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Chapter 26: The Depression and the New Deal, 1929-1939

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Harry Jarcho

on 10 April 2016

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Transcript of Chapter 26: The Depression and the New Deal, 1929-1939

The New Deal’s greatest legacy was a shift in our understanding of the role of government.

As a result of the New Deal, Americans came to believe that the federal government has a responsibility to ensure the health of the nation's economy and the welfare of its citizens.
The New Deal did not end the Depression nor did it significantly reduce the gap between the rich and the poor. But it did provide many Americans with new economic security that they had never known before.

New Deal programs that still exist today include:
unemployment insurance
Social Security –
old age insurance & support for the disabled
insured bank deposits
The National Labor Relations Act
, which reduced violence in labor relations and protected workers’ rights to organize into labor unions
The Securities and Exchange Commission
, which protected stock market investments of millions of small investors
The Federal Housing Administration and government guaranteed mortgages
enabled many more Americans to become homeowners
In addition to traditional public works projects, the New Deal also provided jobs to artists, writers, playwrights, musician and other performing artists.
New Deal administrators encouraged the production of projects that would appeal to the entire public, "Art for the Millions," not just cultural elites.
Numerous young artists got their start through these programs:
Saul Bellow
Ralph Ellison
John Cheever
Zora Neale Hurston
Richard Wright
Orson Wells
John Houston
Arthur Miller
By 1940, nearly 25% of the nation’s 12 million blacks lived in the Northern cities – facing racism and higher unemployment
Immigration restrictions on Asians continued:
the Chinese Exclusion Act was not repealed until 1943
Japanese-Americans continued to face prejudice and land-ownership restrictions in California
Hispanics faced hostility in the west and southwest, often losing jobs to white migrants, (e.g., Okies)
Efforts to unionize migrant farm workers were unsuccessful
FDR was frustrated that the Supreme Court had struck down a number of his New Deal programs as unconstitutional.
In 1937 FDR proposed a bill to add a new Supreme Court Justice for each one over 70 yrs of age, an obvious attempt to pack the court with liberal judges who would back his New Deal policies
The press and the public reacted sharply to the
“court packing” scheme
, and after the Senate voted it down, FDR dropped it
Even without adding judges, FDR appointed 4 new Justices, which left a liberal New Deal legacy well beyond his presidency
The
Wagner Act
and labor-friendly New Deal policies led to a boom in unionization
The
Congress of Industrial Organizations
(CIO) formed
The CIO organized workers into a single industry-wide union, rather than into craft-based unions, as within the AFL
The
Social Security Act
established a mixed federal-state system of:
Old-age retirement pensions,
unemployment insurance,
worker injury compensation benefits,
aid for the disabled and dependent mothers with children

It was funded jointly by employer and employee payroll deductions

Although it did not cover farm workers, domestic workers, or the self-employed, the Social Security Act established the precedent of government responsibility for social welfare, and laid a foundation for the expanded welfare system of the future

Conservatives attacked the New Deal as too expensive and as socialism, but public support remained strong.
In large part because FDR's “fireside chats” made Americans feel that he understood their pain, the Democrats actually increased their Congressional majorities in the 1934 elections.
In 1936, FDR moved to the left:
He campaigned as a champion of the poor and the working class
He became more vocally critical of large corporations and excessive wealth

