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Presentation on theme: "THE AMERICAN PEOPLE CREATING A NATION AND A SOCIETY NASH  JEFFREY HOWE  FREDERICK  DAVIS  WINKLER  MIRES  PESTANA Chapter 24: The Great Depression."— Presentation transcript:

1 THE AMERICAN PEOPLE CREATING A NATION AND A SOCIETY NASH  JEFFREY HOWE  FREDERICK  DAVIS  WINKLER  MIRES  PESTANA Chapter 24: The Great Depression and the New Deal Pearson Education, Inc, publishing as Longman © 2006 7th Edition

2 THE GREAT DEPRESSION The U.S. had had previous recessions and depressions but nothing compared with the Great Depression – All the more shocking because it came after a decade of unprecedented prosperity – Had an impact on all areas of American life – Destroyed American confidence in the future

3 THE DEPRESSION BEGINS Few people foresaw the stock market crash and even fewer expected the entire economy to go into a tailspin – By 1932 the median income was half of what it was in 1929 – Construction spending fell to one-sixth of its 1929 level – By 1934, one-quarter of the work force was unemployed The prosperity of the 1920s had been superficial – Farmers, coal and textile workers had suffered throughout the 1920s and the farmers were the first to sink into depression – Two percent of the population received 28 percent of the national income while the lower 60 percent only got 24 percent – Businesses increased profits while holding down material costs and wages, thus suppressing consumer spending power – The automobile and housing industries were already slackening before the crash – Well-to-do Americans were speculating a significant portion of their money in the stock market The crash revealed serious structural weaknesses in the financial and banking systems – Federal Reserve Board tightened credit Global economic problems created by World War I also contributed


5 HOOVER AND THE GREAT DEPRESSION President Hoover took aggressive action to stem the depression by using the power of the federal government – Called conferences with businessmen and labor leaders – Met with mayors and governors and encouraged them to speed up public works projects – He also sponsored a tax cut hoping to stimulate the economy

6 ECONOMIC DECLINE Voluntary actions and psychological campaigns were not enough The market collapsed further and 1300 banks failed in 1930 – Many factories cut back on production and others closed – US Steel announced a 10 percent wage cut in 1931 and the auto industry laid off workers leading to unemployment of over 40 percent in Detroit – By 1932, 12 million Americans were unemployed As the Depression deepened, the rich feared revolution but most Americans simply despaired – While not everyone lost their job or stood in bread lines, everyone was affected and most victims blamed themselves – Probably disrupted women’s lives less than men’s because when men lost their jobs, their identity and sense of purpose as the family breadwinner was shattered – Women’s lives changed little except for the addition of extra work Depression altered the patterns of family life – Many relatives moved in together – The marriage, divorce and birth rate all dropped

7 A GLOBAL DEPRESSION Hoover urged more voluntary action and insisted on maintaining the gold standard and balancing the budget By June 1931 the German financial system was in chaos – In September, Britain abandoned the gold standard, precipitating a decline in international lending and trade – Soon most of the industrialized world was caught in the Depression As the depression worsened, more people blamed Hoover who became isolated and bitter – Shanty towns were called Hoovervilles Hoover did try innovative schemes – More public works projects were built during his administration than in the past 30 years – In 1931 tried to organize a pool of private money to rescue banks and businesses and, when it failed, he turned to Congress to pass the Reconstruction Finance Corporation in 1932 to make loans to banks, insurance companies, farm mortgage companies, and railroads – Hoover asked Congress for a Home Financing Corporation and the Federal Home Loan Bank Act of 1932 became the basis for the New Deal Federal Housing Administration – Supported the passage of the Glass-Steagall Banking Act of 1932 which expanded credit to make more loans available to businesses and individuals – But rejected calls for the federal government to restrict production in the hopes of raising farm prices

