Hard Times
- No even of the 20th Century had a greater effect on Americans than the Depression
- “The invisible scar” - the emotional and psychological toll of the Depression years
The Bull Market
- Following stock trading in the late 20s became as popular as following sports stars
- Prices in the late 20s far outran the real rate of industrial production
- On paper, people were very successful, but in reality, there was no real value
- Many people bought on margin (only pay for a small % of the cost now, rest later)
The Crash
- Bull market peaked in September of 1929
- Oct 23 - Dow Jones lost 21 points in one hour - many investors felt the boom was over
- Oct 29 - “Black Tuesday” - more than 16 million shares were traded as panic took over
- Hardly anyone predicted a Depression would follow - many saw potential benefits
Underlying Weaknesses
- Production had been accelerated to the extent that it was hard to adjust to the drop off
- Most of the wealth in the US was clustered at the top
- This spiral could have been stopped by mass consumer spending, but everyone saved $
- Many banks failed because of mass withdrawls - thousands lost their savings
Mass Unemployment
- 1930 - Roughly 9% of the labor work force was out of work
- 1933 - More than 25% of the labor work force was unemployed
- Unemployment left many with feelings of guilt and emotional stress
- Many contemplated suicide
- Even if people hated their jobs, they hung onto them for fear of losing them
Hoover’s Failure
- In large urban centers, unemployment neared 50%
- Although Hoover aided large-scale humanitarian projects in WWI, he did little now
- 1931 - Hoover claimed Americans were responding well to the Depression
- Declined to help out the unemployed - “It would be doing them a disservice”
- Reconstruction Finance Corporation (RFC) - 1932
- Managed to save many banks by extending credit
Protest and the Election of 1932
- Many Americans turned to violent protests - eg: Commie-led march at Ford factory
- Detroit police used tear gas and bullets - 4 killed, 50 wounded
- “Bonus Army” of WWI vets gathered at Washington, DC
- Wanted immediate payments of $1,000 bonus bonds due for payment in 1945
- Eventually evicted y Douglas MacArthur, who claimed they were revolutionaries
- Democrats nominated New York senator FDR
- Pledged to give Americans a “new deal”
- Democrats won huge majorities in the House and the Senate as well
FDR and the First New Deal
- Of all the century’s presidents, FDR had the greatest impact
- FDR controlled American policy through the Depression and the Second World War
FDR the Man
- FDR’s family had long-standing aristocratic values - educated at Harvard and Columbia
- Born 1882 in Dutchess County, New York
- 1905 - Married Eleanor Roosevelt, his distant cousin - EEEEWWWW!
- Nominated for VP in the losing 1920 campaign
- Stricken with polio in 1921 - Strengthened his resolve to continue in politics
- Won a national reputation as a reformer as governor of New York in the late 20s
- Built a “brain trust” around him who believed in using experts to sort out the economy
Restoring Confidence
- FDR’s inaugural address: “The only thing we have to fear is fear itself”
- Called a four-day “bank holiday” to clear up the nation’s failing bank system
- FDR began a series of “fireside chats” to let the nation know what he was doing
- Became enormously successful
- Emergency Banking Act - allowed successful banks to reopen only with permission
- By mid-March, 1933, 50% of banks held about 90% of the nation’s deposits
The Hundred Days
- From March to June 1933 FDR pushed through various acts to combat the Depression
- The “New Deal”, as it was called, was not one unified program but many acts
- Focused on reviving industrial and agricultural sectors - Five main aspects:
- Civilian Conservation Corps (CCC) - gave young men work conserving the nation’s natural resources, building roads, reforesting, etc
- Federal Emergency Relief Administration (FERA) - gave federal grants directly to the states and local governments for relief
- Led by Harry Hopkins, who became the most important New Deal figure
- Agricultural Adjustment Administration (AAA) - gave relief to farmers by establishing parity prices for products, and also gave grants for reducing production surpluses
- Tennessee Valley Authority (TVA) - economic development and cheap electricity for Tennessee Valley, also gave cheap fertilizer to farmers
- National Industrial Recovery Act - made up of two main parts:
- National Recovery Administration (NRA) - regulated businesses through codes regulating prices, output, and trade practices
- Public Works Administration (PWA) - Gave more than $3 billion for public works; wanted to increase the number of jobs and also raise consumer spending
Left Turn and the Second New Deal
- FDR’s active spirit in Washington brought reassurance that the nation was on track
- Some felt Roosevelt had done too much, others felt not enough
Roosevelt’s Critics
- American Liberty League held FDR responsible for the decline of personal liberty
- Democrats managed to increase their majorities in the mid-term elections - unusual
- Father Charles E. Coughlin - originally supported FDR, but then turned against him
- Coughlin felt he did not have enough influence on national policies
- Eventually founded the National Union for Social Justice - Anti-FDR
- Nominated a candidate for the Union Party in 1936
- Many left-wing Democrats felt the New Deal did not go far enough
- Huey Long originally supported FDR but aspired to the presidency
- Assassinated in 1935 by a disgruntled political enemy
- Although workers tried to strike to gain reforms, they were usually met by police
The Second Hundred Days
- 1935 - Roosevelt focused on new programs of social reform
- Strengthen national committment to creating jobs
- Provide security against old age, unemployment and illness
- Improve housing conditions and cleaning slums
- Emergency Relief Appropriation Act
- Allocated $5 billion for large-scale public works programs for the jobless
- Social Security Act (1935) - Provided old-age pensions and unemployment insurance
- Resettlement Administration (RA) - designed to move families to better areas
- Due to lack of funds, only about 1% of the intended group was actually moved
Labor’s Upsurge: Rise of the CIO
- Between 1932 and 1942 union membership rose by more than 4 times
- Committee for Industrial Organization - wanted to group workers by industry, not craft
- Wanted to include blacks and women
- Sit-down strikes: Workers refused to work, but stayed in the factory
- CIO membership grew to nearly 4 million people
- Became the Congress of Industrial Organizations
The New Deal Coalition at High Tide
- Very few political observers predicted the 1936 election’s lopsided outcome
- FDR’s opponents called the New Deal “socialistic” and criticized his central power
- On election day, FDR carried every state except Maine and Vermont
- Very popular among blue-collar workers and farmers
- FDR had managed to turn the Depression around
The New Deal and the West
- Westerners recieved more from the New Deal than any other area, per capita
- The New Deal helped to propel the west into the modern era
The Dust Bowl
- Overcropping stripped the soil in the plains of its nutrients, and it dried up and died
- As wheat prices fell, farmers needed to harvest more and more land
- Unable to rotate crops effectively
- Winds blew up the dried soil and left many areas unsuitable for farming
- Resettlement Administration gave many families relief aid
- When rains came, farmers began to pursue commercial agriculture with wild abandon
- Many victims of the Dust Bowl migrated to California
- Sand and dust vs. Sun and hot chicks? Which would you choose?
