lie fallow and be paid – focus on conservation
Yes
2nd Agricultural Adjustment Administration New AAA
1938
Conservation payments and parity payments
Parity – prices set for a product that gave it the same value as in
While such measures may seem counter productive, the end result was positive for most farmers; gross farm income increased by 50% between the act's introduction in May 1933 and its being declared unconstitutional by the Supreme Court in Jan 1936.

38. Dust Bowl What caused the Dust Bowl? Winds and Drought
Dry-farming techniques
Heavy machinary tore up more soil, leaving a powdery topsoil

39. Farmer and sons...dust storm, Cimarron County, Oklahoma. 1936.
10,000 flee.
350,000 Okies and Arkies trekk to So Cal.
The Grapes of Wrath showed people what this was like.

40. Other New Deals

41. The Tennessee Valley Authority
One of the largest and most successful programs was the creation of the Tennessee Valley Authority (TVA)
The Tennessee Valley was a very underdeveloped and impoverished area
The idea was to build a series of dams on the Tennessee River. The result would be more industry, better schools and libraries, and cheap hydroelectric power.
Electric-Power industry had become huge
A public utility – reached directly into the pocketbook of citizens
New Dealers thought they were gouging the public
Planned economy – one of the most revolutionary of the New Deal schemes – gov’t competing with private

42. Helping Housing Federal Housing Administration (FHA)
Goal: speed recovery and better homes
How? Provided small loans t householders to improve homes or complete new homes
Very popular and long-standing
Added to the FHA with the United States Housing Authority (USHA)
Goal: Build low-income housing
How? Lend money to states or communities
Helps to shrink slum areas
USHA – 650,000 units built

43. The Elderly Traditional economic security: family, labor, or charity
First 150 years of American history, most citizens are farmers
Close to family and assumed elderly would be cared for
Second Industrial Revolution change this – now dependant on wages to live
Also left elderly parents on the farm to move to the city
People now living longer
In three short decades between 1900 and 1930, the average life span increased by 10 years. By 1935, there were 7.8 million aged persons in America.

44. Social Security Administration (SSA)
What can you do?
Nothing
Hoover’s Volunteerism
Expand current state welfare
FDR’s proposal of social insurance
SSA Included two major programs:
Federal system of old-age benefits for retired workers who had worked in industry and commerce
Federal-State system of unemployment insurance.
Most important New Deal agency
Social insurance already used in Europe, but US was different in that you had to be employed to get coverage.
Passed in 1935
Financed by a payroll tax on employers and employees
Also provisions for the blind, handicapped, and other dependents.

45. A woman in South Carolina scrawls a note to a man in Washington whom she addresses as "Dear Mr. President." "I'm 72 years old and have no one to take care of me." Another letter comes to the White House from Virginia. "I'm a 60 year-old widow greatly in need of medical aid, food and fuel, I pray that you would have pity on me." Letters such as these came by the thousands from old folks across the country to the President, to Mrs. Roosevelt, to almost every one in Washington whose name was familiar to them.

46. Repealing Prohibition
Congress passed the Beer-Wine Revenue Act which amended the Volstead Act and permitted the sale of low levels of alcohol
Provided taxable revenue and employment
The Twenty-First Amendment was passed in December of 1933 ended Prohibition

47. Native Americans Indian Reorganization Act of 1934
Encouraged tribes to establish local self-governments and preserve native crafts and traditions
Worked to reverse the Dawes Act of 1887
Some Indians worried it was “back to blankets”
Nearly 200 tries organized tribal governments

48. New Deal Critics
Not everyone approved of the New Deal legislation and attacks from all sides
H. L. Mencken complained that Roosevelt was creating a welfare state
Father Charles Coughlin “the radio priest” by 1934 he had turned against Roosevelt – calling the president a liar.
Dr. Francis Townsend suggested that all people over 60 receive $200 a month, the money could be raised through a sales tax.
The most vocal critic was Huey Long, once governor and senator of Louisiana
Long was nicknamed the modern-day Robin Hood for his “share our wealth” plan – limit income of the rich
Communist party felt the New Deal was too conservative
Long proposed to make “every man a king” by limiting the amount of money the wealthy could possess
The government would take control of all incomes over $1 million and estates over $5 million. This money would then be distributed to the less fortunate
Long and Coughlin both appealed to the mass through populist movements that feed on dissatisfaction and disappointment
In 1935 Long was assassinated and while the movement continued it did not thrive without Long
The Communist party attacked the New Deal for being too conservative
Membership in the Communist party increased during the Depression. While it communism never really attracted a mass appeal it did became especially appealing to Hollywood people

49. Election of 1934 Overwhelmingly for Democrats
FDR’s appeal to the “forgotten man”
South, unions, blacks, urbanites, New immigrants, and the poor vote Dem
In new term, FDR sought to pack the Supreme Court
6 of the 9 justices were over 70
Had ruled against FDR in 7 of 9 cases
Asked Congress to add a new justice to the Court for every member over 70
STRONGLY opposed
Eventually, FDR appoints more judges than anyone besides Washington

50. End of the 1930’s New Deal does not end the Depression
A recession hits in 1937
Roosevelt turn to Keynesian economics
British economist John Maynard Keynes
Deficit spending
By 1938 no more rabbits to pull out of FDR’s hat

51. THE NEW DEAL OPPONENTS Waste, incompetence, confusion Lefty socialists
Too much improvising without a real plan
Growth of bureaucracy – states fade further
National debt
Business and republicans hated it
Too much presidential powers
DIDN’T FIX THE DEPRESSION!!
SUPPORTERS
Some waste, but relief was needed
Headed off a more radical swing with a moderate option
Government was morally bound to prevent mass hunger – gov’t is to be used, not feared
Citizens retained self-respect
Deflected hatred of business
New Deal did relieve the worst of the crisis in 1933
Like Jefferson – bold reform without a bloody revolution – at a time when some other nations were suffering armed uprising and Europe was predicting communism or fascism