This
“Second New Deal”
emphasized 6 initiatives:
expanded public-works programs (relief jobs)
expanded assistance to the rural poor (relief)
increased support for organized labor (reform)
new benefits for retired workers and other at-risk groups (relief)
tougher business regulation (reform)
heavier taxes on the wealthy (reform)
The psychological impact of unemployment, poverty was immense – marriage and birthrates both fell
Women in workforce faced discrimination and resentment
Women were paid less than men
Married women faced hostility for “taking jobs” from bread-winning men
Unionization benefited women in unionized industry, but many female-dominated industries (e.g., textiles, clerical, sales) were resistant and/or late to unionize
Minorities especially hard hit – last hired and first fired
Union membership increased from under 3 million in 1933 to over 8 million in 1941 – but 75% of non-farm labor was still not organized
Ford and other steel companies resisted unionization, using violence against labor leaders, strikers, and sit-downers, but both the auto and steel industries eventually unionized
Early union organizers were often far more politically radical than the rank-and-file workers – as unions won gains, the appeal of radical ideas faded
Also called the
Wagner Act
had power to supervise union elections, and make sure they were run fairly
guaranteed collective-bargaining rights (the right of a union to represent and bargain for workers)
legalized
closed shops
(all workers are required to join the union if the shop voted for union)
outlawed blacklisting of union organizers
The new rights in the Wagner act led to a sharp rise in unionization
National Labor Relations Act (1935)
The Labor Movement Grows
Roosevelt's
Second New Deal
“There is no work. First the gasoline gives out. And without gasoline a man cannot get to a job if he could get one. Then the food goes. And then it rains, with insufficient food, the children develop colds because the ground in the tents is wet. I talked to a man last week who lost two children in ten days with pneumonia. His face was hard and fierce and he didn’t talk much.”
Okies
“My Oklahoma Home”
Lyrics by Bill & Sis Cunningham
Sung by Bruce Springsteen
Falling Farm Prices and Drought:
The Dust Bowl
FDR the Pragmatist
Video: Alphabet Soup: Jobs Programs and Aid for Farmers
The 1st phase of the New Deal focused on relief and recovery:
Emergency relief
– direct aid, e.g., food, clothing, shelter, public-works jobs, to get money and essentials into hands of the unemployed
Industrial recovery
through business-government cooperation, as well as “pump-priming federal spending
Agricultural recovery
through crop reduction
Relief
– Relief programs were intended to make things more tolerable but often did not offer long-term solutions – they provided emergency aid (e.g., food, housing) and jobs.
Recovery
– Recovery programs were designed to stimulate business, to create jobs from the top-down.
Reform
– reform finds the cause of the problem and aims to alter it to prevent the same issue in the future. Programs to regulate risk in the stock market and banks, programs to control farm prices and production are examples of reforms.
Key Terms:
Relief, Recovery & Reform
Rebuilding the Nation's Confidence and the Hundred Days
The Hungry &
Unemployed

June, 1932 – 10,000 WWI veterans marched on Washington demanding early payment of a promised bonus
Fearing the impact on the deficit, Congress refused
Several thousand soldiers set up camp – Hoover ordered the Army to close the camps, using tear gas, tanks, and machine guns
Public was outraged and Hoover’s credibility destroyed
The Bonus Army
Hoover’s Efforts to Deal with the Depression Fail
Public Anxiety Rises, Banks Fail, and Spending Plummets
The Statistics of Hard Times
Cartoons Reflecting the Overwhelming Press and Public Opposition to FDR’s “Court Packing” Scheme
The CIO’s industrial unions grew rapidly with passage of the pro-union National Labor Relations Act in 1935. Union membership increased still more as war plants hired workers in the early 1940s.
The Growth of Labor Union Membership, 1933–1946

Labor Organizing, 1930s-Style
Walter Reuther (left) and Richard Frankensteen of the United Auto Workers, after their beating by Ford Motor Company security guards, Detroit, May 1937.
William Gropper,
Construction of the Dam
This painting by an artist of the social realist school depicts a construction project under the WPA project.
Enacted in 1935, Social Security has been one of the most enduring of all New Deal programs. This poster urges eligible Americans to apply promptly for their Social Security cards.
Social Security poster
“Give a Man a Job”
Providing Jobs to Youth Building Parks and on conservation projects
The Hundred Days
(March-June, 1933) – Congress passed measures that significantly expanded the federal government’s role in the nation’s economic life
Roosevelt’s confidence and communication skills did much to calm the nation
Fireside Chats
Soup Kitchen
The Statistics of Hard Times
Statistics on the stock market, gross national product, personal income, unemployment, and business failures all show the Depression’s shattering impact, with gradual and uneven improvement as the 1930s wore on.
1.
Stock Market Crash
ushered in the Great Depression
“Buying on margin”
[borrowing most of the cost of the stock] had led to a
market boom
that inflated the price of stocks – when prices fell, investments were wiped out - both citizens and the banks that lent the money lost their investments

