U.S. History
Mr. Mintzes
Unit Outline: The Great Depression and the New Deal
Causes of the Great Depression
“Brother, can you spare a D.I.M.E.?”
Distribution of income was uneven – increasing split between rich and poor
Low taxes on businesses and on high incomes – too much paid by lower and middle
income families
Imbalance in foreign trade High tariffs placed on foreign goods to protect US industries – wound up hurting US
business as European countries retaliated
Mechanization of American industry
Overproduction of consumer goods – early in 1920s demand for consumer good was
high – tailed off later in the decade – surplus goods
Failure of farm sector – also farmers had mechanized and when prices dropped they
could pay off loans for equipment.
Easy Credit
Stock market speculation, buying on margin, excessive use of credit, installment buying
Herbert Hoover’s Response to Crash and Depression
(Too Little, Too Late), 1929-1933;
Voluntary action by business with only government assistance from the
states.
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Market crashed in October, 1929 – crash was followed by bank failures and runs on banks
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Hawley-Smoot Tariff (1930) increase tariff on imported manufactured goods
Goal: To protect US markets from foreign competition
Europe retaliated, set high tariffs
Result: reduced trade for all nations, economies sank further in to depression.
Hoover believed in “Rugged Individualism” (laissez-faire) and non-intervention by government
“trickle down” economics
Hoover sets up Reconstruction Finance Corporation, 1932
Voluntary agreements by businesses
End of war debts by European nations – European nations unable to pay off loans made to them
in World War One.
Effects of Great Depression
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Unemployment – reaches a maximum of approx. 32%,
homelessness as banks foreclose on mortgages of the unemployed, migration of people
from areas where crops failed or there were not jobs to areas that seemed more
promising.
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The Bonus Army, 1932 – A 1924 law promised them cash certificates that could be redeemed
in 1945. Due to Depression they wanted them redeemed immediately. 15,000 marched
on Washington. Hoover ordered Army to disperse them from shantytown set up near
Capitol & White House.
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Growth and solidification of the labor movement – more workers turned to labor unions in an
attempt to get their job secured from layoff or plant closing.
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“Hoovervilles” – shanty towns set up by the unemployed and homeless, usually in or near
cities (for the urban unemployed) or in agricultural areas where migrants looked for
work
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The Dust Bowl – massive dust storms due to over farming and drought – did more damage to
the land.
F.D.R. elected in 1932 – inaugurated in March 1933
promised New Deal: Relief, Recovery and Reform
Franklin Delano Roosevelt – governor of NY State – had set up Recovery Administration in
NY that was working to improve conditions – had been successful.
First Hundred Days of administration was active – new agencies – plans, etc.
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First New Deal, 1933
New federal agencies: FDIC, HOLC, FERA, PWA, CCC, TVA, NRA,
AAA, SEC, FHA
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Second New Deal, 1935
Additional agencies and statutes: WPA, Wagner Act, NLRB, REA, SSA
GOALS OF THE NEW DEAL:
1. Relief of human suffering
Emergency Banking Act; Bank “holiday,” March 6, 1933 – immediately after inauguration
closed banks for several days to allow federal inspectors to certify that banks were sound and
could reopen
Federal Emergency Relief Act, 1933
PWA, CCC, WPA, TVA – new agencies created to increase employment – federal money used to
fund agencies and pay salaries to workers
2. Recovery of U.S. economy
More new agencies: NRA, HOLC, FHA, First AAA, Second AAA (Agricultural Adjustment
Adminstration)
“Codes of Fair Competition” - Antitrust laws suspended; companies were required to write
"codes of fair competition" that fixed prices and wages, established production quotas, and
imposed restrictions on entry of other companies into the alliances
Agricultural price supports were provided to allow farmers to sell crops for a reasonable price
3. Reform
Banking: Glass-Steagall Act; FDIC – created to insure deposits in banks – restored confidence in
banking system
Stock market: SEC – established controls to prevent margin buying and other problems that
helped to bring on the crash of 1929
Social Security Act, 1935 – provided retirement security and pensions
National Labor Relations Act (Wagner Act), 1935; NLRB – gave employees the right to join
unions, organize, and engage in collective bargaining with their employers – increased the
power and influence of labor unions
Fair Labor Standards Act, 1938 – set rules for minimum wage – payment of overtime –
maximum hours – child labor
Controversial aspects of the New Deal
Constitutional Issues
Schechter Poultry Corp. v. United States, 1935 – federal government right to set prices and
rules – Supreme Court declares the NRA to be unconstitutional
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Supreme Court and the AAA
United States v. Butler, 1936 – Supreme Court declares Agricultural Assistance Act to
be unconstitutional – Federal government was trying to control farm prices – area
reserved to the states
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Roosevelt’s “court packing” – tried to appoint six new judges (one for each judge over 70)
Plan was defeated
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FDR decides to run for a 3rd term in 1940 “Third term controversy” (the unwritten
Constitution – many felt it was unconstitutional for him to have 3rd term) Nothing in
Constitution set term limits for President – just custom first establish by G. Washington
Passage of 22nd Amendment, 1951 – sets term limits for President – can’t be elected more than
twice
Great Depression and New Deal: The human factor
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FDR: Restore public confidence, “Fireside Chats” – radio speeches he gave to country
intended to keep people informed and to build confidence in government, Brain Trust – a
collection of intellectuals and business leaders put together to lead country our from the
Depression
New Deal and Women: Eleanor Roosevelt – the First Lady – got very involved in social
programs, Frances Perkins – first woman appointed to the cabinet (Secy of Labor)
Dust Bowl: “Okies”, John Steinbeck;s The Grapes of Wrath (1939)
The New Deal and Minorities
Shift in African-American vote, 1936 New Deal coalition
Latinos – new political influence
Indian Reorganization Act, 1934 – ended sale of tribal lands – restored ownership of much land
to Native Americans
Opposition to the New Deal
Huey Long – former Governor of Louisiana – US Senator – supporter of Social Security but
vocal opponent of FDIC and banking acts
Father Coughlin – early supporter of FDR who became a vocal enemy – had radio show and
gave sermons and speeches against FDR – listened to by millions
Dr. Townsend – came up with a plan to help the poor that was similar to Social Security –
thought it was a better plan – when FDR did not support he became a detractor of FDR and
New Deal
Republicans – Many Republicans opposed New Deal – felt that there was too much
government and too much government involvement – feared that New Deal would lead to
Socialism.
Culture of the Great Depression
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Jazz of the “Roaring Twenties” became “swing” of the 1930’s
Band leaders were now mostly white – Benny Goodman, Glen Miller
Most bands were segregated
Movies and books sometimes depicted Depression conditions or life, such as “Okies” in “The
Grapes of Wrath”
Movies became a way for people to forget their troubles - cost just a few cents for admission –
big stars of the era were: Shirley Temple, James Stewart, Clark Gable, Katherine Hepburn
Comic Books made their appearance in the 1930s – Superman, Batman, Captain Marvel,
Wonder Woman, Spiderman
WPA also hired artists to paint murals and posters, musicians to perform free concerts and
playwrights to write plays for production on Broadway – intended to lift spirit of American
people
End of Depression:
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No actual end date. Beginnings of war material production to help allies in Europe helped US
industry return to full production – increase employment in farm and factory sectors –
increased purchasing power of Americans
Draft and increase in size of military from a couple of hundred thousand to millions also found
“jobs” for many.
FDR’s fireside chats
“Okies” & The Grapes of Wrath
Clark Gable –
“Gone With the Wind”