Great Depression & New Deal PDF

Great Depression & New Deal  stock trading late 1920s capture imagination public - market resemble sports, mills follow stock prices (as Babe Ruth) -business leaders & economists told Amers duty buy stocks John Raskob (Dupont & Gen Motors exec) Ladies’ Home Journal “Everybody Ought be R...

Great Depression & New Deal  stock trading late 1920s capture imagination public - market resemble sports, mills follow stock prices (as Babe Ruth) -business leaders & economists told Amers duty buy stocks John Raskob (Dupont & Gen Motors exec) Ladies’ Home Journal “Everybody Ought be Rich” (1929) “Way to wealth is to get into profit end of wealth production in this country.” save $15/mth & invest stocks could $80k in 20 yrs new approaches buy stock contrib to expansive optimistic atmosphere on Wall St lured into market - easy credit / buying on margin investors buy stock w/ sm down pay (10%) & borrow rest fr broker (shares as collateral) hi returns- mgr’s expert knowledge of market bull market (1928) Radio Corp of Amer stock fr 85 pts to 420 Chrysler 63 pts to132 most Amers don’t own stock- 4 m (out of 120 m) Crash portray as 1 / 2 day catastrophe on Wall St - actually steep slide bull market peak Sept ‘29 & prices drift downward “Black Tues” -bottom fell out, 16 m shares trade - panic selling – no buyers for many stocks (Oct 29, ’29) hardly anyone predicting depress would follow crash oversimplification say Crash cause Dep - underlying econ weakness 1- workers / consumers get too sm share of enormous increases in labor productivity -wages up only 8% - encourage overproduction 2- farm sector never regain prosperity WWI yrs – decline prices, exports drop, debts incur during wartime expansion *3- weakness in econ - unequal distribution income & wealth ‘top 0.1% US flys (24k flys) aggregate income = to bottom 42% (11.5 m flys) 1929 crash undermine confidence, investment, spend of bus & wealthy -manufacturers decrease production lay offs layoffs further decline consumer spend & more prod cutbacks banks fail, depositors withdrew $ (uninsured) - 1,000s flys lost savings massive unemploy (1/3) - no unemploy ins & little public relief raised idea responsible for fate, blame selves fail find work - shame, guilt, inadequacy women (labor cheaper) easier hold jobs - clerks, secs, maids, waitress…earn less than factory worker but jobs survive hard times pressure those lucky have job increase - women put up w/ sex harass men drank, angry, suicide - fathers felt lost prestige in home fear unemploy & desire security – Depression Gen Herbert Hoover (1928-32) US Sec Commerce Repub won & 8 mths later market crash resist calls fr Congr & local communities for fed role relief efforts / public works projects didn’t want injure “initiative & enterprise of Amer people” plan-restore business confidence (banks, RRs, insurance comps, etc) = stimulate econ act Congr $1k bonus (bond) WWI vets - mature 1945 “Bonus Army” -DC demand immed payment (spg ’32) summer - they & flys (20k) camp DC - “Hoovervilles” Chief Staff Douglas MacArthur & army forcibly evict remain 2k (July ‘32) Mac exagg threat peaceful demonstrators “rev” / comm conspiracy unarm, unemply WWI heroes driven by bayonet & bullet…stark evidence failure HH admin Franklin Delano Roosevelt Dem gov NY (‘28-’32) Progressive tax relief farmers, state reg power, prison reform, labor laws, pension old & unemploy ins – attack HH spending unemploy 25% - any Dem but FDR landslide (‘32) Dems won maj HOR & Sen & stage set New Deal FDRs leadership inaug 40 yr Dems maj party (4 elections)  Hyde Park, only child, vast estate, dad wealthy RR investor, private schools, Harvard, Columbia Law, 5th cousin Eleanor Dem NY senate 1910 Guillain-Barre syndrome, never walk w/o support (summer ‘21 @ 39) “Once I spent 2 yrs in bed trying move my big toe, after that anything else seems easy” eye pres - assemble key advisors “brain trust” follow DC, create New Deal Harry Hopkins (sec commerce, NYC social worker), Frances Perkins (sec labor, 1st female cabinet) (husb NY …bi-polar), met FDR list need him pledge support (Feb’33) 40 hr wk, min wage, worker’s comp, unemploy comp, fed ban child labor, Soc Sec, health ins, rt to collective bargain 12 yrs - all but health ins “Let me assert my firm belief that only thing we have to fear is fear itself.” (inaug Mar 4, 1933) optimism & confidence -badly shaken US 1st days, FDR call special session Congr deal w/ bank crisis, unemploy & farm relief fireside chats explain steps taken meet fin emergency – Mar 12 courage to ordinary Amers, compassion fr Wh House urged put savings back banks - worked! by mid-mth - ½ banks open again 100 Days Mar –June ‘33 FDR pass extraord # acts combat aspects of Dep – known as “New Deal” -opposition fr Congr & business! used influence over public opinion to get his way Civilian Conserv Corps (CCC) unemploy relief effort (2.5m young men) protect & conserving nation’s nat’l resources (Mar) road construct, re-forestation, flood control, nat’l park improvements Agricultural Adjustment Adm (AAA) relief farmers new fed role in plant & price set funds raised fr new taxes on food processing Public Works Administration (PWA) $3.3 b -roads, public bldgs, schools, post offices, bridges, courthouses 2nd 100 days response criticism, turn left concentrate on social reform nat’l commitment create jobs, security agst old age, unemploy & illness improve housing & clean slums Soc Sec Act 1935 payroll tax workers & employers- fund retirees after 65 Works Progress Administration - pub relief projects inspire Amers rebuild lives (1935) beautify walls public bldgs positive images history - murals celebrate regional histories (nat’l competitions) pub works infrastructure - schools, hospitals, storm drains & bridges, roads, plant trees “I noticed a tattered marine…staring stiffly at nothing. His mind had crumbled in battle…his eyes were like two black empty holes in his head…” Tom Lea on “2,000 yd Stare” Dust Bowl ecological & econ disaster struck S Great Plains mid- ‘30s (w KS, e CO, w OK, TX panhandle, e NM) drought, parch earth swept up dust Inflated wheat prices WWI, overplanting plains FDR led Congr pass National Labor Relations Act / Wagner Act (‘35) guarantees rts for workers in unions, bargain for wages, better work conditions, etc. prohibit unfair labor practices /firing for union activity National Housing Act 1937 fund pub housing construct & slum clearance rent subsidies low-income flys by ‘38, reform whirlwind New Deal over conclusion New Deal (1933-41) did little alter prop rts / distrib wealth fail help most powerless – migrant workers, tenant farmers, women & Blks (little end racial / gender discrim) create new pol coalition - wh workers, Blks, female laborers & leftist intellectuals hadn’t previously seen shared same interests  nat’l health ins never off ground fed expectations going forward fed gov would intensify & increase role in lives DC greater center econ regulation, pol power & fed bureaucracy -WWII expand role of nat’l gov far past New Deal