Transcript Roaring Twenties

THE GREAT
DEPRESSION
Unit VIB
AP U.S. History
Fundamental Question
► Analyze
how the Great Depression changed
America’s political and economical
structures.
Past Major American Recessions
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Panic of 1807
 MAJOR CAUSE: Embargo Act of 1807
Panic of 1819
 MAJOR CAUSES: End of War of 1812 and First Bank of U.S. not rechartered
 MAJOR LEGACY: Second Bank of U.S. chartered, first example of business cycle contraction
Panic of 1837
 MAJOR CAUSES: Second Bank of U.S. not rechartered and Specie Circular
Panic of 1873
 MAJOR CAUSES: Land and railroad speculation
Panic of 1893
 MAJOR CAUSES: Railroad speculation and Sherman Silver Purchase Act
 MAJOR LEGACY: J.P. Morgan bailed out government with $65 million in gold bullion
Panic of 1907
 MAJOR CAUSES: Stock market speculation and bank runs
 MAJOR LEGACY: Led to Federal Reserve System
Depression of 1920-1921
 MAJOR CAUSES: War economy to peace economy, influx of laborers, overproduction in
agricultural sector
Republican Policies of 1920s
► Harding-Coolidge-Hoover’s
laissez-faire policies
 Banks and corporations increased questionable or
corrupt financial tactics
► Mellon’s
Tax Bill
 Revenue Acts of 1824, 1826, 1828 decreased tax
rates
 Inspired massive consumer and investment
spending
► Fordney-McCumber
Tariff (1922)
 Heavily favored industries and factories
 Farmers suffered with limited foreign markets
A “Boom” Economy during 1920s
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Mass Consumerism
 Scientific management and assembly lines spurred production
 Welfare capitalism led to wage increases and consumer confidence
 Installment plans led to consumer debt
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1920s Socioeconomics
 Socioeconomic gap widened further than Gilded Age
 5% wealthy class owned 33% of income
 Top 1% owned over 35% of the nation’s wealth
 Bottom 20% owned 4% of the nation’s wealth
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Agricultural Sector
 Overproduction
 Price decreases after World War I
 Increased farming resulted in poor environmental conditions
The Stock Market and the Crash of 1929
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Background
 Speculation
 “Buying on Margin”
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The Crash of 1929
 381.17 (9/3/29)
 Concern over high
stock prices led to
massive sell-off
 Thursday, October 24
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299.50
 Monday, October 28
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260.64
 Tuesday, October 29
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230.07
 41.22 (7/8/32)
Causes of the Great Depression
► Unequal
Distribution of Wealth
► Industrial Overproduction
► Agricultural Crisis
► Overextension of Credit
► Bank Failures
► Stock Market Crash of 1929
► High Tariffs
► Dawes Plan and Foreign Loans
Hoover and the Republicans
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“Given the chance to go forward with the policies of the last eight years, we shall soon with the help of God,
be in sight of the day when poverty will be banished from this nation.” - Inauguration, March 4, 1929
“There is no cause to worry. The high tide of prosperity will continue.” Sec. Of Treasury Andrew Mellon, Sept.
1929
“While the crash only took place six months ago, I am convinced we have now passed the worst and with
continued unity of effort we shall rapidly recover.” Pres. Hoover, May 1, 1930
“The worst is over without a doubt.” Sec. Of Labor James Davis, June 29, 1930
Hoover’s Economic Philosophy
 Promote voluntarism, restraint, and self-reliance
 Limited federal government involvement; facilitate with business sector and banking
► Hawley-Smoot Tariff (1930)
 Historical increase in tariff rates to protect domestic industries
 EPIC FAIL - since foreign nations enacted high tariff rates on U.S. goods
► Federal Farm Board
 Increased power to temporarily hold crop surpluses to curb overproduction
 FAIL - since government would not limit production
► Reconstruction Finance Corporation (RFC)
 Government-backed private corporation to offer loans to banks, corporations, insurance
companies, and railroads
 FAIL - did not offer relief to individual Americans
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Depression by Numbers
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Dow Jones Industrial
Average
 1929: 381.17
 1932: 41.22
 The average of stock prices
dropped over 90%
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 1929: 659 banks ($200,000,000)
 1930: 1,300 banks (853,000,000)
 1931: 2,294 banks ($1,700,000,000)
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Price Indices
Unemployment
 1929: 3.2%
 1933: 24.9%
 Unemployment rates higher
in specific regions, among
different groups
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 1929: $103.6B
 1933: $56.4B
Manufacturing wages down 60%
 Farmers’ income declined 55%
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Industrial production
 Down 26% in 1930; 51% by 1932
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Investments
 $10B in 1929; $1B in 1932
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Fertility Rates
 1928: 93.8
 1933: 76.3
Toledo, OH: 90%
GDP
Income
 National income fell $80B to $50B
 Salaries declined 40%
 Consumer prices feel 25%
 Wholesale prices fell 32%
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Bank Failures
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Suicide Rates
 1920-1928: 12.1
 1929: 18.1
 1930-1940: 15.4
Hoovervilles
Displaced Americans
set up shanty towns
Came to be known as
“Hoovervilles”
Public Reaction to Depression
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Blame and Needs
 Hoover and Republicans suffer
public backlash
 Public demands direct
government action and
intervention
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Farmers’ Holiday Association
Bonus March
 WWI veterans marched on D.C.
