Hoover becomes President: 1928 Herbert Hoover (R) v. Alfred
Smith (D) American son, businessman Immigrant, Catholic,
anti-Prohibition Focus of election: Prosperity, debt/tax reduction,
tariff (econ. =), enforcement of Volstead Act Republican victory:
444 87 EC, 21 m. 15 m. HH = 1928-1932
Slide 3
The Good... Business strong I have no fears for the future of
our country. Income up Inflation stable Stabilization of economy AG
Marketing Act, 1929 Fed. Farm Board, farm surplus Hawley-Smoot
Tariff on farm goods, 1930
Slide 4
The Bad... Hidden effect of tariff Price for consumer Export
(farmers) Inefficiency Foreign reprisal
Slide 5
Twenties Prosperity Misguided optimism New Era of PERMANENT
growth Get-rich quick schemes $$ + autos = real estate boom
(FLORIDA) Collapsed in 26
Slide 6
The 1920s Stock Market Tax reductions capital investment (Wall
Street) $$$ Buying stocks on margin 10% down, stock as
collateral
Slide 7
Early Signs 27- decline in housing construction Auto sales
match demand Business inventories up Consumer spending slowed 29-
decline in production, employment Stocks rise- speculation
Slide 8
... The Ugly September 4-5 Waver drop October 22 I know of
nothing fundamentally wrong with the stock market or with the
underlying business and credit structure. Bank president October
23-24 Stock values drop, unloading of stocks Oct. 29 = BLACK
TUESDAY -23% October 1929 -37% (avg)
Slide 9
Slide 10
The Response Consumers slow purchasing Orders decrease Wages
down, layoffs Decline in purchasing power more cutbacks Multiplier
Effect Farm commodities fall 50% Bank failures @ 9k Business
failures Factories, mines Slow erosion of stock values By 33, 20%
of peak value in 29
Slide 11
Slide 12
Causes and Flaws Business Prices set for high profit Profit
back into business, NOT wages rise in production, fall in
purchasing power Hidden by installment plans/credit Demand falls
investment falls Tariffs Deflation hidden Loans to Europe = foreign
demand for US goods Later, stock market better option
Slide 13
Government Mellon Plan Oversaving, decrease in demand Low
interest rates money supply high, speculation Low enforcement of
antitrust laws Hostility toward Unions Discouraged collective
bargaining Imbalance in income High Tariffs Gold Standard 29
tighten $$ supply
Slide 14
The Human Toll Unemployment 1.6 m (3%)- 29 12.8 m (25%)- 33
Blacks, Mexicans first to be let go Jobless, homeless, penniless
Jobless, Homeless, Penniless Bank failures NO FDIC Soup kitchens,
churches, local welfare Hobos and Tramps Hoovervilles and Hoover
blankets
Slide 15
Slide 16
Slide 17
Slide 18
Slide 19
Hoovers Efforts @ Recovery How bad is it really? Mellon, Hoover
views Self-cure, limited action + confidence We have passed the
worst and with continued effort we shall rapidly recover. HH
Corporate profits vs. purchasing power Keep business open, fair
wages, no strikes Conservative focus = look to the past Farm
surplus (AG. Mrkting Act) Tax cuts H-S Tariff Public Works
Jobs
Slide 20
Europes Decline 1931- Austrian bank failure PANIC! Hoovers
response: re: DEBT moratorium Euros: gold withdrawn from banks,
dump stocks All abandon gold standard Worsen US economy
Slide 21
Congressional Efforts @ Recovery Dem. Control in House, high
influence in Senate by 1930 32- Reconstruction Finance Corporation
(RFC) Emergency loans to banks, insur. Co., RRs 32- Glass-Steagall
Act (FDR) Stop the run, restore confidence, commercial vs.
