Chapter 13 The Great Depression and The New Deal

Gender discrimination

- Before the 1960s, there were no federal laws prohibiting gender discrimination. - The Civil Rights Act of 1964, however, gave feminists a legal tool. - It included a clause, called Title VII, that outlawed discrimination on the basis of sex. - The clause was actually inserted by civil rights opponents, who thought it was so outlandish that it would make the entire bill look ridiculous.

RFC

- Believing the economy suffered from a lack of credit, Hoover urged Congress to create the Reconstruction Finance Corporation (RFC). - Created by Congress in early 1932, the RFC gave more than a billion dollars of government loans to railroads and large businesses. - The agency also lent money to banks so that they could extend more loans to struggling businesses.

Hoover Dam

- By the time Hoover became President in 1929, Congress had approved the project as part of a massive public-works program. - Workers broke ground on Boulder Dam (later renamed Hoover Dam) in 1930. - Construction brought much-needed employment to the Southwest during the early 1930s.

Crop prices

- Crop prices fell even further, and new debts were added to old debts. - To make matters even worse, the Great Plains was suffering through a choking drought, an ecological disaster that lasted for years. - As a result, many more farmers lost their farms and moved. - They traveled about the country, looking for work and fighting for survival.

Okies

- Dust Bowl refugees were generally referred to as Okies, regardless of their states of origin. - Okie families packed onto rickety trucks and headed toward California or Oregon or Washington, any place where a job might be found. - Before the pace slowed, 800,000 people migrated out of Missouri, Arkansas, Oklahoma, and Texas alone.

FDR

- FDR gained a great deal of self-confidence and a belief that public service was a noble calling. - FDR did not allow his physical disability to break his spirit. - FDR—with the support of those who embraced his ideas as well as those who opposed Hoover's approach—won a landslide victory, winning the electoral votes of all but six states.

TVA

- In 1933, Congress responded by creating a government agency called the Tennessee Valley Authority (TVA). - The TVA built a series of dams in the Tennessee River valley to control floods and to generate electric power. - The agency also replanted forests and built fertilizer plants. - These projects created jobs and attracted industry with the promise of cheap power.

Sit-down strikes

- In December 1936, members of the CIO's newly formed United Automobile Workers (UAW) union staged a sit-down strike, occupying one of General Motors's most important plants in Flint, Michigan. - In a sit-down strike, workers refuse to leave the workplace until a settlement is reached. - When the police and state militia threatened to remove them by force, the workers informed Michigan governor Frank Murphy that they would not leave.

Schechter Poultry vs. US

- In the case of Schechter Poultry v. United States, the Supreme Court unanimously ruled that since the President has no power to regulate interstate commerce, - the National Industrial Recovery Act was unconstitutional. - The power to regulate interstate commerce rests with Congress and cannot be delegated to the Executive branch.

NRA

- National Industrial Recovery Act, which established the National Recovery Administration (NRA). - Roosevelt called the NRA "the most important and far-reaching legislation ever enacted by the American Congress." - Working with business and labor leaders, the NRA developed codes of fair competition to govern whole industries. - These codes established minimum wages for workers and minimum prices for the goods that businesses sold.

Wagner Act

- New Deal law that abolished unfair labor practices, recognized the right of employees to organize labor unions, and gave workers the right to collective bargaining. - Also called the Wagner Act, it recognized the right of employees to join labor unions and gave workers the right to collective bargaining.

Black Tuesday

- On October 29, Black Tuesday, the bottom fell out. - More than 16 million shares were sold as the stock market collapsed in the Great Crash. - Billions of dollars were lost. - Whole fortunes were wiped out in hours. - Many speculators who had bought stock on margin lost everything they had.

Tenant Farmer

- Some farmers remained on the land as tenant farmers - working for bigger landowners rather than for themselves. - But another effect was that many people drifted away from their rural communities, and migrated to cities to look for some other kind of work.

