THE GREAT THE GREAT DEPRESSIONDEPRESSION

Unit VIBUnit VIB

AP U.S. HistoryAP U.S. History

Fundamental QuestionFundamental Question

►Analyze how the Great Depression Analyze how the Great Depression changed America’s political and changed America’s political and economical structures.economical structures.

Past Major American Past Major American RecessionsRecessions► Panic of 1807Panic of 1807

MAJOR CAUSE: Embargo Act of 1807MAJOR CAUSE: Embargo Act of 1807► Panic of 1819Panic of 1819

MAJOR CAUSES: End of War of 1812 and First Bank of U.S. not recharteredMAJOR CAUSES: End of War of 1812 and First Bank of U.S. not rechartered MAJOR LEGACY: Second Bank of U.S. chartered, first example of business cycle MAJOR LEGACY: Second Bank of U.S. chartered, first example of business cycle

contractioncontraction► Panic of 1837Panic of 1837

MAJOR CAUSES: Second Bank of U.S. not rechartered and Specie CircularMAJOR CAUSES: Second Bank of U.S. not rechartered and Specie Circular► Panic of 1873Panic of 1873

MAJOR CAUSES: Land and railroad speculationMAJOR CAUSES: Land and railroad speculation► Panic of 1893Panic of 1893

MAJOR CAUSES: Railroad speculation and Sherman Silver Purchase ActMAJOR CAUSES: Railroad speculation and Sherman Silver Purchase Act MAJOR LEGACY: J.P. Morgan bailed out government with $65 million in gold MAJOR LEGACY: J.P. Morgan bailed out government with $65 million in gold

bullionbullion► Panic of 1907Panic of 1907

MAJOR CAUSES: Stock market speculation and bank runsMAJOR CAUSES: Stock market speculation and bank runs MAJOR LEGACY: Led to Federal Reserve SystemMAJOR LEGACY: Led to Federal Reserve System

► Depression of 1920-1921Depression of 1920-1921 MAJOR CAUSES: War economy to peace economy, influx of laborers, MAJOR CAUSES: War economy to peace economy, influx of laborers,

overproduction in agricultural sectoroverproduction in agricultural sector

Republican Policies of 1920sRepublican Policies of 1920s►Harding-Coolidge-Hoover’s laissez-faire Harding-Coolidge-Hoover’s laissez-faire

policiespolicies Banks and corporations increased questionable Banks and corporations increased questionable

or corrupt financial tacticsor corrupt financial tactics

►Mellon’s Tax BillMellon’s Tax Bill Revenue Acts of 1824, 1826, 1828 decreased Revenue Acts of 1824, 1826, 1828 decreased

tax ratestax rates Inspired massive consumer and investment Inspired massive consumer and investment

spendingspending

►Fordney-McCumber Tariff (1922)Fordney-McCumber Tariff (1922) Heavily favored industries and factoriesHeavily favored industries and factories Farmers suffered with limited foreign marketsFarmers suffered with limited foreign markets

A “Boom” Economy during A “Boom” Economy during 1920s1920s

► Mass ConsumerismMass Consumerism Scientific management and assembly lines spurred productionScientific management and assembly lines spurred production Welfare capitalism led to wage increases and consumer Welfare capitalism led to wage increases and consumer

confidenceconfidence Installment plans led to consumer debtInstallment plans led to consumer debt

► 1920s Socioeconomics1920s Socioeconomics Socioeconomic gap widened further than Gilded AgeSocioeconomic gap widened further than Gilded Age 5% wealthy class owned 33% of income5% wealthy class owned 33% of income Top 1% owned over 35% of the nation’s wealthTop 1% owned over 35% of the nation’s wealth

Bottom 20% owned 4% of the nation’s wealthBottom 20% owned 4% of the nation’s wealth ► Agricultural SectorAgricultural Sector

OverproductionOverproduction Price decreases after World War IPrice decreases after World War I Increased farming resulted in poor environmental conditionsIncreased farming resulted in poor environmental conditions

The Stock Market and the Crash of The Stock Market and the Crash of 19291929

► BackgroundBackground SpeculationSpeculation ““Buying on Buying on

MarginMargin””