2.
Overproduction
in both agriculture and industry caused
prices to fall - farms and industry could not make profits [when Supply > Demand, prices fall]

3.
European depression
led to a drop in U.S. exports.

4. U.S. adherence to the
gold standard and high tariff policies

prevented the U.S. from making adjustments, compounding trade problems.
Efforts to protect U.S. manufacturing by raising import tariffs (
Smoot-Hawley Tariff (1930)
resulted in retaliatory tariffs and even less international trade)

5.
Wages did not keep up with cost of living
a. led to widening gap between rich and poor
b. reduced consumer spending

6. High unemployment, reduced hours, and lower wages led to
reduced consumer spending
, resulting in a spiral of unsold inventory and further cuts [when Supply > Demand, prices fall]
Causes of the Crash
The mood of nation was becoming more upbeat by the end of the 1930s – the American people appreciated New Deal efforts to provide jobs and relief.
John Steinbeck’s

novel,

The Grapes of Wrath
, although critical of the economic system that plagued depression-era farmers, was upbeat and optimistic in its view of the strength, endurance, and humanity of the common man.
Aid to Farmers
The
Resettlement Administration
, established in 1935, was authorized to resettle impoverished farm families from areas of soil erosion, flooding, and stream pollution to better, farmable land.
Poster by Ben Shahn: “Years of Dust”
The left wing (liberals, Progressives, socialists, Communists) attacked the New Deal for not going far enough, urging public ownership of industry

Francis Townsend
ridiculed Social Security as too little
The
Townsend Plan
would have given a pension to all retired people, requiring that they spend it within 30 days
his plan had fleeting support, but its cost would have bankrupted the nation, a bigger challenge came from Louisiana Senator Huey Long
Companies that cooperated with the National Recovery Administration displayed this banner.
The
National Recovery Administration
was passed to stimulate industrial recovery during the First One Hundred Days. The goal was to eliminate "cut-throat competition" by bringing industry, labor and government together to create codes of "fair practices" and set prices. The NRA was created by the National Industrial Recovery Act (NIRA) and allowed industries to get together and write "codes of fair competition."
“We Do Our Part”
The Tennessee Valley Authority
To control flooding and to generate electricity, the Tennessee Valley Authority constructed dams along the Tennessee River and its tributaries from Paducah, Kentucky, to Knoxville, Tennessee.
“The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something. The millions who are in want will not stand by silently forever while the things to satisfy their needs are within easy reach."
Franklin Delano Roosevelt
Calling for a “new deal for the American people,” “bold experimentation,” and compassion for the “forgotten man at the bottom of the economic pyramid,” NY Governor
Franklin Delano Roosevelt
was swept into office in a landslide, and with heavy majorities in both houses of Congress
Lesson 2: The New Deal
Burning Shanties of Bonus Marchers, July 1932
When President Herbert Hoover ordered the army to evict jobless veterans who had come to Washington seeking early payment of promised bonuses, it reinforced his public image as uncaring and out of touch, and his popularity plummeted.
Bonus Army
They received neither gratitude nor the bonus. Instead, Hoover commented:
"Thank God we still have a government that knows how to deal with a mob."
A lampooned President Hoover looks smug and fat as Bonus Marchers parade by
Hoover and the Bonus Marchers
Video: Domestic and International Causes of the Great Depression
Lesson 1:
The Great Depression
Video: Dorothea Lange -
New Deal Photographer
Student Video on Great Depression
Sample Web Videos:
Great Depression and the New Deal
The Big Question:
Does the government have a responsibility to safeguard the health and welfare of the people, or does "big government" pose a threat to individual freedom and undermine individual responsibility?
Chapter 26: The Depression and the New Deal, 1929-1939
1930s:
The Golden Age
of Movies
Works Progress Administration
Formed to provide jobs for the unemployed through public-works projects, the WPA also sponsored arts projects for writers, artists, performers
Long’s plan would guarantee every family an annual income of $2,000 – enough for a home, a car, and a radio; free college education; old-age pensions; a 30 hour work week; and a four week vacation for every worker
Louisiana Governor Huey Long
promoted his
“Share Our Wealth”
program, which imposed very high taxes on the rich in order to provide new benefits to the poor and middle class.
His plan imposed a 100% tax on all income above $1 million, and would confiscate all wealth above $5 million
Growing unemployment, bread lines, home and farm foreclosures led to anger, labor protests, and farmers withholding or destroying their crops to force up the prices
The People Turn Against Hoover
Agriculture During the Great Depression
The depression hit rural America with brutal ferocity, as the statistics on commodity prices and farm mortgages show.
Click to play “Dust Bowl Refugee,”
by Woody Guthrie
The Dustbowl: Refugees and Migrant Workers
Video: Hoovervilles
Hoover believed that the depression was temporary and that prosperity was “just around the corner.”
Hoover opposed government intervention
He supported using private, local, voluntary action to help the needy.
He believed that government "hand-outs" and intervention would weaken character, make people dependent - that they were morally wrong
Hoover eventually agreed to government funding of public-works projects (1931), and to providing loans to try to help businesses, but his efforts were too little, too late
Hoover’s Response
Speech on Sharing the Wealth
“Corrupted by wealth and power, your government is like a restaurant with only one dish. They’ve got a set of Republican waiters on one side and a set of Democratic waiters on the other side. But no matter which set of waiters brings out the dish, the legislative grub is all prepared in the same Wall Street kitchen.”
Although Huey Long was slandered as a crackpot, his program was very popular among the poor, and Long set his sights on a possible challenge to FDR in the 1936 Presidential election. But in 1935 an assassin murdered Huey Long.
Social and Psychological Impact of the Great Depression
The Fate of Women and Minorities in the Great Depression
Bread Lines
The New Deal Takes Shape
Civilian Conservation Corps:
Using Mass Media to Promote the NRA
Lesson 4 & Lesson 5:
Legacy and Effects of the New Deal

