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Rakib Kabir Mr. Kann APUSH 01/04/2017 Chapter 24: The Great Depression and the New Deal, 1929­1939 Worst Economic Depression (p. 492) ● American people were in fear for their survival ○ The depression lasted longer ○ People lost jobs and businesses failed ○ Both middle and working class were affected Wall Street Crash (p. 493) ● Rising stock prices symbolized wealth in the 1920s ○ Millions of people invested money and in October 1929, it collapsed ● Black Thursday : October 24, 1929 ○ High volume of selling on Wall Street and prices plunged ■ Bankers attempted to stabilize this by buying stocks ● This worked but for only one business day ● Black Tuesday : October 29, 1929 ○ Millions of investors ordered brokers to sell ■ There weren’t any buyers left ○ From that day on, Wall Street kept going down Causes of Wall Street Crash (p. 493­494) ● The depression throughout the nation was a result of many things ○ Uneven distribution of income ○ Stock market speculation ■ People began selling their stocks as soon as prices rose ○ Excessive use of credit ■ People began financing and using installment payments ○ Overproduction of consumer goods ○ Weak farm economy ■ Farmers faced difficulties with weather and finances ○ Government policies ■ Government trusted businesses and so Congress enacted high tariffs ● This helped businessed but hurt farmers ○ Global economic problems Effects of the Great Depression (p. 494­496) ● The Great Depression influenced American thinking and policies ○ The value of goods declined from $104 billion ­ $56 billion in four years ○ Nation’s income declined over 50% ○ Republican domination of government was at an end (p. 495) ■ Power of federal government increased greatly ● People accepted the new changes made ○ Social effects were felt by all classes (p. 496) ■ Farmers and A
frican Americans had increased difficulties ■ Poverty and homelessness increased Hoover’s Policies (p. 496) ● President Hoover believed the nation would recover soon ○ People should take his advice about voluntary action and restraint ■ Businesses should not cut wages ■ Unions should not strike ■ Charities should help needy and jobless Responding to a Worldwide Depression (p. 496) ● Hawley­Smoot Tariff (1930) ○ Tax increases ranging from 31% to 49% on foreign imports ■ Higher tariffs would protect from foreign competition ● In response, E
uropean countries increased their import rates ○ As a result, national and international trade sunk ● The Dawes Plan for collecting war debts could no longer continue ○ Hoover proposed a moratorium (pause) on the payment for international debts ■ Britain and G
ermany accepted but F
rance declined Domestic Programs (p. 497) ● Hoover believed government action was needed to help the U.S. economy ○ Federal Farm Board ■ Created in 1929 before stock market crash ■ Authorized to help farmers stabilize prices by storing for excess grains ● This failed to keep up with the overproduction of goods ○ Reconstruction Finance Corporation (RFC) ■ Created by Congress in early 1932 ■ Loans would help stabilize faltering railroads, banks, and institutions ● Democrats believed this would only help the rich Despair and Protest (p. 497) ● By 1932, millions of unemployed workers and farmers decided to take direct action ○ Farmers banded together to stop banks from foreclosing their farms and homes ○ Farm Holiday Association was formed by farmers ■ Reverse drop in prices by stopping crops from reaching market ○ In the summer of 1932, 1,000 unemployed WWI veterans demanded payment of the bonuses that were promised to them ■ Congress failed to pass the bill they marched for ■ Two veterans were killed after violence broke out with police The Election of 1932 (p. 497­498) ● Republicans nominated Hoover ○ He believed a Democratic victory would result in more problems ● Democrats nominated New York governor Franklin D. Roosevelt ○ Pledged a “new deal” for Americans ○ Repeal of Prohibition ○ Aiding unemployed ○ Cutting government spending ● Roosevelt won the election ○ All but six traditional Republican states voted for him ○ Socialists supported Roosevelt ○ Now president, both houses, and Congress were Democrat majority ● The 20th Amendment was passed in February 1933 ○ Period between presidential election and inauguration was shorted Franklin D. Roosevelt (p. 498­499) ● Expanded the size of the federal government ● He also enlarged the powers of the presidency ● He was cousin of T
heodore Roosevelt ○ Unlike Theodore, Franklin was a Democrat ● Roosevelt was paralyzed by polio in 1921 ○ Went back into politics after recovery ○ He was known for having a warm personality, gifted, and inspirational ● He was married to E