► The Crash of 1929The Crash of 1929 381.17 (9/3/29)381.17 (9/3/29) Concern over high Concern over high

stock prices led to stock prices led to massive sell-offmassive sell-off

Thursday, October Thursday, October 2424► 299.50299.50

Monday, October 28Monday, October 28► 260.64260.64

Tuesday, October 29Tuesday, October 29► 230.07230.07

41.22 (7/8/32)41.22 (7/8/32)

Causes of the Great DepressionCauses of the Great Depression►Unequal Distribution of WealthUnequal Distribution of Wealth► Industrial OverproductionIndustrial Overproduction►Agricultural CrisisAgricultural Crisis►Overextension of CreditOverextension of Credit►Bank FailuresBank Failures►Stock Market Crash of 1929Stock Market Crash of 1929►High TariffsHigh Tariffs►Dawes Plan and Foreign LoansDawes Plan and Foreign Loans

Hoover and the RepublicansHoover and the Republicans► ““Given the chance to go forward with the policies of the last eight years, we shall soon with the Given the chance to go forward with the policies of the last eight years, we shall soon with the

help of God, be in sight of the day when poverty will be banished from this nation.” - help of God, be in sight of the day when poverty will be banished from this nation.” - Inauguration, March 4, 1929Inauguration, March 4, 1929

► ““There is no cause to worry. The high tide of prosperity will continue.” Sec. Of Treasury Andrew There is no cause to worry. The high tide of prosperity will continue.” Sec. Of Treasury Andrew Mellon, Sept. 1929Mellon, Sept. 1929

► ““While the crash only took place six months ago, I am convinced we have now passed the worst While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover.” Pres. Hoover, May 1, 1930and with continued unity of effort we shall rapidly recover.” Pres. Hoover, May 1, 1930

► ““The worst is over without a doubt.” Sec. Of Labor James Davis, June 29, 1930The worst is over without a doubt.” Sec. Of Labor James Davis, June 29, 1930► Hoover’s Economic PhilosophyHoover’s Economic Philosophy

Promote voluntarism, restraint, and self-reliancePromote voluntarism, restraint, and self-reliance Limited federal government involvement; facilitate with business sector and Limited federal government involvement; facilitate with business sector and

bankingbanking► Hawley-Smoot Tariff (1930)Hawley-Smoot Tariff (1930)

Historical increase in tariff rates to protect domestic industriesHistorical increase in tariff rates to protect domestic industries EPIC FAIL - since foreign nations enacted high tariff rates on U.S. goodsEPIC FAIL - since foreign nations enacted high tariff rates on U.S. goods

► Federal Farm BoardFederal Farm Board Increased power to temporarily hold crop surpluses to curb overproductionIncreased power to temporarily hold crop surpluses to curb overproduction FAIL - since government would not limit productionFAIL - since government would not limit production

► Reconstruction Finance Corporation (RFC)Reconstruction Finance Corporation (RFC) Government-backed private corporation to offer loans to banks, corporations, Government-backed private corporation to offer loans to banks, corporations,

insurance companies, and railroadsinsurance companies, and railroads FAIL - did not offer relief to individual AmericansFAIL - did not offer relief to individual Americans

Depression by NumbersDepression by Numbers► Dow Jones Industrial Dow Jones Industrial

AverageAverage 1929: 381.171929: 381.17 1932: 41.221932: 41.22 The average of stock The average of stock

prices dropped over 90%prices dropped over 90%► Price IndicesPrice Indices

Consumer prices feel Consumer prices feel 25%25%

Wholesale prices fell Wholesale prices fell 32%32%

► UnemploymentUnemployment 1929: 3.2%1929: 3.2% 1933: 24.9%1933: 24.9% Unemployment rates Unemployment rates

higher in specific higher in specific regions, among different regions, among different groupsgroups► Toledo, OH: 90%Toledo, OH: 90%

► GDPGDP 1929: $103.6B1929: $103.6B 1933: $56.4B1933: $56.4B

► Bank FailuresBank Failures 1929: 659 banks ($200,000,000)1929: 659 banks ($200,000,000) 1930: 1,300 banks (853,000,000)1930: 1,300 banks (853,000,000) 1931: 2,294 banks ($1,700,000,000)1931: 2,294 banks ($1,700,000,000)