Black Cabinet

- These unofficial advisers became known as the Black Cabinet. - They included Robert Weaver and William Hastie, Harvard University graduates who rose to high positions within the Department of the Interior. - Hastie later served as a federal judge, and Weaver became the first African American Cabinet member in the 1960s.

Fireside chats

- This was the first of many presidential fireside chats. - They became an important way for Roosevelt to communicate with the American people. - In the first fireside chat, FDR explained the measures he had taken to stem the run on banks. - His calming words reassured the American people. - When the bank holiday ended, Americans did not rush to their banks to withdraw their funds.

Indian New Deal

- To prevent further loss of land and improve living conditions for Native Americans, Collier developed the Indian New Deal, a program that gave Indians economic assistance and greater control over their own affairs. - Collier got funding from New Deal agencies for the construction of new schools and hospitals and to create an Indian Civilian Conservation Corps. - In addition, the Bureau of Indian Affairs, in a reversal of previous policies, encouraged the practice of Indian religions, native languages, and traditional customs.

Congress of Industrial Organizations

- United Mine Workers, and a number of other labor leaders established the Congress of Industrial Organizations (CIO). - The workers targeted by the CIO-organizing campaigns tended to be lower paid and ethnically more diverse than those workers represented by the AFL. - labor organization founded in the 1930s that was composed of industrial unions which represented all workers in an industry regardless of their job or skill.

Huey Long

- threatened to throw his support behind an even more popular New Deal critic, Senator Huey Long of Louisiana. - Long was an expert performer whose folksy speeches delighted audiences. - Long's approach to solving the depression was his "Share Our Wealth" program that proposed high taxes on the wealthy and large corporations, and the redistribution of their income to poor Americans.

Business Cycle

- Americans saw this contraction as a regular contraction of the nation's business cycle, which explains the periodic growth and contraction of the economy. - It most certainly was not regular. - Production, employment, and income will normally expand, contract, and expand again over time in a cyclical way. - However, a number of factors combined in the 1920s to turn the normal, cyclical expansions and contractions of the nation's economy into an economic collapse in the 1930s. - Millions of Americans suffered hardships and despair as a result.

Trickle Dow Economics

- Companies would then hire workers, production and consumption would increase, and the depression would end. - This theory, known as trickle-down economics, held that money poured into the top of the economic pyramid will trickle down to the base. - Businesses and top earners receive tax breaks. - tax breaks allows businesses and top earners to increase investments. - new investment stimulates economic growth, providing new jobs.

Hawley-Smoot Tariff

- Congress passed the Hawley-Smoot Tariff. - President Hoover signed the bill into law. - The Hawley-Smoot Tariff raised taxes on foreign imports to such a level that the foreign goods could not compete in the American market. - The tariff inspired European countries to retaliate and enact protective tariffs of their own.

Court packing

- Critics, recognizing that Roosevelt's new appointees would most likely be New Deal supporters, called his plan court packing. - They accused him of trying to increase presidential power and upsetting the delicate balance between the three branches of the federal government. - President Franklin D. Roosevelt's plan to add six new justices to the nine-member Supreme Court after the Court had ruled some New Deal laws to be unconstitutional.

Frank Capra

- Director Frank Capra was a leader of this genre. - The characters in his films were everyday people struggling with the hardships of the time. - In Capra's Mr. Smith Goes to Washington, actor James Stewart plays a junior senator who fights against the greed and corruption he finds in the nation's capital. - Depression-era audiences cheered Capra's films, which celebrate American idealism and the triumph of the common man over the forces of adversity.

Charles Coughlin

- Father Charles Coughlin presented an even bigger challenge to FDR. - Coughlin, a Roman Catholic priest, had attracted millions of listeners to his weekly radio show. - At first, Coughlin supported the New Deal, but in time he broke with FDR, accusing him of not doing enough to fight the depression. - Coughlin said that Roosevelt had "out-Hoovered Hoover" and called the New Deal "the raw deal."