demanding early payments of
pensions
 Federal troops sent in to break
up Hoovervilles
► Burned
down shacks and
displaced veterans and families
 Public backlash on Hoover
increased due to perceived
apathy by Hoover
Depression through Pictures
The Dust Bowl (1930-1936)
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Causes
 Overgrazing
 Improper
farming
techniques
 Increased
cultivation
 Drought in 1934
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Effects
 Dust storms
 Black Sunday April 14, 1935
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300 million tons
of topsoil blown
across southern
Plains region
 Plight for
farmers
 Migration west
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“Okies”
Dust Turns Day Into Night
Election of 1932
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Republicans
 Herbert Hoover
 Blamed and criticized
for causing and
exacerbating
Depression
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Democrats
 Franklin Delano
Roosevelt (FDR)
Campaign promise of
a “new deal” and help
for the “forgotten
man”
► Repeal Prohibition
► Cut government
spending and provide
direct assistance for
unemployed rather
than businesses
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Legacy of Election of 1932
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Realignment election
leading to the Fifth Party
System
Twentieth Amendment
(1933)
 Lame-duck amendment
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FDR expanded
intervention and influence
of the executive branch
Eleanor Roosevelt
exemplified First Lady as
more than just a hostess
Fifth Party System (1932-1968)
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Democrats
 New Deal Coalition
► Catholics
► Jews
► Blacks
► Progressive
Intellectuals
► Urban Machines
► Populist Farmers
► White Southerners
► Labor Unions
► Low-Income
► Immigrants
 Dominated Congress and American
public for the next 36 years
 Increased government involvement in
economy and society
► New
Deal
► Great Society
► Civil Rights
► Republicans
 Pro-business
 Northeast
 Conservatives
► Economic
► Social
John Maynard Keynes
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Before the New Deal
 Classical economics
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Supply and demand, laissez-faire
Economies will naturally recover in
the long-run
 Say’s Law
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“products are paid for by products”
Keynesian Economics
 “In the long-run we are all
dead.”
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Criticized Say’s Law: “supply creates
its own demand”
 Strong aggregate demand
drives economies
 Mixed Economies
Some intervention from public
sector to stimulate economy
► Fiscal policy
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Government spending/deficit
spending
Monetary policy
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Fed increasing or decreasing the
money supply
FDR’s Message of Hope
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FDR had no specific plan for the
Depression
Calming the nation
 “… the only thing we have to
fear is fear itself.”
 Fireside chats
The Three R’s
 Relief
 Recovery
 Reform
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Brain Trust
 Capable advisers ordered to
experiment, be pragmatic
 “Do something.”
First New Deal - Alphabet Soup
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First Hundred Days*
Bank Holiday*
Emergency Banking
Relief Act*
Farm Credit Act
Wagner Act
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 National Labor
Relations Board
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Gold Reserve Act
21st Amendment
(1933)
 18th Amendment and
Prohibition repealed
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Civil Conservation Corps (CCC)*
Agricultural Adjustment Act (AAA)*
Federal Emergency Relief Act (FERA)*
Tennessee Valley Authority (TVA)*
Homeowners Refinancing Act (HRA)*
National Industrial Recovery Act
(NIRA)*
 National Recovery Administration (NRA)
 Public Works Administration (PWA)
Federal Deposit Insurance Corporation
(FDIC)
 Glass-Steagall Act
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Securities Exchange Commission
(SEC)
Federal Housing Administration (FHA)
The Second New Deal (1935-1938)
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Resettlement Administration/Farm Security
Administration
 Resettled poor farmers; economic and
educational programs for farmers
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Works Progress Administration/Works
Projects Administration (WPA)
 National labor project for infrastructure
and humanities
 National Youth Administration (NYA)
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Rural Electrification Administration
(REA)
 Public-private effort to electrify farms and rural
areas
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Revenue Act of 1935
 Increased tax rates on wealthy, capital gains,
gifts, inheritance
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Social Security Act (1935)
 Tax on employee income to be used for
retired persons, disabled, dependents,
unemployed
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Fair Labor Standards Act (1938)
 Established national minimum wage
 Maximum 40 hour workweek and overtime
 Child labor under 16
Election of 1936
► Democrats
 Popularity of
New Deal
 New Deal
Coalition
► Republicans
 Alfred Landon,
Governor of
Kansas
 Pro-business
and
conservative
criticism of New
Deal
Federal government
used posters, songs,
advertisements,
literature to promote
and support FDR’s
New Deal programs
among the American
public
New Deal Reactions
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Majority of Americans
approved of FDR’s programs
Business leaders and
corporations called him
traitor or fascist or
communist
Boondoggles
American Liberty League
Father Charles Coughlin
 Radio broadcasts attacking FDR
 Pro-fascist and anti-Semitic
remarks
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Huey Long – “Kingfish”
 Share the Wealth
► $5000
for every family, $2,000
annually
 Heavily tax wealthy
FDR and Court Packing
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Supreme Court reversed
several New Deal programs
 United States v. Butler
► AAA
unconstitutional
 Schecter Poultry Corp. v.
