The Great Depression

Part Two

The Beginning

• The economic contraction that began with the Great Crash triggered the most severe economic downturn in the nation’s history—the Great Depression

• The Great Depression lasted from 1929 until the United States entered World War II in 1941

• The stock market crash of 1929 did not cause the Great Depression. Rather, both the Great Crash and the Depression were the result of deep underlying problems with the country’s economy

X

X

Hoover’s Response• To protect domestic industries, Congress passed the Hawley-Smoot

tariff, the highest import tax in history. European countries also raised their tariffs, and international trade suffered a slowdown

• Hoover set up the Reconstruction Finance Corporation (RFC), which gave government credit to banks, industries, railroads, and insurance companies. The theory was that prosperity at the top would help the economy as a whole. Americans saw it as helping bankers and businessmen, while ordinary people went hungry

• Hoover did not support federal public assistance because he believed it would destroy people’s self-respect and create a large bureaucracy

• Finally, public opinion soured for Hoover when he called the United States Army to disband a protest of 20,000 unemployed World War I veterans called the Bonus Army

X

PORTRAYAL OF AMERICAN LIFE BY LOST GENERATION PORTRAYAL OF AMERICAN LIFE BY LOST GENERATION WRITERSWRITERS

EffortEffort DescriptionDescription EffectivenessEffectiveness

public-workspublic-worksprogramsprograms

agriculturalagriculturaleffortsefforts

ReconstructionReconstructionFinanceFinanceCorporationCorporation(RFC)(RFC)

poured money into public poured money into public construction projects construction projects such as the Boulder Damsuch as the Boulder Dam

created the Federal created the Federal Farm Board; made Farm Board; made loans, established loans, established cooperatives, and cooperatives, and bought surplus goodsbought surplus goods

loaned taxpayer money loaned taxpayer money to stabilize industriesto stabilize industries

failed to affect the failed to affect the entrenched depressionentrenched depression

helped some farmers helped some farmers take advantage of take advantage of cooperatives and avoid cooperatives and avoid closure, but failed to closure, but failed to end the farm crisisend the farm crisis

helped some helped some companies avoid companies avoid bankruptcy, used bankruptcy, used money for businesses; money for businesses; not peoplenot people

Hoover’s Limited Strategy

X

X

A “New Deal” for America• FDR promised a New Deal for the American people.

• He was ready to experiment with government roles in an effort to end the Depression.

• As governor of New York, Roosevelt had set up an unemployment commission and a relief agency.

• FDR’s wife, Eleanor, was an experienced social reformer. She worked for public housing legislation, state government reform, birth control, and better conditions for working women.

• When the Roosevelts campaigned for the presidency, they brought their ideas for political action with them.

X

The Election of 1932Herbert Hoover

• Believed that federal government should not try to fix people’s problems

• Argued that federal aid and government policies to help the poor would alter the foundation of our national life

• He argued for voluntary aid to help the poor and argued against giving the national government more power

• Hoover gave very few campaign speeches and was jeered by crowds

Franklin Roosevelt

• Believed that government had a responsibility to help people

• Called for a reappraisal of values and more controls on big business

• Helped many Americans reassess the importance of “making it on their own” without any help

• Much of his support came from urban workers, coal miners, and immigrants in need of relief

• Roosevelt won 57 percent of the popular vote and almost 89 percent of the electoral vote

X

X

helped modernize the Southhelped modernize the South

broke down class barriersbroke down class barriers

brought electricity brought electricity to rural areasto rural areas

boosted family boosted family incomes so that incomes so that

children could stay children could stay in schoolin school

provided jobs, provided jobs, improved people’s improved people’s sense of self worthsense of self worth

New Deal New Deal ProgramsPrograms

Restoring Hope & the First Hundred Days

X

FDR wanted to restore public confidence in the nation’s banks.FDR wanted to restore public confidence in the nation’s banks.Congress passed the Emergency Banking Act, which authorized the Congress passed the Emergency Banking Act, which authorized the government to inspect the financial health of all banks.government to inspect the financial health of all banks.Congress also passed the Glass-Steagall Banking Act of 1933. This act Congress also passed the Glass-Steagall Banking Act of 1933. This act established a Federal Deposit Insurance Corporation (FDIC) to insure bank established a Federal Deposit Insurance Corporation (FDIC) to insure bank deposits.deposits.

Stabilizing Stabilizing Financial Financial Institu-Institu-tionstions

FDR persuaded Congress to establish the Federal Emergency Relief FDR persuaded Congress to establish the Federal Emergency Relief Administration (FERA). FERA put money into public works programs, Administration (FERA). FERA put money into public works programs, government-funded projects to build public facilities and create jobs. government-funded projects to build public facilities and create jobs. One public works program was the Civilian Conservation Corps One public works program was the Civilian Conservation Corps (CCC). The CCC put more then 2.5 million men to work maintaining (CCC). The CCC put more then 2.5 million men to work maintaining forests, beaches, and parks.forests, beaches, and parks.

Providing Providing Relief Relief and and Creating Creating JobsJobs

Areas of New Deal Reform

In 1933, Congress passed the National Industrial Recovery Act (NIRA). NIRA In 1933, Congress passed the National Industrial Recovery Act (NIRA). NIRA established the National Recovery Administration (NRA), which tried to balance established the National Recovery Administration (NRA), which tried to balance the unstable economy through extensive planning.the unstable economy through extensive planning.The NRA established codes for fair business practices. These codes regulated The NRA established codes for fair business practices. These codes regulated wages, working conditions, production, and prices, and set a minimum wage.wages, working conditions, production, and prices, and set a minimum wage.

Regulating Regulating the the EconomyEconomy

The Federal Housing Administration (FHA) worked to improve housing The Federal Housing Administration (FHA) worked to improve housing standards and conditions, and insure mortgages.standards and conditions, and insure mortgages.The Agricultural Adjustment Administration (AAA) raised farm prices through The Agricultural Adjustment Administration (AAA) raised farm prices through subsidies. They paid farmers subsidies. They paid farmers notnot to raise certain crops and livestock, hoping to raise certain crops and livestock, hoping that lower production would cause prices to rise.that lower production would cause prices to rise.The Tennessee Valley Authority (TVA) provided jobs, hydroelectric power, The Tennessee Valley Authority (TVA) provided jobs, hydroelectric power, flood control, and recreational opportunities to farmers in the underdeveloped flood control, and recreational opportunities to farmers in the underdeveloped Tennessee Valley.Tennessee Valley.

Assisting Assisting Home-Home-owners and owners and FarmersFarmers

Areas of New Deal Reform

Work Programs• The Civilian Conservation Corps

– CCC = relieve unemployment & poverty– 250,000 young men, 17-24 yrs = Nat’l parks, etc.– $30/month + food, shelter, clothing & education

• Modest Gains for Labor– NIRA: monitoring BIG business– 1938: Fair Labor Stand. Act = ended child labor,

established min. wage, overtime pay• Praise for the New Deal

– Roosevelt's received thousands of fan mail with requests for soap, money, and clothing

Key Players in the New Deal• FDR was the first President to appoint a woman to a

Cabinet post. Frances Perkins, a former Progressive, was the Secretary of Labor until 1945

• FDR also broke new ground by hiring African Americans in more than a hundred policymaking posts

• Eleanor Roosevelt was one of FDR’s most important colleagues. Occasionally the First Lady took stands that embarrassed her husband. For example, she protested the Jim Crow laws at a meeting of the Southern Conference for Human Welfare in Birmingham, Alabama.