Chapter 23 (The Great Depression) - The American YAWP

Introduction

• The economic crisis following the 1929 crash lasted longer and inflicted more harm than any previous crisis in US history
• The economy crashed after a decade of prosperity where people suddenly stopped borrowing and buying
• Debt-fueled industries sold fewer goods, retailers lowered prices and laid off workers, leading to a decline in income and further job losses, creating a downward cycle
• Four years after the crash, nearly 25% of Americans who wanted work could not find it, and more than half of those who could only found part-time work
• Farmers could not earn enough from their crops to make harvesting worthwhile, resulting in food rotting in the fields
• People drew on savings, turned to family, and sought public assistance and charities, but resources were quickly depleted
• Unemployed workers and cash-strapped farmers defaulted on debts, including mortgages
• Banks closed due to being over-extended and deprived of income
• Fearful observers demanded their deposits, causing banks to panic and shut down
• The nation's economy ground to a halt due to little being bought, sold, lent, or spent
• Remedies adopted by the president and Congress, such as higher tariffs, immigration restrictions, and expressions of confidence, were insufficient
• In the 1932 presidential election, incumbent Republican President Herbert Hoover promised to stand firm against those he claimed would destroy the U.S. Constitution
• The Democratic nominee, New York Governor Franklin D. Roosevelt, pledged a New Deal for the American people
• Roosevelt won in a landslide, leading to a rapid and enduring transformation in the U.S. government
• Although the New Deal did not achieve everything proponents hoped, it changed how Americans saw their country

The Origins of the Great Depression

• On October 24, 1929, stock market prices plummeted, with $10 billion in investments disappearing which is roughly equivalent to $100 billion today
• Panicked selling occurred, stock values sank, and investors crowded the NY Stock Exchange demanding answers
• Leading bankers met privately and raised millions to halt the slide, ceremoniously buying stocks at inflated prices
• The market temporarily stabilized, but investors dumped portfolios to avoid further losses
• On October 29, Black Tuesday, the stock market began its long fall, evaporating stock values
• U.S. Steel shares dropped from $262 to $22, General Motors stock went from $73 to $8, and four fifths of J. D. Rockefeller's fortune vanished
• The crash exposed deeper problems with the American economy; stock market popularity grew, but only 2.5% of Americans had brokerage accounts
• The majority had no personal stake in Wall Street; crash exposed rising inequality, declining demand, rural collapse, overextended investors, and speculative bubbles
• Despite resistance by Progressives, gap between rich and poor grew throughout the early twentieth century
• Per capita income rose 10% for all Americans from 1920-1929, but 75% for richest citizens
• Conservative politics in the 1920s reinforced federal fiscal policies that exacerbated the divide that favored wealthy investors
• Pro-business policies of the 1920s were designed for an American economy built on the production and consumption of durable goods
• By the late 1920s the market became saturated; automobile manufacturing slowed as fewer Americans could afford cars and consumers had no need
• Products failed to sell, inventories rose, manufacturers scaled back production, companies fired workers, and demand for consumer goods was blunted
• The situation was compounded by increased automation and factory efficiency, with unemployment around 7% in the 1920s
• American farmers faced hard times before the markets crashed
• After several years of profits, farm prices in the South and West declined in 1920 and 1921 due to rising production and stalled demand for agricultural products
• Soil exhaustion compounded the problem; farmers could not make loan payments, and banks tightened credit
• By 1929, farm families were overextended and in a precarious position before the Depression

Herbert Hoover and the Politics of the Depression

• Americans still believed the economy would bounce back in 1929 and 1930
• In 1930, President Herbert Hoover reassured an audience that “the depression is over”
• During his 1928 election campaign, Hoover promoted higher tariffs to encourage domestic consumption and protect farmers from foreign competition
• Hoover signed the Smoot-Hawley Tariff of 1930, the highest in American history, as markets began to crumble
• Other countries responded in kind, raised tariff walls across the globe, and international trade halted dropping from $36 billion to $12 billion between 1929 and 1932
• US Exports fell by 78%; tariff exacerbated the world's economic collapse
• A human element: panic, aggravated the economy's problems
• The Federal Reserve raised interest rates and tightened credit, causing banks to deny loans and call in debts leading to bank runs
• In 1930, 1,352 banks failed and in 1932, nearly 2,300 banks collapsed

The Lived Experience of the Great Depression

• Individuals, families, and communities faced the painful collapse of economic institutions
• By the end of 1932, the crisis was widespread and markets crashed independent of their own actions and workers plunged into poverty through no fault of their own
• With unemployment and declining wages, Americans slashed expenses
• Middle and working-class Americans relied on credit at stores, defaulted on utility bills, or skipped meals while those who could borrowed from relatives or took in boarders in homes/tenements
• Cities borrowed from their own future, wage work plans collapsed due to the lack of funds

