The Great The Great Depression/New Depression/New DealDeal

Mr. Buttell APUSHKC 7.1 Part IIIWBHS

1928 Election – 1928 Election – Hoover!!!Hoover!!!

Hoover Hoover AdministrationAdministration

Agricultural Marketing Agricultural Marketing Act 1929 (Law)Act 1929 (Law)

Federal Farm Board Federal Farm Board (agency) = (agency) = cooperatives/storagecooperatives/storage

Grain Stabilization Corp. Grain Stabilization Corp. & Cotton Stabilization & Cotton Stabilization Corp. = buy up surplusesCorp. = buy up surpluses

Hawley-Smoot Tariff Hawley-Smoot Tariff 19301930

38.5% to 60%38.5% to 60%International ChaosInternational ChaosHitler RisingHitler Rising

““Black TuesdayBlack Tuesday””The Long Boom had The Long Boom had seemed endlessseemed endless

October 1929, Brits October 1929, Brits start calling in loansstart calling in loans

Investors start to Investors start to dump stocksdump stocks

Tensions build on Oct. Tensions build on Oct. 29 when 16.4 million 29 when 16.4 million shares are tradedshares are traded

By end of year, $40 By end of year, $40 billion had been lostbillion had been lost

End of 1930, 4 million End of 1930, 4 million workers out of workworkers out of work

UnemploymentUnemployment

What caused the What caused the depression?depression?

Farm overproductionFarm overproduction

Overexpansion of creditOverexpansion of credit

Europe had not recovered Europe had not recovered from WWIfrom WWI

Tariffs curbing tradeTariffs curbing trade

WWI reparationsWWI reparations

Too much money in hands Too much money in hands of too few people, not of too few people, not salariessalaries

Defaults on loansDefaults on loans

Overspeculation – Real Overspeculation – Real EstateEstate

Drought – Dust BowlDrought – Dust Bowl

““Rugged Rugged IndividualismIndividualism””

HooverHoover’’s insistence on R.I. s insistence on R.I. could only last so longcould only last so long

““Trickle-downTrickle-down”” philosophy philosophy establishedestablished

Public works – (Boulder) Public works – (Boulder) Hoover DamHoover Dam

Reconstruction Finance Reconstruction Finance Corporation 1932 (RFC) – Corporation 1932 (RFC) – ““Pump-PrimingPump-Priming”” Loans to Loans to insurance co., banks, insurance co., banks, agricultural org., RR, state agricultural org., RR, state and local govt.and local govt.

Norris-La Guardia Anti-Norris-La Guardia Anti-injunction Act = outlawed injunction Act = outlawed ““yellow-dogyellow-dog”” contracts contracts

Bonus ArmyBonus Army

WWI vets due a WWI vets due a ““BonusBonus”” for service, payable for service, payable in 1945in 1945

““Bonus Expeditionary Bonus Expeditionary ForceForce””, 20,000 strong , 20,000 strong descended on D.C.descended on D.C.

““HoovervilleHooverville”” set up in set up in D.C.D.C.

MacArthur ordered to MacArthur ordered to evict the unwanted evict the unwanted soldiers after bill failssoldiers after bill fails

““Battle of Anacostia Battle of Anacostia FlatsFlats””

1932 ELECTION1932 ELECTION

1 out of 4 was 1 out of 4 was unemployed…unemployed…

nat'l income was nat'l income was 50% of what it 50% of what it had been in 1929had been in 1929

Repubs. Repubs. nominated nominated Hoover Hoover no hope no hope

winner by a winner by a landslide = landslide = FRANKLIN FRANKLIN DELANO DELANO ROOSEVELTROOSEVELT (Dem (Dem - N.Y. governor) - N.Y. governor)

The New Deal: The New Deal: 3 R’s3 R’s

ReliefRelief (the (the ““doledole”” for people out of work): for people out of work):

