Chapter 20 & 21: The Great Depression and the New Deal

Father Charles E. Coughlin

A catholic priest who headed the National Union for Social Justice, which denounced FDR's New Deal policies Held a weekly radio show and discussed politics finance Proposed to his many listeners an ambiguous currency program, but found popularity mostly though anti-Semitic rhetoric and support for European fascism called for government ownership of key industries to fight the Depression Initially supported FDR but became increasingly critical as he saw what he thought was a failure of the New Deal to promote social justice

Black Tuesday

October 29, 1929; date of the worst stock-market crash in American history and beginning of the Great Depression. *stock-market crash did not cause the Great Depression by itself

Federal Dance Project

WPA project which sponsored ballets and modern dance programs

Sit-down Strike

method of boycotting work by sitting down at work and refusing to leave the establishment Rather than walking out of a plant, thus enabling management to bring in strikebreakers, workers halted production but remained inside.

American Liberty League (1934)

organization of wealthy Republicans and conservative Democrats whose attacks on the New Deal caused Roosevelt to denounce them as "economic royalists" in the campaign of 1936 believed FDR was recklessly spending money and restricting freedom

Glass-Steagall Banking Act

outlawed commercial banks from becoming involved in the buying/selling of stocks helped to prevent many irresponsible practices that led to the stock-market crash created the FDIC

FCC (Federal Communications Commission)

oversaw nation's broadcast airwaves and telephone communications

Federal Music Project

oversaw the production of concerts, creating work for the unemployed musicians

Harold Ickes

FDR's Secretary of Interior Helped in TR's Progressive Campaign of 1912

Mary McLeod Bethune

FDR's special advisor on minority affairs

Harry Hopkins

Former New York social worker who became an influential FDR adviser and head of several New Deal agencies Headed emergency relief efforts during FDR's term as NY governor

A. Phillip Randolph

He was the black leader of The Brotherhood of Sleeping Car Porters. He demanded equal opportunities in war jobs and armed forces during WWII. He helped encourage the end of segregation in the military, although that happened after the war.

Louis Brandeis

advised WW during 1912 campaign Served on Supreme Court offered political advice to FDR

Reconstruction Finance Corporation

agency established by Hoover in 1932 to provide emergency relief to large businesses, insurance companies, and banks.

Wagner Act (1935)

established National Labor Relations Board; protected the rights of most workers in the private sector to organize labor unions, to engage in collective bargaining, and to take part in strikes and other forms of concerted activity in support of their demands. based on the idea that unionization and higher wages would aid economic recovery by boosting purchasing power of ordinary Americans

Un-American Activities Committee (1938)

established by the House of Representatives; investigated alleged disloyalty and subversive activities on the part of private citizens, public employees, and those organizations suspected of having ties to Communism.

Smith Act (1940)

law that made it unlawful to teach or advocate the violent overthrow of the United States government

National Youth Administration

(FDR) , (NYA)1935, provided education jobs counseling and recreation for young people. part time positions at schools for students allowed for aid in h.s. college and grad school. part time jobs for dropouts

EPIC (End Poverty in California)

- Created by Upton Sinclair, major socialist - Plan supported big public work programs, tax reforms, and pensions - state should use idle factories and land in cooperative ventures to provide jobs for the unemployed - Gained a lot of support but when Sinclair lost the election for Governor it never was enacted - FDR did not endorse Socialism and considered Sinclair too radical but used these ideas in the New Deal programs

Effects of the Stock Market Crash

- Destroyed investment companies created to buy and sell stock - Wiped out thousands of investors - Reduced business and consumer confidence - 26,000 businesses failed in 1930 -Surviving businesses cut back on further investment & laid off workers - Global financial system based on the gold standard could not deal with the downturn - Germany defaulted on reparations payments to France and Britain → can no longer repay debts to American banks - Banks failed throughout the world was depositors rapidly withdrew money - Families lost their life savings - 25% unemployment - wages fell and hours were reduced - prices fell by nearly 40%

