college on campus: american history chapter 24

Chapter 24 : The Great Depression and The New

Deal1929-1940

Flint, Michigan strikes

Sit down strike at flint

In 1936 GMs net profits had reached $285 million and its total assets were $1.5 Billion. The average assembly line worker only made $30 a week

The Great Depression hit Flint very hard. Employment fell from 56,000 (1929) to 17,000 (1932).The United Automobile Workers (UAW) came to flint in 1936 seeking to organize GM workers in one industrial union. The previous year Congress passed the National labor Relations Act also known as the Wagner which made union organization easier.

Hard Times

Underlying Weaknesses of the 1920s Economy

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Three months before the stock market crash

The crash followed a speculative boom that had taken hold in the late 1920s. During the later half of the 1920s, steel production, building construction, retail turnover, automobiles registered, even railway receipts advanced from record to record. The combined net profits of 536 manufacturing and trading companies showed an increase, in fact for the first six months of 1929, of 36.6% over 1928, itself a record half-year. Iron and steel led the way with doubled gains.[21] Such figures set up a crescendo of stock-exchange speculation which had led hundreds of thousands of Americans to invest heavily in the stock market. A significant number of them were borrowing money to buy more stocks. By August 1929, brokers were routinely lending small investors more than two-thirds of the face value of the stocks they were buying. Over $8.5 billion was out on loan,[22] more than the entire amount of currency circulating in the U.S. at the time.[17][23]

The rising share prices encouraged more people to invest; people hoped the share prices would rise further. Speculation thus fueled further rises and created an economic bubble. Because of margin buying, investors stood to lose large sums of money if the market turned downor even failed to advance quickly enough. The average P/E (price to earnings) ratio of S&P Composite stocks was 32.6 in September 1929,[24] clearly above historical norms.[citation needed]

Sir George PaishGood harvests had built up a mass of 250,000,000 bushels of wheat to be 'carried over' when 1929 opened. By May there was also a winter-wheat crop of 560,000,000 bushels ready for harvest in the Mississippi Valley. This oversupply caused a drop in wheat prices so heavy that the net incomes of the farming population from wheat were threatened with extinction. Stock markets are always sensitive to the future state of commodity markets and the slump in Wall-street predicted for May by Sir George Paish, arrived on time. In June 1929 the position was saved by a severe drought in the Dakotas and the Canadian West, plus unfavorable seed times in Argentina and Eastern Australia. The oversupply would now be wanted to fill the big gaps in the 1929 world wheat production. From 97c per bushel in May wheat rose to $1.49 in July. When it was seen that at this figure the American farmers would get rather more for their smaller crop than for that of 1928, up went stocks again and from far and wide orders came to buy shares for the profits to come.

Then in August the wheat price fell when France and Italy were bragging of a magnificent harvest and the situation in Australia improved. This sent a shiver through Wall Street and stock prices quickly dropped, but word of cheap stocks brought a fresh rush of 'stags,' amateur speculators and investors. Congress had also voted for a 100 million dollar relief package for the farmers, hoping to stabilize wheat prices. By October though, the price had fallen to $1.31 per bushel.[25] The falling commodity markets in other countries told upon even American self-confidence, and the stock market started to falter.

Glass Stegall Act Separated investment

and commercial banking activities

Passed because commercial banks were accused of being too speculative

http://www.youtube.com/watch?v=OCPg8fDYq_Q (1:54)

The Bull Market and the Crash

The Bull Market

Crash of 1929

http://www.youtube.com/results?search_query=the+great+depression

The Stock Market, 1919-The Stock Market, 1919-19391939

Greed similar to 1929 and 2007 Bubbles and Depression

Their friendshi1929. Financier Baruch encouraged Churchill to get out of the market before the Crash pre-dated the Stock Market Crash of 1929

Economist James K. Galbraith wrote in the introduction to his father, John Kenneth Galbraiths, definitive study of the Great Depression, The Great Crash, 1929:

The main relevance of The Great Crash, 1929 to the great crisis of 2008 is surely here. In both cases, the government knew what it should do. Both times, it declined to do it. In the summer of 1929 a few stern words from on high, a rise in the discount rate, a tough investigation into the pyramid schemes of the day, and the house of cards on Wall Street would have tumbled before its fall destroyed the whole economy. In 2004, the FBI warned publicly of an epidemic of mortgage fraud. But the government did nothing, and less than nothing, delivering instead low interest rates, deregulation and clear signals that laws would not be enforced. The signals were not subtle: on one occasion the director of the Office of Thrift Supervision came to a conference with copies of the Federal Register and a chainsaw. There followed every manner of scheme to fleece the unsuspecting .

This was fraud, perpetrated in the first instance by the government on the population, and by the rich on the poor.

Pecora Report vs. Levin Coburn Report

In the earlier period, there essentially was very limited federal regulation -- nothing in securities, nothing in commodities, nothing in insurance," said Joel Seligman, president of the University of Rochester and an expert in securities regulation. "To the extent you had economic regulation, a fair amount was at the state level."

These days, the country has an elaborate regulatory system, albeit one whose failings became obvious during the current crisis. Obama isn't advocating an entirely new system. He's mostly trying to repair the current one. His boldest proposals include a new agency that would oversee consumer financial products such as mortgages and credit cards and expanding the power of the Federal Reserve to monitor systemic risks throughout the economy.

Whatever regulatory changes ultimately emerge from Congress, they alone may not be enough. In his book, Pecora -- who went on to become an SEC commissioner under its inaugural chairman, Joseph P. Kennedy Sr., and later a New York Supreme Court judge -- warned that laws themselves "are no panacea; nor are they self-executing."

On the day that Franklin Roosevelt signed the Securities Exchange Act into law in 1934, Pecora was in attendance. At one point, the president turned to Pecora and asked, "Ferd, now that I have signed this bill and it has become law, what kind of law will it be?"

"It will be a good or bad bill, Mr. President," Pecora said, "depending upon the men who administer it."