The Origins of the Welfare StateThe Origins of the Welfare State

Recovery Recovery Ending the DepressionEnding the Depression

Banking, Industry and AgricultureBanking, Industry and Agriculture

Reform Reform (of American institutions)(of American institutions)::

FDIC, Social Security, Labor Laws,FDIC, Social Security, Labor Laws,

Stock Market Regulations, Stock Market Regulations,

Farm SubsidiesFarm Subsidies

NEW DEALNEW DEAL•The first phase dealt The first phase dealt exclusively w/ economic exclusively w/ economic reform – 100 Days reform – 100 Days SessionSession

•Every law request of Every law request of FDR was passed. Most FDR was passed. Most in congressional in congressional history.history.

•Step 1 - dealt w/ the Step 1 - dealt w/ the banking crisis - banking crisis - BANKING HOLIDAY-BANKING HOLIDAY- 5000 banks had failed 5000 banks had failed in 1933.in 1933.

•Banks would be closed Banks would be closed until they could be until they could be reorganized and were reorganized and were sound. -Emergency sound. -Emergency Banking Relief ActBanking Relief Act

•Repeal of Prohibition Repeal of Prohibition first with Beer-Wine first with Beer-Wine Revenue Act then 21Revenue Act then 21stst Amendment.Amendment.

FDR Reassures FDR Reassures PublicPublic

FDR went on the radio FDR went on the radio for his “Fireside for his “Fireside Chats”.Chats”.

Banks were now safe. Banks were now safe. People started re-People started re-depositing money in depositing money in new banks.new banks.

Glass-Steagall Act Glass-Steagall Act increased regulation of increased regulation of banksbanks

FDIC guaranteed bank FDIC guaranteed bank deposits, and the gold deposits, and the gold standard was ditched.standard was ditched.

SPECIFIC PIECES OF LEGISLATION (direct SPECIFIC PIECES OF LEGISLATION (direct gov't intervention in the eco.)(called gov't intervention in the eco.)(called

"Alphabet Soup")"Alphabet Soup")NATIONAL INDUSTRIAL RECOVERY NATIONAL INDUSTRIAL RECOVERY ACT (NIRA) and NATIONAL ACT (NIRA) and NATIONAL RECOVERY ADMIN (NRA)RECOVERY ADMIN (NRA) were were established to end animosity established to end animosity between labor and businessbetween labor and business

Codes of fair competition instituted, Codes of fair competition instituted, Labor hours reduced Labor hours reduced Ceiling placed on max hours worked.Ceiling placed on max hours worked.Floor placed under wages (min. Floor placed under wages (min. wage)wage)Workers guaranteed right to Workers guaranteed right to organize, “yellow-dog” contracts organize, “yellow-dog” contracts forbidden, restrictions of child laborforbidden, restrictions of child labor

Opposition formed with the Opposition formed with the LIBERTY LIBERTY LEAGUELEAGUE – –

At LL's urging, the Supreme Ct. At LL's urging, the Supreme Ct. overturned the NIRA & NRA, overturned the NIRA & NRA, claiming that fed. gov't was claiming that fed. gov't was exceeding its authority (by exceeding its authority (by interfering in state jurisdiction)interfering in state jurisdiction)

AGRUCULTURAL ADJUSTMENT ACT AGRUCULTURAL ADJUSTMENT ACT (AAA)(AAA) - - passed in 1933 to aid passed in 1933 to aid formers- its objective was to restore formers- its objective was to restore farmers' purchasing power and to farmers' purchasing power and to restore the family farm restore the family farm

AAA had farmers cut back on crop AAA had farmers cut back on crop production by paying them production by paying them equivalent equivalent SUBSIDIESSUBSIDIES (paid not to (paid not to produce) - bad side:produce) - bad side:

1) Food production down when 1) Food production down when millions were starvingmillions were starving2) Black sharecroppers were hurt: 2) Black sharecroppers were hurt: white landowners paid not to farm so white landowners paid not to farm so they got rid of Black tenant formersthey got rid of Black tenant formers

In 1935, AAA was declared In 1935, AAA was declared unconstitutional by courts (too unconstitutional by courts (too much control over individual much control over individual states), so it was revised and states), so it was revised and introduced as new legislation in 2introduced as new legislation in 2ndnd New Deal.New Deal.