8 THE BONUS ARMY Many WWI vets lost their jobs and, beginning in 1930, lobbied for early payment of their veterans’ bonuses – Over Hoover’s veto, a bill passed Congress allowing them to borrow up to 50 percent of the bonus due them – In May 1932, 17,000 veterans marched on Washington with a number taking up residence in a shantytown outside the city – When the Senate defeated the bonus bill in June, most veterans accepted free railroad tickets and left but several thousand remained – Hoover exaggerated the radical elements in this group, refused to talk to the leaders and called out the U.S. Army under General Douglas MacArthur to clear the area Hoover was incapable of understanding the true nature of the problem and believed Americans’ biggest problem was a lack of confidence – While he was willing to use the federal government to support business, he could not accept federal aid to the unemployed

9 ROOSEVELT AND THE FIRST NEW DEAL The first New Deal (1933 to early 1935) focused mainly on recovery from the Depression and relief for the poor and unemployed – No single ideological position united all legislation – Franklin Delano Roosevelt believed in economic planning and government spending to help the poor though he was still cautious and conservative – New Deal rested on the assumption it was possible to create a just society by superimposing a welfare state on the capitalist system, leaving the profit motive undisturbed

10 THE ELECTION OF 1932 Hoover’s unpopularity denied him his second term and ushered Franklin D. Roosevelt into the White House with more than 57 percent of the popular vote Roosevelt promised a “new deal” for Americans and relief from the depression – As a result of the long wait for Roosevelt’s inauguration, the Twentieth Amendment was passed in 1933 moving the inauguration from March 4 to January 20 At his inaugural address, Roosevelt announced that “The only thing we have to fear is fear itself” – Had the ability to communicate with his listeners – Instituted radio “fireside chats” to explain what he was doing to solve the nation’s problems

11 ROOSEVELT’S ADVISORS Roosevelt surrounded himself with intelligent and innovative advisers – Harold Ickes, secretary of the interior and Republican lawyer – Henry Wallace, secretary of agriculture, was another republican – Frances Perkins, secretary of labor, was the first woman ever appointed to a cabinet post – His informal brain trust included Adolph Berle, Jr., Rexford Tugwell, Raymond Moley and Harry Hopkins Eleanor Roosevelt was a controversial first lady who wrote newspaper columns and made a great many speeches and radio broadcasts – She traveled widely and listened to the concerns of women, minorities and ordinary Americans – She took stands on social issues and civil rights and pushed the president toward social reform

12 ONE HUNDRED DAYS Congress was cooperative because the crisis was so bad Despite haste and difficulties, many of the laws passed during Roosevelt’s first 100 days would have far-reaching implications for the relationship of government to society

13 THE BANKING CRISIS Many American banks had closed and the public no longer trusted them – Roosevelt declared a four day banking holiday – Three days later, Congress gave the president broad powers over financial transactions, prohibited the hoarding of gold and allowed for the reopening of sound banks, sometimes with loans from the Reconstruction Finance Corporation Over the next few years, Congress passed additional legislation that gave the federal government more regulatory power over the stock market and over the process by which corporations issued stock The Banking Act of 1933 strengthened the Federal Reserve system and established the Federal Deposit Insurance Corporation (FDIC) to insure deposits up to $5000 The Economy Act called for a 15 percent reduction in government salaries as well as the reorganization of the federal agencies to save money – Cut veterans’ pensions Beer-Wine Revenue Act legalized beer that had an alcohol content of 3.2 percent and light wines and levied a tax on both – The Twenty-first Amendment, ratified 5 December 1933, repealed Prohibition Congress granted Roosevelt great power to devalue the dollar and manipulate inflation – FDR took the country off the gold standard – January 1934, FDR fixed the price of gold at $35 an ounce which inflated the dollar about 40 percent

14 RELIEF MEASURES The Federal Emergency Relief Administration (FERA) was authorized by Congress with an appropriation of $500 million in direct grants to cities and states The Civil Works Administration (CWA) was created to put more than 4 million people to work on various state, municipal and federal projects – In just over a year the agency built or restored half a million miles of roads and constructed 40,000 schools and 1000 airports – Hired 50,000 teachers to keep rural schools open and others to teach adult education courses in the cities – Put more than a billion dollars of purchasing power into the economy – Fearing the cost of the program and the possibility of creating a permanent class of relief recipients, Roosevelt closed the program in spring 1934 The Public Works Administration (PWA) between 1933 and 1939 built hospitals, courthouses, and school buildings as well as a variety of structures and even several aircraft carriers, planes and low-cost housing – One purpose was economic pump priming though since the head of the agency, Harold Ickes, spent money slowly and carefully, there was little effect