Investors in Clarence Hatry's company lost billions when it was discovered he used fraudulent collateral to buy United Steel. A few days later, England's Chancellor of the Exchequer Philip Snowden, knew and took his money out of stock market

Among these witnesses were Richard Whitney, president of the New York Stock Exchange, investment bankers Otto H. Kahn, Charles E. Mitchell, Thomas W. Lamont, and Albert H. Wiggin, plus celebrated commodity market speculators such as Arthur W. Cutten. Given wide media coverage, the testimony of the powerful banker J.P. Morgan, Jr. caused a public outcry after he admitted under examination that he and many of his partners had not paid any income taxes in 1931 and 1932

The government also went after Charles "Sunshine Charley" Mitchell, president of National City Bank, now Citibank. Mitchell divided National City into a banking arm and an investment arm, with the latter selling up to $2 billion annually in speculative securities and shaky bonds. Before the Pecora Commission, Mitchell acknowledged that he knew his salesmen were pushing bad investments on unsophisticated customers, many of who then borrowed money from his banking arm to finance their investments. While National City's behavior shocked the nation, the company's salesmen hadn't broken any laws. (In a dja vu moment, a Goldman Sachs employee admitted to Congress in April 2010 that he sold investments that he thought were a "shitty deal.") Mitchell himself resigned his post and was charged with tax evasion for selling company stock to his wife at a loss, but he got off with a fine. His performance at the Pecora Hearings led to the Glass-Steagall Act of 1933, which prohibited banking companies from speculating in the market. The law was repealed in 1999.

The Pecora Commission humiliated others, including Richard Whitney, the head of the New York Stock Exchange. He would later go to jail for stealing from the NYSE pension fund, but that was nine years after the 1929 collapse. The legendary J.P. Morgan was forced to admit that he hadn't paid any taxes whatsoever in three years due to investment losses, but several days of questioning failed to reveal any illegal behavior

Following the 1929 Wall Street Crash, the U.S. economy had gone into a depression, and a large number of banks failed. The Pecora Investigation sought to uncover the causes of the financial collapse. As chief counsel, Ferdinand Pecora personally examined many high-profile witnesses, who included some of the nation's most influential bankers and stockbrokers. Among these witnesses were Richard Whitney, president of the New York Stock Exchange, investment bankers Otto H. Kahn, Charles E. Mitchell, Thomas W. Lamont, and Albert H. Wiggin, plus celebrated commodity market speculators such as Arthur W. Cutten. Given wide media coverage, the testimony of the powerful banker J.P. Morgan, Jr. caused a public outcry after he admitted under examination that he and many of his partners had not paid any income taxes in 1931 and 1932.

As reiterated by U.S. Securities and Exchange Commission (SEC) Chairman Arthur Levitt during his 1995 testimony before the United States House of Representatives, the Pecora Investigation uncovered a wide range of abusive practices on the part of banks and bank affiliates. These included a variety of conflicts of interest, such as the underwriting of unsound securities in order to pay off bad bank loans, as well as "pool operations" to support the price of bank stocks. The hearings galvanized broad public support for new banking and securities laws. As a result of the Pecora Commission's findings, the United States Congress passed the GlassSteagall Banking Act of 1933 to separate commercial and investment banking, the Securities Act of 1933 to set penalties for filing false information about stock offerings, and the Securities Exchange Act of 1934, which formed the SEC, to regulate the stock exchanges.

Whitney stole over $3 million dollars through inside trading. Whitney who allowed the bubble of margin stocks to increase at a danger point. Whitney wanted to escape with profit similar to 2007 stock brokers.

While Richard Whitney was assumed to be a brilliant financier, he in fact had personally been involved with speculative investments in a variety of businesses and had sustained considerable losses. To stay afloat, he began borrowing heavily from his brother George as well as other wealthy friends, and after obtaining loans from as many people as he could, turned to embezzlement to cover his mounting business losses and maintain his extravagant lifestyle. He stole funds from the New York Stock Exchange Gratuity Fund, the New York Yacht Club (where he served as the Treasurer), and $800,000 worth of bonds from his father-in-law's estate.

Having retired as president of the NYSE in 1935, Whitney remained on the board of governors, but in early March 1938, his past began to catch up with him when the comptroller for the NYSE reported to his superiors that he had established absolute proof that Richard Whitney was an embezzler and that his company was insolvent. Within days, events snowballed, and Whitney and his company would both declare bankruptcy. An astonished public learned of his misdeeds on March 10 when he was officially charged with embezzlement by New York County District Attorney Thomas E. Dewey. Following his indictment by a Grand Jury, Richard Whitney was arrested and eventually pleaded guilty. He was sentenced to a term of five to ten years in Sing Sing prison.[5] On April 12, 1938, six thousand people turned up at Grand Central Station to watch as a scion of the Wall Street Establishment was escorted in handcuffs by armed guards onto a train that delivered him to prison.

Levin Coburn Commission shows the weaknesses of the 2007 morality of Stock market brokers.

Many causes for the financial crisis have been suggested, with varying weight assigned by experts.[13] The U.S. Senate's LevinCoburn Report concluded that the crisis was the result of "high risk, complex financial products; undisclosed conflicts of interest; the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street."[14] The Financial Crisis Inquiry Commission concluded that the financial crisis was avoidable and was caused by "widespread failures in financial regulation and supervision," "dramatic failures of corporate governance and risk management at many systemically important financial institutions," "a combination of excessive borrowing, risky investments, and lack of transparency" by financial institutions, ill preparation and inconsistent action by government that "added to the uncertainty and panic," a "systemic breakdown in accountability and ethics," "collapsing mortgage-lending standards and the mortgage securitization pipeline," deregulation of over-the-counter derivatives, especially credit default swaps, and "the failures of credit rating agencies" to correctly price risk.[15] The 1999 repeal of the Glass-Steagall Act effectively removed the separation between investment banks and depository banks in the United States.[16] Critics argued that credit rating agencies and investors failed to accurately price the risk involved with mortgage-related financial products, and that governments did not adjust their regulatory practices to address 21st-century financial markets.[17] Research into the causes of the financial crisis has also focused on the role of interest rate spreads

"Using emails, memos and other internal documents, this report tells the inside story of an economic assault that cost millions of Americans their jobs and homes, while wiping out investors, good businesses, and markets," said Levin. "High risk lending, regulatory failures, inflated credit ratings, and Wall Street firms engaging in massive conflicts of interest, contaminated the U.S. financial system with toxic mortgages and undermined public trust in U.S. markets. Using their own words in documents subpoenaed by the Subcommittee, the report discloses how financial firms deliberately took advantage of their clients and investors, how credit rating agencies assigned AAA ratings to high risk securities, and how regulators sat on their hands instead of reining in the unsafe and unsound practices all around them. Rampant conflicts of interest are the threads that run through every chapter of this sordid story."

