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The 1920’s, the Great Depression, and the New Deal

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1 The 1920’s, the Great Depression, and the New Deal
Chapters 17, 18, and 19

2 Cause and Effect: Characteristics of the 1920’s caused by WWI
The flapper and increased women’s rights Greater independence and gains for women—education, employment, social restrictions Birth control—Margaret Sanger How related to WWI? Harlem Renaissance and African American Political Activism Harlem Renaissance: artistic and cultural flourishing in the African American community—Jazz, blues, literature (Langston Hughes, Claude McKay, Zora Neale Hurston) Political Activism: Marcus Garvey and Black Nationalism How different from earlier African American activism? NAACP

3 Cause and Effect: Characteristics of the 1920’s caused by WWI (Cont.)
Higher wages/better standard of living for ordinary workers How related to WWI? Nativism and the revival of the KKK Hatred of foreigners, immigrants, Jews, and Catholics KKK—harrased African Americans (like before), but now focused on “un- American” elements as well (anyone not a native born Protestant of north- western European ancestry) Immigration Restrictions: Emergency Quota Act of 1921, National Origins Act of 1924 Organized crime/mobsters

4 Politics During the 1920’s: Pro-Business
Laissez Faire Capitalism: government pursued a “hands off” approach to the economy how does this compare to the Progressive policies toward the economy? Warren G. Harding ( ) Very pro-business Members of his administration were involved in many scandals Teapot Dome, Embezzlement from the Veterans Administration, Bribes and Bootlegging Died of a stroke in 1923 Calvin Coolidge ( ) Also very pro-business “The man who builds a factory builds a temple, that the man who works there worships there, and to each is due, not scorn and blame, but reverence and praise.” “The business of America is business”

5 Problems Under the Surface: 1920’s Economy
Economy during the 20’s was booming but there were hidden structural problems Farmers 1 in 4 farmers defaulted on loan payments, had their farms foreclosed on Tariff High tariffs meant good business inside US, but no trade outside of US Labor problems Higher wages during the war, but then wages staid flat, workers couldn’t afford to buy the products they were making Taxes Lower taxes for wealthy meant a rise in income inequality Wealthy began to invest extra money in the stock market

6 Election of 1928 Hoover vs. Smith
1928 Republicans nominated Herbert Hoover Secretary of Commerce under Harding and Coolidge, engineer of the prosperity of the 1920’s Successful head of the Food Administration during WWI Democrats nominated Al Smith Machine Politician turned progressive reformer First Catholic ever to run for President Smith’s Catholicism played a large role in the election--many feared a Catholic in the White House Hoover won easily

7 Herbert Hoover’s Background and Political Philosophy
Born into poverty, self made man Went to Stanford, became an engineer Became wealthy working in the gold mines of Australia Progressive reformer/humanitarian during WWI Hoover’s philosophy (A Tale of Two Hoovers) Not the laissez faire capitalist that Coolidge was Had progressive tendencies—have government and business work together to promote efficiency and increase production “Rugged Individualism”—individuals were responsible for helping themselves without direct government aid—that’s what made America Great

8 The Great Depression: 1929-1941
Worldwide economic downturn Began/ended at different times in different places: generally speaking worst years were just about everywhere Unique for the breadth and depth of the economic downturn Beginning of the Great Depression in the US: Chain of Events October 1929—US stock market crash Investors had bought stock using borrowed money (buying on a margin) stock market crash meant investors AND banks lost lots of money ($40 Billion)economic problems go from stock market to banks Banks forced to call in loans to make up lost moneyproblems go from banks to the general economy AND to Europe (international bank loans) Businesses cut back/go out of business to repay loans, production slows, workers laid off, underlying problems of the US and world economies exposed, Depression begins

9 Great Depression: Background Causes
Income inequality Workers not paid enough, meant they couldn’t consume as many goods as they were producing, lack of demand meant shutdown of businesses Overproduction of goods Technological advances had made it easier to produce more goods (both industrial and agricultural) eventually the country made more goods than it could consume High tariffs High protective tariffs meant lack of international trade for US businesses Problems with agriculture Farmers had been stuck in a bad spot since the late 1800’s weak agricultural sector couldn’t support the economy when industrial sector collapsed Environmental problems—dust bowl—led to poverty/foreclosures in the southern part of the Midwest (Oklahoma, etc.)

10 Hoover and the Depression
The two Hoovers battled it out over the response to the Depression Rugged Individualism Hoover—didn’t want to ruin the American character with handouts from the government Humanitarian Progressive Hoover—wanted to help ease the massive economic disaster using the government Hoover was slow to act, but eventually did more than any other president before him, but (in retrospect) not enough to fix the problem New public works spending--$2.25 billion Reconstruction Finance Corporation (RFC) 1932 Lent money to states, big businesses, railroads, banks, etc. – keep the big companies from going under or else thousands more will lose their jobs Limits of Hoover’s efforts No direct aid from Federal government to the poor/unemployed No government corporations that could compete with private businesses (viewed as socialistic)

11 Election of 1932: FDR emerges
Franklin Roosevelt (Democrat) Distant cousin of Theodore Roosevelt, followed the same path to success Paralyzed from waist down due to polio Election of 1932: Roosevelt vs. Hoover Roosevelt promised people a New Deal—never exact about what that was, but he promised action Hoover had a horrible record Roosevelt won easily, Democrats took control of the Congress