Challenges of the farmer

- From the overproduction of the struggling farmer to the underconsumption of the lower-income industrial worker, deep-seated problems created economic instability. - Too many Americans did not have enough money to buy what they needed or wanted. - American farmers faced difficult times during the 1920s. - Farmers made up one fourth of the American workforce during the decade.

Douglas MacArthur

- General Douglas MacArthur and federal troops to "[s]urround the affected area and clear it without delay." - MacArthur exceeded his order, deciding to move the marchers out of the city altogether. - He ordered his troops to ready tear gas and fix bayonets. - The Army force that pushed the marchers out included not only MacArthur but also the future World War II generals Dwight Eisenhower and George Patton.

New Deal Coalition

- His legendary political skills had united an unlikely alliance of Americans into a strong political force called the New Deal coalition. - This coalition brought together southern whites, northern blue-collar workers—especially those with immigrant roots—poor midwestern farmers, and African Americans. - political force formed by diverse groups who united to support Franklin D. Roosevelt and his New Deal.

Great Depression

- Historians and economists struggle to identify the exact causes of the Great Depression. - Some have stressed a single root cause in their explanations of the financial crisis. - The economist Milton Friedman believed that the depression resulted from the contraction in the money supply. - The stock market crash marked the beginning of the Great Depression, a period lasting from 1929 to 1941 in which the economy faltered and unemployment soared.

Eleanor Rooselvelt

- In 1905, Franklin married his distant cousin Eleanor Roosevelt. - President Theodore Roosevelt, Eleanor's uncle and Franklin's fifth cousin gave the bride away. - In time, Eleanor would also become deeply involved in public affairs.

Bonus Army

- In 1932, thousands of World War I veterans marched on Washington, D.C., demanding a solution to their particular problem. - They became known as the Bonus Army. - many veteran groups began to call for an early payment of the bonus, arguing that out-of-work vets needed the money to support their families. - In May and June of 1932, almost twenty thousand veterans arrived in the capital, setting up camps and occupying empty government buildings.

Repatriation

- In the Southwest, many white Americans clamored for Asian American and Mexican American repatriation. - Repatriation involved efforts by local, state, and federal governments to encourage or coerce immigrants and their naturalized children to return to their country of origin. - Hundreds of thousands of people of Mexican ancestry—many of them U.S. citizens—were pushed out of the United States.

FDR's Effect on Presdiency

- Increased power of the president and the executive branch. - made mass media, such as radio, an essential tool in advertising and promoting policies. - Expanded role of the president in managing the economy. - Expanded role of the president in developing social policy.

Pump Priming

- Keynes called this theory pump priming. - Critics also argued that FDR was using the program to build voter loyalty to the Democratic party. - economic theory that favored public works projects because they put money into the hands of consumers who would buy more goods, stimulating the economy.

Lillian Hellman

- Lillian Hellman, a New Orleans native, wrote several plays featuring strong roles for women. - Hellman's plays The Children's Hour, The Little Foxes, and Watch on the Rhine are also notable for their socially conscious subject matter that reflected some controversial issues of the time. - American playwright and screenwriter known for her dramas that focused on social injustice and exploitation.

Mary McLeod Bethune

- Mary McLeod Bethune was another member of the Black Cabinet. - The founder of what came to be known as Bethune Cookman College, she was a powerful champion of racial equality. - In her view, the New Deal had created a "new day" for African Americans. - She noted that African Americans gained unprecedented access to the White House and positions within the government during Roosevelt's presidency.

New Deal Legislation

- New Deal legislation created child labor laws, workers' compensation laws, and unemployment insurance, programs that had important and enduring impacts on the U.S. economy. - New Deal legislation changed the historical roles of state and federal governments. - It established the principle that the federal government, not state or local government, was responsible for the welfare of all Americans.