"The free market has helped make America great, but it only functions when people deal with each other honestly and transparently. At the heart of the financial crisis were unresolved, and often undisclosed, conflicts of interest," said Dr. Coburn. "Blame for this mess lies everywhere from federal regulators who cast a blind eye, Wall Street bankers who let greed run wild, and members of Congress who failed to provide oversight."

The Levin-Coburn report expands on evidence gathered at four Subcommittee hearings in April 2010, examining four aspects of the crisis through detailed case studies: high-risk mortgage lending, using the case of Washington Mutual Bank, a $300 billion thrift that became the largest bank failure in U.S. history; regulatory inaction, focusing on the Office of Thrift Supervision's failed oversight of Washington Mutual; inflated credit ratings that misled investors, examining the actions of the nation's two largest credit rating agencies, Moody's and Standard & Poor's; and the role played by investment banks, focusing primarily on Goldman Sachs, creating and selling structured finance products that foisted billions of dollars of losses on investors, while the bank itself profited from betting against the mortgage market.- See more at: http://www.levin.senate.gov/newsroom/press/release/us-senate-investigations-subcommittee-releases-levin-coburn-report-on-the-financial-crisis#sthash.ofWxhsq0.dpuf

, New York magazine had a different view on Fuld's last three months as CEO before the firm's bankruptcy. Hugh "Skip" McGee III, then-head of the Investment Banking Division, had earlier disagreed with COO Joseph M. Gregory's appointment of one of his subordinates, Erin Callan, as CFO. On June 11, 2008, McGee organized a meeting of the firm's senior bankers, who forced Fuld to demote Callan and Gregory. Gregory's replacement as president and COO was Bart McDade. While Fuld remained CEO in title, it has been said that a management coup had taken place and that the one guy in charge was now McDade.[24] New York magazine's account also stated that Fuld was desperately searching for a buyer during the summer and even offering to step aside as CEO to facilitate the sale of the firm, being quoted as saying "We have two priorities, that the Lehman name and brand survive and that as many employees as possible be saved, and you'll notice our priority isnt price".[25]

In October 2008, Fuld was among twelve Lehman Brothers executives who received grand jury subpoenas in connection to three criminal investigations led by the United States Attorney's offices in the Eastern and Southern Districts of New York as well as the District of New Jersey, related to the alleged securities fraud associated with the collapse of the firm.[26][27][28]

On October 6, 2008, Fuld testified before the United States House Committee on Oversight and Government Reform regarding the causes and effects of the bankruptcy of Lehman Brothers.[29][30][31] During the testimony, Fuld was asked if he wondered why Lehman Brothers was the only firm that was allowed to fail, to which he responded: "Until the day they put me in the ground, I will wonder."

Soon after Lehman filed for bankruptcy, there was a well circulated rumor promulgated initially by the satirical financial blog "Dealbreaker" and overly excited reporters that Fuld was "punched in the face" and/or "knocked out cold" by someone while working out in the company gym. According to the man who was gym manager at the time

Mardoff and 1929 and 2007 Greed is a common denominator

Bernard Lawrence "Bernie" Madoff (/ me d f/;[1] born April 29, 1938) is an American convicted of fraud and a former stockbroker, investment advisor, and financier. He is the former non-executive chairman of the NASDAQ stock market,[2] and the admitted operator of a Ponzi scheme that is considered to be the largest financial fraud in U.S. history.[3]Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest on December 11, 2008.[4][5] The firm was one of the top market maker businesses on Wall Street,[6] which bypassed "specialist" firms by directly executing orders over the counter from retail brokers.[7] He employed at the firm his brother Peter, as Senior Managing Director and Chief Compliance Officer; Peter's daughter Shana Madoff, as the firm's rules and compliance officer and attorney; and his sons Andrew and Mark. Peter has since been sentenced to 10 years in prison[8] and Mark committed suicide by hanging exactly two years after his father's arrest.[9][10][11] Andrew died of lymphoma on September 3, 2014.[12]On December 10, 2008, Madoff's sons told authorities that their father had confessed to them that the asset management unit of his firm was a massive Ponzi scheme, and quoted him as describing it as "one big lie".[13][14][15] The following day, FBI agents arrested Madoff and charged him with one count of securities fraud. The U.S. Securities and Exchange Commission (SEC) had previously conducted investigations into Madoff's business practices, but had not uncovered the massive fraud

While Madoff hailed from simple roots and attended Hofstra University, Whitney was born on third base, the scion of a prominent New England family. The Groton and Harvard man had rowed on his schools' crews and played football. He served for five years as the president of the New York Stock Exchange and played a key role in helping slow the stock market slide in October 1929. On Black Thursday, as panic reached a crescendo, he dramatically placed a series of generous bids on shattered blue chip stocks, helping bring confidence back to the markets. "Richard Whitney Halts Stock Panic," headlines proclaimed.

But Whitney was living a lie. For years, he concealed growing problems at his firm, Richard Whitney & Co. Finally, in March 1938, the firm collapsed, causing a brief sell-off in the New York Stock Exchange.

Whitney, who like Madoff, took blame for the firm's admitted wrongdoing, went down fast. After the firm's fall it took just one month for him to be indicted and shipped off to the slammer. He pleaded guilty to stealing $214,000 from funds he supervised. At his sentencing, he received a withering rebuke from the judge.

"To cover up your thefts and your insolvency, you resorted to larcenies, frauds, misrepresentations and falsifications of books," the judge thundered, adding that Whitney had dealt "the decent forces of America" a "severe setback."

One of his main victims: The New York Yacht Club.