12 The New Deal 1933-1941 New Deal: Themes of the New Deal: The three R’s
President Roosevelt’s policies during the Great Depression to help end the Depression and make sure another one didn’t happen again Roosevelt used the Federal govt. to regulate the economy, and Federal money to help jump start the economy Massive increase in the power and role of the federal govt. Themes of the New Deal: The three R’s Reform: big business had been allowed to do whatever it wanted in the 1920’s, business abuses had helped cause the Depression, Roosevelt wanted to pass laws to fix these abuses Recovery: industry and agriculture had collapsed, by getting the government involved Roosevelt hoped he could use the power of the Federal govt. to help rebuild the US’s industrial and agricultural economies Relief: there were millions of people out of work who needed food, housing, money and jobs right away, Roosevelt wanted to have the Federal govt. provide these people with money to stay alive as well as jobs so they could support themselves

13 The First New Deal 1933-1935 The Three R’s in Action Reform: Recovery
Securities Exchange Commission (SEC) created to monitor business activity and the stock markets especially Federal Deposit Insurance Corporation (FDIC) insured money deposited in banks Glass-Steagall Banking Bill limited what banks could and couldn’t do (like buying stocks on a margin) Recovery National Recovery Administration (NRA) – tried to rebuild industry by using the government to get employers, workers and business competitors to cooperate and work together Agricultural Adjustment Administration (AAA) – tried to get farmers to work together to grow less food in order to boost food prices Relief Civilian Conservation Corps (CCC)—made jobs for unemployed young men Civil Works Administration (CWA)—gave money and jobs to people in big cities Public Works Administration (PWA)—spent billions of dollars to fund public works projects around the country

14 The “Second” New Deal First New Deal had not solved the Depression entirely Some thought the New Deal had gone too far, some thought it hadn’t gone far enough The Supreme Court had overturned some of the major elements of the first New Deal (NRA, AAA) Roosevelt responded with 2nd New Deal Works Progress Administration (WPA) billions for public works projects $13.4 billion, employed 3 million people at its height Social Security Act—pensions for elderly/disabled Americans 2nd Agricultural Adjustment Act Wagner Act—gave unions the legal right to organize, established the National Labor Relations Board to monitor workplace abuses by employers Question: which of the three R’s did Roosevelt focus most on during the 2nd New Deal?

15 Pros and Cons of the New Deal
Economy improved (although the country was still in a depression) Lots of people got relief that they needed to survive Laws were put in place to curb some of the abuses that had caused the Great Depression in the first place Cons New Deal cost a lot of money—increased the national debt New Deal greatly expanded the size and role of the federal govt. New Deal put limitations on what people could and couldn’t do with their property Question: Did the pro’s of the New Deal outweigh the cons?

16 End of the Great Depression: WWII
1st and 2nd New Deals improved the US Economy but didn’t totally fix the Depression Unemployment only got as low as 10% (it had been around 25-30% before the New Deal) Massive government spending on military projects due to WWII finally ended the Great Depression Example: WPA spent a total of $13.4 billion on public works projects During WWII the US spent $50.1 billion on military aid for other countries (Lend Lease Act) In total the US spent about 5 times as much money on WWII as it did on the New Deal Massive government spending resulted in the end of the Depression

17 New Deal and Labor NRA regulations, Wagner Act greatly aided unions
Roosevelt was the first President since Teddy Roosevelt not to be openly hostile to unions—first pro-union president National Labor Relations Board—meant to monitor and prevent abuses against unions by management Union membership began to grow during the Depression Emergence of the CIO Committee (eventually Congress) of Industrial Organization Started out as a part of the AFL eventually became its own entity 1938 Industrial union, not a trade union, different from the AFL Used the sit-down strike in order to gain concessions Became a major force by the end of the Depression—4 million members Eventually merged with the AFL in the 1950s (AFL-CIO)

18 New Deal and African Americans
African Americans and the New Deal Many leaders of the New Deal were sympathetic to African Americans (Eleanor Roosevelt for example) Roosevelt appointed many African Americans to mid-level positions in his administration (Black Cabinet) Roosevelt mandated that 10% of all funds spent by the New Deal be allocated to African Americans (African Americans constituted 10% of the total US population) Many New Deal programs not specifically targeted to African Americans helped African Americans Limitations: no effort made by Roosevelt to end segregation in the South (or anywhere else), some New Deal programs indirectly hurt African Americans (AAA) Significance: major swing in African American loyalty from Republican to Democratic party during the New Deal

19 New Deal and Women and Native Americans
Roosevelt and other members of his administration were sympathetic to the plight of women during the Depression Roosevelt appointed the first ever female cabinet member (Frances Perkins, Secretary of Labor) New Deal programs specifically designed to aid women (some elements of the WPA for example) Native Americans Roosevelt formally reversed earlier government policies that took reservation land away from Native American tribes Returned control of land and Native American affairs to Native American tribes Appointed sympathetic director to head the Bureau of Indian Affairs

20 Roosevelt and the New Deal Coalition
New Democratic Coalition Old Democrats Conservative southern Democrats “Ethnic” Americans—recent immigrants, children of immigrants Catholics Jews Urban poor New Democrats Labor unions African Americans Farmers New Deal would make the Democratic party the dominant political party in the US, possibly until the present day New Deal Coalition weakness: diverse group of people, not easily united

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