PWA

- New Deal legislation was the Public Works Administration (PWA), which built bridges, dams, power plants, and government buildings. - The PWA was responsible for building many important structures that are still in use today, such as New York City's Triborough Bridge, the Overseas Highway linking Miami and Key West, Florida, and the Bonneville Dam on the Columbia River in the Pacific Northwest. - These public-works projects improved the nation's infrastructure and created millions of new jobs for workers.

New Deal

- New Deal: programs and legislation pushed by President Franklin D. Roosevelt during the Great Depression to promote economic recovery and social reform. - When FDR pledged a "New Deal," he had only a vague idea of how he intended to combat the depression. - Believing that the federal government needed to play an active role in promoting recovery and providing relief to Americans, he experimented with different approaches to see which ones worked best.

Bread Line

- Often the only place for the family to get a free scrap of food was in a bread line. - where people lined up for handouts from charities or public agencies. - Sometimes the parents and children received free meals in public soup kitchens.

FDIC

- One act created the Federal Deposit Insurance Corporation (FDIC), which insured bank deposits up to $5,000. - In the following year, Congress established the Securities and Exchange Commission (SEC) to regulate the stock market and make it a safer place for investments. - These financial reforms helped restore confidence in the economy

CCC

- Programs such as the CCC and WPA allowed individuals of varied backgrounds to get to know one another, breaking down regional and ethnic prejudices. - FDR created the Civilian Conservation Corps (CCC). - The CCC provided jobs for more than 2 million young men. - They replanted forests, built trails, dug irrigation ditches, and fought forest fires. - As time went on, programs such as the CCC became more inclusive, extending work and training to Mexican American and other minority youth, as well as to whites. - FDR called the CCC his favorite New Deal program.

Federal Art Project

- Programs such as the Federal Art Project, the Federal Writers' Project, and the Federal Theatre Project offered a variety of job opportunities to artists. - division of the Works Progress Administration that hired unemployed artists to create artworks for public buildings and sponsored art-education programs and exhibitions.

Fair Labor Standards Act

- The Fair Labor Standards Act of 1938 provided workers with additional rights. - It established a minimum wage, initially at 25 cents per hour, and a maximum workweek of 44 hours. - It also outlawed child labor. - The minimum wage remains one of the New Deal's most controversial legacies.

Social Security Act

- The Social Security Act, passed by Congress in 1935, established a pension system for retirees. - It also established unemployment insurance for workers who lost their jobs. - In addition, the law created insurance for victims of work-related accidents and provided aid for poverty-stricken mothers and children, the blind, and the disabled.

Welfare State

- The many programs he enacted to realize this goal led to the rise of a welfare state in the United States, a government that assumes responsibility for providing for the welfare of children and the poor, elderly, sick, disabled, and unemployed. - government that assumes responsibility for providing for the welfare of the poor, elderly, sick, and unemployed. - The creation of the American welfare state was a major change in government policy.

John Steinbeck

- The most famous novel of the 1930s was John Steinbeck's The Grapes of Wrath. - Steinbeck follows the fictional Joad family from their home in Oklahoma, which has been ravaged by Dust Bowl conditions, to California, where they hope to build a better life. - But instead of the Promised Land, the Joads encounter exploitation, disease, hunger, and political corruption. - American novelist who frequently wrote about migratory farmworkers and other laborers during the Great Depression.

Causes of Great Depression

- The twin events of the stock market crash in 1929 and the run of bank failures in 1930, added to the Federal Reserve's monetary policy decisions, left too little money in circulation for the nation's economic needs. - Critical problems in money supply, distribution of wealth, stock speculation, consumer spending, productivity, and employment could have been controlled, he said, by proactive government policies. - problems in consumption contributed heavily to it.

Credit

- They lived largely on credit from month to month, often teetering on the brink of financial ruin. - Americans bought automobiles, appliances, radios, and other goods on credit. - Using the installment plan, they paid a small percentage down and the rest over a period of months or years. - By the end of the decade, 80 percent of radios and 60 percent of cars were purchased on installment credit.