leanor Roosevelt ( p. 499) ○ She was the most active first lady ■ Wrote in newspapers, gave speeches, and traveled the country ■ She influenced Roosevelt in many decisions ● Support the minorities and less fortunate New Deal Philosophy (p. 499) ● In his 1932 campaign, he offered vague promises and no programs ○ No detailed plan to end depression but was willing to take action ● The three R’s ○ During his acceptance speech at the Democratic convention in 1932 ■ Relief for people out of work ■ Recovery for businesses and the economy as a whole ■ Reform of American economic institutions ● Brain Trust and other advisors ○ Roosevelt was led by a group of advisors ■ Louis Hower was the chief political advisor ■ Roosevelt had a group of advisors known as the Brain Trust ● Consisted of professors ■ They were the most diverse group appointed ● African Americans, women, Catholics, and Jews ● Frances Perkins was the first women to serve in president’s cabinet The First Hundred Days (p. 499­501) and Other Programs of the First New Deal (p. 501­502) ● Roosevelt was eager to provide leadership ○ After being sworn into office, he called Congress into a 100 day long secession ■ Congress passed every law President Roosevelt requested ● Bank Holiday (p. 500) ○ Banks were failing at a frightening rate ■ President ordered to have the banks closed on March 6, 1933 ● This would allow the government to reorganize them ● Repeal of Prohibition ○ Congress passed the Beer­Wine Revenue Act ■ Legalized the sales of beer and wine ● 21st Amendment repealed the 18th Amendment ○ Brought Prohibition to an end ● Fireside chats ○ Roosevelt went on the radio and assured people the banks were now safe ■ Public responded by depositing money into the banks ● Financial recovery programs ○ Roosevelt persuaded Congress to pass these measures ■ The Emergency Banking Relief Act
● Government could examine finances of banks ■ The Federal Deposit Insurance Corporation (FDIC) ● Bank deposits were allowed to be as high as $5,000 ●
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■ The Home Owners Loan Corporation (HOLC) ● Financing for small homes to prevent foreclosures ■ The Farm Credit Administration ● Low interest farm loans and mortgages for farmers Programs for relief for the unemployed ○ The Federal Emergency Relief Administration (FERA) ■ Federal money would be sent to states and local governments that operated forms of relief for the jobless and homeless ■ Director was H
arry Hopkins ○ The Public Works Administration (PWA) (p. 501) ■ Money for state and local governments for building roads, bridges, and other public works ● This brought thousands of jobs ■ Director was H
arold Ickes ○ The Civilian Conservation Corps (CCC) ■ Employed young men to work on federal land and paid families ○ The Tennessee Valley Authority (TVA) ■ Hired thousands of people to work in Tennessee Valley ● Built dams, operate power plants, and control flooding ■ Sold electricity to residents The National Recovery Administration (NRA) ○ Made to combine long­term relief and immediate relief ○ Directed by H
ugh Johnson ○ Guaranteed reasonable profits for businesses and fair wages for workers ■ Set codes for wages, hours for work, levels of productions, prices ■ Gave workers the right to gather ● Schechter v. U.S. declared the NRA unconstitutional after 2 years The Agricultural Adjustment Administration (AAA) ○ Encouraged farmers to reduce production ■ This would increase prices ■ The government would pay farmers per acre plowed ■ Declared unconstitutional in 1935 by the Supreme Court The Civil Works Administration (CWA) ○ Added to the PWA for creating jobs by hiring workers for construction jobs The Securities and Exchange Commission (SEC) (p. 502) ○ Regulate the stock market and place limits on speculative practices The Federal Housing Administration (FHA) ○ Insured bank loans for building new houses and repairing old ones The value of the dollar was set at $35 per ounce of gold The S
econd New Deal ( p. 502­503) ● Roosevelt’s first two years were mostly focused on recovery ○ In 1935, the second New Deal was launched for relief and reform ● Relief Programs ○ Works Progress Administration (WPA) ■ Spent billions of dollars to provide people with jobs ● Employed 3.4 million men and women ● Worked on construction and as artists ○ National Youth Administration (NYA) ■ Part time jobs for youth ● So they can work and stay in school or college ○ Resettlement Administration (RA) ■ Provided loans for sharecroppers, tenants and farmers ■ Established federal camps where migrant workers could live ● Reforms (p. 503) ○ National Labor Relations (Wagner) Act (1935) ■ Replaced provisions of N
ational Industrial Recovery Act ■ Guaranteed workers the right to join unions ● National Labor Relations Board (NLRB) ○ Ensured those rights were protected ○ Rural Electrification Administration (REA) ■ Provided loans for electrical cooperatives to supply power in rural areas ○ Federal Taxes ■ Revenue Act of 1935 ● Significantly increased tax on incomes of the wealthy ● Increased tax on bond or property sales/transfers ○ The Social Security Act ■ Created a federal insurance program ● Based on automatic collection of employees ○ When they retire after 65, money gets paid back monthly ■ Unemployed, disabled, and single parent children received money as well The E
