The Depression and the New Deal

Key Themes• The most interesting story of the Depression is

the push and pull between “normal people” and people in the government: it’s democracy in action.

• The economy crashes, and that has real impact on people’s lives.

• What does the government do? What should it do? How does that change over time?

• There will be a lot of government programs in this unit - you shouldn’t feel the need to memorize them all. Just try to get a sense of a couple and how they fit into the story of the government trying to help.

The Coming of the Depression• October 29, 1929:

Black Tuesday: Stock Market Crash

• panic selling, $10 billion vanishes in 5 hours

• U.S. Steel $262 to $22 per share; General Motors from $73 to $8

Images from the Stock Market, 1920s

Americans and the Depression• 25% of American

work force could not find work

• U.S. Steel: 225,000 full-time workers in 1929; none at end of 1932

• Thousands evicted: Hoovervilles

• People moved to the country to try to grow their own food

Hoover and the Political Response• 1928: Hoover (R) vs. Smith (D)

• “associational action” vs. government action

• “Federal aid... weakens the sturdiness of our national character” - Hoover, quoting Cleveland

• 1930 Hawley-Smoot Tariff - worsens problem

• 1932: Reconstruction Finance Corporation; Federal Home Loan Bank System; $2 billion to public-works and local relief

Will Rogers, an American celebrity from Oklahoma, has a famous radio speech from the beginning of the Depression, called “Beans, Bacon, and Limousines.”

Take a listen.

FDR and 1932 Election• 1920 ran for VP; 1921

contracted polio and lost use of legs

• FDR (D) vs. Hoover (R)

• “new deal” but no clear vision

• Coalition: “farmers, industrial workers, reform-minded urban middle class, liberal intellectuals, northern African-Americans... the white supremacist South” (Foner 644)

FDR has been our only president with a physical disability. He was hardly ever photographed in his wheelchair or using braces.

Check out this video of him walking into the inauguration to show how his staff provided him cover as he moved.

The irony of this, of course, is that he’s our president during some of America’s hardest times - so it should make it clear that

a physical disability doesn’t prevent someone being a great leader… and yet. He had to hide it, and prejudice against

disabled people has continued.

The First New Deal: 1933-1934• Goal: fix Depression

without going to extremes

• Strategy: economic planning

• “brains trust” dominates

• big business inevitable: large firms should be managed by government

Banking Crisis• Panic about banks

because of stock market crash

• Banks close doors to depositors

• Glass-Steagall Act: banks can’t buy or sell stocks

• Federal Deposit Insurance Corporation (FDIC) insures deposits Panic at Millbury, MA

Source: http://www.sechistorical.org/museum/photos/1930/

National Industrial Recovery Act (and related)

• National Recovery Administration (NRA)

• Public Works Administration (PWA)

• Civil Works Administration (CWA)

• Tennessee Valley Authority (TVA)

CWA Road Building, San FranciscoSource: http://newdeal.feri.org/images/y64.gif

PWA

Civilian Conservation Corps

Photos from CA State Parks CCC page:http://www.parks.ca.gov/?page_id=24877

The New Deal and Agriculture

• AAA: raise farm prices by setting quotas and paying farmers not to plant

• Winners: farm owners

• Losers: tenant farmers; hungry people

• Dust Bowl: drought + mechanization = massive erosion in OK, TX, KS, CO

• More than 1 million farmers displaced

“And then the dispossessed were drawn west- from Kansas, Oklahoma, Texas, New Mexico; from Nevada and Arkansas, families, tribes, dusted out, tractored out. Car-loads, caravans, homeless and hungry; twenty thousand and fifty thousand and a hundred thousand and two hundred thousand. They streamed over the mountains, hungry and restless - restless as ants, scurrying to find work to do - to lift, to push, to pull, to pick, to cut - anything, any burden to bear, for food. The kids are hungry. We got no place to live. Like ants scurrying for work, for food, and most of all for land.”

