Unit Twelve

U.S. History

Causes of the Great Depression Tariff tension Uneven distribution of

wealth/income Failure to understand

international economic issues/trends/policies

Overproduction of consumer goods

Overspeculation/

Investment “playing the market”

Buying on margin (10% down payment)

Excessive use of credit Weak farm economy

Effects of the Great Depression

Banks closed Stock market prices

dropped Serious economic

downturn Unemployment

Poverty and homeless increased

Mortgages foreclosures/evictions

Hoover’s Reaction Assumed the crisis would be brief Urged businesses to cut wages Unions not to strike Urged private charities to increase their

efforts for the needy and jobless. Hesitated to bring government into it,

feared Americans would lose self-reliance Believed public relief should come from the

state and local governments and not the federal government

The worst mistake of his presidency

Hawley-Smoot Tariff 1930 Highest tariff in American history - increased tax

rate on foreign imports to protect American markets from foreign competition.

In retaliation, European nations enacted higher tariffs of their own against U.S. goods.

The effect—trade was reduced for all nations deepening the depression at the national and international levels.

TOO LITTLE, TOO LATE Debt moratorium - suspended collection of

payments on international debts Federal Farm Board - assistance to

indebted farmers Reconstruction Finance Corporation -

emergency loans to struggling businesses –railroads, banks, life insurance companies, and other financial institutions.

The benefits would then “trickle down” to smaller businesses and ultimately bring recovery

Initial Reaction of the People

Farm Holiday Association Bonus march

The Election of 1932

Republicans nominated Hoover

Believing a Democratic victory would worsen the Depression

Democrats nominated NY governor Franklin D. Roosevelt.

FDR pledged:

1. A “new deal” for the American people

2. The repeal of Prohibition

3. Aid for the unemployed

4. Cuts in government spending

Election Results

RESULTS 60% of the voters opted for a change and elected FDR

Socialists and many Republicans even supported FDR

Both houses in Congress also gained Democratic majorities

Lame duck president/Lame duck amendment (Twentieth Amendment)

FDR National Monument

FDR: A Profile

Only child to a wealthy NY family

Admired Teddy Roosevelt NY state legislator, U.S.

assistant secretary of the navy

VP candidate (James Cox) vs. Harding 1920 landslide

Contracted polio in 1921 Warm personality, gifted

speaker, & able to work with and inspire people

Became NY Governor in 1928

Instituted a number of welfare and relief programs to help the jobless.

Married to his cousin, Expanded the size of the

government Enlarged the powers of

the presidency. Stayed in office 12 years

elected 4 times One of the most

influential world leaders of the 20th century

New Deal Philosophy

Relief for the people out of work

Recovery for businesses and the economy

Reform of American institutions

Brain Trust

Advisors from his NY days University professors Great diversity in his administration: record

number of African Americans, Catholics, Jews, and women. (Secretary of Labor, Frances Perkins, 1st woman to serve in a president’s cabinet

Black Cabinet -Mary McLeod Bethune (close to Eleanor Roosevelt)

1st Hundred Days

Hundred day long special session in Congress

Congress passed into law every request of the president enacting more legislation than any single Congress in history

The new laws and agencies were commonly referred to by their initials: WPA, AAA, CCC, NRA

Immediate Action

Bank Holiday -closed banks to reorganize and regain stability

Repeal of Prohibition Beer-Wine Revenue Act/Twenty-first Amendment

Fireside Chats used radio to communicate directly to the American people

Financial recovery reform

The Emergency Banking Relief Act—bank holiday

The Federal Deposit Insurance Corporation -FDIC insure deposits up to $5000

The Home Owners Loan Corporation -refinancing for small homes

The Farm Credit Administration- low interest farm loans and mortgages

Relief for the unemployed

Federal Emergency Relief Agency - grants to state and local governments to aid the jobless and homeless

Public Works Administration - money for building roads, bridges, dams, and other public works (source of thousands of jobs)

Civilian Conservation Corps employed young men on federal lands  

The Tennessee Valley Authority —built dams, operated electric power plants, controlled flooding and erosion, and manufactured fertilizer in on the nation’s poorest regions

Industrial Recovery

National Recovery Administration - set codes for wages, hours of work, levels of production, and prices of finished goods.