EX:EX: Food Stamp Act of 1939Food Stamp Act of 1939 - - gave gave away surplus food to poor, also away surplus food to poor, also guaranteed (small) farmers a guaranteed (small) farmers a marketmarket

UNEMPLOYMENT - still a UNEMPLOYMENT - still a major problemmajor problem

FDR like Hoover was wary FDR like Hoover was wary of gov't handouts - he of gov't handouts - he wanted people to earn wanted people to earn their keep so gov't their keep so gov't agencies were created - agencies were created - temporarily - to address temporarily - to address the unemployment the unemployment problemproblem

CIVILIAN CONSERVATION CIVILIAN CONSERVATION CORPS (CCC)CORPS (CCC) - in 1933 - - in 1933 - set to establish work for set to establish work for young men (18-25) in young men (18-25) in areas of reforestation, areas of reforestation, soil conservation, flood soil conservation, flood control, road construction control, road construction - also took them out of - also took them out of urban labor markets.urban labor markets.

TENNESSEE VALLEY AUTHORITY (TVA)TENNESSEE VALLEY AUTHORITY (TVA) - - used to promote hydroelectric power, used to promote hydroelectric power, control flooding - lower rates control flooding - lower rates private private industry, manuf. fertilizer industry, manuf. fertilizer fed. gov't. fed. gov't. took ownership (took ownership (nationalization v. nationalization v. privatizationprivatization))

Step 2 - stock market Step 2 - stock market reformreform- - Security Security Exchange CommissionExchange Commission est. to police the est. to police the NYSE. NYSE.

Practice of buying on Practice of buying on margin was regulatedmargin was regulated

Step 3 - to put more $ Step 3 - to put more $ in circulation, FDR in circulation, FDR went off the went off the GOLD GOLD STANDARDSTANDARD (gov't (gov't could print more $ could print more $ than Fort Knox gold than Fort Knox gold reserves would reserves would allow)- w/ more $ in allow)- w/ more $ in circulation, wages circulation, wages and prices increasedand prices increased

(= inflation), causing (= inflation), causing dollar value to lower- dollar value to lower- gave gov't spending gave gov't spending power power ((Keynesian Keynesian economicseconomics))

Critics of the New Critics of the New DealDeal

Dr. Francis Townsend'sDr. Francis Townsend'sRevolving Pension PlanRevolving Pension Plan

22ndnd New Deal New DealW.P.A. ProjectsW.P.A. Projects

Art & Lit - WPAArt & Lit - WPA

Depression Depression ArtistsArtists Regionalism – Regionalism –

Naturalistic and Naturalistic and representational representational work. work. Regional Regional artists interpret artists interpret physiography, physiography, industry, and industry, and psychology of their psychology of their hometown, and hometown, and that the that the competition of competition of these preceding these preceding elements creates elements creates American cultureAmerican culture

Kansas CityKansas Cityfrom Politics, from Politics, Farming, & the LawFarming, & the Law

Thomas Hart Thomas Hart Benton,Benton,19361936

The Annual MoveThe Annual Moveby Otis Dozier, 1936by Otis Dozier, 1936

The Annual MoveThe Annual Moveby Otis Dozier, 1936by Otis Dozier, 1936

Construction of the Construction of the DamDam

by William Gropperby William Gropper

Construction of the Construction of the DamDam

by William Gropperby William Gropper

Social Security ActSocial Security Act (1935)- (1935)- feared by opponents as feared by opponents as ""creeping socialismcreeping socialism"-"- this this act typifies the act typifies the WELFARE WELFARE STATESTATE - - unemployment unemployment insurance, old age insurance, old age pensionspensions