Social Security Act (1935)

- Unemployment insurance - Old age pensions - Aid to disabled, elderly poor, and families of dependent children -Based on Progressive platform of 1912, maternalist reform, and European countries -Revolutionary bc not just temporary relief but permanent social insurance -greatest victory of 2nd ND

Bonus Army March (1932)

- WWI veterans marched to Washington to demand early payment of bonus due in 1945 - driven away by federal soldiers under army's chief of staff, Douglas MacArthur

Fair Labor Standards Act (1938)

- banned goods produced by child labor from interstate commerce - established a minimum hourly wage of 40 cents - required overtime pay for hours of work exceeding 40 hours/week -established the practice of federal regulation of wages and working conditions, a radical departure from pre-Depression policies

Second New Deal Agricultural Reform

- based on belief that country cannot prosper with rural standard of living so low - rural poverty due to poor use of natural resources - federal assistance to reduce soil loss - fed purchase marginal and eroded land --> convert to national grasslands/parks - mainly benefitted landowners, not sharecroppers, tenants, or migrant workers

REA (Rural Electrification Agency)

- brought electricity to homes that lacked it - mostly to the 80% of farms in 1934 without electricity - intended to enable Americans to purchase more household appliances (increase consumer demand to reverse Depression)

Communist Party (Great Depression)

- gave some political focus to the despair - formed unemployed councils - sponsored marches/demonstrations for public assistance - protested eviction of unemployed families from homes

NRA Controversy

- large companies dominated the code-writing - used administration to drive up prices, limit production, lay off workers, and divide markets among themselves at the expense of smaller competitors - workers' right to unionize was largely ignored - gov't lacked the manpower to police the 750 codes in place - NRA failed to help economic recovery or fix relationship between employers/workers

Causes of the Stock Market Crash

- real estate speculation and busts in SoCal and Florida led to bank failure, undeveloped land, and foreclosing of mortgages - highly unequal distribution of income and prolonged depression in farm regions reduced American purchasing power - automobile and household consumer good sales stagnated after 1926 - European demand for US goods declined as industries recovered from wartime destruction

Herbert Hoover (1929-1933)

- rose to fame after coordinating overseas food relief during WWI - criticized government regulation as interference with economic opportunities of ordinary Americans - believed self-interest should be subordinated to public service - considered himself Progressive - preferred associational action to government intervention

Roosevelt Recession (1937-1938)

- sharp downturn of the economy after FDR reduced federal funding for farm subsidies and WPA work relief following the improving economic conditions of 1936 - as gov't spending fell, so did business investment, industrial production, and the stock market - unemployment rate went from 14% to 20% - showed that the New Deal didn't end the depression but its relief programs were successful in mitigating its worst effects

Second New Deal (1935)

- spurred by the failure of the First New Deal to end the Great Depression - democratic gains in the midterm elections of 1934 - greater emphasis on economic security and protection against unemployment and poverty rather than economic recovery in the first new deal - the idea of a lack of consumer demand causing the Depression had been popularized by Huey Long, Francis Townsend, and the CIO - New Dealers began to believe that government should redistribute national income to sustain mass purchasing power in the consumer economy - measures in 1935 attacked weak demand and economic inequality

American Welfare State

-Government must assist the needy, guarantee basic welfare of citizens -Government guaranteed social safety net -Social Security Act 1935 1. Unemployment insurance 2. Old age pensions 3. Aid to the disabled, elderly poor, families with dependent children -Permanent system of social insurance - radical departure from previous government policies but more decentralized, had less public spending, and applied to less citizens to European programs

Indian New Deal

-ended the policy of forced assimilation -allowed Indians unprecedented cultural autonomy. -replaced boarding schools meant to eradicate the tribal heritage of Indian children with schools on reservations -dramatically increased spending on Indian health.

