The Great Depression and the “New Deal”

How the greatest economic crisis in American history shaped American

politics, culture and society

I. The Stock Market Crash

• Republican responsibility for the economy

• Stock market outraces real economic growth

• The problem of buying stock “on margin”

• Public concern over the stock market by 1929

• The crash• “Deflationary

Psychology”

II. The Great Depression

• Initial governmental optimism

• Catastrophic unemployment figures

• Urban poverty, especially for immigrants, is the worst

• State and local governments as well as private charities can do little

II. The Great Depression

• Corporate failures• Drop in farm income• Even the wealthy had

problems

--Howard Johnson restaurant chain

• “Riding the rails” looking for work

III. Contributing Causes to this Economic Catastrophe

• American farmer in trouble

• Unstable American foreign trade

• The Gold standard forsaken in Europe

• Weak and vulnerable American banks

• Large individual debt• Corporate profits enriched

only a few

IV. The Response of the Hoover Administration

• Positive statements aggravate the Depression crisis

• Hoover’s background

• Hoover’s actions to stem the economic crisis

• Creation of the Reconstruction Finance Corporation (1932)

• “Trickle Down” Solutions

IV. Hoover’s Response (cont.)

• Unemployment continued and farm prices dropped dramatically

• Violent farm protests by 1932

• Hoover was limited by his own governmental philosophy

• Hoover championed “voluntarism” as a solution

IV. Hoover’s Response (cont.)

• Growing inability to compromise with Congress

• Hoover’s unpopularity grows

• His name becomes synonymous with the Depression

• Economic and Political blunders

• The Bonus March (Summer of 1932)

V. The Election of 1932

• Democrats nominated Franklin Roosevelt

• FDR’s background

• Republicans nominated Hoover

• Roosevelt’s campaign

• FDR projects the image that he will take action as President

• Results of the Election

VI. “The New Deal”: A “Revolution”?

• Origins of the phrase• Contrast with

progressivism• Major success =

restoration of confidence• FDR’s “Brain Trust”• Military analogy• Reliance on Social

Workers--Frances Perkins and Harry Hopkins

VI. The “New Deal”: A “Revolution”? (cont.)

• Bi-partisan support for FDR publicly and in Congress

• How revolutionary was the “New Deal”?

• “New Deal” may have prevented a revolution

• Really not a revolution in the truest sense

VII. Changes Made

• Federal government directly provided services to the American people -- “welfare state”

• Vast centralization of national power

• Increase in power of the presidency

• Democratic party becomes majority party

• Blacks vote for Democrats

VIII. Franklin Delano Roosevelt: The Man

• Strong president who enjoyed leading

• Great politician• Used the radio effectively

-- “fireside chats”• Not a systematic thinker• Great ability to project

empathy• Many Americans think of

FDR as part of the family• More loved and hated than

any other president

IX. First Lady Eleanor Roosevelt

• Creates model for the active first lady

• Activist, especially for Blacks and women

• Real concern for the poor

• FDR’s “eyes and legs”• Reputation for being

constantly on the go

X. The “New Deal” and American Banking

• Emergency Banking Act (March 6, 1933)

• Use of the “fireside chat” to explain the bank holiday to the American public

• Initial success• Federal Deposit Insurance

Corporation (1933)• US abandoned the gold

standard

XI. The “New Deal” and the Problem of Individual Economic Relief

• Justification for the “alphabet soup” agencies of the “New Deal”

• Federal Emergency Relief Administration (FERA—spring, 1933)

--directed by Harry Hopkins

• Civil Works Administration (1933-34)

XI. Problem of Individual Economic Relief (cont.)

• Civilian Conservation Corps (CCC—spring, 1933)

• Public Works Administration (PWA—June, 1933)

--Directed by Harold Ickes

• Works Progress Administration (WPA—1935)

XI. Problem of Individual Economic Relief (cont.)

• WPA directed by Harry Hopkins

• Federal Writers and Artists projects

• National Youth Administration (NYA)

• National Recovery Administration (NRA—1933)

XII. The “New Deal” and the American Farmer

• Agricultural Adjustment Act (AAA—spring, 1933)

• Commodity Credit Corporation (1933)

• “Dust Bowl” migrations-- “Okies”

• Tennessee Valley Authority (TVA—spring, 1933)

• Farm Security Administration (FSA—1937)

XIII. The “New Deal” and Organized Labor

• FDR’s sympathy with union concerns grows

• Growth in union membership

• Wagner Act (1935)--Creation of NLRB

• Congress of Industrial Organizations (CIO) created in 1935

XIII. The “New Deal” and Organized Labor (cont.)

• The Leadership of John L. Lewis and others

• Use of the “sit down strike”

• Fair Labor Standards Act (1938)

--minimum wage: 40 cents

--prohibition of child labor

--maximum work week of 40 hours

XIV. The Social Security Act (1935)

• Myth of poor being lazy exposed

• 13 weeks of unemployment insurance

• Pension fund for retired people over 65

• Funds also for disabled and single parent families

• Response to more radical schemes

XIV. The Social Security Act (cont.)

• Huey Long’s “Share Our Wealth” program

• Revenue Act of 1935 (“Soak the Rich” Tax)

• Health insurance pulled due to congressional resistance

• Problems with Social Security initially and long-term

• Important “New Deal” legacy

XV. The Culture of the 1930’s

• Return to political and social concern in ‘30’s literature--John Reed Clubs

• John Dos Passos-- U.S.A. (1938)

• John Steinbeck--Grapes of Wrath (1939)

• Richard Wright--Native Son (1940)

XV. The Culture of the 1930’s (cont.)

• I’ll Take My Stand (1930)• Thomas Wolfe• William Faulkner

--Absalom! Absalom! (1936)• James Agee and Walker

Evans--Let Us Now Praise Famous Men (1941)

• 1930’s Movies-- “The Wizard of Oz”--The Marx Brothers

XVI. Roosevelt’s Second Term (1937-1941)

• Election of 1936• FDR vs. Alf Landon

(R-Kan)• Biggest landslide since

1820• The “Roosevelt

Recession” of 1937-1938

• Harsh CIO strikes

XVII. The Court Reorganization Act (Spring, 1937)

• Supreme Court attack on the “New Deal” (1934-1936)

• FDR’s proposals for change• Court fight eroded public

confidence in Roosevelt administration

• Supreme Court suddenly begins to reverse itself on the “New Deal”

• Congressional opposition takes shape

XVIII. Summary of the Results of the “New Deal”

• Did not end the Depression• Many agricultural problems unsolved, especially for

southern Blacks and tenant farmers• Did restore national hope• Controls were built into the economy to avert future

crises--Federal Securities Act of 1933 and SEC (1934)

• The Government as “broker state”• Restoration of confidence in U.S. government and

economy—but both different than before 1932