Problem: it took some $ Problem: it took some $ out of circulation (payroll out of circulation (payroll deductions) at a time deductions) at a time when purchasing power when purchasing power was already low- also, it was already low- also, it only covered the only covered the unemployedunemployed

1936 - "Soak The Rich" tax1936 - "Soak The Rich" tax

FDRFDR’’s Popularity s Popularity

ELECTION OF 1936 - FDR ELECTION OF 1936 - FDR won easily (v Repub. Alf won easily (v Repub. Alf Landon - Kansas governor) Landon - Kansas governor)

This victory gave FDR a This victory gave FDR a mandate to continue his mandate to continue his New Deal policies New Deal policies

First objective: to reorganize First objective: to reorganize the Supreme Court - they the Supreme Court - they disallowed some New Deal disallowed some New Deal legislation legislation

FDR wants # of judges FDR wants # of judges changed from 9 changed from 9 15 (to 15 (to ""pack the courtpack the court") ") - great - great opposition, so FDR w/drew opposition, so FDR w/drew this proposal this proposal

But judges retired & FDR got But judges retired & FDR got to appoint new ones to appoint new ones they they approved all New Deal approved all New Deal legislationlegislation

The late 1930's – new Qs The late 1930's – new Qs arose…arose…

FDR concerned w/ int'l issues FDR concerned w/ int'l issues (1938 bi-election Republican (1938 bi-election Republican gains in Congress block some gains in Congress block some of his New Deal policies)of his New Deal policies)

In 1939 he proposed no new In 1939 he proposed no new major domestic reform major domestic reform measures (1st time in his measures (1st time in his pres.) pres.)

ELECTION OF 1940ELECTION OF 1940 - FDR broke - FDR broke with tradition & ran a 3rd time with tradition & ran a 3rd time

FDR v. FDR v. Wendell WilkieWendell Wilkie - the big - the big issue here was American issue here was American support of the support of the AlliesAllies (G.B.)(G.B.), , now embroiled in WWII v. now embroiled in WWII v. Nazi Nazi Ger.Ger.

Both U.S. pol. parties wanted Both U.S. pol. parties wanted to support G.B. but to remain to support G.B. but to remain neutralneutral - in fact a CONSENSUS - in fact a CONSENSUS had developed b/n the Dems. had developed b/n the Dems. and Repubs. and Repubs.

Both parties approved of Both parties approved of (most) New Deal legislation & (most) New Deal legislation & wanted an wanted an isolationistisolationist foreign foreign policy- FDR won in 1940 (and policy- FDR won in 1940 (and again in 1944)again in 1944)

IMPACT OF THE IMPACT OF THE NEW DEALNEW DEAL

A A 3rd revolution3rd revolution in American in American culture and politics- more culture and politics- more gov't involvement but w/in the gov't involvement but w/in the context of traditional U.S. context of traditional U.S. democracy (not socialist…) democracy (not socialist…)

New Deal helped in New Deal helped in stimulating the U.S. economy, stimulating the U.S. economy, but only WWII would solve any but only WWII would solve any lingering problems lingering problems unemployed found jobs in unemployed found jobs in munitions factories and the munitions factories and the military as the U.S. became military as the U.S. became the the ARSENAL OF DEMOCRACYARSENAL OF DEMOCRACY

New Deal saw expansion of New Deal saw expansion of U.S. gov't in :U.S. gov't in :

1) 1) Economy - constant gov't Economy - constant gov't intervention/deficit spending intervention/deficit spending

2) Social reform - welfare state, 2) Social reform - welfare state, after this point the U.S. gov't was after this point the U.S. gov't was expected to play a role in any expected to play a role in any economic crisis economic crisis

So FDR fundamentally So FDR fundamentally reformed (not transformed) reformed (not transformed) American society…American society…