United States
► NIRA
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unconstitutional
Justice Reorganization Bill
 Appoint new justices for every
justice over 70
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additional justices
 Most of Congress defeated bill
 Designed to pressure Supreme
Court to approve New Deal
programs
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Compared FDR to fascists in
Europe
New Deal and Labor
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AFL strengthened by unionbacked New Deal legislation
 National Labor Relations
Act/Wagner Act
 Fair Labor Standards Act
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Congress of Industrial
Organizations (CIO)
 Organize unskilled laborers in
major industries
 Industrial unionism
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Strikes
 Auto industry recognized United
Auto Workers due to sit-down
strikes
 Republic Steel violent strike helped
recognize CIO
End of the New Deal
Roosevelt Recession (1937-1938)
 Contractionary monetary policy in lieu
of economic expansion
 FDR blamed big business
► Midterm Election of 1938
 GOP gained seats in House and
Senate; Democratic majority
preserved
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Recession of 1937-1938
FDR’s controversial court-packing
 Congress began to limit or eliminate
spending for New Deal programs
 Hatch Act of 1939
► Limited politicians and campaign
contributions
► People who received federal
assistance could not use money
for campaign contributions
► International Concerns
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Totalitarian governments spawned
defensive preparations
Women and Depression
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Men left their families in
search of work or worked
more than one job
Limited income and absence
of fathers placed intense
pressures on mothers
Female labor force increased
for female-based jobs
Wages remained low
compared to men
Suffered backlash as a
competitive workforce
Minorities and the Depression
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Blacks
 Suffered extreme poverty compared to other groups due to racism and worsening
conditions
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“No jobs for niggers until every white man has a job!” – rally cry in South
 FDR and New Deal
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Lower wages in NRA; AAA evicted thousands of blacks from tenant farms
WPA hired 1 million blacks in construction and educational projects
Mary McLeod Bethune in NYA
 Scottsboro Boys Trial (1931)
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Nine blacks youths accused of raping two white girls on a train in Alabama
Appeals showed lack of fair trial, impartial jury, fair sentencing, effective counsel
Natives
 Indian Reorganization Act (1934)
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Repeal of Dawes Act (1887) eliminating assimilation programs, return of native sovereignty,
preservation of native cultures
Immigrants
 Immigration was reduced by restrictive policies of 1920s
 Suffered discrimination and prejudice with worsening economic conditions
 Mexican Repatriation
► With farming jobs limited, white Americans migrated west and policies established to
push out Mexican immigrants
Federal One
► Part
of the WPA
► Federal Writers Project
► Federal Theatre Project
 Negro Theatre Project
► Federal
Music Project
► Federal Art Project
► Historical Records Survey
Escapism
Great Depression in Arts and Entertainment
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Literature
 John Steinbeck
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The Grapes of Wrath
Of Mice and Men
Photography
 Dorothea Lange
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Music
 Brother, Can You Spare a Dime?
 Woody Guthrie
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Radio
 Comedies
 Soap operas
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Movies
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The Wizard of Oz
Shirley Temple
Snow White and the Seven Dwarves
Marx Brothers
Escapism
Great Depression in Sports and Recreation
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Sports
 WPA
► Athletic
facilities
► Athletic educational programs
 Innovation, consolidation, and
sacrifice of professional and
college sports
► College
bowl games
► NFL playoffs
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Recreation
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Games and Monopoly
Gambling
Rodeos
Dance halls and jazz