► IncomeIncome National income fell $80B to $50BNational income fell $80B to $50B Salaries declined 40%Salaries declined 40%

► Manufacturing wages down 60%Manufacturing wages down 60% Farmers’ income declined 55%Farmers’ income declined 55%

► Industrial productionIndustrial production Down 26% in 1930; 51% by 1932Down 26% in 1930; 51% by 1932

► InvestmentsInvestments $10B in 1929; $1B in 1932$10B in 1929; $1B in 1932

► Fertility RatesFertility Rates 1928: 93.81928: 93.8 1933: 76.31933: 76.3

► Suicide RatesSuicide Rates 1920-1928: 12.11920-1928: 12.1 1929: 18.11929: 18.1 1930-1940: 15.41930-1940: 15.4

HoovervillesHoovervilles

Displaced Americansset up shanty townsCame to be known as“Hoovervilles”

Public Reaction to Public Reaction to DepressionDepression

► Blame and NeedsBlame and Needs Hoover and Republicans Hoover and Republicans

suffer public backlashsuffer public backlash Public demands direct Public demands direct

government action and government action and interventionintervention

► Farmers’ Holiday Farmers’ Holiday AssociationAssociation

► Bonus MarchBonus March WWI veterans marched on WWI veterans marched on

D.C. demanding early D.C. demanding early payments of pensionspayments of pensions

Federal troops sent in to Federal troops sent in to break up Hoovervillesbreak up Hoovervilles► Burned down shacks and Burned down shacks and

displaced veterans and displaced veterans and familiesfamilies

Public backlash on Hoover Public backlash on Hoover increased due to perceived increased due to perceived apathy by Hooverapathy by Hoover

Depression through PicturesDepression through Pictures

The Dust BowlThe Dust Bowl (1930-1936) (1930-1936)► CausesCauses

OvergrazingOvergrazing Improper Improper

farming farming techniquestechniques

Increased Increased cultivationcultivation

Drought in Drought in 19341934

► EffectsEffects Dust stormsDust storms Black Sunday - Black Sunday -

April 14, 1935April 14, 1935► 300 million 300 million

tons of topsoil tons of topsoil blown across blown across southern southern Plains regionPlains region

Plight for Plight for farmersfarmers

Migration westMigration west► ““Okies”Okies”

Dust Turns Day Into NightDust Turns Day Into Night

Election of 1932Election of 1932► RepublicansRepublicans

Herbert HooverHerbert Hoover Blamed and Blamed and

criticized for causing criticized for causing and exacerbating and exacerbating DepressionDepression

► DemocratsDemocrats Franklin Delano Franklin Delano

Roosevelt (FDR)Roosevelt (FDR)► Campaign promise Campaign promise

of a “new deal” and of a “new deal” and help for the help for the “forgotten man”“forgotten man”

► Repeal ProhibitionRepeal Prohibition► Cut government Cut government

spending and spending and provide direct provide direct assistance for assistance for unemployed rather unemployed rather than businessesthan businesses

Legacy of Election of 1932Legacy of Election of 1932► Realignment election Realignment election

leading to the Fifth leading to the Fifth Party SystemParty System

► Twentieth Twentieth Amendment (1933)Amendment (1933) Lame-duck Lame-duck

amendmentamendment

► FDR expanded FDR expanded intervention and intervention and influence of the influence of the executive branchexecutive branch

► Eleanor Roosevelt Eleanor Roosevelt exemplified First Lady exemplified First Lady as more than just a as more than just a hostesshostess

Fifth Party System (1932-Fifth Party System (1932-1968)1968)

► DemocratsDemocrats New Deal CoalitionNew Deal Coalition

► CatholicsCatholics► JewsJews► BlacksBlacks► Progressive IntellectualsProgressive Intellectuals► Urban MachinesUrban Machines► Populist FarmersPopulist Farmers► White SouthernersWhite Southerners► Labor UnionsLabor Unions► Low-IncomeLow-Income► ImmigrantsImmigrants

Dominated Congress and American Dominated Congress and American public for the next 36 yearspublic for the next 36 years