The Social Security Act of 1935
The CIO:
Industrial Workers Organize
Union Membership Grows
FDR Battles the Supreme Court
Left Out of the New Deal?
Minorities Face Racism and Exploitation

"Art for the Millions"
New Deal Entertainment
The Later 1930s:
Reaffirming Traditional Values
The Legacy of the New Deal
Student Video - I Believe We Live in a Great Country
Al Jolson -
Brother, Can You Spare a Dime
The Legacy of the New Deal
Video: The Great Depression: Introduction
The First Hundred Days
Hoover Reacts to the Depression
Enter Herbert Hoover:
"We have come to collect the gratitude that was promised us for participating in the World War."
Farmers dumping milk into the road and blocking traffic to protest below-production cost milk and farm produce prices
Video: The Banking Crisis, Fireside Chats & the End of Prohibition, Bottom-Up Relief
Banking Reform
Emergency Banking Act
– closed nation’s banks to prevent withdrawals, then allowed solvent banks to reopen
Federal Deposit Insurance Corporation (FDIC)
created to insure deposits up to $5000
Laws passed to provide relief to homeowners and farmers facing foreclosure or already having lost homes and farms
FDR removed the U.S. from the gold standard, allowing the Federal Reserve to lower interest rates
Agriculture and Manufacturing
Agricultural Adjustment Act
(AAA) provided federal subsidies to farmers to cut production of key agricultural commodities
National Industrial Recovery Act
(NIRA) financed large-scale public works projects through the
Public Works Administration
(PWA)
created the very controversial
National Recovery Administration
(NRA) which brought business leaders together to set production limits, wages, prices, and to regulate unfair business practices
Banned child labor
Unemployment Relief
Federal Emergency Relief Administration (FERA)
provided federal funds for state-run relief programs (federal money, but local control)
Public Works Administration (PWA)
funded construction jobs such as highways, bridges, and public buildings
Civilian Conservation Corps
(CCC) provided jobs to youths in conservation projects
The New Deal Draws Fire:
Critics on the Left
The Townsend Plan
Share Our Wealth
Lesson 3:
Living Through the Depression

