The Great Depression

1. The Great Depression Enduring The New Deal Progressivism Fulfilled

2. Underlying Causes Boom goes bust Stock market speculation – “on margin “ buying Overproduction – under- consumption – economy dependent on consumer spending Excessive reliance on credit Maldistribution of wealth -0.1 % held as much wealth as bottom 42% -- limited buying power – MC dependent on salaries Technological unemployment Economic ties to Europe – tariffs, end of Dawes Plan – more global economy Weak economic areas – RR, agriculture, construction, coal – over-invested and developed Limited political and economic leadership in gov’t and Federal Reserve – Galbraith

3. NY Stock Market Crash Babson Break SM Crash = trigger or catalyst

4. Impact “Hard Times” (Turkel) GNP 104.6 billion 1929 ----56.1 b 1933 Unemployment – 20-25% -- not really counting the self employed -- minorities more like 30-33% “last hired, first fired” Income decreased by 54%; farm income by 55%; labor by 41% 22% of all banks failed Breadlines, homelessness, migrations – “Army of the Dispossessed” , Hoovervilles Marriages and birth rates decrease – so does divorce – families often drifted apart Women often had to give up jobs Loss of identity and worth “invisible scars” - Bird Fears of class warfare and revolution Freedom limited

5. Hoover’s Response Schlesinger “crisis of the old order” Voluntarism /associationalism – state and private charities Mellon advises to let it “bottom out” Commitment to the balanced budget “Rugged Individualism”

6. Hoover’s Response • Often too little – too late • Public Works – Hoover Dam • Federal Farm Loan Board • Glass – Steagall Act • Home Loan Banking Act • Moratorium on debt collection from Europe but Hawley Smoot Tariff • Reconstruction Finance Corporation – bridge to the New Deal – but focus on RR, businesses, banks

7. The People • Reno – Farm Holiday Association • Bonus Army – Hoover’s Response • Election of 1932 – income for most 50% of 1929 • Hoover v. FDR • Emergency Banking Act & First Inaugural Address • Leadership – the analogy of war • Brain Trust • Fireside Chats • “reform to save” – goals: preserve capitalism and democracy • The Hundred Days – 15 key pieces of legislation • The Three Rs – Relief, Recovery and Reform

11. Nevins – Effective Greatness • Characteristics that fit the needs of the time Three Qualities: • Willingness to experiment • Timing – met each crisis w/ action • Spiritual strength and optimism Two transformations: • Helps American become more socially minded • Moves the nation from isolation to leadership and participation in the world

12. First New Deal 1933-1935 • Focus = Recovery • Key Programs: • Relief – FERA, TVA, PWA, CCC – Hopkins • Finance – Emergency Banking Act, FDIC, HOLC, off gold standard, Sec • AAA – key to recovery ---Butler v US Strikes Down • STFU • NRA – section 7a – problems – Schechter v US Strikes Down

13. Critics • The Right – American Liberty League – businessmen • The Left – those pushing for greater changes • Upton Sinclair – EPIC – Progressives • Huey Long – “Share Our Wealth” • Dr. Townsend – the elderly • Father Coughlin – radio priest demogogues

15. The Second New Deal 1935-1938 • Trickledown v Pump-priming – Keynesian theory • Focus = Relief and Reform • Key Programs: • Relief – WPA, Federal One, NYA, RA • Finance – Revenue Act of 1935 • Reform – response to critics • Social Security • National Labor Relations Act – Wagner Act • REA • 2nd AAA • FSA • Fair Labor Standards Act – last major ND legislation

16. End of the New Deal Court- Packing Scheme - Impact Failed Purge of Conservative Democrats Sit-Down Strike – GM 1937 Roosevelt Recession 1938 Focus shifts to foreign policy – war in Europe 1939 New Deal doesn’t end Depression – ameliorates and preserves – only embracing deficit federal spending as the US becomes the “Arsenal of Democracy” brings productivity, employment and $ flowing through the system

18. Impact of the New Deal Labor: CIO formed – Lewis UAW 1937 GM Strike & 1937 Republic Steel Strike – gains in union membership Women: cabinet positions, E Roosevelt – but limited gains African Americans: “black cabinet” - limited real gains – SS doesn’t apply to most, hiring discrimination & in federal programs Native Americans: Collier – Indian Reorganization Act Hispanic Americans: job discrimination Communism & the Popular Fronts – the Common Man

19. Legacy of the New Deal • The system – democracy and capitalism is preserved • Leutchenberg – Halfway Revolution; Friedel – conservative revolution - no re-arrangement of wealth or power • The Broker State model emerges – if organized – but limited response to the “voiceless” or unorganized • Political Re-Alignment ---Roosevelt Coalition • Increased power to the executive branch and the federal level of government • New perception of the relationship between the people and the government – the “guarantor” state – a transformation of consciouness” -- Progressivism revived • Tools & processes for stabilizing the economy • New Definition of Freedom – economic security – work – impact of economic inequalities

20. Assessment “Roosevelt was a pragmatist – impatient w/ theory – he kept what worked and discarded the rest. The result was paradoxically, both profoundly revolutionary and profoundly conservative.” Capitalism’s basic structure and problems were dealt w/ through traditional democratic processes. Third American Revolution --- Missed opportunity for broader reforms Leutchenberg –”halfway revolution” – helped some –ignored others