15 AGRICULTURAL ADJUSTMENT ACT The Agricultural Adjustment Act (AAA) sought to control the overproduction of basic commodities so that farmers might regain the purchasing power they had before WWI – To guarantee “parity prices” the production of major agricultural staples—wheat, cotton, corn, hogs, rice, tobacco and milk—would be controlled by paying farmers to reduce the acreage under cultivation – Levied a tax at the processing stage to pay for the program Act created controversy among farmers and especially with the public when the AAA ordered thousands of acres of cotton plowed up and 6 million young pigs slaughtered in 1933 AAA helped large farmers more than small ones and was often disastrous for tenant farmers and sharecroppers who were simply kicked off the land – Large farmers often cultivated the smaller acreage more intensely so that the overall production was not heavily reduced – Drought that hit the Southwest in 1934 did more to limit production and raise agricultural prices Long term impact of AAA (which was later declared unconstitutional) was the establishment of the idea that the government should subsidize farmers for limiting production

16 INDUSTRIAL RECOVERY The National Industrial Recovery Act (NIRA) was designed to help business, raise prices, control production, and put people back to work – Established the National Recovery Administration (NRA) with the power to set fair competition codes in all industries – Section 7a guaranteed labor’s right to organize and to bargain collectively and established the National Labor Board to see that their rights were respected, though since business usually dominated the board, the interpretations were somewhat loose Small business owners said NIRA was unfair and many consumers worried that it was raising prices Supreme Court declared NIRA illegal in 1935

17 CIVILIAN CONSERVATION CORPS CCC combined work relief with the preservation of natural resources. – Put young, unemployed white men between the ages of 17 and 25 to work on reforestation, road and park construction, flood control, and other projects – There were a few carefully segregated black units – The men lived in work camps and earned $30 a month, $25 of which had to be sent home – About 8000 women participated at a few special camps established for them

18 TENNESSEE VALLEY AUTHORITY FDR promoted flood control projects and added millions of acres to the country’s national forests, wildlife refuges, and fish and game sanctuaries The TVA was a project spearheaded by Republican George Norris, senator from Nebraska, who campaigned to have the government operate the hydroelectric plan at Muscle Shoals in Alabama – FDR endorsed the plan and expanded it into a regional development plan Congress authorized the TVA as an independent public corporation with the power to sell electricity and fertilizer and to promote flood control and land reclamation – Built nine major dams and many minor ones between 1933 and 1944 – For residents it meant cheaper electricity and an improvement in lifestyle – Created jobs for thousands

19 The Tennessee Valley Authority

20 CRITICS OF THE NEW DEAL The first 100 days improved the country’s outlook and raised stock prices 11 percent. Many business people worried FDR was leading the country toward socialism – Conservative revolt surfaced in the summer of 1934 with the formation of the Liberty League, which actually had little influence Communist party (which had 75,000 members by 1938) claimed FDR had done too little to help the poor – Communism had a special appeal to writers, intellectuals and some college students Other criticisms from the left included – Governor Floyd Olsen in Minnesota accused capitalism of starting the Depression – Upton Sinclair, running for governor in California, promised to pay everyone over 60 a pension of $50 per month financed by higher income and inheritance taxes – Dr. Francis E. Townsend supported the Townsend Old Age Revolving Pension Plan, which promised $200 a month to all unemployed citizens over 60 on the condition they spend it the same month they received it The most influential critics were Father Charles E. Coughlin, who attacked the New Deal as too pro-business, and Senator Huey P. Long, who talked about a guaranteed $2000 to $3000 income for all American families and promised pensions for the elderly and college educations for the young that would be paid for by taxing the rich and liquidating the great fortunes – Long was assassinated in September 1935

21 THE SECOND NEW DEAL Responding to the discontent of the lower middle class and to the threat of various utopian schemes, Roosevelt moved his programs in 1935 toward the goals of social reform and social justice – Also departed from attempts to cooperate with the business community

