Depression and New Deal

Chapter 24

Election of 1928

Herbert Hoover – Republican

Alfred E. Smith - Democrat

Hoover’s solid reputation, Smith’s anti-prohibition stance that divided Democrats, and the “Coolidge Prosperity” allowed for an easy Republican victory

Hoover’s Beliefs

Hoover believed in limited federal government intervention, and generally left problems to the state and local governments, as well as voluntary associations and big business (which he did not regulate)

Great Depression EventsEvents leading to the

Depression were:

1) 1928 – Wave of stock investors speculating on borrowed money bought stocks in the hope of quick profits

2) Oct, 1929 – Black Thursday and Black Tuesday stock market crash and runs on the bank to get money out

Stock Market Crash

The stock market and the economy continued to go down throughout Hoover’s Presidency

Causes of the Depression1) Buying stock and consumer goods with borrowed

money (on credit through the installment plan) leading to debt for consumers and overproduction for businesses (who think more people are buying)

2) Uneven prosperity of the 1920s (rich get richer, poor aren’t helped, farmers suffer)

3) Lack of Global Trade – high tariffs in the US and in other nations hurt trading opportunities and Europe’s lack of money during the 1920s means that we can’t get bailouts from them

Hoover’s Response

Hoover believed that the economy would turn by itself and it took until late in his Presidency to spend federal money

He advocated for the Hawley-Smoot Tariff (raised tariffs which hurt more), Suspension of debt payments from Europe, the Federal Farm Board to help farmers, and the RFC gave emergency loans to important businesses that were failing

HoovervillesHoover’s lack of action led to homelessness and the development of shantytowns, which poor people referred to as Hoovervilles

Great Depression Unemployment

The Bonus Army IncidentHoover also refused to give federal aid to farmers and drove away the Bonus Army (wanting their WWI bonuses)

Election of 1932

Republican – Herbert Hoover

Democrat – Franklin Roosevelt

Hoover’s lack of popularity and Roosevelt’s promise for a “New Deal” with spending cuts, the end of prohibition, and unemployment aid helped him win easily

To make matters worse for Hoover, the 20th Amendment was passed to remove him from office quicker

Roosevelt’s Presidency

Roosevelt focused on the three R’s: relief, recovery, and reform and in the first hundred days proposed several plans that Congress passed known as the First New Deal

He put around him a Brain Trust of Individuals:

John Nance Garner – Vice President, Eleanor Roosevelt – First Lady, Secretary of Labor – Frances Perkins, Interior and PWA head – Harold Ickes, Agriculture – Henry Wallace, Treasury – Henry Morgenthau, NRA – Hugh Johnson, RFC – Jesse Jones, CWA – Harry Hopkins

Roosevelt’s Fireside Chats1. On the Bank

Crisis - Sunday, March 12, 1933

2. Outlining the New Deal Program - Sunday, May 7, 1933

3. On the Purposes and Foundations of the Recovery Program - Monday, July 24, 1933

A “Chat” with FDR

Roosevelt’s Fireside Chats were designed to connect with citizens and explain to them what his programs were. With your New Deal Program write a radio broadcast explaining:

1) The reason why the program is needed (what was the cause of this problem in the first place)

2) How this program will solve the problem (what it will actually do, how it will help)

New Deal and the Budget

• Budget Expenditures

-FDIC, HOLC, FCA, CCC, FERA, AAA, PWA, RFC, TVA, CWA, WPA and FTP, Farmer’s Administrations

• Budget Balancers

-Revenue Act (raising taxes on wealthy) and Social Security Act

Opposition to the New Deal

While most people backed Roosevelt:

1) Conservatives claimed FDR was socialist, hurt business, and increased the deficit (American Liberty League)

2) Liberal Demagogues claimed he needed to nationalize banks (Coughlin), give money to retired people (Townsend), and that a “Share Our Wealth” program should be adopted (Huey Long)

Election of 1936Roosevelt’s new programs won him a coalition that consisted of the Solid South, immigrants, farmers, labor, minorities, elderly, but not big business (pro-union, Revenue Act)

The national strength of his coalition showed in his overwhelming victory

The “Court-Packing” Bill

The 1932 Supreme Court

Despite Roosevelt’s political success, he was unhappy that the 1930s Supreme Court ruled his programs unconstitutional, and called for a bill to replace the justices with new ones

Roosevelt failed and his opponents accused him of “court-packing”, but he did ultimately get his wish as many retired in the late 30s

The Recession of 1937Caused by the Social Security Tax and cutbacks on government spending to balance the budget because it tightened the economy

Afterwards, Roosevelt adopted Keynesian economics and used deficit spending

Dust BowlThe psychological impact

of the Depression caused stress to millions, especially:

1) Farmers with the Dust Bowl (many leave for California)

2) Families and Women with home duties and needing to supplement family income (birth and marriage rates down)

Unions in the 30s

Labor Unions were helped by the New Deal with the organizations of the AFL (skilled labor) and the CIO (unskilled workers) that won strikes (General Motors Strike in Flint, MI) and cases (US v. Darby Lumber Co. which upheld child labor laws)

Depression Gains and Setbacks

1) African-Americans faced racial discrimination that made them the last hired and first fired, and they were purposefully excluded from some programs due to Roosevelt’s commitment to the South, but nonetheless voted overwhelmingly Democratic due to getting some New Deal help, appointments to federal positions, and the Marian Anderson concert

2) Mexican-Americans were discriminated against and the amount of immigrants slowed dramatically once there was a lack of work

3) Native Americans were helped by the Indian Reorganization Act and John Collier, both of which worked to give the natives back control over their lands

Escaping the Depression – 30s Culture

Judy Garland in “The Wizard of Oz” (1939) and Walt Disney with the Seven Dwarves (1937)

An even more homogenous culture existed in the 30s with radio and movies providing avenues of escape from life (usually comedies), but growing apprehension was clear with the “War of the Worlds” radio announcement about an invasion from Mars

Orson Welles’s War of the Worlds

Artists and Architects

Streamlining buildings allows for air to better travel around it

Writers admired American resilience and the enduring of capitalism, and were backed by the government (WPA, FTP) to produce nationalist writing, art, and music (jazz, swing) projects

Architects developed streamlining, which took ideas of functionality and expanded them to develop new designs

In a state of DepressionPick one of the following types of people and create a diary entry

that explains daily life for them in the 1930s. Give at least 3 things for them to do and hardships that they would have had:

1) African-American

2) Mexican-American

3) Artist, Writer, Musician

4) Labor Union Worker

5) Big Businessman

6) Mayor or Governor

7) Farmer