According to a contemporaneous New York Times account, the disgraced financier was fingerprinted on an April morning, sent to the showers with the other prisoners, "and his well-tailored blue serge suit, polo coat and gray felt hat were laid aside for a baggy suit of gray prison shoddy and ill-fitting cap." He was shackled to two extortionists and escorted out of The Tombs. A crowd of 5,000 people assembled at Grand Central Station to see Whitney's train off before it headed north along the Hudson River to Sing Sing prison. An auction of his belongings, which included a pair of pearl studs, and a key-wind watch, brought just $763.

Whitney was paroled in 1941 after serving more than three years of his five-

A pyramid scheme is a form of fraud similar in some ways to a Ponzi scheme, relying as it does on a mistaken belief in a nonexistent financial reality, including the hope of an extremely high rate of return. However, several characteristics distinguish these schemes from Ponzi schemes:[1] In a Ponzi scheme, the schemer acts as a "hub" for the victims, interacting with all of them directly. In a pyramid scheme, those who recruit additional participants benefit directly. (In fact, failure to recruit typically means no investment return.)A Ponzi scheme claims to rely on some esoteric investment approach and often attracts well-to-do investors; whereas pyramid schemes explicitly claim that new money will be the source of payout for the initial investments.A pyramid scheme typically collapses much faster because it requires exponential increases in participants to sustain it. By contrast, Ponzi schemes can survive simply by persuading most existing participants to reinvest their money, with a relatively small number of new participants.

An economic bubble: A bubble is similar to a Ponzi scheme in that one participant gets paid by contributions from a subsequent participant (until inevitable collapse). A bubble involves ever-rising prices in an open market (for example stock, housing, or tulip bulbs) where prices rise because buyers bid more because prices are rising. Bubbles are often said to be based on the "greater fool" theory. As with the Ponzi scheme, the price exceeds the intrinsic value of the item, but unlike the Ponzi scheme, there is no single person misrepresenting the intrinsic value.

See also[edit]

Mass Unemployment

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Oct. 29Dies Irae, a 1929 lithographby James N. Rosenberg

Hooverville

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Unemployed men, lined up at the New YorkMunicipal Lodging House in 1930.

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A Hoovervillea shantytown created byhomeless squattersoutside Seattle

The celebrated photographer Dorothea Lange took thisphotograph of an unemployed man on a San Francisco

An unemployed man and woman sellingapples on a city street

DepressionGreat Depression

Depression

DepressionDepression

Hoover the Person

Hoover Social interests under Hoover led to: The deaths of 4 demonstrators in Detroit labor demonstration at Fords River Rogue factory Bonus Armys march on Washington http://www.youtube.com/watch?v=dWvCCxOUsM8 (2:39)

Farmers Holiday Association

Policies under Hoover showed that private charities do not have the resources to meet massive social problems

QuickTime and a decompressor

are needed to see this picture.

Hoovers Failure

Hoover simply lacked the money, resources and staff to deal with the worsening situation. In large urban centers like Detroit and Chicago, unemployment approached 50% by 1932. For the year 1932 one West Virginia coalmining county with 1,500 unemployed miners had only $9,000 in relief.

Hoovers Plan for recovery centered on restoring business confidence. His administration most important institutional response to the depression was the RFC. Reconstruction Finance Corporation established in early 1932 and based on the War Finance Corporation. The RFC was designed to make government credit available to ailing banks, railroad, insurance companies and other businesses to stimulate economy. There mistake was that the supply was there; the demand was not. A need for markets.

Hoover, worsened the situation of the depression by 1) The Federal Reserve whose policies of low interest rates and easy credit in the late 1920s helped fuel the speculative boom in stock buying, tightened cred sharply. That caused interest rates to spike, putting heavy pressure on the nations banking system, especially the smaller banks on which farmers, merchants and local businessmen relied. Without any state or federal insurance more than 5,000 rural bank and ethnic group oriented savings and loan failed. Between 1929 and 1932 more than 9 million depositors lost their savings.

Second Mistake of Hoovers was that he passed the Smooth Hawley Tariff, raising import duties to their highest level in American history. Supporters including the president claimed that this would protect American farers from global competition and raise farm prices. Other nations responded by raiding their own tariffs which caused world trade to decline steeply thus exacerbating the economic collapse.

A Global Crisis and the Election of 1932

The 1919 peace settlement had saddled Germany with $33 Billion in war reparation, owed largely to Great Britain and France. The United States loaned money t the British and French during the war and American banks loaned large sums to Germany.

The total volume of global trade declined from about $36 billion in 1929 to $12 billion by 1932. American banks badly hurt by both domestic depositors and foreign withdrawal of capital . In 19313 alone 2,294 United States banks failed double the number that had collapsed.

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Police battling bonus marchers in Washington,D.C., July 1932.

HooverHoover

Social interests under Hoover led to:Social interests under Hoover led to: The deaths of 4 demonstrators in DetroitThe deaths of 4 demonstrators in Detroit labor demonstration at Fordlabor demonstration at Fords River Rogue s River Rogue

factoryfactory Bonus ArmyBonus Armys march on Washingtons march on Washington http://www.youtube.com/watch?v=dWvCCxOUsM8http://www.youtube.com/watch?v=dWvCCxOUsM8 (2:39) (2:39)

FarmerFarmers Holiday Associations Holiday Association

Policies under Hoover showed that private Policies under Hoover showed that private charities do not have the resources to meet charities do not have the resources to meet massive social problemsmassive social problems



1932 Election: 1932 Election: Roosevelt vs. Roosevelt vs. HooverHoover

During the campaign, FDR During the campaign, FDR accused Hoover of reckless accused Hoover of reckless spending spending

http://www.youtube.com/watch?vhttp://www.youtube.com/watch?v=MbkMh-XcY88=MbkMh-XcY88 (1:14) (1:14)

FDR only focused on the faults of FDR only focused on the faults of HooverHoover

The map of the The map of the election showed election showed that Republican, that Republican, Hoover, carried Hoover, carried most of the New most of the New England statesEngland states

FDR was not FDR was not committed to committed to either market either market driven or govt driven or govt driven economic driven economic recovery recovery



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Communist Party headquarters in NewYork City, 1932.

FDR and the First New Deal

FDR the Man

Roosevelt was educated at private schools Harvard and Columbia Law School. He married his distant cousin Anna Eleanor and had five children. The marriage was publically strong privately weak.