Failures of the New Deal

.- failed to address racial inequality (programs were discriminatory and did not benefit minorities) - failed to generate sustained prosperity/end the Great Depression (over 15% of workforce remained unemployed in 1940)

Accomplishments of the New Deal

1. Greatly expanded fed govt role in American economy 2. became an independent force in industry/labor relations 3. Regulated farmers' production 4. Required employers to deal w unions 5. Insured bank deposits 6. Regulated stock market 7. Loaned money to homeowners 8. Provide payments to majority of elderly and unemployed 9. Transformed physical environment through hydroelectric dams, reforestation projects, and rural electrification 10. Constructed many public facilities 11. Restored faith in democracy 12. Govt became institution DIRECTLY experienced in American's daily lives and DIRECTLY concerned w their welfare 13. Redrew map of American politics 14. New idea of freedom: public guarantee of of economic security for ordinary citizens & economic inequality = greatest threat to American freedom

First New Deal (1933-1935)

1933 *Civilian Conservation Corp (1933): Provided work for young men through projects such as road construction and flood control *National Industrial Recovery Act (1933): Created National Recovery Administration, which prepared codes for fair competition *Public Works Administration (1933): Constructed roads, schools, dams, bridges, and other projects to aid the economy through increasing jobs *Agricultural Adjustment Act (1933): Encouraged farmers to decrease their production, thereby increasing their profits did NOT end the Depression but helped recover economy

Indian Reorganization Act (1934)

1934 - Restored tribal ownership of lands, recognized Indians' right to govern their own affairs, and provided loans for economic development. marked the most radical shift in Indian policy in American history but did not drastically improve living conditions, as many ND programs ignored Indians' interests

Marian Anderson

A famous African American concert singer who had her first performance in 1935, dazzling the audience and launching herself into fame. The next year she performed at the White House by presidential invitation, and performed on the steps of the Lincoln Memorial when the Daughters of the American Revolution refused to let her rent Constitution Hall (Eleanor Roosevelt and several others resigned after this decision).

Southern Veto

A reference to the power of the white South to mold the New Deal into an entitlement for white Americans (and to deny many of the New Deal's benefits to African Americans). A Democrat himself, FDR understood he needed the votes of Southern Democrats in order to pass his New Deal Legislation. And Southern Democrats were tremendously powerful in Congress where they held many key leadership positions and committee chairmanships. Therefore, FDR had to accommodate the Southern Democrats' desire to insert racially discriminatory language in many New Deal bills in order to get them enacted into law. For example, at their insistence, both the Social Security Act and the FLSA excluded agricultural and domestic workers (the largest category of black employment).

Bank Holiday

All the banks were ordered to close until new laws could be passed. An emergency banking law was rushed through Congress. The Law set up new ways for the federal government to funnel money to troubled banks It also required the Treasury Department to inspect banks before they could re-open.

WPA (Works Progress Administration)

American New Deal agency, employing millions of job-seekers (mostly unskilled men) to carry out public works projects, including the construction of public buildings and roads. Reversal of FDR's previous hesitation to provide federal employment found the most success in the arts

Francis Townsend

American physician and social reformer whose plan for a government-sponsored old-age pension was a precursor of the Social Security Act of 1935. Won widespread support for a plan by which the government would make a monthly payment of $200 to older Americans, of which they were required to spend immediately. He argued this would help boost the economy and Townsend Clubs significantly grew in popularity.

Huey Long

As senator in 1932 of Washington preached his "Share Our Wealth" programs. It was a 100% tax on all annual incomes over $1 million and appropriation of all fortunes in excess of $5 million. With this money Long proposed to give every American family a comfortable income, etc Ideas were extremely radical and denounced FDR's policies as overly business-friendly and unconcerned with the plight of the poor

Hoover's Response to the Depression

At the start - very little. Believed that it was simply a temporary dip in the economy Increased taxes Smoot Hawley Tariff Act, 1929 - raised import taxes - was meant to increase American trade but destroyed businesses relying on imports as well as leading to retaliatory taxes on American goods from other countries He called business leaders to the White House to urge them not to lay off workers or cut wages In 1931 he backed creation of the Reconstruction Finance Corporation (RFC, established 1932) to give loans to businesses etc.