Migration and the Great Depression

• The environmental catastrophe deepened America's agricultural crisis during the Depression
• Beginning in 1932, severe droughts hit from Texas to the Dakotas and lasted until at least 1936
• Plains farmers had plowed up natural ground cover, and without rain, the topsoil turned to dust leading to storms that blotted out the sky, choked settlers/livestock, and rained dirt
• The Dust Bowl exposed all-too-late conservation needs
• The region's farmers, were decimated by years of foreclosures and declining commodity prices
• For many in Texas, Oklahoma, Kansas, and Arkansas who were “baked out, blown out, and broke,” their only hope traveled to California, whose rains brought bountiful harvests
• Oklahoma lost 440,000 people, or 18.4% to outmigration
• Dorothea Lange's Migrant Mother became one of the enduring images of the Dust Bowl and the ensuing westward exodus
• The first reversal in the flow of people between rural and urban areas occurred
• As relief efforts floundered, some state legislatures made it a crime to bring migrants into the state and allowed local officials to deport migrants to neighboring states
• In the winter of 1935–1936, California, Florida, and Colorado established “border blockades" to block migrants
• Congress created the Select Committee to Investigate the Interstate Migration of Destitute Citizens and started widely publicized hearings in 1940
• Americans feared foreign workers willing to work for even lower wages
• Americans Meanwhile, feared foreign workers
• The Saturday Evening Post warned that foreign immigrants, who were “compelled to accept employment on any terms and conditions offered,” would exacerbate the economic crisis
• On September 8, 1930, the Hoover administration issued a press release on the administration of immigration laws
• Hoover instructed consular officers to scrutinize visa applications of those “likely to become public charges" which included alien laborers and artisans
• The number of European visas issued fell roughly 60% while deportations increased from 1930-1932
• Exclusionary measures targeted Mexican immigrants, where officials led coordinated efforts to push out Mexican immigrants
• State officials in Los Angeles began deportation raids, while the Los Angeles County Department of Charities began repatriating Mexicans
• From 1930 to 1940 the Mexican-born population living in Arizona, California, New Mexico, and Texas fell from 616,998 to 377,433
• Immigration plummeted and deportations rose, and more people left the U.S. than entered it

The Bonus Army

• In the summer of 1932, more than fifteen-thousand unemployed veterans and their families converged on Washington, D.C.
• They wanted to petition for a bill authorizing payment of cash bonuses to veterans of WWI originally scheduled to be paid out in 1945
• The bonus came to symbolize government relief for the most deserving recipients where the veterans erected a tent city
• Calling themselves the Bonus Expeditionary Force, or the Bonus Army, they drilled and marched and demonstrated for their bonuses
• Concerned with what immediate payment would do to the federal budget, Hoover opposed the bill, and was voted down by the Senate
• Hoover called the veterans "insurrectionists" and ordered them to leave
• General Douglas MacArthur, stormed the tent city and routed the Bonus Army; troops chased people down, tear-gassed children, and torched the shantytown.
• Newsreels showed footage, of Americans recoiling at Hoover's insensitivity, condemning his presidency

Franklin Delano Roosevelt and the "First" New Deal

• The Depression worsened and unemployment peaked at 25% in 1932
• The U.S. electorate chose Franklin Delano Roosevelt, the Democratic New York governor
• Roosevelt came from a privileged background in New York's Hudson River Valley; he was diagnosed with polio
• In 1928, Roosevelt won election as governor of New York
• He established the Temporary Emergency Relief Administration (TERA), supplying jobs with aid
• The first female secretary of labor was Frances Perkins
• On July 1, 1932, Roosevelt delivered his acceptance speech for the Democratic presidential nomination said, “I pledge you, I pledge myself, to a new deal for the American people.”
• Roosevelt proposed jobs programs, public work projects, higher wages, farm subsides, and more
• Roosevelt crushed Hoover to win the election in November and spent the months assembling advisors, the Brain Trust, to formulate a plan of action
• On March 4, 1933, in his first inaugural address, Roosevelt famously declared, "the only thing we have to fear is fear itself" and he and his advisors secured enactment of laws
• Roosevelt looked to stabilize the collapsing banking system; every 2/5 banks shut down with some Federal Reserve banks on the verge of insolvency
• Roosevelt declared a national “bank holiday” closing American banks pushed the Emergency Banking Act swiftly through Congress where Roosevelt appeared on the radio in his Fireside Chats
• In the first chat, Roosevelt described banking safeguards and asked the public to place their trust and their savings in banks
• In June, Congress passed Glass-Steagall Banking Act, which instituted a federal insurance system and barred the mixing of commercial and investment banking
• Roosevelt and allies focused on relief for Americans where Congress debated and passed what Roosevelt proposed by establishing the Civilian Conservation Corps (CCC) and the Federal Emergency Relief Administration (FERA)
• The Tennessee Valley Authority (TVA) built a series of hydroelectric dams as part of a program to economically develop a chronically depressed region/ several agencies helped home and farm owners refinance mortgages
• Roosevelt's early recovery program consisted of the Agricultural Adjustment Administration (AAA) in May 1933 and the National Recovery Administration (NRA)
• The National Industrial Recovery Act (NIRA) in June 1933 suspended antitrust laws to coordinate prices, regulate production levels, and establish conditions of employment
• In exchange businesses agreed to provide reasonable wages and hours end child labor, allow workers to unionize, and earn the right to display a NRA's Blue Eagle
• The programs of the First Hundred Days stabilized the American economy
• The Civil Works Administration (CWA) and, later, the Works Progress Administration (WPA) put unemployed people to work on infrastructure projects