Franklin Delano Roosevelt used the media with the radio. He was an aristocrat who wanted a more government control system instead of market driven society/

The only thing we have to fear is fear itself restoring confidence

Franklin Roosevelt's speechwriter and legal counsel Samuel Rosenman suggested having an academic team to advise Roosevelt in March 1932. This concept was perhaps based on The Inquiry, a group of academic advisors President Woodrow Wilson formed in 1917 to prepare for the peace negotiations following World War I. In 1932, New York Times writer James Kieran first used the term Brains Trust (shortened to Brain Trust later) when he applied it to the close group of experts that surrounded United States presidential candidate Franklin Roosevelt. According to Roosevelt Brain Trust member Raymond Moley, Kieran coined the term, however Rosenman contended that Louis Howe, a close advisor to the President, first used the term but used it derisively in a conversation with Roosevelt.[1][2]

The core of the first Roosevelt brain trust consisted of a group of Columbia law professors (Moley, Tugwell, and Berle). These men played a key role in shaping the policies of the First New Deal (1933). Although they never met together as a group, they each had Roosevelt's ear. Many newspaper editorials and editorial cartoons ridiculed them as impractical idealists.

The core of the second Roosevelt brain trust sprang from men associated with the Harvard law school (Cohen, Corcoran, and Frankfurter). These men played a key role in shaping the policies of the Second New Deal (19351936

Columbia Law School

Bank Holiday Bank Holiday

http://www.youtube.com/watch?v=kFvrL_nqx2chttp://www.youtube.com/watch?v=kFvrL_nqx2c

The Hundred Days

RooseveltRoosevelts First 100 Days s First 100 Days

Raise farmerRaise farmers purchasing s purchasing powerpower

The AAA Tried to: The AAA Tried to: Establish parity prices for Establish parity prices for

basic farm commodities basic farm commodities Displace sharecroppers Displace sharecroppers

by reducing productionby reducing production Raise pricesRaise prices

All of the following were All of the following were established:established:

AAAAAA FERAFERA CCCCCC TVATVA The second 100 days included:The second 100 days included: The Resettlement ActThe Resettlement Act Wagner ActWagner Act Social Security ActSocial Security Act WPAWPA

During the Hundred Days and the months immediately following Congress pass a great series of taxes, regulatory codes of labor. Spending is what FDR did to stimulate the American economy.

The New DealThe New Deal

Coalition included: Trade unionists Industrial workers

of all racesFirst and second

generation Catholic immigrants

Traditional-minded white southerners

http://www.booktv.org/Program/9951/Traitor+to+His+Class+The+Privileged+Life+and+Radical+Presidency+of+Franklin+Delano+Roosevelt.aspx

Problems of the New Deal:

Criticism by a Catholic priest

Violent strikes such as that by teamsters in Minneapolis

Accusations of socialism by businessmen and some democrats

Protest marches by the unemployed councils and the communists

In exchange for an entry fee of $2,500, the Bell-Wray group was awarded the assets of the failed Yellow Jackets organization. Drawing inspiration from the insignia of the centerpiece of President Franklin D. Roosevelt's New Deal, the National Recovery Act, Bell and Wray named the new franchise the Philadelphia Eagles. Neither the Eagles nor the NFL officially regard the two franchises as the same, citing the aforementioned period of dormancy. The Eagles simply inherited the NFL rights to the Philadelphia area. Also, almost no players from the 1931 Yellow Jackets ended up with the 1933 Eagles.

National Recovery Administration tried to promote peace with

employee and employer with its 750 codes dealing with price controls and a 35 hour work

week

Section 7a was part of the National Recovery

Administration which granted unions outlawed

the anti union open house system

FDIC Insured $5,000 to anyone in a registered in the banking

system

NIRA: There is a right to collectively bargain with labor.

Wagner Act allowed unions to exist with

NRA section 7a collective

bargaining

NIRA

The NIRA sparked union organization and gave the government more control

It was controversial due to the constitutionality of the power of the program

http://www.youtube.com/watch?v=8L7txbm8S5Q

(3:29)

RooseveltRoosevelt

FDRFDRs Brains trust s Brains trust believed in government believed in government business corporationsbusiness corporations

It was a reversal of It was a reversal of Coolidge and Mellon in itCoolidge and Mellon in its s free market systemfree market system

RooseveltRoosevelts first act as s first act as president was to president was to declare a Bank declare a Bank Holiday Holiday

He shut down all He shut down all banks in the country banks in the country for a week for a week

http://www.youtube.com/watch?http://www.youtube.com/watch?

v=kFvrL_nqx2cv=kFvrL_nqx2c (6:52) (6:52)

Emergency Banking Act which gave the president broad powers over all banning transaction and foreign exchange. Roosevelt passed the FDIC which insured over $5,000 per customer in banks. Banks began to attract new deposits. The bank crisis had passed.

Family IncomeFamily Income

The distribution of family The distribution of family income in percent's from 1929-income in percent's from 1929-19441944

The lower four-fifths all gained, The lower four-fifths all gained, while the top fifths lostwhile the top fifths lost

The AAA Policy was to not have the farmers grow crops or raise livestock. The costs of the crops and

livestock would increase because of the price of goods and raise their salaries.

Civil Works Administration (CWA) employed more than 4 million person in the construction of high ways tunnels,

courthouses and airports

Other Programs of FDRs New Deal

The ideas of

Roosevelts FHA built

thousands of houses in

1930s

Under Harry Hopkins leadership oversaw h employment of more that 8 million Americans on construction projects. Roads bridges, dams, airports and sewers. WPA programs were community service projects that employed thousands of jobless artist and musician.