AAA (Agricultural Adjustment Act)

Authorized the federal government to try to raise farm prices by setting production quotas for major crops and paying farmers to plant less. It succeeded in raising farm prices and incomes but not all farmers benefited. Property-owning farmers who were paid to grow less evicted poor tenants and sharecroppers Declared unconstitutional (1936) in United States v.s. Butler

Court Packing Plan (1937)

Because the Supreme Court was striking down New Deal legislation, Roosevelt decided to curb the power of the Court by proposing a bill to allow the president to name a new federal judge for each who did not retire by age 70 and 1/2. At the time, 6 justices were over the age limit. Would have increased the number of justices from 9 to 15, giving FDR a majority of his own appointees on the court. The court-packing bill was not passed by Congress. Significance: Many considered FDR a dictator but threat of "court packing" made the Court more willing to support economic regulation by both the federal government and the states.

Mexican Deportation

Discrimination in the New Deal programs and competition for jobs forced thousands of Mexican Americans to return to Mexico. (p. 513)

Okies

Displaced farm families from the Oklahoma dust bowl who migrated to California during the 1930s in search of jobs.

20th Amendment (1933)

Congress begins on January 30th; President starts on January 20th "Lame-duck" Amendment The major effect of this was to severely cut down the "lame duck" period from the presidency.

Farm Board

Created in 1929 before the crash but supported and enacted to meet the economic crisis and help farmers. Authorized to help farmers stabilize prices by temporarily holding surplus grain and cotton in storage.

CWA (Civil Works Administration)

Created manual labor jobs for millions of unemployed workers helped construct highways, tunnels, courthouses, and airports dissolved by FDR when ppl complained that the New Deal created a class of Americans dependent on gov't jobs

Flint Sit-Down Strike (1936-1937)

December 1936 7,000 General Motors workers seized control of Fisher Body Plant in Cleveland Sit downs spread to GM plants in Flint, Michigan (center of automobile production) Workers fought off local police Democratic governor, Frank Murphy supported the CIO and refused to forcefully end the strike Strikers demonstrated a spirit of unity Major success and helped other labor organizations (Ex. Steelworkers)

Election of 1932

Democrat Franklin D. Roosevelt, beat the Republican, Herbert Hoover, who was running for reelection. FDR promised relief for the unemployed, help for farmers, and a balanced budget. FDR believed the government was responsible to guarantee every man a right to make a comfortable living, criticized Hoover's excessive gov't spending and advocated for a repeal of prohibition. Americans were desperate for change and elected FDR.

PWA (Public Works Administration)

Directed by Harold Ickes New Deal agency that provided millions of jobs constructing public buildings built roads, schools, hospitals, and other public facilities established under the NIRA

FERA (Federal Emergency Relief Administration)

Granted federal funds to state and local agencies to help the unemployed

Scottsboro Case (1931)

In overturning verdicts against nine black youths accused of raping two white women, the U.S. Supreme Court established precedents in Powell v. Alabama (1932), that adequate counsel must be appointed in capital cases, and in Norris v. Alabama (1935), that African-Americans cannot be excluded from juries

Keynesian Economics

John Maynard Keynes large scale government spending was necessary to sustain purchasing power and stimulate economic activity during downturns. Such spending should be enacted even at the cost of a budget deficit

The Grapes of Wrath (1939)

John Steinbeck Dust Bowl: "Okies" from Oklahoma and surrounding states migrated westward to California in search of farm or factory work that often could not be found. The novelist John Steinbeck wrote about their hardships

Hawley-Smoot Tariff (1930)

Passed under President Hoover, it raised tariffs up to sixty percent which became the nation's highest protective tariff during peacetime. Hoover & Republicans hoped it would help US economy, but instead it resulted in retaliatory tariff increases against the US by other countries. It deepened depression and increased international financial chaos.