Increased government Increased government involvement in economy and involvement in economy and societysociety► New DealNew Deal► Great SocietyGreat Society► Civil RightsCivil Rights

► RepublicansRepublicans Pro-businessPro-business NortheastNortheast ConservativesConservatives

►EconomicEconomic►SocialSocial

John Maynard KeynesJohn Maynard Keynes► Before the New DealBefore the New Deal

Classical economics Classical economics ► Supply and demand, laissez-Supply and demand, laissez-

fairefaire► Economies will naturally Economies will naturally

recover in the long-runrecover in the long-run Say’s LawSay’s Law

► ““products are paid for by products are paid for by products”products”

► Keynesian EconomicsKeynesian Economics ““In the long-run we are all In the long-run we are all

dead.”dead.”► Criticized Say’s Law: “supply Criticized Say’s Law: “supply

creates its own demand”creates its own demand” Strong aggregate demand Strong aggregate demand

drives economiesdrives economies Mixed EconomiesMixed Economies

► Some intervention from public Some intervention from public sector to stimulate economysector to stimulate economy

► Fiscal policy Fiscal policy Government spending/deficit Government spending/deficit

spendingspending► Monetary policyMonetary policy

Fed increasing or decreasing Fed increasing or decreasing the money supplythe money supply

FDR’s Message of HopeFDR’s Message of Hope► FDR had no specific plan for FDR had no specific plan for

the Depressionthe Depression► Calming the nationCalming the nation

“… “… the only thing we have the only thing we have to fear is fear itself.”to fear is fear itself.”

Fireside chatsFireside chats► The Three R’sThe Three R’s

ReliefRelief RecoveryRecovery ReformReform

► Brain TrustBrain Trust Capable advisers ordered Capable advisers ordered

to experiment, be to experiment, be pragmaticpragmatic

““Do something.”Do something.”

First New DealFirst New Deal - Alphabet - Alphabet SoupSoup

► First Hundred First Hundred Days*Days*

►Bank Holiday*Bank Holiday*► Emergency Emergency

Banking Relief Act*Banking Relief Act*► Farm Credit ActFarm Credit Act►Gold Reserve ActGold Reserve Act► 21st Amendment 21st Amendment

(1933)(1933) 18th Amendment 18th Amendment

and Prohibition and Prohibition repealedrepealed

► Civil Conservation Corps (CCC)*Civil Conservation Corps (CCC)*► Agricultural Adjustment Act Agricultural Adjustment Act

(AAA)*(AAA)*► Federal Emergency Relief Act (FERA)*Federal Emergency Relief Act (FERA)*► Tennessee Valley Authority (TVA)*Tennessee Valley Authority (TVA)*► Homeowners Refinancing Act (HRA)*Homeowners Refinancing Act (HRA)*► National Industrial Recovery Act National Industrial Recovery Act

(NIRA)*(NIRA)* National Recovery Administration National Recovery Administration

(NRA)(NRA) Public Works Administration (PWA)Public Works Administration (PWA)

► Federal Deposit Insurance Federal Deposit Insurance Corporation (FDIC)Corporation (FDIC) Glass-Steagall ActGlass-Steagall Act

► Securities Exchange Commission Securities Exchange Commission (SEC)(SEC)

► Federal Housing Administration Federal Housing Administration (FHA)(FHA)

The Second New Deal (1935-The Second New Deal (1935-1938)1938)

► Resettlement Administration (RA)/Farm Resettlement Administration (RA)/Farm Security Administration (FSA)Security Administration (FSA) Resettled poor farmers; economic and Resettled poor farmers; economic and

educational programs for farmerseducational programs for farmers► Revenue Act of 1935Revenue Act of 1935

Increased tax rates on wealthy, capital Increased tax rates on wealthy, capital gains, gifts, inheritancegains, gifts, inheritance

► Works Progress Administration/Works Works Progress Administration/Works Projects Administration (WPA)Projects Administration (WPA) National labor project for National labor project for

infrastructure and humanitiesinfrastructure and humanities National Youth Administration (NYA)National Youth Administration (NYA)

► Rural Electrification Administration Rural Electrification Administration (REA)(REA) Public-private effort to electrify farms and Public-private effort to electrify farms and

rural areasrural areas► Social Security Act (1935)Social Security Act (1935)

