Transcript 1929-1939

1929-1939
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Uneven distribution of income
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Gains in income were more for wealthy than working class
 Top 2% of population controlled 40% of nation’s savings
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Market Speculation
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Very wealthy purchase stocks and speculate on future
Buying stock “on the margin”
Excessive use of credit
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Installment buying for cars, refrigerators, vacuums
 This prohibited families from buying other items such as food, clothing
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Overproduction
Weak farm economy: farm prices were highest during WWI
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Farmers unable to payback installment loans on equipment
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The exuberant spending of the 1920’s caused people to buy
beyond their means (“on the margin”: purchasing a stock for
a percentage of its value)
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This was true for consumer goods as well as fr stocks
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This greatly inflated the price of stocks, far beyond actual
value
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When the market “crashed” it was actually stock prices
returning to more reasonable levels
This left many in debt
1.
Bank Closings Increased
-banks had to close when farmers couldn’t repay the loans, and it trickled
into the cities
-5,000 banks failed with over $5 million in American savings
2.
Income decreased for industrialists
--invested heavily in the stock market & lost money when it crashed
3.
Effect on the world
-many European countries had loans in American banks
-banks failing causes insecurity in these countries
GRAPH
Consumer Debt, 1921-1929
DIAGRAM
Worldwide Depression
GRAPH
Bank Failures
# of Bank Failures by year

http://www.history.com/topics/great-depression/videos#the-great-depression
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-not uncommon for 2 people to share a job, since many lost their jobs (25%
unemployment rate)
 Women & minorities often 1st to lose jobs

Hoovervilles: settlements of scrap metal/lumber usually located on the outskirts of
cities

Hobos riding on railroads (unemployed young people)

Dust Bowl: by the 1930s, many farms in OK, KS, NE, CO, TX were either ruined or
abandoned due to drought & farmer loans
 People moved to CA for work
 The Grapes of Wrath by John Steinbeck portrays this
Note
the extensive wind erosion in the western Oklahoma panhandle region, which was dubbed
the “Dust Bowl” in the 1930s. Mechanized farmers had “busted” the sod of the southern plains so
thoroughly that they literally broke the back of the land. Tons of dust blew out of the Dust Bowl in
the 1930s and blotted the sun from the skies as far away as New York. A Kansas newspaperman
reported in 1935 that in his dust-darkened town, “Lady Godiva could ride through streets without
even the horse seeing her.”
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Hawley-Smoot Tariff (1930): imposed highest import tax in history;
Europe responds with their own high tariffs; did little to help US
economy
Voluntarism: Hoover encouraged Americans to donate as much as
they could to charities during this time
Debt Moratorium: 1 year moratorium on WWI debts
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1929 Agriculture & Marketing Act created the Federal Farm Board:
created to stabilize prices & promote sale of agricultural products
Reconstruction Finance Corporation (1932): federal agency that gave
money to banks to loan to railroads and businesses

This was intended to spur economic growth
Bonus Army, Summer of 1932: WWI vets march to Washington ask
federal govt for bonuses they were supposed to get in 1945
Hoover urged Senate to deny them the bonus now
Hoover ordered them removed and Gen. Douglas MacArthur used tear gas
to rid them from the White House
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One of the worst years of the depression & also happened to be an
election year
Roosevelt campaign pledged a “New Deal” for the American public
Roosevelt won nearly 60% of the popular vote
Both houses of Congress also went to the Democrats in the election
This would later be important as Roosevelt attempted to pass his
recovery plan
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Wealthy
Sec. of Navy under Wilson, NY Governor
Stricken with polio in 1921
Several biographies say this made him more
sensitive to the people struggling
 Married Eleanor Roosevelt

 Very active in NY state politics, especially reforms for
women

http://www.history.com/topics/great-depression/videos#fdr-a-voice-of-hope
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Roosevelt used his first 100 days in office to implement a his new
ideas
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Did something similar in NY & it was successful
The New Deal centered around 3 key ideas:

Relief: the concept of helping people immediately to get out of the misery
of the Depression

