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Chapter 25

Chapter 25. The Great depression and the New Deal, 1929-1939. Web. Causes of the Great Depression. Stock Market Speculation Buying on margin common Stock prices spiraled out of control Mistakes by the Federal Reserve Tight money policy in 1930 and 1931

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Chapter 25

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  1. Chapter 25 The Great depression and the New Deal, 1929-1939 Web

  2. Causes of the Great Depression • Stock Market Speculation • Buying on margin common • Stock prices spiraled out of control • Mistakes by the Federal Reserve • Tight money policy in 1930 and 1931 • Worsened situation and prevented recovery • Ill-advised tariff

  3. Causes of the Great Depression (cont.) • Hawley-Smoot Tariff (1930) • Increased duties and fostered retaliation by other countries • Seriously curtailed exports, and international trade in general • Misdistribution of wealth • Fostered by Republican tax policies • Slowed consumption and prevented consumer-driven growth

  4. ©2004 Wadsworth, a division of Thomson Learning, Inc. Thomson Learning™ is a trademark used herein under license. Income distribution before the Great Depression

  5. Herbert Hoover and the Depression • Hoover’s program • First turned to “associational” principles • Turned to more vigorous action when that didn’t work • Moratorium on foreign loan payments • Glass-Steagall Act of 1932 • Reconstruction Finance Corporation (1932) • Home Loan Bank Board (1932) • Could not accept radical solutions, such as deficit spending • Reluctant to provide direct aid to individuals • Bonus Army 1932 • World War 1 veterans sought early payment of promised bonus • Hoover authorized force to eject them from Washington • Shocked the nation • Contributed to Hoover’s defeat in 1932

  6. ©2004 Wadsworth, a division of Thomson Learning, Inc. Thomson Learning™ is a trademark used herein under license. Presidential Election, 1932

  7. The Democratic Ideology of Franklin D. Roosevelt • Governor of New York (1929-33) • Democratic Party divided during 1920s • Agrarians favored government regulation of both the economy and people’s lives • Urban ethnics opposed government intervention in people’s lives but were divided about the efficacy of intervention in the economy • FDR gravitation toward new reform movement of “liberalism” • Government should regulate capitalism • Government should not tell people how to behave

  8. The First New Deal, 1933-1935 • Saving the banks • Bank holiday and Emergency Banking Act • Glass-Steagall Act (1933) • Created Federal Deposit Insurance Corporation • Securities Act (1933) and Exchange Act (1934) • Saving the people • Federal Emergency Relief Administration (FERA) • Civilian Conservation Corps (CCC) • Civil Works Administration (CWA) • Homeowners’ Loan Corporation (HLC)

  9. ©2004 Wadsworth, a division of Thomson Learning, Inc. Thomson Learning™ is a trademark used herein under license. Bank Failures, 1929-1933

  10. The First New Deal, 1933-1935 • Repairing the Economy: Agriculture • Agricultural Adjustment Administration (AAA) • Goal was curtailing farm production by paying farmers not to produce • Tenant Farmers and sharecroppers left out • Soil Conservation Service (SCS) • Deal with problem of Dust Bowl • Supreme Court declared AAA unconstitutional in 1935 • Administration replied with Soil Conservation and Domestic Allotment Act • Took land out of cultivation for conservation rather than economic reasons • Repairing the Economy: Industry • National Recovery administration (NRA) • Goal was to limit production through persuasion and association • Industry-drafted codes for prices,wages and hours • Supreme Court declared unconstitutional in 1935

  11. Innovative and Long-term New Deal Program • Public Works Administration (PWA) • Built bridges, roads, dams, hospitals, schools, airports • Helped to spur development in Arizona, California, Washington • Tennessee Valley Authority (TVA) • Government itself would promote economic development • Control flooding, generate electricity, develop industry, improve transportation • The New Deal and Western Development • Dam construction central

  12. ©2004 Wadsworth, a division of Thomson Learning, Inc. Thomson Learning™ is a trademark used herein under license. Tennessee Valley Authority