investment FDIC 32- Federal Home Loan Bank Act Financial aid to
mortgage institutions
Slide 22
Direct Relief? ...Is there any reason why we should not
likewise extend a helping hand to that forlorn American, in every
village and every city of the U.S., who has been without wages
since 1929? NY Senator Robert Wagner Hoover lacks leadership in
relief movement Small step: 32- Emergency Relief and Construction
Act $300+ m.: No cash payments, but relief loans to states, local
gov. building projects, public works
Slide 23
Farmers and Vets Farmers Dust Bowl hits28-30 Survival Efforts
to raise prices Bonus Expeditionary Force WWI vets to DC, spring 32
15k+ want immediate payment (Bonus Bill, 24) of life insur. House,
Senate camp out near Capitol Forced out by July: fire, MacArthur,
Eisenhower, Patton + 700 soldiers
Slide 24
Slide 25
Slide 26
*Hoover and Foreign Policy* Good Neighbor Policy Tour of Latin
America, 28 Back away from intervention (RC to MD) FDRs Good
Neighbor Policy Stimson Doctrine, 32 Result of Japans rise to
power, totalitarianism 31- invasion of Manchuria, later Shanghai
bombing US wont recognize territory acquired by force in China
Slide 27
FDR: Happy Days Are Here Again! FDR (D) v. HH (R) Prohibition,
Depression, Peace, totalitarian govs. I pledge you, I pledge myself
to a new deal for the American people. FDR Aristocrat that loved
common people Traditionalist that loved experiment A charmer with
convictions Skilled political tactician that listened and learned
from others Determined to succeed, cass, manipulator, power hungry,
willing to sacrifice, took credit for others accomplishments
Slide 28
Campaign Notes Pledge to balance budget Short-term deficit OK
Help to farmers Gov. regulation of electricity Repeal of
Prohibition CONFIDENT, BOLD, JOYFUL
Slide 29
FDR Part I: 1932-1936 The only thing we have to fear is fear
itself. FDR The Brain Trust Cordell Hull- SOS Francis Perkins- SOL
Professor Felix Frankfurter (Harvard)- Advisor SCJ Louis Brandeis-
Advisor Harry Hopkins- WPA director William Woodin- SOT Plan?
NATIONAL SPENDING! Advocated by John Maynard Keynes
Slide 30
Challenges Revive devastated economy Relieve human misery
Alleviate desperate plight of farmers Brain Trust Solutions?
Antitrust laws competition Large corps. + government regulation
Expansion of welfare programs, gov. spending
Slide 31
Aims of the Administration Remedy to financial crisis Relief to
jobless Promotion of industry Fed. Spending up, cooperation b/t
management & unions Raise commodity prices Would raise farm
income, subsidies
Slide 32
The New Deal 3/8 6/16 = First 100 days = 15 pieces of legis.
3/6 10 = Bank Holiday HALT THE HYSTERIA Emergency Banking Relief
Act 33 Sound banks reopen, managers to others 3/12 = 1 st Fireside
Chat safer to keep your money in a reopened bank than under the
mattress. 3/13- deposits exceed withdrawals 3/15- most banks open
Next? Cut to military pensions, gov. payrolls (Economy Act)
Beer-Wine Rev. Act (3.2%) & 21 st Amend.
Slide 33
Slide 34
Debt Issue 20k farm mortgages foreclosed per month Farm Credit
Administration (FCA) Emergency Farm Mortgage Act Refinance farms @
lower rate Lower monthly payment Home Owners Loan Act Refinance for
city-dwellers (HH had advocated) Through Home Owners Loan Corp.
Glass-Steagall Banking Act FDIC- $5k Commercial separate from
investment banking
Slide 35
Regulation of Wall Street via Federal Securities Act
Stocks/bonds issued registered w/ FTC, SEC (regulatory) 4/19-
OFFICIAL ABANDONMENT OF GOLD STANDARD No redemption for gold!
Decline in value of $ increase in price = GOOD!
Slide 36
Unemployment The test of our progress is not whether we add to
the abundance of those who have much. It is whether we provide
enough for those who have too little. FDR Goals? Insurance system
($ to retirees, disabled, needy), direct relief to unemployed
Civilian Conservation Corps (CCC) Useful jobs for men 18-25,
$30/month ($25 to family) Forests, parks, rec. areas, roads,
bridges, fish hatcheries, soil erosion Military discipline
instilled, lived in camps, led by army & foresters
Slide 37
Federal Emergency Relief Admin. (FERA) Fed. Gov. + state/local
Grants $ used to create jobs to build public buildings (5k),
bridges (7k), adult literacy, college education, day-care,
food/clothing to needy (via local agencies)
Slide 38
Federal Work Relief: Priming the Pump People on gov. payroll,
competitive wages Civil Works Admin. (CWA) 11/33- 4/34: created
public jobs/wages for winter Highway repairs, sewer work, teachers-
$1 billion Works Progress Administration (WPA) Through Emergency
Relief Appropriation Act (35) Harry Hopkins Replaced FERA as
managing federal job programs
Slide 39
WPA and the Arts Federal Theater Project Productions- Orson
Welles Federal Art Project Federal Music Project Federal Writers
Project Travel guides, slave narratives Hurston, Ellison
http://newdeal.feri.org/asn/asn00.htm
http://newdeal.feri.org/asn/asn00.htm
Slide 40
Slide 41
Young People CCC high-school diploma $$ for self, to family
Natl Youth Administration (NYA) Part-time work for students Tech.