Recovery: aimed at helping the business community and restarting the
economy

Reform:
trying to change the country so that a depression could never
again have significant effects on the country

http://www.history.com/topics/great-depression/videos#thenew-deal-how-does-it-affect-us-today
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Until this time, Economists believed the
markets would adjust themselves (but they
didn’t—Great Depression)
John Maynard Keynes
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
Economist
Demand-side/Keynesian Economics
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Passed several programs to stimulate the economy &
provide relief/jobs (Obama Administration)
The Bank Holiday: FDR orders all banks closed, US
Treasury must OK bank reopening (part of the Emergency
Banking Act, March 1933)
 ¾ of banks belonging to the Federal Reserve System
opened 3 days later
Repeal of Prohibition
 National Recovery Adm., declared unconstitutional
Farm Controls
 Agric. Adj. Adm. (AAA) offered subsidies to encourage
production, also declared unconstitutional
 Paid farmers NOT to produce certain crops and livestock

Tennessee Valley Authority (TVA): Authorized construction of
a series of damns to provide electricity/flood control to those living in
Tennessee River Valley

Financial Recovery

FDIC insures bank deposits (today, up to $150,000), Home
Owners Loan Corp., Farm Credit Adm.

Federal Emergency Relief Adminstration (unemployment
relief)

Public Works Administration (PWA): Schools, highways,
hospitals were built
More than twenty dams were constructed on the river’s tributaries as part of
a massive project to control flooding, generate hydroelectric power, and
revitalize the Tennessee Valley region, while also creating jobs for the
unemployed. The shaded area represents the area served by TVA electric
power.
The
Tennessee Valley Authority contributed to making electricity available
to almost all Americans by 1960. African American leader Andrew Young
later claimed that the TVA created the economic underpinnings of the civil
rights movement: “It was the presence of the cheap electricity, lower interest
rates, water projects, that laid the foundation for the New South.”
The
daughter of ex-slaves and founder
of a college in Florida, Bethune became
the highest-ranking African American
in the Roosevelt administration when
she was appointed director of the Office
of Minority Affairs in the National
Youth Administration (NYA). From
this base she organized the “Black
Cabinet” to make sure blacks benefited
from the New Deal programs along
with whites. Here she is picketing
against segregated hiring practices at
the Peoples Drug Store chain, one of the
earliest targets of the black civil rights
movement.
Civilian Conservation Corp (CCC): work in forest /conservation
programs
 Fireside chats
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Radio addresses to explain the immediate problems facing the country
Felt as though he was in your living speaking to you
Roosevelt’s “brain trust” cabinet
National Industrial Recovery Act (NIRA): attempted to stop
prices from falling
 More involved unions & collective bargaining
 National Recovery Administration (NRA): President sets
minimum wage, working hours
 Declared unconstitutional in Schechter vs. US (1935)
 Congress can not give the power to legislate to the President
Located
in central Washington
State, the Grand Coulee Dam was
one of the most ambitious projects
of the New Deal’s Public Works
Administration. It is the largest
concrete structure in the United
States and the central facility in the
Columbia Basin Project, which
generates electricity for the Pacific
Northwest and provides irrigation
for half a million acres of Columbia
Valley farmland—services that
have transformed the life of the
region.
The
first part of the New Deal was aimed largely at relief
Wealthy did not support New Deal programs
Resettlement Administration: many farms were still being
foreclosed
 This offered loans to small farmers who faced foreclosure
 Helps migrant farmers find work
Workers
Progress Administration (WPA): people benefitting
from FERA & employed them 30-35 hours per week
-approximately 2,000,000 per month employed by WPA
-unemployed artists, musicians, actors benefitted
Wagner Act:
gave workers the right to organize/form unions
National Labor Relations Board: reported unfair working
conditions here
After
generations of struggle,
organized labor made dramatic
gains in membership and
bargaining power during the
New Deal years.
The
Pedestrian Scene, painted on a wall of Coit
Tower in San Francisco, was one of a series of
murals commissioned by the federal government
to employ artists during the Great Depression.
The
first woman cabinet member, Perkins served as secretary of
labor under Roosevelt. She was subjected to much undeserved
criticism from male businessmen, laborites, and politicians. They
sneered that FDR “kept her in labor” for many years.

