Chapter TwentyFour
The Great
Depression and the
New Deal, 1929–
1940
Section 1
Sit-Down Strike at Flint:
Automobile Workers Organize
a New Union
Sit-Down Strike at Flint
 In 1937, the community of Flint, Michigan, went
on strike at the General Motors plant.
 The depression hit this auto-producing town
very hard.
 The United Auto Workers attempted to take
advantage of the Wagner Act and organize a
union, but GM resisted them.
 They used the tactic of sit-down strikes
 Strikers seized two GM plants and refused
to leave. Supported by the governor, the
strikers resisted efforts to eject them.
 The community rallied to support the
strikers.
 GM gave in and recognized the UAW, a
move that the other automakers soon
followed.
Section 2
Hard Times
Great Depression in
America
The Bull Market and the
Crash
 During the 1920s, stock prices rose rapidly.
 Investors were lured by easy-credit policies like
buying on margin.
 The market peaked in early September 1929,
drifted down until late October, and crashed on
October 29.
 Dow Jones Industrial Average: Average
of stock prices of major industries
 Timeline Leading up to Stock Market
Crash
 September 3,1929
 Dow Jones reaches all-time high (381)
 Begins to fall after peak
 Wednesday- October 23, 1929
 Dow Jones drops 21 points in 1 hour
 Thursday-October 24,1929 (Black
Thursday)
 Investors begin to worry and sell their stock
 Stock prices fall
 Group of bankers pull their $ together to buy
stock
 Prices stabilize, but only for a few days
 Tuesday-October 29, 1929 ( Black
Tuesday)
 16.4 million shares sold ( average 4-8 million)
 This leads to the Great Crash: the collapse of
the stock market
 Worst day
 November 13, 1929
 Dow Jones=198.7
 Losses=$30 billion
 Business cycle: economy grows, then
contracts
 By mid-November, the market had lost
half of its value.
 Buyers on margin faced paying hard
cash to the cover the loans they received
for purchasing stock that sold well below
what they had originally paid.
 Few people predicted that a depression
would follow.
Underlying Weakness
 The crash did not cause the depression but
revealed the underlying economic weakness.
 Industrial growth during the 1920s had not
been accompanied by comparable increases in
wages or farm income.
 The gap between rich and poor widened, as
did that between production and consumption.
 The weakness in the economy
contributing to the Great Depression
included
 Failure of companies to pay wages
commensurate with productivity
 Rise in productivity had encouraged
overproduction in many industries
 Near depression in agriculture in the 20s
Mass Unemployment
 The stock market crash led manufacturers to
decrease spending and lay off workers.
Weak consumer demand and bank runs
turned the slump into a depression.
 By 1933, nearly one-third of the labor force
was out of work.
 Unemployment took a tremendous personal
toll and undermined the traditional authority
of the male breadwinner.
Hoover’s Failure
 The enormity of the depression overwhelmed
traditional sources of relief.
 President Hoover seemed unable to accept
the facts of the depression. He vetoed
measures to aid the unemployed.
 Hoover’s response to the Depression was to
have the government help business to help
themselves
 That the business cycle would correct itself
 His Reconstruction Finance Corporation
failed to restore business confidence.
 Efforts to make government credit
available saved banks but did not
encourage business growth.
 Policies under Hoover showed that private
charities do not have the resources to meet
massive social problems
 Social unrest under the Hoover administration
led to
 Bonus Army marching on Washington
 Farmers’ Holiday Association
 Refused to sell produce to raise prices
 Labor demonstration at Ford’s River Rouge Factory
 Strike turned violent when police fired on crowd killing 4 and
injuring 50
Protest and the Election of
1932
 In 1932, protests erupted throughout the
country, including the Bonus Army of
veterans in Washington.
 Congress had promised a $1,000 bonus in
the form of a bond that would not mature
until 1945-to every WWI vet
 The Democrats, led by Franklin D.
Roosevelt, won a massive electoral
victory.
 He had accused Hoover of reckless
spending
Section 3
FDR and the First New
Deal
FDR the Man
 FDR came from a privileged New York
background.
 His rapid rise in politics came to a halt when he
was stricken with polio.
 The experience changed him, allowing him
personally to understand struggle and hardship.
 He served two terms as governor of New York
where he:
 established a reputation as a reformer
 put together the “brain trust” to help him
implement changes
 His “brain trust” believed in government business
cooperation
Restoring Confidence
 To restore confidence, on his first full day as
president, FDR called for a four-day “bank
holiday.”
 Temporarily closing all the banks
 In his fireside chat a week later, he told
Americans of the steps he had taken,
strengthening public faith in his ability to help
 Congress passed legislation that strengthened
the banking system, helping to avert the
immediate banking crisis.