- Many poor whites competed with Mexican immigrants for jobs - led to much racism
Water Policy
- The New Deal provided many projects aimed at increasing irrigation in the west
- Boulder Dam - Later renamed the Hoover Dam - built to harness the Colorado River
- Roosevelt’s support of power projects in the west led to his large support in elections
- 1935 - Central Valley Project - designed to bring water to arid lands in the south
- Grand Coulee Dam - 1941 - designed to help irrigate the Pacific Northwest
A New Deal for Indians
- Bureau of Indian Affairs had a long history of corruption and mismanagement
- John Collier appointed by FDR to bring reform to Indian Affairs
- Led the Indian Reorganization Act (1934) - gave surplus land to tribal ownership
- Very difficult to get the Indians to agree to the IRA - language barriers made it tough
- Rejected by the Navajos and other groups
Depression-Era Culture
- During the Depression, sentiments of protest and celebration both existed
- Movies, radio broadcasting and big-band jazz achieved a central place in US life
A New Deal for the Arts
- Federal Project No. 1 - Offered work to artisans and intellectuals
- Federal Writers Project - Employed 5,000 writers on various projects
- Federal Theatre Project - Sought to expand the traditional audience of theatre
- Tickets were cheap and put on a variety of plays
- Federal Music Project and Federal Art Project did the same thing
The Documentary Impulse
- Many documentaries were produced with a view to creating social change
- Some aimed at overthrowing capitalism in a revolutionary way
- Photographers helped document working conditions, etc
- Poor people were portrayed as resilient and determined to overcome adversity
Waiting for Lefty
- Although few Americans actually became Communist, Marxist writings affected the era
- Some Americans saw the Russian system as an alternative to the failing American one
- Many intellectuals briefly flirted with the idea of becoming Communist
- Communists tended to be strong supporters of the New Deal
Hollywood in the 1930s
- The advent of “talkies” towards the end of the 20s made movies popular
- Gangster films did very well in the early depression years
- Little Caesar and Public Enemy showed criminals being brought to justice, but also gave audiences exposure to lawbreaking, wealth, and power
- By and large, Hollywood avoided confronting dangerous social issues
The Golden Age of Radio
- By the end of the 30s, radios could be found in 90% of American homes
- NBC and CBS dominated radio broadcasting - controlled nearly 90%
- Dramas such as Fall of the City and War of the Worlds showed radios persuasive power
- 1939 - 70% of Americans relied on the radio as their prime source of news
The Swing Era
- The radio led to the widespread acceptance of jazz music
- Benny Goodman became the key figure in the “swing era”
- Inspired by black musicians, and created big band arrangements
- Swing music was perfect for young fans to dance to
- The mass culture industry was formed during the Depression
The Limits of Freedom
- FDR emphasized that much still had to be done to fix the Depression
- By 1937 the New Deal was in retreat and social reforms were suffering setbacks
Court Packing
- Several Supreme Court decisions found the New Deal to be unconstitutional
- FDR introduced a bill to allow him to appoint new judges when older ones reached 70
- Many newspapers denounced FDR’s “court-packing bill”
- Roosevelt compromised and made his bill reform lower courts only
- This battle lost him valuable support in Congress
The Women’s Network
- 1940 - More than a quarter of the workforce was female
- Eleanor Roosevelt actively used her influence as First Lady to fight for reforms
- Saw herself as a guardian of “human values” within the administration
- Eleanor Roosevelt’s chief political ally was Molly Dewson
- Head of the Women’s Division of the National Democratic Party
- FDR appointed the first cabinet woman in history - Frances Perkins
A New Deal for Minorities?
- During the depression, black workers were often the “last hired, first fired”
- FDR made little effort to combat this racism - worried about losing valuable votes
- Refused to introduce legislation making lynching a federal crime
- FDR appointed many blacks to second-level cabinet positions
- By 1936, many blacks had shifted to the Democrats - supported the New Deal
The Roosevelt Recession
- By 1937, the economy had improved significantly
- When Roosevelt called for cutbacks in government spending, it caused a steep recession
- Republican gains in the mid-term elections made it harder to push bills through
- By 1938 the reform whirlwind that was the New Deal was all but over
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