22 WORK RELIEF AND SOCIAL SECURITY The Works Progress Administration (WPA), authorized by Congress in April 1935, was the first massive attempt to deal with unemployment and its demoralizing effects – Employed about 3 million people a year on a variety of socially useful projects – Nearly 85 percent of funds went directly into salaries and wages – A minor but important part of the program supported writers, artists, actors, and musicians – Only one member of a family could qualify for a WPA job, and first choice always went to the man – A woman could qualify only if she headed the household though eventually more than 13 percent of those employed by the WPA were women – Despite criticism, the program built 6000 schools, 2500 hospitals, 13,000 playgrounds and restored the morale of millions of people The National Youth Administration (NYA) supplemented the work of the WPA and assisted young men and women between the ages of 16 and 25

23 WORK RELIEF AND SOCIAL SECURITY The Social Security Act of 1935 was a compromise that excluded national health insurance (something most other industrialized countries had) because of protests from the medical profession – Old-age and survivor insurance was to be paid for by a tax of 1 percent on both employers and employees resulting in benefits of from $10 to $85 per month – Established a cooperative federal-state system of unemployment compensation – Authorized federal grants to the states to help care for the disabled and the blind – Provided some aid to dependent children No other country financed such programs by a regressive tax on workers’ wages – Excluded farm laborers and domestic servants – Discriminated against married women who were wage earners and failed to protect against sickness

24 AIDING THE FARMERS The Resettlement Administration (RA) set out to relocate tenant farmers on land purchased by the government though the effectiveness of the program was limited The Rural Electrification Administration (REA) was authorized in 1935 to lend money to cooperatives to generate and distribute electricity in isolated rural areas not served by private utilities

25 THE DUST BOWL: AN ECOLOGICAL DISASTER Record heat and below-average rainfall in the 1930s turned the area from the Oklahoma panhandle to western Kansas into a giant dust bowl – Between 1932 and 1939 there was an average of 50 storms a year – Thousands died of “dust pneumonia” – By the end of the decade, 10,000 farms were abandoned, 9 million acres of farmland were reduced to wasteland, and 3.5 million people migrated to find a better life – Some 350,000 left Oklahoma for California during the decade Human actions had contributed to the Dust Bowl – Plains west of the 98 th meridian were not suitable for intensive agriculture – Overgrazing, too much plowing and indiscriminate planting exposed the thin soil to the elements Taylor Grazing Act of 1934 restricted the use of the public range in an attempt to prevent overgrazing and ended an era of unregulated use of natural resources in the West. Soil Conservation Service promoted drought-resistant crops and contour plowing

26 The Dust Bowl

27 Taylor Grazing Act, 1934

28 THE NEW DEAL AND THE WEST New Deal probably aided the West more than any other region – Most important were the large scale water projects such as Boulder Dam and the Grand Coulee Dam Despite all the aid, many Westerners bitterly criticized the New Deal

29 CONTROLLING CORPORATE POWER AND TAXING THE WEALTHY In the summer of 1935, FDR set out to control the large corporations The Public Utility Holding Company Act of 1935 attempted to restrict the power of the giant utility companies by giving various government commissions the authority to regulate and control the power companies – Included a “death sentence” clause that gave each company five years to demonstrate that its services were efficient or the government would dissolve the company While Congress refused to include an inheritance tax increase, they did increase estate and gift taxes and raise the top income tax rates


31 THE NEW DEAL FOR LABOR National Labor Relations Act (1935) outlawed blacklisting and a number of other practices and reasserted labor’s right to organize and to bargain collectively – Established a Labor Relations Board with power to certify a properly elected bargaining unit Union membership increased to 4.5 million by 1935 – Farm laborers, unskilled workers and women were left out – Only about 3 percent of women belonged to unions and women earned 60 percent of wages paid to men for equivalent work John L. Lewis, David Dubinsky and Sidney Hillman formed the Committee of Industrial Organization (CIO) within the AFL to organize workers in the auto, steel and rubber industries in industry-wide unions – Used new and aggressive tactics including sit-down strike (won the UAW union recognition from GM) – Violence spread along with sit-down strike The AFL was horrified by the tactics of the CIO (and its willingness to organize unskilled workers) and expelled it from the AFL – CIO then formed its own union (Congress of Industrial Organization)