Efforts by the New Deal to Efforts by the New Deal to sidestep or avoid sidestep or avoid discrimination included:discrimination included:

Choice of Robert Weaver Choice of Robert Weaver to advise on economic to advise on economic affairsaffairs

Inclusion of blacks by CIO Inclusion of blacks by CIO labor unionslabor unions

Appointment of May Appointment of May Mclead Bethune to the Mclead Bethune to the black cabinetblack cabinet

Employment of black Employment of black workers in PWA workers in PWA construction jobsconstruction jobs

Racism and Racism and discriminations discriminations appeared in the New appeared in the New Deal in the following Deal in the following ways:ways:

The hiring policies of The hiring policies of the TVAthe TVA

The SS Act excluded The SS Act excluded domestic and casual domestic and casual laborslabors

Lower wages for Lower wages for blacks were allowed blacks were allowed under NRA labor codesunder NRA labor codes

The separated camps The separated camps established by the CCCestablished by the CCC

The Social Security Act: The Social Security Act: joined people together in joined people together in a mutual aid programa mutual aid program

Is a current system todayIs a current system today May be the best legacy of May be the best legacy of

FDRFDRs programss programs Money was given to Money was given to

elderly, disabled, and elderly, disabled, and unemployed unemployed

The AAA: The AAA: Paid subsidies to large Paid subsidies to large

landownerslandowners Led to an increase in Led to an increase in

evictions of sharecroppers evictions of sharecroppers and tenant farmersand tenant farmers

Inspired the founding of Inspired the founding of the Southern Tennant the Southern Tennant FarmerFarmers Unions Union

The Social Security Act: joined people together in a The Social Security Act: joined people together in a mutual aid programmutual aid program

Is a current system todayIs a current system today May be the best legacy of FDRMay be the best legacy of FDRs programss programs Money was given to elderly, disabled, and Money was given to elderly, disabled, and

unemployed unemployed

Roosevelts Critics Right and Left

#http://www.hueylong.com/programs/education.php

Fr. John Ryan Social Justice

Glass-Steagel Act

The Glass-Steagal Act:

1)Created the Federal Deposit Insurance Corporation (FDIC) which provided protection to individual depositors by guaranteeing accounts up to $5,000 in case of Bank Failure.2)Established the Securities and Exchange Commission (SEC) to regulate sock exchanges and brokers, require full financial disclosures and curb the speculative practices which contributed to the 1929 Crash.

Glass Stegall Act Glass Stegall Act

Separated investment Separated investment and commercial banking and commercial banking activitiesactivities

Passed because Passed because commercial banks were commercial banks were accused of being too accused of being too speculativespeculative

http://www.youtube.com/watch?v=OChttp://www.youtube.com/watch?v=OCPg8fDYq_QPg8fDYq_Q (1:54) (1:54)

Left Turn and the Second New Deal

1934 Vanity Fair cover showing how the Blue Eagle has control of Uncle Sam

The Justices ruled that New York could not

establish a minimum wage for women and

children

In 1936 the court found the NRA unconstitutional in its in entirety. Butler versus United Stated the Supreme Court in validated the AAA declaring it an unconstitutional attempt at regulating agriculture. Regulation of prices is unconstitutional.

The regulations at issue were promulgated under the authority of the National Industrial Recovery Act (NIRA) of 1933. These included price and wage fixing, as well as requirements regarding the sale of whole chickens, including unhealthy ones. The government claimed the Schechters sold sick poultry, which has led to the case becoming known as "the sick chicken case". Also encompassed in the decision were NIRA provisions regarding maximum work hours and a right of unions to organize. The ruling was one of a series which overturned elements of President Franklin D. Roosevelt's New Deal legislation between January 1935 and January 1936

Schlienler Taylor in Brooklyn lowered prices

SchlienlerManhattan tailor who was living in the east side not as attractive, sold his services in altering for 15 cents per item. The NRA closed his shopped since the standard price was 19 cents per hour.

Resettlement Act: Led by Rexford Tugwell RA helped destitute farm families relocate t more productive areas. Due to lack of funds only 1% of the 500,000 farm families were relocated. Suburbs worked relocation of farms did not

Labor Upsurge : Rise of CIO

Workers in the steel

industry use the wagner

act to see if they can

improve there value

In Minneapolis where an organization of businessmen known as the Citizens Alliance controlled the city government , a four month strike by truck drivers led to pitched battles in the streets and the governor declares martial

law

In 1938 CIO unions boasting nearly 4 million members with drew from the AFL and reorganized themselves as the Congress of Industrial Organizations. For the first time ever, the labor movement had gained a permanent place in the nations mass-production industry Frances Perkins was the secretary of labor.

Ed McRea a white CIO organizer in Memphis Tennessee reported that he had little difficulty persuading black workers the

value of Unionization.

Cleveland Fisher Body Shop

Sit Down Strike

The New Deal Coalition at High Tide

FDR was popular with Catholics and Jewish and this was evident with his Home Owners Loan Corporation, Social Security and WPA. In exchange for the working mans votes they now looked to the state especially the federal government, for relief, protection and help in achieving the American Dream. FDR would later go into Maine and Vermont they only states he lost and place unneeded government program to win in 1940 (peers and coastline reinforcements)

The New Deal in the South and West

In early 1930s only 3% of rural Southerners and access to electric power. With TVA program built 16 dams and gave electrical power to hundreds of thousands of families. Electrification allowed farm families to enjoy radio, electric lights and conveniences for these farmers.

TVA Sights

TVA Electric Plants

From taxes on inheritance

(Long) 90% of Rural people

now have electricity in

REA

An Environmental Dust Bowl

The Dust Bowl The map of 1935-1940

shows that the Dust Bowl affected all of the following states:

Texas Oklahoma Kansas Colorado

The Dust Bowl:http://www.youtube.com/watch?v=x2CiDaUYr90

(2:58)

The New Deals response to the Dust Bowl:

Formation of the Soil Conservation Service and soil conservation districts

Temporary projects with the Progress Administration

Direct emergency release for families by the resettlement administration

Crop and seed loans

Dust Bowl occurred which

displaced 1 million farmers

Water Policy

In 1935 the Bureau of Reclamation of the Department of the Interior launched the giant Central Valley Project. The largest and power and irrigation project of all was Grand Coulee Dam, northwest of Spokane, Washington. Between 1933 and 1940, Washington State ranked first in per-capita federal expenditures. In the longer run Grand Coulee provided the cheapest electricity in the United States.

Bureau of Reclamation

The projects begun under the New Deal included:

Lake Meag Central Valley project Grande Coulee Dam All-American Canal

The Bureau transformed the West with huge water and public power projects

Grand Coulee Dam helped harness the Columbia River for electricity and crop erosion

A New Deal for Indians

The Bureau of Indian Affairs led by John Collier helped the problems with Indians. The number of Indian people employed by the BIA from a few hundred to 4,600.