The New Deal in the South

• New Deal legislation impacted the region of poverty the South
• In 1929 the average per capita income in the American Southeast was $365, the lowest in the nation; southern farmers averaged $183 at a time where West Coast made more than x4 times that
• Southerners made significantly less than other workers; 75% of nonsouthern textile workers, 60% of iron and steel workers, and just 45% of lumber workers.
• Major New Deal programs were with designed the South in mind like drastic decreasing of land set aside for cotton where farmers plowed the land, but landlords left farmworkers without the AAA to help
• Southern industrial practices attracted attention due to the NRA that encouraged better better working conditions
• The 1938 Fair Labor Standards Act, set a wages of $0.25/hour (rising to $0.40/hour
• President support for unionization impacted the Sout
• In 1935 the National Labor Relations Act, also known as with the Wagner Act, guaranteed the right of most workers to organize and bargain collectively.
• The TVA built hydroelectric dams providing electricity

Voices of Protest

• Roosevelt's initial relief programs lacked scope, with Roosevelt's reluctance to tinker with the foundational economic and social structures
• Senator a Huey Long from Louisiana, was a prominent voice of protest who saw injustice in the nation's economic system
• Long proposed a Share Our Wealth program through guaranteed minimum incomes
• Twenty-seven thousand Share the Wealth clubs sprang up across the nation and even convinced Roosevelt attack unemployment
• Francis Townsend a former doctor, promoted a plan for old-age pensions and Charles Coughlin a priest, gained a following by anti-Roosevelt remarks
• The Supreme Court nullified the NRA

"The Second" New Deal (1935-1936)

• Democrats gained seats in selections Bolstered by these gains, by facing reelection in 1936, and to be confronting rising opposition, Roosevelt rededicated to bold programs the “Second New Deal”
• An appropriation in 1935 established the WPA could employ millions
• In 1935, hoping to reconstitute protections President Roosevelt passed the National Labor Relations Act known as the Wagner and gave legal protection for workers to organize was revolutionary
• In 1935 John L. Lewis, in response to worsening conditions, took the lead in forming a national workers' organization, the Congress of Industrial Organizations (CIO),
• The CIO won a victory in 1937 when members in the UAW struck for recognition and better pay/hours, where GM was had to grant pay increase
• The Second New Deal also oversaw restoration of a highly progressive income tax, home mortgages for homeowners, and rural/urban reconstruction projects, the Social Security Act provided economic aid

Equal Rights and the New Deal

• In 1931, near Scottsboro, Alabama nine men charged with assaulting white men would undergo trials where all were sentenced to die
• The communist-oriented International Labor Defense offered aid to the Scottsboro Boys; an appeal lessened the boys' death sentences and the were paroled
• Despite appointing advisors, Roosevelt address concerns for racial discrimination and risked alliances because he rejected such propositions Abolishing and making it a federal crime
• codes of the NRA set new scales, though set against the south the knew codes implied that
• Blacks were paid, while others were given more and that had a code for armors was equal due to their blacks to and a more high-paid one was in the city

The End of the New Deal (1937-1939)

• In 1936 Roosevelt and the New Deal won popularity with the Great Depression retreating
• There were conservative barriers to his support like the Supreme Court, so Roosevelt called legislation to expand the Court
• Roosevelt’s court-packing scheme would not become law and it emboldened New Deal opponents
• Roosevelt and his advisors cut economic spending in 1928 because the economy was improving, though the the allowed Midwestern Republicans to significant gains causing Roosevelt was struggled build congressional support
• By war to stole dominates interest and outshine the deal.

The Legacy of the New Deal

• Roosevelt and his Democratic congresses presided over a reformation of the American government and a realignment in American party politics
• After the New Deal, Americans saw the government after ally in struggles - After both and and after and the government or securing turning getting a getting and for cultural Voter most elections and voter turnout in 1930 was an important and that but of a that a even and turning to that American