The Depression-1929-1941
1920-19th Amendment; Harding elected
1922-5 Power, 9 Power, and 4 Power treaties; Fordney-McCumber Tariff
1923-Teapot dome; Harding dies; Coolidge becomes President
1924-Coolidge elected; Dawes Plan
1927-The Jazz Singer-first talking movie
1928-Kellog-Briand Pact; Hoover elected
1929-Stock Market crash-Black Tuesday 10/29/1929
1930-Smoot-Hawley Tariff
Prelude to Depression
-Harding is elected in 1920; backlash against Wilson and World War I
-A “return to normalcy” = desire for pre-war values, simplicity, isolationism. Advances
in technology made this impossible.
-Prohibition/1920s a time of frivolity, spending. Technological advances in movies and
radio created a national culture based on consumer spending, instant gratification.
-Three Republican presidents (Harding, Coolidge, Hoover) supported minimal
government, laissez faire policies, that allowed unregulated businesses and
unregulated banks to develop unethical practices
-Foreign issues:
-Treaties were idealistic and unrealistic follow up to Treaty of Versailles,
agreements to limit military and naval development. Allowed Japan to
exert influence in Asia (prelude to World War II)
-1922-Fordney-McCumber Tariff was designed to protect U.S. farmers and
factories; forced higher prices on European goods.
-1924-Dawes Plan = revision of WWI reparations plan. U.S.
loaned money to Germany, so Germany could pay
reparations to Britain and France, who
could then repay war debt to U.S.
-1928-Kellog-Briand Pact made war illegal.
-1929-Tuesday, October 29, 1929 the stock market collapsed. Not the cause of the
Depression but a symptom of an unstable economy. Crash was the result
of speculation and buying stock on margin; without regulation, the value
of stocks had risen sharply but had no real value. U.S. could not pay loans
to Germany; Germany could not pay Britain and France; Britain and
France could not pay the U.S.
1930-Hawley-Smoot tariff-Was a reaction to the stock market crash. 60% tax on
imports. Meant to increase purchase of American goods, but led to
retaliatory tariffs from European countries.
CAUSES OF THE DEPRESSION
1) Focus on consumer goods and use of credit
2) Buying stocks on margin (borrowed against future value of stock to purchase more
stock) artificially inflated the value of stock
3) Overproduction-under consumption. Factories were mass producing consumer goods,
but workers had low wages and couldn’t buy the goods without credit.
4) Farm overproduction (wheat) during the war led to a surplus of wheat and over-
plowed land = Dust Bowl
5) Reckless banking investments due to no regulations
HOOVER’S RESPONSE
-Hoover did not realize the depth of the crisis; believed it would solve itself
-Hoover believed in rugged individualism; opposed “the dole”. Thought people
would become dependent on government aid
-Hoover established the Reconstruction Finance corporation to provide loans to
businesses; angered the people who were out of work
-Hoovervilles = shanty towns made from trash
-1932-Bonus Army = World War I vets had been promised a bonus when they
signed up for the army in 1924. Out of work, they demanded their bonus early. Congress
refused. They set up a Hooverville near the capitol and refused to leave. Hoover told the
army to remove the protestors. Douglas Mac Arthur confronted the veterans with tanks
and machine guns and set the camp on fire. It was captured on film and shown in theaters
across the country. Result: FDR wins the 1932 election.
-1932 campaign-FDR promises the people “a new deal” and the repeal of
prohibition.
The New Deal
Happy Days Are Here Again…..
1932-FDR elected in backlash against Hoover
1933-1 in 4 people unemployed; the Hundred Days; 21st Amendment repeals prohibition
1935-Schecter v United States
1937-court packing scheme
Franklin Roosevelt’s first administration-
- Half the adults in major cities were unemployed
-Fascism, communism were on the rise
- FDR brought joy, energy, hope
-Very charismatic; used new technology of radio to create a personal connection to the
people.
-FDR impacted by polio; identified with the poor, suffering
- 20th Amendment-ended lame duck presidency, moved inauguration from March to
January
1933-By inauguration, 4/5 of banks were closed
-FDR declared a bank holiday, closed all banks for four days
-Emergency Banking Relief Act ->Federal Deposit Insurance Agency-> Insured deposits
for $5000
-FDR called for unprecedented presidential powers
New Deal goals:
-Relief for the jobless, bank crisis
-Recovery for industry to revive the economy
-Reform to rescue the farmers
-Brain trust-FDR invited academic and business experts to brainstorm solutions, strategies
-Implemented fireside chats: radio programs to discuss issues with the public
-21st Amendment-Repealed Prohibition
PROGRAMS
-Civilian Conservation Corps: provided work for unemployed, unmarried males age 18-25
3 million hired: national parks, forest service, recreation areas
Paid $30 a month; $25 was sent home
-Federal Emergency Relief Act: Civil works Administration was created.