Tax on employee income to be used for Tax on employee income to be used for retired persons, disabled, dependents, retired persons, disabled, dependents, unemployedunemployed

► Wagner Act (1935)Wagner Act (1935) National Labor Relations BoardNational Labor Relations Board

► Fair Labor Standards Act (1938)Fair Labor Standards Act (1938) Established national minimum wageEstablished national minimum wage Maximum 40 hour workweek and overtimeMaximum 40 hour workweek and overtime Child labor under 16Child labor under 16

Election of 1936Election of 1936►DemocratsDemocrats

Popularity of Popularity of New DealNew Deal

New Deal New Deal CoalitionCoalition

► RepublicansRepublicans Alfred Alfred

Landon, Landon, Governor of Governor of KansasKansas

Pro-business Pro-business and and conservative conservative criticism of criticism of New DealNew Deal

Federal government used posters, songs, advertisements, literature to promote and support FDR’s New Deal programs among the American public

New Deal ReactionsNew Deal Reactions► Majority of Americans Majority of Americans

approved of FDR’s approved of FDR’s programsprograms

► Business leaders and Business leaders and corporations called him corporations called him traitor or fascist or traitor or fascist or communistcommunist

► BoondogglesBoondoggles► American Liberty LeagueAmerican Liberty League► Father Charles CoughlinFather Charles Coughlin

Radio broadcasts attacking Radio broadcasts attacking FDRFDR

Pro-fascist and anti-Semitic Pro-fascist and anti-Semitic remarksremarks

► Huey Long – “Kingfish”Huey Long – “Kingfish” Share the WealthShare the Wealth

► $5000 for every family, $5000 for every family, $2,000 annually$2,000 annually

Heavily tax wealthyHeavily tax wealthy

FDR and FDR and Court PackingCourt Packing► Supreme Court reversed Supreme Court reversed

several New Deal several New Deal programsprograms United States v. ButlerUnited States v. Butler

► AAA unconstitutionalAAA unconstitutional Schecter Poultry Corp. Schecter Poultry Corp.

v. United Statesv. United States► NIRA unconstitutionalNIRA unconstitutional

► Justice Reorganization BillJustice Reorganization Bill Appoint new justices for Appoint new justices for

every justice over 70every justice over 70► 6 additional justices6 additional justices

Most of Congress defeated Most of Congress defeated billbill

Designed to pressure Designed to pressure Supreme Court to approve Supreme Court to approve New Deal programsNew Deal programs

► Compared FDR to fascists Compared FDR to fascists in Europein Europe

New Deal and LaborNew Deal and Labor► AFL strengthened by union-AFL strengthened by union-

backed New Deal legislationbacked New Deal legislation National Labor Relations National Labor Relations

Act/Wagner ActAct/Wagner Act Fair Labor Standards ActFair Labor Standards Act

► Congress of Industrial Congress of Industrial Organizations (CIO)Organizations (CIO) Organize unskilled laborers in Organize unskilled laborers in

major industriesmajor industries Industrial unionismIndustrial unionism

► StrikesStrikes Auto industry recognized Auto industry recognized

United Auto Workers due to United Auto Workers due to sit-down strikessit-down strikes

Republic Steel violent strike Republic Steel violent strike helped recognize CIOhelped recognize CIO

End of the New DealEnd of the New Deal► Roosevelt Recession (1937-1938)Roosevelt Recession (1937-1938)

Contractionary monetary policy in Contractionary monetary policy in lieu of economic expansionlieu of economic expansion

FDR blamed big businessFDR blamed big business► Midterm Election of 1938Midterm Election of 1938

GOP gained seats in House and GOP gained seats in House and Senate; Democratic majority Senate; Democratic majority preservedpreserved► Recession of 1937-1938Recession of 1937-1938► FDR’s controversial court-packingFDR’s controversial court-packing

Congress began to limit or Congress began to limit or eliminate spending for New Deal eliminate spending for New Deal programsprograms

Hatch Act of 1939Hatch Act of 1939► Limited politicians and Limited politicians and

campaign contributionscampaign contributions► People who received federal People who received federal

assistance could not use assistance could not use money for campaign money for campaign contributionscontributions