32 AMERICA’S MINORITIES IN THE 1930s Half a million African Americans joined unions through the CIO during the 1930s and many blacks were helped by New Deal agencies yet they still suffered from discrimination, low-paying jobs and intimidation through violence (lynchings in the South actually increased) – Case of the “Scottsboro boys” Migration of blacks to northern cities continued in the 1930s but poor education and a lack of skills trapped most in northern ghettos where they suffered from triple the white unemployment rate and lower welfare payments Black leaders attacked the FDR government for permitting segregation in government programs – FDR refused to support the two major civil rights bills of the era—an anti-lynching bill and an anti-poll tax bill – The “black cabinet,” a group of more than 50 young blacks who had appointments in various New Deal Agencies and were led by Mary McLeod Bethune, helped encourage the presence of more blacks – W.E.B. DuBois supported a separate Negro nation within the US and eventually joined the communist party and moved to Ghana While FDR was not particularly committed to civil rights, Eleanor Roosevelt was

33 AMERICA’S MINORITIES IN THE 1930s Hundreds of thousands of Mexicans who had come to US in 1920s lost their jobs during the Depression – The primary solution was not to provide aid but to ship them back to Mexico – Some who remained adopted militant tactics to obtain fair treatment Asians mostly lived in ethnic enclaves and were treated as foreigners – Those from the second generation who were automatically citizens felt caught between The condition of Native Americans was compounded by years of exploitation and the loss of more than 60 percent of their land – Indians had been granted citizenship in 1924 Indian Reorganization Act of 1934, passed at the behest of commissioner of Indian affairs John Collier, sought to restore the political independence of the tribes and to end the allotment policy of the Dawes Act – Also sought to promote the study of Indian civilization and to preserve traditional arts and crafts – Not all Indians agreed with the new policies especially the Navajos who objected to Collier’s insistence on the forced reduction of sheep and goat herds to prevent soil erosion

34 WOMEN AND THE NEW DEAL Women made some gains during the 1930s and more women occupied high government positions than in any previous administration – Molly Dawson, head of the Women’s Division of the Democratic Committee – Katharine Lenroot, director of the Children’s Bureau – Mary Anderson, head of the Women’s Bureau Yet early New Deal did nothing for 140,000 homeless and 2-4 million unemployed women – Married women were often fired from their jobs – Single, divorced and widowed women were often ignored In 1933, Eleanor Roosevelt sponsored the White House Conference on the Emergency Needs of Women – Advocated including more women in New Deal programs

35 THE LAST YEARS OF THE NEW DEAL The election of 1936 marked the high point of Roosevelt’s power and influence After 1937, in part because of the growing threat of war but also because of increasing Congressional opposition, the pace of social legislation slowed

36 THE ELECTION OF 1936 Republicans nominated Alfred Landon who attacked the New Deal but promised essentially the same things just more cheaply and efficiently Roosevelt was supported by a coalition of the Democratic South, organized labor, farmers and urban voters and won easily – A majority of African Americans for the first time voted for the Democrats


38 THE BATTLE OF THE SUPREME COURT As the first act of his second term, Roosevelt announced a plan to reform the judicial system – Angry with the Supreme Court for invalidating several New Deal measures, the president was determined to create a more willing court by appointing one justice for every justice over the age of 70 (there were 6 of those) – His plan also called for modernizing the court system but all this was lost in a vast public outcry that led even Democrats to break with the president – Roosevelt withdrew the proposal after several months and admitted defeat Ironically, the Court began passing practically every new initiative after this event – When Justice Willis Van Devanter retired, FDR was able to make his first appointment and ensure a shaky liberal majority – After 1937, a series of cases established the principle that Congress and federal power trumped states’ rights and local control – Yet FDR’s efforts to change the court had slowed reform initiative and hurt his popularity and support Economy improved in late 1936 and early 1937 but collapsed in August causing FDR to resort to “deficit spending” as urged by economist John Maynard Keynes