Creation of a retirement plan for those over 65
Workers & employers pay into
 Included unemployment insurance funded by
payroll tax (employers with more than 8 employees)
 AFDC
 Disabled
 Officially called OASDI

It is now the job of the federal
government to take care of those
who could not take care of
themselves
Campaign
He
speeches rallied against business
said they opposed his policies so they could continue
to get rich
Ran against Governor Alfred Landon of KS
Landslide victory of 523 to 8 (ME & VT) Electoral College
votes
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: Dems major party in America throughout the
rest of 1930s-1980s (Reagan)
White urban dwellers support Democrats
Whites in south had largely voted Dem. Since
the 1800s
Now labor unions/blacks/farmers join
coalition

DRAMATIC shift as most blacks had voted
Republican since Emancipation)
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People called him a socialist/communist
Wealthy thought he was a traitor
People felt neither party was trying to help
average Americans
American Liberty League: wealthy Americans
including prominent members of the DuPont
family

Disliked 1935 Revenue Act which raised the income
tax rate for those making over $50,000
 Referred to it as Bolshevism
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Old Age Revolving Pension Plan
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National sales tax would pay for a pension of $200
per month for all retired Americans
Created by Francis Townsend of CA (who ran for
governor of CA in 1934 against Upston Sinclair &
won)

Dr. Charles Coughlin

On Coughlin’s radio show, referred to Roosevelt as a
liar and betrayer
 Very anti-semitic feelings/statements, praised
Mussolini/Hitler
 Church pulled him off the air during WWII
LA Sen. Huey Long
“Share the Wealth” program allowed no Americans to make over
$1,000,000/per year (anything over would be payment to the govt in
taxes)
From this tax $$, give every American family $5,000 immediately
Wanted to run against FDR in 1936 but was assassinated in 1935

1937 Justice Reorganization Bill


US Supreme Court had said several New Deal
programs were unconstitutional
Would have allowed FDR to appoint a new justice
for every justice over 70 years of age
 Nothing in constitution saying only 9 justices
 Could pack the court with 6 new justices
 Said to help older justices with their workload
 Democrats & Republicans said trying to push his agenda
 Did not pass
 Several justices retired in few years after bill and
Roosevelt still packed the court
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Large recession hit mid-1937
Factories had major layoffs
New Deal critics blamed Roosevelt program for
recession
Wagner
Act permanently legitimizes labor unions
Sit-down strikes: Dec. 1936, GM plant in Flint, MI most
famous
 By Feb. 1937 management had to give in to demands
Congress of Industrial Organizations (CIO): lead by John L.
Lewis, represent unskilled factory/textile workers
By 1938 represented 4 million workers
Strikers
like these sometimes kept their spirits up with the song “Sit Down”:
When the boss won’t talk
Don’t take a walk;
Sit down, sit down.
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Women forced to work meager jobs to make ends
meet
Blacks often first fired from jobs
 Relief programs in south often excluded blacks
 Lynchings
 Scottsboro Trial: 9 black men were accused of raping 2
young white women on a train
 Got help from Communist Party, in end, some
convictions were overturned
 Blacks supported FDR as they felt he was responsive to
their needs
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Zora Neale Hurston wrote Their Eyes Were
Watching God (about growing up black in a
small southern town)
Studs Lonigen by James T. Farrell shows lives of
Irish in Chicago
Erskine Caldwell’s Tobacco Road about suffering
of sharecroppers in GA
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Gone with the Wind by Margaret Mitchell a
romanticized tale from Civil War period
1930s radio offers soap operas, comedies,
dramas, symphonic music/operas
70% of all adults went to the movies once a
week
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Mr. Smith Goes to Washington
Shirley Temple movies
Theaters designed to look like palaces, air
conditioned