► International ConcernsInternational Concerns Totalitarian governments spawned Totalitarian governments spawned

defensive preparationsdefensive preparations

Women and DepressionWomen and Depression► Men left their families in Men left their families in

search of work or worked search of work or worked more than one jobmore than one job

► Limited income and Limited income and absence of fathers placed absence of fathers placed intense pressures on intense pressures on mothersmothers

► Female labor force Female labor force increased for female-increased for female-based jobsbased jobs

► Wages remained low Wages remained low compared to mencompared to men

► Suffered backlash as a Suffered backlash as a competitive workforcecompetitive workforce

Minorities and the Minorities and the DepressionDepression► BlacksBlacks

Suffered extreme poverty compared to other groups due to racism and Suffered extreme poverty compared to other groups due to racism and worsening conditionsworsening conditions► ““No jobs for niggers until every white man has a job!” – rally cry in SouthNo jobs for niggers until every white man has a job!” – rally cry in South

FDR and New DealFDR and New Deal► Lower wages in NRA; AAA evicted thousands of blacks from tenant farmsLower wages in NRA; AAA evicted thousands of blacks from tenant farms► WPA hired 1 million blacks in construction and educational projectsWPA hired 1 million blacks in construction and educational projects► Mary McLeod Bethune in NYAMary McLeod Bethune in NYA

Scottsboro Boys Trial (1931)Scottsboro Boys Trial (1931)► Nine blacks youths accused of raping two white girls on a train in AlabamaNine blacks youths accused of raping two white girls on a train in Alabama► Appeals showed lack of fair trial, impartial jury, fair sentencing, effective counselAppeals showed lack of fair trial, impartial jury, fair sentencing, effective counsel

► NativesNatives Indian Reorganization Act (1934)Indian Reorganization Act (1934)

► Repeal of Dawes Act (1887) eliminating assimilation programs, return of native Repeal of Dawes Act (1887) eliminating assimilation programs, return of native sovereignty, preservation of native culturessovereignty, preservation of native cultures

► ImmigrantsImmigrants Immigration was reduced by restrictive policies of 1920sImmigration was reduced by restrictive policies of 1920s Suffered discrimination and prejudice with worsening economic conditionsSuffered discrimination and prejudice with worsening economic conditions Mexican RepatriationMexican Repatriation

► With farming jobs limited, white Americans migrated west and policies With farming jobs limited, white Americans migrated west and policies established to push out Mexican immigrantsestablished to push out Mexican immigrants

Federal OneFederal One► Part of the WPAPart of the WPA► Federal Writers ProjectFederal Writers Project► Federal Theatre ProjectFederal Theatre Project

Negro Theatre ProjectNegro Theatre Project► Federal Music ProjectFederal Music Project► Federal Art ProjectFederal Art Project► Historical Records Historical Records

SurveySurvey

EscapismEscapismGreat Depression in Arts and Great Depression in Arts and

EntertainmentEntertainment► LiteratureLiterature

John SteinbeckJohn Steinbeck► The Grapes of WrathThe Grapes of Wrath► Of Mice and MenOf Mice and Men

► PhotographyPhotography Dorothea LangeDorothea Lange

► MusicMusic Brother, Can You Spare a Dime?Brother, Can You Spare a Dime? Woody GuthrieWoody Guthrie

► RadioRadio ComediesComedies Soap operasSoap operas

► MoviesMovies The Wizard of OzThe Wizard of Oz Shirley TempleShirley Temple Snow White and the Seven DwarvesSnow White and the Seven Dwarves Marx BrothersMarx Brothers

EscapismEscapismGreat Depression in Sports and Great Depression in Sports and

RecreationRecreation► SportsSports

WPAWPA► Athletic facilitiesAthletic facilities► Athletic educational Athletic educational

programsprograms Innovation, consolidation, Innovation, consolidation,

and sacrifice of and sacrifice of professional and college professional and college sportssports► College bowl gamesCollege bowl games► NFL playoffsNFL playoffs

► RecreationRecreation Games and MonopolyGames and Monopoly GamblingGambling RodeosRodeos Dance halls and jazzDance halls and jazz