39 COMPLETING THE NEW DEAL Bankhead-Jones Farm Tenancy Act of 1937 created the Farm Security Administration (FSA) to aid tenant farmers, sharecroppers and farm owners who had lost their farms – Provided loans to grain collectives and set up camps for migratory workers New Agricultural Adjustment Act in 1938 that tried to solve the problem of farm surpluses – Replaced the processing tax with direct payments from the federal treasury to farmers – Added a soil conservation program – Provided for the marketing of surplus crops National Housing Act of 1937 provided federal funds for slum clearance projects and for the construction of low-cost housing

40 COMPLETING THE NEW DEAL In the long run, New Deal had a greater impact on middle class housing policies as a result of the Home Owners Loan Corporation (HOLC) which provided low interest loans and helped people save their homes from foreclosure – Introduced first long term fixed rate mortgages and a uniform system of real estate appraisal that tended to undervalue urban property (beginning of the practice of “redlining”) Federal Housing Administration (FHA), created in 1934 by the National Housing Act, expanded and extended many of the HOLC policies – While FHA loan system allowed millions to buy homes, it favored the purchase of suburban homes over the repairing of older urban residences Fair Labor Standards Act in 1938 proposed a minimum wage and maximum hours for all industries engaged in interstate commerce – Act covered only 20 percent of the work force and only 14 percent of working women – Law also prohibited child labor in interstate commerce and made no distinction between women and men


42 THE OTHER SIDE OF THE 1930S A communication revolution changed the lives of middle-class Americans – Sale of radios and attendance at movies increased – Literature flourished – Many people traveled during the decade

43 TAKING TO THE ROAD Americans held on to their cars during the Depression American middle class traveled at an increasing rate after 1933, making tourism the third largest industry by 1938 – Four out of five who traveled went by car

44 THE ELECTRIC HOME The 1930s was the era of the modern kitchen as the sale of electrical appliances increased throughout the decade, with refrigerators leading the way – Designs became increasingly streamlined Electric washing machine and iron revolutionized laundry though most women still did it on traditional days Packaged and canned goods became more widely available Most middle-class families maintained their standard of living only through women’s hard efforts to stretch, save and make do – Many married women also took jobs outside the home


46 THE AGE OF LEISURE Leisure was mechanized during the 1930s Many popular games had elaborate rules and directions Decade was also a time of fads and instant celebrities – Shirley Temple was the biggest box office attraction – Dionne quintuplets

47 LITERARY REFLECTIONS OF THE 1930s John Steinbeck: Tortilla Flat (1935) and Grapes of Wrath (1939) John Dos Passos trilogy U.S.A. (1930-1936) conveyed a deep pessimism about American capitalism Thomas Wolfe and William Faulkner more sympathetically portrayed Americans caught up in the web of local life and facing the complex problems of the modern era Margaret Mitchell: Gone with the Wind (1936)

48 RADIO’S FINEST HOUR Radio purchases increased steadily throughout the decade – Was the focus of the living room and places where families gathered to listen to shows During the day there were soap operas and programs aimed at kids Radio allowed people to feel connected to distant places and to believe they knew the performers personally

49 THE SILVER SCREEN The 1930s were the golden decade of the movies with between 60 and 90 million Americans attending every week – In small towns for 25 cents one could go to at least four movies during the week – Movies were social events that generated lively discussions afterward – Also set tastes and styles


51 DISCOVERING U.S. HISTORY ONLINE Riding the Rails Americans React to the Great Depression ress.html The Hoover Dam Hooverville ooverville1.html ooverville2.html ooverville3.html

52 DISCOVERING U.S. HISTORY ONLINE Migrant Labor Camps New Deal A New Deal for the Arts Franklin D. Roosevelt Library and Digital Archives A Short History of the Tennessee Valley Authority One Hundred Days

53 DISCOVERING U.S. HISTORY ONLINE Franklin Delano Roosevelt Voices from the Dust Bowl Weedpatch Camp Taxation in War and Depression, 1933-1946 America from the Great Depression to World War II Los Angeles at Work, 1920-1929 America in the 1930s


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