training Johnson in TX, Nixon in NC
Slide 42
AG Relief Need for efficient regulation/planning As seen in WWI
Agriculture Adjustment Act (AAA)- 33 and 38 $ to farmers to reduce
production $ from tax on processors of commodities (cotton, four)
By 35: farm income up 58% Drought (32-35= Dust Bowl Migrations),
production cut (cotton, hogs) U.S. v. Butler, 36 SC say tax
unconstitutional Soil Conservation and Domestic Allotment Act (no
taxes, quotas)
Slide 43
Industrial Relief Natl Industrial Recovery Act (NIRA) =
Economic recovery + public-works projects 1. Sec. of Interior
Harold Ickes (PWA) Gov. buildings, highways, flood control Private
contractors vs. gov. workers 2. Natl Recovery Admin. (NRA) Hugh S.
Johson Industry-wide codes, wages = no competition stability
Purchasing power to consumers Industry committees set codes, 40-hr
workweek, wages ($13), age limit (16)
Slide 44
Business owners see codes as restraints Large-companies
dominated code making, want chance to compete Didnt apply to ag or
domestic workers Schechter v. the U.S. 35 Unconstitutional
Slide 45
Regional Planning Tennessee Valley Authority (TVA), 33
Electricity & jobs Dams, Great Lakes of the South, opened
rivers to barges, soil conservation, forestry, labor unions,
schools/libraries I want to sit here and look out over these hills.
TN woman success @ generating power consumption, cheap utilities to
mass consumer markets
Slide 46
Slide 47
Social Costs Hardships Continue 39- 17% unemployed Petty theft,
begging, prostitution Effect on families Divorce rate down,
birthrate down Dust Bowl Migrants From S, SW to CA Okies in
jalopies To LA, San Fran, Frisco, San Joaquin Valley (AG)
Competition w/ Asians/Hispanics Tents, cabins, migrant camps
Prejudice, WASP, country
Slide 48
Slide 49
Slide 50
Slide 51
Okie usta mean you was from Oklahoma. Now it means youre a
dirty son-of-a-bitch. Okie means youre scum. Dont mean nothing in
itself, its the way they say it. -JS
Slide 52
Minorities FDR doesnt face racism/segregation- didnt want to
alienate S. Dems New Deal for whites only CCC & TVA = seg.,
Fed. Housing Auth. Effort to limit crop production (& raise
prices) affected lands out to tenant farmers, sharecroppers 200k
displaced Mexican-Americans in CA, NM, AZ, CO, TX No citizenship =
little access to relief programs deportations
Slide 53
Native Americans Bureau of Indian Affairs (John Collier)
Increase in NA employees, lobby for access to relief Indian
Reorganization Act replace Dawes by restoring land to tribes,
establish business, own constitutions, voc. Training Indian New
Deal- partial imporovement
Slide 54
Civil Rights Race not high priority for FDR Many left out of
programs De facto black cabinet vote Dem. In 36 Grovey v. Townsend-
35 White only primary OK (44 struck down) Others: Scottsboro case 9
CONVICTED of rape in AL Powell v. Alabama, 32 Norris v. Alabama,
35
Slide 55
30s Culture Literature John Steinbeck, Richard Wright 39- GofW:
workers =people, not ideological tools Traveled w/ Okies 40-
Naative Son: own family of Slaves, sharecroppers, 9 th grade ed.
Chicago- joined FWP, reflection of black ghettos, The Ethics of
Living Jim Crow
Slide 56
Pop Culture Radio, movies = ESCAPE soap operas, Amos n Andy,
Superman, Dick Tracy, big band, church, sports Fireside Chats 33-
drive- ins: one movie/week $.25 adults, $.10 kids No hard times!
Intended to laugh the big bad wolf of the depression out of the
public mind. Marx Bros., horror films (31 Dracula, Frankenstein),
gangster films, cartoons Few of reality: GofW (40), Gone with the
Wind (39)