- The Grapes of Wrath, John Steinbeck

Photo: Dorothea Langehttp://newdeal.feri.org/nchs/docs02.htm

Migrant Camps in Bakersfield, CAPhotos by Dorothea Lange

Migrant Camps in Bakersfield, CAPhotos by Dorothea Lange

Migrant worker in Bakersfield, CAPhotos by Dorothea Lange

The Court and the New Deal

• 1935: Supreme Court invalidates NRA

• 1936: AAA overturned

• Court opposition and continued Depression end “First New Deal”

Image source: http://www.bbc.co.uk/schools/gcsebitesize/history/images/hist_roosevelt_cart.jpg

Grassroots Revolt• 1934: 2,000 strikes

• Congress of Industrial Organizations (CIO)

• 1934: Upton Sinclair, head of End Poverty in California movement, for CA governor

• idea: Depression comes from underconsumption, which comes from wealth inequality

Photo: Flint Sit-Down Strike, 1937Source: http://www.flintsitdown.com/

FDR’s Populist Opponents

• These three influential voices helped to push FDR to launch the Second New Deal. Check out video clips on the next 3 slides!

• Huey Long: governor LA (1928-1930); elected U.S. Senator 1930

• Dr. Francis Townsend: doctor in CA

• Father Coughlin: Michigan-based “radio priest”

The Second New Deal

• Launched 1935 (after midterm elections in 1934)

• Focus: economic security

• Goal: redistribute income to stimulate consumer economy

• Shows influence of more liberal voices

WPA and Wagner Act

• Works Progress Administration (WPA) - 1934-1943: hires people for infrastructure development and arts projects

• Wagner Act: supports democracy in workplace and unionization

An example of a WPA Project: Oral Histories

Workers went out an interviewed normal people (including former slaves in the South) and wrote down their stories.

Check out the story on the next page!

Will, living is certainly a lot easier than it was when I was young. There were ten in our family, nine girls and one boys and we had, besides, a half brother, John. For one thing, in the summer, when our spring-well went dry, we had to drag water for a quarter of a mile on a wooden sled, bringing two or three kegs at a time. I tell you, the first time I simply turned a tap and all the water I wanted, hot or cold, ran out, it seemed like the very acme of luxury. No moderately well-to-do homes had nice, comfortable over-stuffed furniture when I was a girl. How well I recall that when we girls had young man callers it was a gamble as to who would come first to occupy the two spare chairs, and all the light we had was a little kerosene lamp -- one of those funny looking little things, with a handle on one side of the bowl, that are treasured as antiques nowadays. Well, I suppose light wasn't any more essential, or any more popular, in courting them than it is now.

-- Mrs. John H. James, Portland, OR, as told to Sarah B. Wrenn, 6 February 1939.http://lcweb2.loc.gov/cgi-bin/query/D?wpa:9:./temp/~ammem_ozRG::

Social Security

• Social Security Act of 1935

• Unemployment insurance

• Old age pensions

• Aid to the disabled, the elderly poor, families with dependent children

The Second New Deal and “Liberty”

• FDR’s liberalism: connecting liberty to economic security

• 1936: FDR vs. Alfred Landon - debates over liberty

• The Court Fight, Round 2

End of Second New Deal• United States Housing Act

(1937)

• Fair Labor Standards Act (1938)

• But 1937 economy gets worse after cuts in federal spending

• John Maynard Keynes - argues government spending is necessary in recession (1936)

Limits to Change

Limits to Change: Women

• Eleanor Roosevelt as national figure

• Economy Act of 1932

• Exclusion of many women from Social Security

Eleanor RooseveltImage Source: http://www.firstladies.org/biographies/images/

EleanorRoosevelt.jpg

Limits to Change: African Americans

• Southern Veto - leads to exclusion of African Americans from many New Deal benefits

• Last hired, first fired

• Federal Discrimination - housing, employment, agriculture

Limits to Change: Mexican Americans

• 20% of population of Mexican origin returned to Mexico during Depression

• Numbers included as many as 200,000 Mexican American children (US citizens)

• Divided community struggled with effective advocacy

New Ideas of America

• A flourishing American Left

• Art about and by the people - populist movies and music

• Communists and CIO challenged color lines

Impact of the New Deal

• Limited in scope, more conservative than in Europe

• In some ways, worsened racial inequality

• But:

• developed American infrastructure

• gave aid to struggling Americans

• restored faith in democracy

• redrew the map of American politics

• made economic inequality a major issue in understanding American freedom

Conclusions• The government steps up to help with the New Deal:

• They create jobs

• They pay for infrastructure construction

• They invent a social safety net

• People have to demand government help - it’s not automatic

• There are limits to what the New Deal is able to accomplish and who it helps, based on the existing inequalities in American society