The Indians were the poorest people of America. Alcoholism, tuberculosis, low marketable skills were problems of the reservation. John Collier tried to solve this problems with the government.

John Collier with Indians before the

Indian Reorganization Act

The Limits of ReformCourt Packing

FDR wants to place 6 more Supreme Court Justices to Supreme Court to

control the government

The Supreme Court

In 1937 the Supreme Court upheld the constitutionality of the:

NRA Bureau of

Reclamation Newslands Act AAA

QuickTime and a

decompressor


Roosevelts Supreme Court battle of 1937 politically weakened him.

It was FDRs court packing taking away from the Constitution and enhancing the powers of the president

The Supreme Court

The Womens Network

Eleanor Roosevelt became a powerful political figure fighting for liberal causes. Mrs. Roosevelts closets political ally was Molly Dewson. A longtime social workers and suffragist. Dewson used the women vote to create representative value for women. Economics, Education and Effects in politics were their mantra.

A New Deal for Minorities

Harold Ickes Sec. of Interior was able to

minimize lynching and attacked the principles of segregation against the

blacks

Segregation in the Services

Mexican Americans / Indian Reorganization

Act In the 1930s Mexicans were

deported in large numbers regardless of their citizenship status

Sovereignty: the exclusive right to exercise within a specific territory

The Indian Reorganization Act restored semi-sovereign status to the tribes

Minorities were taken advantage of through this act

Education was not equal with minorities

Mexican Americans

More than 400,000 1/5 of the Mexican origin returned to Mexico

because of the depression.

The Roosevelt Recession and the Ebbing of the New Deal

Depression Era Culture

The Great depression profoundly affected American culture, as it did all other aspects of national life. Movies, Arts, Radio and Literature/ There was as strong celebration of individualism and nostalgia for a simpler life which represents American Core Virtues.

A New Deal for the Arts

WPA offers assistants to the arts

WPA Artisan Important People New Deals Federal Writers project

included: Ralph Ellison Richard Wright Zora Neale Hurston

Federal Arts Project included: William de Koonig Jackson Pollock Louise Nevelson

Charles E Coughlin denounced a conspiracy of Jews international bankers and New Deal









WPA gave money to the arts. Macbeth Play was done by an all black cast

Popular Themes - Ways of Life

Some of the most popular big band sounds were produced by:

Artie Shaw http://www.youtube.com/watch?

v=zNcPnEc99UE (3:13)

Count Basie Jimmie LuncefordDuke Ellington

The most popular movie themes of the 1930s included:

Those depicting core American values

Screw ball comedies

Gangsters Musicals with song

and dance spectacles http://www.youtube.com/watch?

v=2cqS_LAEVZM (1:25)

The 1936 election is about the ideal of freedom. Two

opposing systems of concepts about liberty

-The needs and purposes of two opposing parts of the

population

-Freedom for private enterprises

--The other socialized liberty based on an equitability shared

abundance

Popular Front is a coalition of politicians and writers who believes in communism. Martha Graham was

from the masterpiece American Document

A New Deal for the Arts

The Documentary Impulse

Dorthea Langes photography of the common man. The common man was

to the soul of America according to FDR

Waiting for Lefty

Waiting for Lefty is a 1935 play by the American playwright Clifford Odets. Consisting of a series of related vignettes, the entire play is framed by the meeting of cab drivers who are planning a labor strike. The framing uses the audience as part of the meeting.

While this was not Odets' first play, this was the first to be produced. It was staged by the Group Theatre, a New York theatre company founded by Harold Clurman, Cheryl Crawford and Lee Strasberg, of which Odets was a member. The company was founded as a training ground for actors, and also to support new plays, especially those that mirrored the social and political climate of the day. Waiting for Lefty was the first real critical and popular success for the Group Theatre, appearing on Broadway as well as in cities around the United States. It had its British premiere in 1938 at the Unity Theatre, whose production so impressed a visiting contingent of the American Group Theatre that Unity Theatre was given the British rights to the play

Popular Front the movement of Communism in the United

States

CommunismCommunism

During the 1930During the 1930s, the s, the Communist party of Communist party of the United States the United States attracted intellectuals, attracted intellectuals, but usually only for but usually only for brief periods of time. brief periods of time.

New YorkNew Yorks group s group theatertheater

WPA art projectsWPA art projects The CIO organization The CIO organization

drivesdrives The Abraham Lincoln The Abraham Lincoln

BridgeBridge Communism was Communism was

present in all of the present in all of the following ways (but not following ways (but not limited to) :limited to) :

Raising Spirits, Film, Radio and the Swing Era

In 1929, Catholic layman Martin Quigley, editor of the prominent trade paper Motion Picture Herald, and Father Daniel A. Lord, a Jesuit priest, created a code of standards (which Hays liked immensely[11]), and submitted it to the studios.[7][12] Lord's concerns centered on the effects sound film had on children, whom he considered especially susceptible to their allure.[11] Several studio heads, including Irving Thalberg of Metro-Goldwyn-Mayer (MGM), met with Lord and Quigley in February 1930. After some revisions, they agreed to the stipulations of the Code. One of the main motivating factors in adopting the Code was to avoid direct government intervention.[13] It was the responsibility of the Studio Relations Committee, headed by Colonel Jason S. Joy, to supervise film production and advise the studios when changes or cuts were required

Beginning in late 1933 and escalating throughout the first half of 1934, American Roman Catholics launched a campaign against what they deemed the immorality of American cinema. This, plus a potential government takeover of film censorship and social research seeming to indicate that movies which were seen to be immoral could promote bad behavior, was enough pressure to force the studios to capitulate to greater oversight

Conclusion

Photos of share croppers and immigrants

The Solid South helped to mold the New Deal welfare state into an Entitlement of White America