Economy Act (1932)

Prohibited both members of a married couple from holding federal jobs an attempt to decrease the percentage of women in the workforce during the Great Depression in order to make room for unemployed men

21st Amendment (1933)

Repeal of prohibition (18th Amendment)

Election of 1928

Republican: Herbert Hoover and Democrat: Al Smith. Republicans identified themselves with the booming economy of the 1920s, and Smith's campaign, because Smith was a Roman Catholic, was not as successful because of Anti-Catholic prejudice. Hoover won in a landslide victory

Election of 1936

Roosevelt (D) vs. Alfred E. Landon Roosevelt won by a landslide Election revealed significant class divisions and opposing ideas of freedom freedom for private enterprise vs socialized liberty

Schecter vs. US (1935)

Supreme Court case declaring the NRA unconstitutional Schechter Poultry Corporation of Brooklyn charged with violating a code adopted by the chicken industry Poultry code mandated max working hours, minimum wage, and banned unfair competition NRA was unlawful because ts codes/regulations delegated legislative power to the president & attempted to regulate businesses that did not engage in interstate commerce

Dow Jones Index

The Wall Street stock market index. In September 1929 the index was at a high of 381, in three months it fell to 198. Three years later, the index would finally hit bottom at 41, less than one-ninth of the peak.

First Hundred Days

The first hundred days of Franklin D. Roosevelt's administration, stretching from March 9 to June 16, 1933, when an unprecedented number of reform bills were passed by a Democratic Congress to launch the New Deal.

Frances Perkins

U.S. Secretary of Labor from 1933 to 1945, and the first woman ever appointed to the cabinet. Part of Hull House & NY Consumers' League

Roll on, Columbia

Woody Guthrie wrote for Bonneville Power Authority song exemplified benefits that resulted when government took the lead in economic planning and in improving the lot of ordinary citizens

Grand Coulee Dam (Columbia River Project)

a dam on the Columbia River in the state of Washington residents of undeveloped Pacific NW had long wanted to use the Columbia River, whose steep descent could produce immense amts of energy, for electricity and irrigation but the federal government did not launch dam construction until the 1930s Project created 1000s of jobs for the unemployed during the Great Depression and produced abundant, cheap power became the largest-man made structure in world history and eventually produced over 40% of the nation's hydroelectric power Provided cheapest electricity in the country for towns in deserted areas & factories Part of "public works revolution" that transformed American economy & landscape in the 1930s

CIO (Congress of Industrial Organizations)

a federation of unions that organized workers in industrial unions in the United States from 1935 to 1955 Founded by union presidents, including John L. Lewis of the United Mine Workers Fed up with the refusal of the American Federation of Labor (AFL) to organize unskilled and semiskilled factory workers. The committee formalized its break with the AFL when it held its first convention in 1938 In 1955, merged with the AFL to form the AFL-CIO

UAW (United Auto Workers)

a labor union which represents workers in the United States, Canada, and Puerto Rico. Founded in order to represent workers in the automobile manufacturing industry sit-down strikes were extremely effective during the New Deal

AFL 1935 Convention

a majority of AFL leaders refused to grant charters to new unions organized on an industry-wide basis;the AFL favored the organization of workers according to their skills and trades;the CIO favored the organization of all workers in a particular industry. AFL was hostile to gov't intervention in labor-management relations CIO sought fed action to protect Americans from economic and social insecurity, including public housing, universal health care, unemployment and old age insurance

Popular Front

a period during the mid-1930s when the Communist Party sought to ally itself with socialists and New Dealers in movements for social change, urging reform of the capitalist system rather than revolution alliance of left-wing radicals during the New Deal pro ethnic diversity and civil liberties, fought racism

Revenue Act of 1932

act signed by Hoover that raised taxes, especially on the wealthy...their rate went from 25-63% attempt to balance federal budget but further reduced Americans' purchasing power

FEPC (Fair Employment Practices Committee)

aimed at ensuring morale and maximum use of labor force by preventing employer discrimination against workers because of race or religion. The efforts of this committee laid the foundation for the Civil Rights movement of the 1950's.