  13. ©2004 Wadsworth, a division of Thomson Learning, Inc. Thomson Learning™ is a trademark used herein under license. Federal Water Projects in California Built or Funded by the New Deal

  14. Political Mobilization, Political Unrest, 1934-35 • Populist critics of the New Deal • Huey Long and Share the wealth • Father Charles Coughlin and National Union for Social Justice • Francis Townsend and elderly pensions • Labor and the New Deal • NIRA supposedly supported collective bargaining • Employers’ refusal to follow codes spurred strikes and violence • Midterm elections of 1934

  15. Political Mobilization, Political Unrest, 1934-35 (cont.) • Huge victories for Democrats • Many radicals sent to Congress • Would help to shape post-1935 New Deal • Rise of radical third parties and political movements • Minnesota Farmer-Labor (MFL) Party • End poverty in California (EPIC) • Growth of Communist Party of America

  16. The Second New Deal 1935-37 • Philosophical underpinnings • Reliance on economic theory of under consumptionism • Route to recovery was boosting consumer expenditures, not restricting output • Supporting unions to push wages up • Social welfare expenditures to put money in people’s pockets • Public works projects to create new jobs • Government borrowing from private sources would fund new measures and lead to end of Depression • Major measures of the Second New Deal • Social Security Act • National Labor Relations Act • Rural Electrification Administration • Emergency Relief Appropriation Act • Works Progress Administration

  17. Election of 1936 and Its Aftermath • FDR re-elected by landslide • Strong anti-corporate rhetoric during campaign • Gave Democrats reputation as party of reform and of common American • Gap between FDR’s Rhetoric and reality • Not as radical in practice as his words would have suggested • Receiving significant support from some capitalists

  18. Supporters of the New Deal • FDR’s Advisors • Idealistic, dedicated, confident • Not all were men of wealth and privilege • Important women in administration worked mostly behind the scenes • Little Commitment in administration for women’s equality • Focused instead on protective legislation • Organized labor • Congress of Industrial Organization (CIO) • Labor’s Non-Partisan League (LNPL) • UAW sit-down strike against GM, 1936 • Gained Public stature as well as members

  19. ©2004 Wadsworth, a division of Thomson Learning, Inc. Thomson Learning™ is a trademark used herein under license. Labor Union Membership 1933-1945

  20. American’s Minorities and the New Deal • Eastern and Southern European ethnics • Formidable force within Democratic Party • Received New Deal aid through programs targeted at urban areas • African Americans • New Deal did more to reinforce patterns of racial discrimination than to advance the cause of racial equality • Administration took symbolic steps in support of civil rights but did not make the issue a priority

  21. American’s Minorities and the New Deal (cont.) • Mexican Americans • Campaign to deport illegals continued from Hoover administration • Not really included in most New Deal programs • Native Americans • John Collier at the Bureau of Indian Affairs • Commitment to cultural pluralism • Indian Reorganization Act (1934) • Revoked allotment practices • Redistributed land to tribes and otherwise fostered community authority

  22. The New Deal Abroad • Followed international course after initial flirtation with nationalism • Established diplomatic relations with Soviet Union • “Good Neighbor” policy with Latin America • Reciprocal Trade Agreement • Overreaching goal was to stimulate international trade and boost U.S.exports

  23. Stalemate, 1937-1940 • New Deal losing momentum by 1937 and 1938 • Court-packing fiasco • Motivated by political purposes • Protect National Labor Relations Act and Social Security • Generated firestorm of public opposition • Fueled critics organizing the 1938 midterm elections • Rendered unnecessary, in any event, by subsequent events • Recession, 1937-1938 • Economic improvements in late 1937 caused spending cut backs • Economy slid back into depressed conditions • Led to setbacks for Democrats in 1938 elections

  24. ©2004 Wadsworth, a division of Thomson Learning, Inc. Thomson Learning™ is a trademark used herein under license. Federal Expenditures and Surpluses/Deficits 1929-1945 Web

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