First program to provide direct financial aid
4 million hired at a cost of $1 billion
Lasted four months
Replaced by the Works Progress Administration
-Agriculture Adjustment Act: Compensated farmers for voluntary cutbacks in production
Hoped to raise prices of commodities by reducing supply
Growing season had started; led to “plow under” program. Highly controversial.
6 million pigs slaughtered, milk dumped while people went hungry
-Tennessee Valley Authority: 1933-A series of dams in the Tennessee River Valley. Created
jobs, recreation areas, brought electricity to large area of the South
-Federal Securities Act: Regulated stocks; held businesses accountable
-Home Owners Loan Corporation: Provided homeowner loans to avoid foreclosure
-National Industrial Recovery Act: Led to Public Works Administration
Built public buildings, highways, flood control
Also led to National Recovery Act
1.Purpose was to stabilize business w/ set wages, prices, fair practice
guidelines, 40 hour week, minimum weekly wage of $13. Prohibited labor
for those under age of 16.
2.Allowed unions to organize
3. Excluded agriculture, domestic workers-3/4 of African Americans had
no relief.
Controversy: Did the president have constitutional authority to create these programs?
-1935-Schechter v United States: Supreme Court ruled NIRA unconstitutional
-1937- Court Packing Scheme-FDR asked Congress to create seats for 6 new
Supreme Court Justices. Major power grab; seriously hurt FDR’s image
1937 RECESSION
-Sit down strikes
-Fair Labor Standards Act of 1938: Minimum wage: 40 cents an hour
-Established 40 hour work week
-John Maynard Keynes: Economist, supported deficit spending; “prime the pump”
DUST BOWL-1932-1935
-25 million acres of top soil blown away
-72 dust storms in 1937
-Result of overplanting, over grazing
-Drought
-Suicide increased
-800,000 moved to southern California
-Brought conservative, Populist, fundamentalist beliefs
-Music: Country/western, hillbilly, cowboy
MINORITIES
-FDR afraid of political backlash; did little for minorities
-California deported Mexicans; Mexicans were active in unions
-Indian Reorganization Act-overturned the Dawes Severalty Act of 1887
CULTURE
-Flirtation with communism. Short-lived because of Stalin
-Committee on Un-American Activities formed in 1938 to investigate communists
-New Dealers soon accused of communist sympathies
-Writers: Steinbeck: Grapes of Wrath; Richard Wright: Native Son
Radio extremely popular: People “watched” the radio
Movies: Talkies: 1927-The Jazz Singer
-Movies provided for hours of escape; cheap day care
-Shirley Temple = Horatio Alger stories for the Depression
-Wizard of Oz= technological use of color, transition from drab gray Kansas Dust
Bowl to a colorful better place where all things were possible.
-Who’s Afraid of the Big Bad Wolf? = wolf represented the Depression
-Gone With the Wind = revisionist history, created modern, romantic view of
South and slavery during the Civil War
1933-Drive in movies
Gangsters
Cartoons-Mickey Mouse, Snow White
Musicals
Comedies: Marx Brothers-satire and anarchy
Horror: Dracula, Frankenstein, Mummy
SECOND NEW DEAL
-Eleanor Roosevelt-Social service, focused on civil liberties. Traveled and reported back
to FDR
-Significantly changed the role of the first lady
CRITICS
-American Liberty League-opposed New Deal, supported business
-Huey Long-Louisiana demagogue; Share the Wealth Campaign; FDR’s most serious
opponent; assassinated
-Francis Townsend-Townsend Recovery Plan: retirement pension plan, $200 a month.
Led to Social Security
-Father Coughlin-priest; radio program; appealed to lower middle class. Anti-Semitic
PROGRAMS OF THE SECOND NEW DEAL
-Fewer programs, but more broad in scope
-National Labor Relations Act/Wagner Act: Pro-union. Legalized collective bargaining
Congress of Industrial Organizations Emerged
-Social Security Act
1) Pension for those over 65
2) Unemployment insurance
3) Aid for dependents