National Labor Relations Act (1935)

aka Wagner Act created a National Labor Relations Board that could compel employers to recognize and bargain with unions; this law helped promote the growth of organized labor in the 1930s and for decades thereafter.

SEC (Securities and Exchange Commission)

an independent federal agency that oversees the exchange of securities to protect investors regulated stock and bond markets

NIRA (National Industrial Recovery Act)

authorized the President to regulate industry for fair wages and prices that would stimulate economic recovery. created the NRA in 1933

New Deal Coalition

coalition forged by the Democrats who dominated American politics from the 1930's to the 1960's. urban working class, ethnic groups, Catholics and Jews, the poor, Southerners, African Americans, and intellectuals.

Federal Theater Project (under WPA)

created jobs for actors and playwrights and entertainment for laborers All-black production of Macbeth Sinclair Lewis' It Can't Happen Here

Federal Home Loan Bank System

created under Hoover; offered aid to homeowners threatened with foreclosure

US vs. Butler (1936)

declared the AAA an unconstitutional exercise of congressional power over local economic activities NY could not establish a minimum wage for women/children

Liberalism (New Deal)

departure from 19th century definition of limited government and free market New Deal definition: large, active, socially conscious state

Hoovervilles

depression shantytowns, named after the president whom many blamed for their financial distress; sprang up in parks and abandoned land; sheltered those evicted from their homes

NRA (National Recovery Administration)

federal agency that worked with groups of business leaders to establish industry codes; set standards for output, prices, and working conditions put an end to "cutthroat" competition and these industry-wide arrangements were exempt from antitrust laws headed by Hugh S. Johnson Modeled on the government-business partnership established by the War Industries Board of WWI

United States Housing Act (1937)

first major national effort to build homes for the poorest Americans

TVA (Tennessee Valley Authority)

gave jobs rebuilding the Tennessee Valley; brought flood relief and hydroelectric power to the area built series of dams to prevent floods and deforestation along TN River & to provide cheap electric power for homes/factories put the federal government in business of selling electricity in competition with private companies

FDIC (Federal Deposit Insurance Corporation)

government system that insured the accounts of individual depositors created under the Glass-Steagall Act

Brains Trust

group of intellectual advisers that wrote FDR's speeches and assisted him in the authorization of legislation believed big business was inevitable in a modern economy and that a competitive marketplace was a thing of the past large firms must be managed/directed by government rather than simply dismantled their view prevailed during the First New Deal

CCC (Civilian Conservation Corps)

hired unemployed young single men to work preserving the nation's natural resources ex. forest preservation, flood control, improvement of national parks/wildlife preserves

FHA (Federal Housing Administration)

insured millions of long-term mortgages issued by private banks federal government built 1000s of units of low-rent housing millions of families could finally afford their own homes; became cheaper to buy single-family homes than to rent apartments

John L. Lewis

known for creating the United Mine Workers. helped found the CIO and was responsible for the Fair Labor Standards Act.

Associational Action

private agencies directed regulatory and welfare policies

HOLC (Home Owners Loan Corporation)

provided refinancing of small homes to prevent foreclosures

Dust Bowl

region of the Great Plains that experienced a drought in 1930 lasting for a decade, leaving many farmers without work or substantial wages.

Fireside Chats

the informal radio conversations Roosevelt had with the people to keep spirits up. It was a means of communicating with the people on how he would take on the depression.

GNP (Gross National Product)

the value of all goods and services in the country fell by 1/3 during the Great Depression

Economy Act (1933)

this authorized the President to reduce government salaries, pensions and veterans benefits. It raised taxes slightly in an effort to balance the budget. TLDR: reduce federal spending to win confidence of business community

Eleanor Roosevelt

transformed the role of First Lady from a position with no formal responsibilities to base of political action traveled widely, spoke out on public issues, wrote a regular newspaper column that sometimes disagreed openly with her husband's policies, and worked to enlarge the scope of the New Deal in areas like civil rights, labor legislation, and work relief.