Workers were allowed to organize and bargain collectively

Schechter v. U.S. Supreme Court declared the NRA unconstitutional

Farm Relief

Agricultural Adjustment Administration AAA

Encouraged farmers to reduce production and thereby boost prices by offering to pay government subsidies (financial assistance) for every acre they plowed under.

Other programs

Civil Works Administration – hired laborers for temporary construction projects

Securities and Exchange Commission- regulated the stock market

Federal Housing Administration- construction industry and homeowners boosted by insuring bank loans for building new houses and repairing old ones

 Took the U.S. off of the gold standard: $35 per ounce of gold but paper dollars were not redeemer in gold)

Eleanor Roosevelt

Most active first lady in history

Newspaper column Speeches Traveling Great respect for her

husband/marriage was strained

Served as the president’s social conscience and influenced him to support minorities and the less fortunate Compassionate

Eyes and ears

Second New Deal

The first two years focused on RECOVERY, the new batch of legislation focused on RELIEF and REFORM

Second New Deal

Relief Works Progress Administration- spent billions

of dollars 1935-1940 creating jobs—constructing new bridges, roads, airports, and public buildings.

-Unemployed artists, writers, and actors were paid to paint murals, write histories, and perform in plays

  Resettlement Administration- provided loans to

sharecroppers, tenants, and small farmers, and set up camps for migrant workers

Reforms

National Labor Relations (Wagner) Act 1935- guaranteed workers right to join a union and a union’s right to bargain collectively. Created the National Labor Relations Board NLRB to enforce the law and make sure workers’ rights were protected

Rural Electrification Administration REA- offered loans for electrical cooperatives to supply power in rural areas

Federal Taxes - increased the tax of the wealthy few.

SOCIAL SECURITY ACT 1935 Affected the lives of nearly all Americans Federal insurance program based upon the

automatic collection of taxes from employees and employers throughout people’s working careers.

Retirees over the age of 65 received monthly payments

Unemployment compensations Blind or disabled

Dependent children and mothers

Election of 1936

FDR –Democratic candidate

Republican candidate Alf Landon –

progressive minded but critical of government spending

FDR won in a landslide

New coalition Solid South Ethnic whites in the

cities Midwestern farmers Labor unions Now African

Americans in northern cities

Opponents of the New Deal

Liberal Critics

Conservative

Demagogues (political agitators)

Father Charles E. Coughlin –inflated currency/nationalizing banks

Dr. Francis E. Townsend - $200 month Senior Citizens

Huey Long – “Share Our Wealth” $5000 for every American family

Most Serious Challenge

SUPREME COURT Ruled NRA and AAA

unconstitutional Mandate- popular

support- 1936 election Court-Packing Plan:

Replace Justices over 70.5 (6)

Both Democrats and Republicans were outraged

Supreme Court eventually softened to New Deal

FDR made several appointments

Rise of the Union New Deal was friendly

to organized labor National Labor

Recovery Act 1933 and the Wagner Act 1935

Union membership grew from 3 million in the early 1930s to over 10 million by 1941

AFL dominated skilled labor

CIO emerged welcoming all laborers

(targeted the automobile, steel, and textile industries)

Fair Labor Standards Act

A minimum wage (e.g. 40 cents an hour) A maximum work week of 40 hours and

time and a half for overtime Child labor restrictions on those under 16

-law was ruled unconstitutional in 1916 but reversed in 1941 and Fair Labor Standards Act was upheld by the Supreme Court)

Roosevelt Recession 1937

Economic Downturn WHY? Social

Security tax reduced consumer spending; FDR was also attempting to balance the budget & reduced government spending

John Maynard Keynes Encouraged deficit

spending - the government needed to spend in order to initiate economic growth “priming the pump” to increase investment and create jobs.

Keynesian Economics

FDR adopted this policy   Still the Depression continued Republicans and conservatives were elected

in 1938 and blocked New Deal legislation, and aggressive actions of the Nazis drew attention to foreign affairs weakening the New Deal

Americans and the Depression

Depression mentally-insecure

Women – work-minded

African American

Democratic party

(Eleanor and Marion Anderson vs. DAR)

Executive Order 8802 (FEPC)

A. Phillip Randolph

Brotherhood of the Sleeping Car Porters

March on Washington Indian Reorganization

Act 1937 (Tribal) Mexican Americans