The Hundred Days
 FDR called a special “hundred days”
session of Congress to enact his
program to revive industry and
agriculture while providing emergency
relief.
 Relief, Recovery & Reform
 In the First 100 Days programs that were
established were
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FERA
TVA
CCC
AAA
NIRA
 NIRA
 Self-Regulating industrial codes to revive economic
activity
 Sparked union organization
 TVA
 Economic development and cheap electricity for the
Tennessee Valley
 CCC
 Provided work for jobless young men in protecting
and conserving the nations natural resources
 FERA
 Direct federal $ for relief, funneled through state and
local governments
 AAA
 Established parity prices for basic farm
commodities
 Displaced sharecroppers by reducing
production
 Try to raise farmers purchasing power
Section 4
Left Turn and the Second
New Deal
Roosevelt’s Critics
 More troublesome for FDR were critics who
claimed the New Deal had been too timid
including:
 Charles E. Coughlin denounced a conspiracy of Jews,
international bankers and the New Deal
 Upton Sinclair lost the California gubernatorial
election race in which he called for a
government-run production system.
 Francis Townsend called for providing $200
monthly payments to all persons over 60.
 Huey Long, who served as governor and
then as senator for Louisiana, called for a
“Share Our Wealth” program to redistribute
wealth. Long’s assassination in 1936 ended
his probable third-party candidacy.
 Problems of the New Deal
 Accusations of socialism by businessman
and some Democrats
 Loud criticism by a Catholic priest
 Protest marches by the unemployed
councils and the communists
The Second Hundred Days
 FDR responded by shifting leftward.
 Programs included the
 WPA
 Community service programs that employed
thousands of jobless artists, musicians, actors and
writers
 Resettlement Administration
 Relocation of poor rural families
 Reforestation and social erosion projects
 Wagner Act also called National Labor Relations
Act
 Federal guarantee of right to organize trade unions and
collective bargaining
 Social Security Act
 Federal old-age pension and unemployment insurance
 Mutual- aid program
Labor’s Upsurge: Rise of
the CIO
 A militant group within the AFL formed the
Committee for Industrial Organization (CIO), later the
Congress of Industrial Organizations, to organize
mass-production workers.
 Led by John Lewis & Sidney Hillman of the United
Mine Workers, the CIO drew upon communists and
other radicals to engage in the dangerous task of
building industrial unions
 The success at the Flint GM plant led to victories in
other industries.
The New Deal Coalition at High
Tide
 FDR easily won re-election in 1936
 His supporters included:
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traditional white southern Democrats
Industrial workers of all races
trade unionists
depression-hit farmers
First and second-generation Catholic
immigrants
Section 5
The New Deal in
the South and
West
Southern Farming and
Landholding
 In 1930, less than ½ of all southern farmer
owned their land; over ¾ of the region’s
African-American farmers and nearly ½ of its
white farmers were sharecroppers or tenants
 The Agricultural Adjustment Administration
(AAA) was able to boost prices by paying
farmers to “plow under—take their land out of
production
 Many of the subsidies went to large
landowners who used the money to buy
labor-saving machinery, which put many
out of work
 Those who were put out of work were
forced to migrate to industrial centers
such as Memphis, Chicago, Birmingham,
and Detroit.
 The programs that helped primarily the
South and the West
 Federal Emergency Relief Administration
 Tennessee Valley Authority
 Resettlement Administration
The Dust Bowl
 The Dust Bowl, caused by farmers’
methods that stripped the landscape of
its natural vegetation and left nothing
behind to hold down the topsoil, swept
through parts of the region
The Government and the
Dust Bowl
 Farmers were encouraged to plant soil-enriching
crops.
 The Soil Conservation Service provided assistance to
farmers engaged in conservation work
 The AAA provided
 subsidies to farmers who reduced their acreage.
 Led to an increase in evictions of sharecroppers and tenant
farmers
 Inspire the founding of the Southern Tenant farmers Union
in protest
 As landowners reduced acreage by
evicting their tenants and sharecroppers,
these families became part of a stream of
“Okies.”
 Responding to rising racial hostility,
officials carried out an aggressive
deportation campaign against Mexicans
and Mexican Americans regardless of
their citizenship status
Water Policy
 The New Deal built a series of water projects
that allowed urban growth, agricultural
expansion, and massive irrigation
 These projects promoted flood control and
supplied low-cost electricity
 The consequence of these projects was
that a few farmers became wealthy and
thousands of Mexican workers labored in
the fields for very low wages
 A general decline in the environment also
occurred.