The New Deal was the most stupendous

invasion of the whole spirit of liberty that

nation has ever seen

Chapter 24 : The Great Depression and The New DealPowerPoint PresentationSlide 3Slide 4Sit down strike at flintSlide 6Slide 7Slide 8Slide 9Slide 10Slide 11Slide 12Slide 13Slide 14Slide 15Slide 16Slide 17Slide 18Slide 19Slide 20Slide 21Slide 22Slide 23Slide 24Slide 25Slide 26Slide 27Slide 28Slide 29Slide 30Slide 31Slide 32Slide 33Glass Stegall ActSlide 35Slide 36Slide 37Slide 38Slide 39Slide 40Slide 41Slide 42Slide 43Slide 44Slide 45Slide 46Slide 47Slide 48Slide 49Slide 50Slide 51Slide 52Slide 53Slide 54Slide 55Slide 56Slide 57Slide 58Slide 59Slide 60Slide 61Slide 62Slide 63The Bull MarketSlide 65Slide 66Slide 67Slide 68Slide 69Slide 70Slide 71Slide 72Slide 73Slide 74Slide 75Slide 76Slide 77Slide 78Slide 79Slide 80Slide 81Slide 82Slide 83Slide 84Slide 85Slide 86Slide 87Slide 88Slide 89Slide 90Slide 91Slide 92Slide 93Slide 94Slide 95Slide 96Slide 97Slide 98Slide 99Slide 100Slide 101Slide 102The Stock Market, 1919-1939Slide 104Slide 105Slide 106Slide 107Slide 108Slide 109Slide 110Slide 111Slide 112Slide 113Slide 114Slide 115Slide 116Slide 117Slide 118Slide 119Slide 120Slide 121Slide 122Slide 123Slide 124Slide 125Slide 126Slide 127Slide 128Slide 129Slide 130Slide 131Slide 132Slide 133Slide 134Slide 135Slide 136Slide 137Slide 138Slide 139Slide 140Slide 141Slide 142Slide 143Slide 144Mass UnemploymentSlide 146Slide 147Slide 148Slide 149Slide 150Slide 151Slide 152Slide 153Slide 154Slide 155Slide 156Slide 157Slide 158Slide 159Slide 160Slide 161DepressionSlide 163Slide 164Slide 165Slide 166Slide 167Slide 168Slide 169Slide 170Slide 171Slide 172Slide 173Slide 174Slide 175Slide 176Slide 177Slide 178HooverSlide 180Slide 181Slide 182Slide 183Slide 184Hoovers FailureSlide 186Slide 187Slide 188Slide 189Slide 190Slide 191Slide 192Slide 193Slide 194Slide 195Slide 196Slide 197Slide 198Slide 199Slide 200Slide 201Slide 202Slide 203Slide 204Slide 205Slide 206Slide 207Slide 208Slide 209Slide 210Slide 211Slide 2121932 Election: Roosevelt vs. HooverSlide 214Slide 215Slide 216Slide 217Slide 218Slide 219Slide 220Slide 221Slide 222Slide 223Slide 224Slide 225Slide 226Slide 227Slide 228Slide 229Slide 230Slide 231Bank HolidaySlide 233The Hundred DaysSlide 235Roosevelts First 100 DaysSlide 237Slide 238Slide 239Slide 240Slide 241Slide 242Slide 243Slide 244Slide 245The New DealSlide 247Slide 248Slide 249Slide 250Slide 251Slide 252Slide 253Slide 254Slide 255Slide 256Slide 257Slide 258Slide 259Slide 260Slide 261Slide 262Slide 263Slide 264NIRASlide 266Slide 267Slide 268Slide 269Slide 270RooseveltSlide 272Slide 273Slide 274Slide 275Slide 276Slide 277Slide 278Family IncomeSlide 280Slide 281Slide 282Slide 283Slide 284Slide 285Slide 286Slide 287Slide 288Slide 289Slide 290Slide 291Slide 292Slide 293Slide 294Slide 295Slide 296Slide 297Slide 298Slide 299Slide 300Slide 301Slide 302Slide 303Slide 304Slide 305Slide 306Slide 307Slide 308Slide 309Slide 310Slide 311Slide 312Slide 313Slide 314Slide 315Slide 316Slide 317Slide 318Slide 319Slide 320Slide 321Slide 322Slide 323Slide 324Slide 325Slide 326Slide 327Slide 328Slide 329Slide 330Slide 331Slide 332Slide 333Slide 334Slide 335Slide 336Slide 337Slide 338Slide 339Slide 340Slide 341Slide 342Slide 343Slide 344Slide 345Slide 346Slide 347Slide 348Slide 349Slide 350Slide 351Slide 352Slide 353Slide 354Slide 355Slide 356Slide 357Slide 358Slide 359Slide 360Slide 361Slide 362Slide 363Slide 364Slide 365Slide 366Slide 367Slide 368Slide 369Slide 370Slide 371Slide 372Slide 373Slide 374Slide 375Slide 376Slide 377Slide 378Slide 379Slide 380Slide 381Slide 382Slide 383Slide 384Slide 385Slide 386Slide 387Slide 388Slide 389Slide 390Slide 391Slide 392Slide 393Slide 394Slide 395Slide 396Slide 397Slide 398Slide 399Slide 400The Dust BowlSlide 402Slide 403Slide 404Slide 405Slide 406Slide 407Slide 408Slide 409Slide 410Bureau of ReclamationSlide 412Slide 413Slide 414Slide 415Slide 416Slide 417Slide 418Slide 419The Supreme CourtThe Supreme CourtSlide 422The Womens NetworkSlide 424Slide 425Slide 426Slide 427Slide 428Slide 429Slide 430Slide 431Slide 432Slide 433Slide 434Mexican Americans / Indian Reorganization ActMexican AmericansSlide 437Slide 438Slide 439Slide 440Slide 441Slide 442Slide 443Slide 444Slide 445Slide 446Slide 447Slide 448Slide 449Slide 450WPA Artisan Important PeopleSlide 452Slide 453Slide 454Slide 455Slide 456Popular Themes - Ways of LifeSlide 458Slide 459Slide 460Slide 461Slide 462Slide 463Slide 464Slide 465Slide 466Slide 467Slide 468Slide 469Slide 470Slide 471Slide 472CommunismSlide 474Slide 475Slide 476Slide 477Slide 478Slide 479Slide 480Slide 481Slide 482Slide 483Slide 484Slide 485Slide 486Slide 487Slide 488Slide 489Slide 490Slide 491Slide 492Slide 493

college on campus: american history chapter 24

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