Tennessee Valley Authority
The Tennessee Valley Authority
(TVA) was a massive government environmental public works project with multiple goals:
to bring electricity to rural areas to keep farmers on the land
to modernize the South
to build a series of dams and hydroelectric plants for electricity and flood control
to bring jobs, electricity, and recreational opportunities to rural areas through a series of hydroelectric plants and reservoirs
Radio and the Movies
The popularity and power of radio and movies to create mass culture continued in the 1930s
the public sought happy, fantastic themes to counter the grimness of daily life
Movies had sound and color by the 1930s – In 1939 65% of Americans went to the movies at least weekly
Racial and Gender Stereotypes
Movies reinforced racial stereotypes of blacks
Women were portrayed with more complexity
some female stars, like Mae West and Katharine Hepburn were strong and independent
but most women's roles reinforced traditional gender stereotypes
Escaping Depression Through Popular Entertainment
Click to watch video
Click to watch video
Click to watch video
Click to view video
Click to watch video
The Election of 1932
Click to watch video
A growing coalition of anti-New Deal Republicans and southern Democrats gained power and made significant gains in the 1938 congressional elections

By 1938, the New Deal was mostly over, as FDR and America’s attention turned to the growing threat of war in Europe

But several new programs were passed that have had a long-term impact
Programs were passed that increased aid and loans to tenant farmers and sharecroppers, to help them to buy their own farms
The
Fair Labor Standards Act
was passed in 1938, which banned child labor, set a national minimum wage, and established the 40 hour week

Growing Opposition
to the New Deal
Depression-Era Popular Entertainment
Click on video
Critics on the Right
Father Charles Coughlin
Father Coughlin
was a Detroit priest with a popular radio show
He initially supported the New Deal, but later became a vocal critic of FDR, saying that FDR had become too friendly with big banks
Coughlin called for high taxes on the rich
He also called for the government to take over the nation's banks, railroads, and big corporations
Coughlin began to claim that the banks were controlled by the Jews, and his broadcasts became increasingly anti-semitic
He lost his audience as he became increasingly extreme, supporting Hitler's ideas
Chapter 26: The Depression and the New Deal, 1929-1939
Video: The Legacy of the New Deal
Link to Video Excerpts from FDR's 1932 Inaugural Address:
http://www.history.com/topics/us-presidents/franklin-d-roosevelt/videos/inaugural-address-franklin-d-roosevelt
What is the message of this photograph?
What persuasive technique is being used?
Hoover's Beliefs About the Economy
1. Laissez-Faire
2. Top-Down/
Trickle Down
3. Lower Taxes
4. Higher Tariffs
5. Welfare/ Relief
Don't interfere with or regulate Businesses - "Hands Off" approach
Help businesses grow, and they will hire new workers - the benefits will "trickle down"
Lower taxes means more money in people's pockets to spend and stimulate business
Higher tariffs make foreign goods more expensive - people will buy American goods
Welfare and handouts make people dependent and they will lose their incentive to look for jobs
Trickle Down Economics v Bottom-Up Stimulus
Trickle Down:
Help Businesses be successful and they will be able to hire more workers
If more workers have jobs, they will have more money.
If workers have more, they will spend more.
If workers spend more, businesses will expand and hire even more workers, creating a cycle to raise the economy

Bottom-Up Stimulus:
Put money directly into peoples' pockets by creating jobs
If more workers have jobs, they will have more money.
If workers have more, they will spend more.
If workers spend more, businesses will expand and hire even more workers, creating a cycle to raise the economy

Trickle Down Policies:
Lowering business taxes
Raising tariffs
Reducing regulations on businesses
Bottom-Up Policies:
Government creates public works jobs
Government supports farm prices to keep them from falling
Full transcript