Transcript Chapter 22: The Great Depression (1929 – 1933)

Chapter 22: The Great Depression
(1929 – 1933)
I.
Causes of the Great Depression
Introduction…
A. Weakness in the Overall Economy
1. Depressed agriculture w/ drop in farm prices
2. High unemployment in RR, coal, textile
3. Increase in number of bank failures…
4. Summer ‘29: underconsumption in economy…
I.
Causes
B. Unequal Distribution of Wealth
1. 1% v. 40%
2. Economy depend on small % spending
3. Masses couldn’t pick up slack when they stopped:
underconsumption
4. Wages didn’t keep pace w/ inflation: miners,
textile workers, farmers
I.
Causes
C. Excessive Buying on Credit
D. Inadequate Govt Policies
* Laissez faire; tax policies; not enforce antitrust laws
* FED: allowed low interest rate: led to stock
speculation
E. Weak International Economy
* Hawley-Smoot Tariff (1930)
II.
The Great Stock Market Crash
Introduction…
Terms:
1. “On the Margin”: investor borrows from stockbroker
who borrows from bank.
2. Call loans: can be “called” in at any time
3. Average American…
4. Business Cycle: economy grows, contracts
5. Dow Jones Industrial Average: an average of stock prices
of major industries
III. Misery & the Great Depression
A. By the Numbers
1. 1929-1933: national income: $87 b to $40 b
2. Wages dropped 60%
3. ‘29-’33: 5000 banks closed
4. 25% unemployment: 10 million
5. 90,000 business failed
6. 1 million: homeless
7. Marriages, births, colleges: dropped
8. “Woman” jobs: less affected
III. Misery & the Great Depression
B. Urban Life
1. Hoovervilles/ Hoover Blankets
2. Bread lines & soup kitchens
3. Increase in malnutrition, tuberculosis, typhoid
4. Relief efforts by Red Cross: limited b/c
contributions were down
5. Private organizations: overwhelmed
III. Misery & the Great Depression
C. Dust Bowl
1. 1930s: seven year drought hit parts of Texas,
OKLA, Kansas, Colorado, N. Mexico
2. Drought + poor farming techniques = loss of
topsoil… created huge dust storms
3. Okies, Arkies, The Grapes of Wrath
4. W/ foreclosures, increase suffering of farmers
III. Misery & the Great Depression
D.
Culture and the Great Depression
IV. Herbert Hoover’s Response
A. Philosophy
1. Hoover the Man
2. Philosophy
* Believed in self help and opposed direct govt relief;
would destroy “rugged individualism” & initiative
*Laissez faire: no govt; eco will fix itself (bus. cycle)
* Preferred balanced budget & cut taxes
* Relief: responsibility of local govt, private groups
* “Prosperity is Just Around the Corner”
IV. Hoover’s Response
B. Actions
1. Reconstruction Finance Corporation
2. Business Agreements
3. Government Projects
4. Hawley-Smoot Tariff ( 1930)
5. Moratorium on European Debts
IV. Hoover’s Response
C.Bonus Army
V.
Mandate for Change: FDR
Chapter 23: The New Deal
I.
FDR’s Policy Strategies
A. Introduction…
Fireside Chats… Brain Trust… 100 Days
B. Practical Approaches
Deficit Spending… Keynes
II.
The New Deal in Action: Relief, Recovery,
Reform
A. Relief
1. Emergency Banking Act (1933)
* Bank Holiday
2. Federal Emergency Relief Act/ Ad: chart
3. Public Works Administration: chart
4. Civilian Conservation Corps: chart
5. Works Progress Administration: chart
II.
The New Deal
B. Recovery
1. Home Owners Loan Corporation (HOLC)
*Provided money to pay off mortgages
2. Federal Housing Administration (FHA)
* Insured bank mortgages
II.
The New Deal
B. Recovery
3. National Industrial Recovery Act
* Chart
* Suspended anti-trust laws to revive business and
reduce unemployment
* Business: agree to fair wages and hours; unions
can organize
* Not popular: raised prices and favored BB
* Declared Unconstitutional
II.
The New Deal
B. Recovery
4. First/ Second Agricultural Adjustment Act
* Chart
* Goal: raise income by cutting surplus: crops &
livestock
* Financed by processing tax on manufacturers
* Public: outraged over destruction
III. The New Deal
C. Reform
1. Glass-Steagull Banking Act/ FDIC: chart
2. Securities Exchange Act/ Ad: chart
3. Social Security Act/ Ad: chart **Important!!
4. National Labor Relations/ Wagner Act
* “Magna Carta” of labor
* after NRA: unconstitutional
5. Fair Labor Standards Act: chart
III. Constitutional Issues & the New Deal
A. Supreme Court… Introduction
1. Schechter Poultry Corp. v. US
* “Excessive legislative powers by the executive
branch was unconstitutional”
2. US v. Butler
3. Court Packing
III. Constitutional Issues
B. Tennessee Valley Authority
1. Federal funded corporation that provided jobs,
cheap electricity, flood control to 7 poor states.
2. Controversial: “creeping socialism”
C. Third Term Controversy
IV. The New Deal & Human Element
A. Eleanor Roosevelt
B. Dust Bowl
C. Native Americans
* Indian Reorganization Act
D. AFL & CIO
* Increase in union members: laws
*CIO: split: Committee for Industrial
Organization: unskilled, minorities, women
* Sit down strikes
IV. The New Deal: Human Element
E. “Homegrown Demagogues”
Francis Townshend… Father Coughlin… Huey Long
V.
Criticisms of the New Deal
1. The New Deal Put the Country Into Debt.
2. The Federal Government was too large.
3. Welfare and Govt assistance would destroy people’s
initative