 The Bureau of Reclamation transformed
the West with huge water and public
power projects
 They included :
 Lake Mead
 All-American Canal
 Grand Coulee Dam
A New Deal for Indians
 John Collier, the new head of the Bureau of
Indian Affairs, reformed many harmful
practices
 The Indian Reorganization Act restored
semi-sovereign status to the tribes
 The Bureau of Indian Affairs grew more
sensitive to Indian cultural freedom and
supported efforts to restore tribal rights.
Section 6
Depression-Era
Culture
A New Deal for the Arts
 Due in part to government support, American
culture was influenced by the depression
 The New Deal’s Federal Project No. 1 provides
assistance to writers, musicians and artists
 The Federal Writers Project enabled many of
the country’s writers to survive
 Ralph Ellison
 Richard Wright
 Zora Neale Hurston
 The New Deal also funded theatrical
performances, sent orchestras out on tour,
financed new compositions, and supported
new works of art.
 Federal Project No. 1
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Writing
Theater
Music
Visual arts
The Documentary Impulse
 A “documentary impulse” led many artists to
try to record the extent of human suffering.
 Photographers employed by the Farm
Security Administration traveled throughout
rural areas, recording the faces of despair and
resilience.
 Novelists like John Steinbeck portrayed the
hardships of Okies but affirmed their
willingness to persevere.
Waiting for Lefty
 During the 1930s, the Communist Party
of the United States attracted
intellectuals, but usually for only brief
periods
 Alarmed by the rise of fascism,
communists tried to appeal to
antifascists by forging a “popular front”
that helped to spread their influence.
Film in the 1930s
 Millions of Americans found the movies an
enjoyable escape
 By and large Hollywood avoided confronting
controversial social issues and relied upon indirect
comments in gangster films and screwball
comedies.
 Walt Disney’s cartoons were moral tales
that stressed following the rules.
 Frank Capra’s comedies idealized smalltown America and suggested that
solutions were to be found in the oldfashioned values of common people.
 Most popular movie themes in the 1930s
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“screwball” comedies
Gangsters
American values
musicals
Radio in the 1930s
 In 1930, 40 percent of American homes had a
radio. Ten years later, 90 percent did
 Network radio relied on older forms,
vaudeville, and blackface minstrel comedy
 Soap operas dominated daytime radio
and featured strong women who gave
advice to weak, indecisive friends.
 By the end of the decade network news
had become the prime news source for
most Americans.
The Swing Era
 Radio stations helped to popularize jazz
music
 White performers like Benny Goodman
popularized African-American musical
forms for a mass audience, initiating the
swing era.
 Popular Big Bands
 Duke Ellington
 Artie Shaw
 Jimmie Lunceford
Section 7
The Limits of
Reform
Court Packing
 By 1937, the New Deal was in retreat
 FDR became frustrated when the Supreme
Court overturned several key New Deal
programs.
 The Supreme Court upheld the constitutionality of
the Wagner Act
 He asked Congress to allow him to appoint a
number of new judges
 New Deal sympathizers feared this would
disrupt the constitutional balance and
blocked the effort.
 In time FDR got a more sympathetic
court, but this weakened him politically
The Women’s Network
 The New Deal brought significant changes for
women
 Women who had been engaged in reform work
increased their influence
 Eleanor Roosevelt promoted a number of reforms,
particularly around issues pertinent to women
 The New Deal saw the first female
Cabinet member, Secretary of Labor
Frances Perkins, a long-time reformer
 New Deal agencies opened up spaces
for many women, particularly in social
welfare programs
 Eleanor Roosevelt
 Helped pass anti-lynching legislation
 Reform child labor practices
 End racial discrimination in relief programs
A New Deal for Minorities?
 The New Deal did not directly combat racism
 NRA codes allowed for lower wages for black workers
 Blacks were among the people left unprotected by the
gaps in New Deal reforms, such as Social Security
 FDR banned discrimination in WPA projects, leaving
African Americans to find jobs. A “Black Cabinet” led by
Mary McLeod Bethune advised FDR on black issues
and got a number of second-level positions opened up
 By 1936, a majority of black voters supported the
Democrats
 The New Deal did little to help Mexicans and Mexican
Americans.
The Roosevelt Recession
 By 1937, FDR had become convinced that the
federal deficit had grown too large
 He cut spending, creating a severe recession
that increased unemployment and weakened
popular support for the New Deal
 The 1938 elections increased Republican
strength and made further reforms nearly
impossible.
 By 1938 the New Deal had begun to
expire without ending the Depression
 The last legislation of the New Deal
included
 Wagner-Steagall Act ( National Housing Act)
 Funded public housing construction and slum
clearance and provided rent subsidies for lowincome families
 Fair Labors Standards Act
 Established the first federal minimum wage
 Set a maximum work week at 40 hours involved
in interstate commerce
 Emergency Spending for the WPA
 Giving the WPA new life