Dust Bowl

- This swath of parched earth became known as the Dust Bowl. - For people living in these hardest hit regions, depression and dust storms defined the misery of the "dirty thirties." - Those unfortunate enough to be caught in a dust storm were temporarily choked and blinded by the swirling dirt. - The storms killed cattle and birds, blanketed rivers, and suffocated fish.

Gap between Rich and Poor

- Unlike farmers, industrial workers participated in the great national success story. - During the 1920s, their wages rose steadily, as did their disposable income. - Though they were certainly not wealthy, industrial laborers were in a better financial position than their fathers had been a generation before. - But the problem was that while wages rose gradually, worker productivity increased astronomically. - the wealthiest 1 percent of the population earned about the same amount of money as the bottom 42 percent.

Dorothea Lange

- Walker Evans and Dorothea Lange were among the FSA photographers who created powerful images of impoverished farmers and migrant workers, including Lange's famous photo "Migrant Mother." - Dorothea Lange (1895-1965) was an American documentary photographer known for her portraits of displaced farmers and others suffering economic hardship during the Great Depression.

How did people suffer

- Wealthy individuals often had to accept menial jobs to make a living. - After losing his wealth in the stock market crash, former millionaire Fred Bell sold apples on a street corner. - The unemployed were not the only ones who suffered. - Men lucky enough to have jobs lived in constant fear that the next paycheck would be their last. - They often felt guilty for being employed while so many of their relatives and friends were suffering. - Few Americans were spared from the crisis.

WPA

- Works Progress Administration (WPA) to administer the program. - Roosevelt placed his longtime associate, Harry Hopkins, in charge. - The WPA built or improved a good part of the nation's highways, dredged rivers and harbors, and promoted soil and water conservation. - The WPA even provided programs in the arts for displaced artists, writers, and actors. - As Hopkins explained, artists "have to eat just like other people."

Herbert Hoover

- an accomplished public servant—to run for the White House - Born in Iowa, Hoover was orphaned as a child. - But he overcame this personal tragedy and eventually graduated from Stanford University with a degree in geology. - He became a mining engineer and worked all over the world. - By 1914, after amassing a vast fortune, he retired from engineering and devoted himself to public service.

Mural

- dramatic murals on public buildings across the nation. - These paintings celebrated the accomplishments of the workers who helped build the nation. - Many of the murals can still be seen in public buildings today. - large painting applied directly to a wall or a ceiling.

Speculation

- it became clear that too much money was being poured into stock speculation, as investors gambled on high-risk stocks in hopes of turning a quick profit. - If the market's upward climb suddenly reversed course, many investors would face economic devastation. - Critical problems in money supply, distribution of wealth, stock speculation, consumer spending, productivity, and employment could have been controlled, he said, by proactive government policies.

Hooverville

- makeshift shantytowns of tents and shacks built on public land or vacant lots. - Homeless people, some of whom had worked as skilled carpenters before the crisis, cobbled houses together out of lumber scraps, tar paper, tin, and glass. - One of the largest Hoovervilles in the country sprang up in the middle of Central Park in New York City.

Collective Bargaining

- process in which employers negotiate with labor unions about wages, hours, and other working conditions. - Collective bargaining meant that employers had to negotiate with unions about hours, wages, and other working conditions. - The law created the National Labor Relations Board (NLRB) to look into workers' complaints.

Localism

- the policy whereby problems could best be solved at local and state levels. - However, in this severe situation, towns and states simply did not have the financial or human resources to successfully combat the crisis. - Making matters worse, the President strongly resisted using federal resources to provide direct relief to individuals.

John Maynard Keynes

British economist John Maynard Keynes argued that deficit spending was needed to end the depression. - According to Keynes, putting people to work on public projects put money into the hands of consumers who would buy more goods, stimulating the economy. - British economist best known for his advocacy of government intervention to protect the economy from the negative effects of recessions, depressions, and booms.