lection of 1936 (p. 503) ● Roosevelt was nominated to represent Democrats ● Alf London represented Republicans ○ Believed Democrats were spending too much money with New Deal ● Roosevelt beat London ○ Won every state except Maine and Vermont Opponents of the New Deal (p. 504­505) ● Liberal Critics ○ Socialists from Democratic Party believed it helped businesses more than poor ■ New Deal failed to address problems for women, elderly, and minorities ● Conservative Critics ○ New Deal gave federal government too much power ■ WPA and labor laws bordered socialism and even communism ■ Businesses were alarmed ● Increased regulations ● Pro union stance ● Financing ○ Formed A
merican Liberty League ■ Purpose was to stop the New Deal ● Demagogues ○ Critics used the radio to speak out against the New Deal ○ Father Charles E. Coughlin ■ Founded the N
ational Union for Social Justice ■ Called for issuing inflated currency and nationalizing all banks ○ Dr. Francis E. Townsend (p. 505) ■ Proposed a new 2% federal sales tax before Social Security Act was made ● People over 60 would receive $200 a month ○ This would increase economic activity ■ Proposed to Roosevelt and SSA was passed ○ Huey Long ■ Proposed a “ Share Our Wealth” program ● Promised minimum annual income of $5,000 for every family ○ This would be paid by the wealthy ■ Campaigned against Roosevelt but lost because he got assassinated ● The Supreme Court ○ The Supreme Court challenged Roosevelt the most ■ In 1935 it ended the NRA and AAA for being unconstitutional ● He decided to create a plan to end obstacles made by court ○ Court­reorganization Plan ■ Roosevelt proposed a judicial­reorganization bill in 1937 ● Proposed president be authorized to appoint an additional justice to the Supreme Court for every justice older than 70.5 ○ This would allow Roosevelt to add 6 more justices ○ Reaction ■ Republicans and Democrats outraged by this attempt to unbalance system ● Accused Roosevelt of trying to be a dictator ■ Congress refused to accept it ● Democrats supported Congress as well Rise of Unions (p. 506­507) ● The NRA and Wagner Act increased Union membership ○ Less than 3 million in 1930s to over 10 million in 1941 ● Formation of the C
.I.O. ○ As Unions grew in size, tensions increased ■ American Federation of Labor was mostly skilled white males ● Unions within the AFL wanted membership to be extended to all ○ In 1935, industrial unions joined together and formed C
ongress of Industrial Organizations ■ Leader was J ohn. L. Lewis ● In 1936, AFL suspended the CIO ○ CIO broke away from AFL and became its rival ● Strikes ○ Many companies resisted union demands ○ Workers at G
eneral Motors in Flint, Michigan insisted their right to be in a union ■ Participated in a sit­down strike ● Company recognized them as U
nited Auto Workers (U.A.W.) ○ However, union organizers were beaten and driven away ○ U.S. Steel recognized C.I.O. initions but smaller companies resisted ■ On Memorial Day in 1937, workers at R
epublic Steel in Chicago striked ● Resulted in four deaths ● Fair Labor Standards Act (p. 507) ○ In 1938, Congress enacted the Fair Labor Standards Act ■ A minimum wage (initially fixed at 40 cents an hour) ■ Maximum workweek of 40 hours and time and a half for overtime ■ Child­labor restrictions on those under 16 ● Child labor was declared unconstitutional by Supreme Court in 1916 but U
.S. v. Darby Lumber Co. Supreme Court upheld FLSA Last Phase of the New Deal (p. 507­508) ● Recession , 1937­1938 ○ In the winter of 1937, the economy declined after gradual improvement ■ Social Security tax reduced consumer spending ○ Roosevelt’s economic advisors adopted K
eynesian theory ■ John Maynard Keynesian advised government spend more money than there is debt ● This would make the economy stable again ● Weakened New Deal (p. 508) ○ Although the economy improved, there were still problems ■ After Court­packing fight of 1937, Congress stopped following Roosevelt ● This made Democratic party weaker Life During the Depression (p. 508­509) ● Millions of people developed a “depression mentality” ○ Attitude of insecurity and economic concern ● Women ○ Women sought work due to unemployment of fathers and high expenses ■ Women were accused of taking jobs away from men ■ Eleanor Roosevelt campaigned for women’s equality ● However, New Deal programs allowed women to receive less pay ● Dust Bowl Farmers ○ Drought in the early 1930s ruined crops in the G
reat Plains; l and turned into dust ● Thousands from O
klahoma and that area moved to C
alifornia ● African Americans ○ Racial discrimination continued in the 1930s ■ Unemployment rate grew in African American communities ■ African Americans were excluded from state and local relief programs ○ There were some improvements ■ Found some jobs with the WPA and CCC ■ Moral support from Eleanor Roosevelt ■ Appointed middle­level federal positions by President Roosevelt ○ Fair Employment Practices Committee ■ Committee to assist minorities in gaining jobs ● Done after A
. Philip Randolph from R
ailroad Porters Union threatened a march in W
ashington ● Native Americans ○ John Collier was appointed commissioner of B
ureau of Indian Affairs ■ Indian Reorganization Act (1934) ● The Dawes Act of 1887 was repealed in 1934 ○ Indians had land returned to them ○ They would also control their own tribes ● Mexican Americans ○ Suffered from discrimination and thousands went back to M
exico for work