Brinkley 23-24: Depression & New Deal

Causes of the Depression (pp.604-607)

The 3 main causes of the Depression: Lack of Economic Diversification, Uneven Wealth Distribution, International Debt Structure. After the Stock Market Crash of 1929, banks start closing, causing everyone to have less money during 1930 and 1933. This results in lessened purchasing power, deflation, and consequently companies not producing as much stuff and firing more people. The Federal Reserve also increased interest rates in 1931, which makes everything worse. Due to all of these factors, the Gross National Product plummets by like 30 billion dollars, and 25ish% of workers are unemployed.

Illegal Deportation of Mexican-Americans (611)

After Whites in the Southwest start demanding jobs held by Mexicans (because of the Great Depression), Mexican unemployment increases a lot. Whites then started removing Mexicans from relief rolls and illegally deported them across the border. Around half a million Mexican people were deported at the start of the Depression.

The Hoover Program (pp.620-621)

Hoover creates voluntary cooperation, which temporarily gets labor and business leaders to compromise until mid-1931 when stuff gets super bad. He also spends 400ish million on public works stuff, but he becomes disillusioned with government spending once stuff gets really bad and he wants to keep the budget balanced. The Agricultural Marketing Act and the Hawley-Smoot Tariff try to help farmers but ultimately fail. By 1931, Hoover’s support dramatically decreases, and in December, Hoover supports measures to help banks and prevent foreclosure. Made in 1932, the RFC operated on a large scale to give loans to banks, railroads, and other businesses, with a budget of 1.5 billion for public works, though it didn’t have enough $ to make a sizable impact on the Depression.

Bonus Army (pp.621-622)

After WWI, Congress says they’ll give $1000 to veterans, but in 1932, veterans wanted to be paid immediately. After Hoover rejects this, scared of unbalancing the budget, over 20,000 veterans claiming to be a part of the Bonus Expeditionary Force, or “Bonus Army” go to DC. They make a bunch of camps and promise to stay there until the government approves legislation giving them money. Though some get dissuaded in July after Congress votes down their proposal, many stayed, resulting in Hoover ordering the police and US Army to clear them out. General Douglas MacArthur then chases them out with the Third Cavalry. 100 protesters were injured in the incident, which served as a final blow to Hoover’s reputation.

Fireside Chats (pp.628-629)

Using the radio, FDR simply explained his programs and plans in order to build confidence in his administration. Roosevelt was the first president to master the use of radio, and he often bypassed hostile newspapers to talk to people directly.

Bank Holiday (pp.628-629)

A proclamation by FDR on March 6 1933 two days after he took office that closed banks for 4 days until Congress met to decide on banking reform. Since when a bank fails, depositors lose all of the money they put into the bank, the bank holiday closed the banks so people couldn’t lose their money, helping to ease panic and create a sense of relief and hope. It was followed up with the Emergency Banking Act, which tried to protect bigger banks from being dragged down by smaller ones

FDIC

The Federal Deposit Insurance Corporation was established by the Glass-Steagall Act in June 1933 and repaid lost bank deposits of up to 2.5K dollars. This made it so that when banks failed, small depositors could get their money back. This helped to ease some of the panics around bank failures. It was basically just insurance for depositors.

SEC

Securities and Exchange Commission - Made in June 1934 to police the stock market. It tried to reduce deceitful trading, made sure that all investment risks were available to public, and helped to restore public confidence in the stock market.

AAA

Created by the Agricultural Adjustment Act, passed in May 1933, the Agricultural Adjustment Administration told farmers how much stuff they should make and gave them money if they didn’t use part of their land for production. Though it increased prices for farm products and increased gross farm income by 50% making farming more stable and prosperous, the AAA favored large farmers and didn’t do anything to stop planters from reducing their acreage and firing tenants, sharecroppers, and field hands. The main tenets of the act were destroyed in 1936 by the Supreme Court, but its role was quickly replaced by the Soil Conservation and Domestic Allotment Act.

NRA

Made by the National Recovery Act in June 1933, the National Recovery Administration gave corporations restrictions called industrial codes in exchange for the relaxation of antitrust laws. Directed by Hugh Johnson, it called on every corporation to have a minimum wage of 30-40 cents per hour, abolish child labor, and have a maximum work week of 35-40 hours. Like the AAA, the Supreme Court then took down the NRA on the basis that it was overstepping the federal government’s limits of interstate commerce.

TVA

Reformers really wanted a dam to be made in the Tennessee Valley to produce cheap electric power, but because of opposition from utility companies, it couldn’t be finished. After Samuel Insull’s utility empire collapsed, utility companies were no longer able to block the public power movement, so in May 1933, the Tennessee Valley Authority was created. The TVA was authorized to complete the dam at Muscle Shoals, sell electricity at a reasonable price, and help the region develop by helping local businesses and farmers and supervising a reforestation project. Though it was blocked by conservative opposition, the TVA did improve water transportation, eliminate flooding in the region, and gave electricity to thousands of new people. The Tennessee Valley would remain impoverished, but the TVA’s cheap energy would help decrease private power rates moving forward.

CCC

A relief project made by FDR for the unemployed, called the Civilian Conservation Corps. It made camps in national parks and natural areas where unemployed young men would work in a military-like structure to plant trees, build reservoirs, develop parks, and improve irrigation.

Townsend; Coughlin; Long

Townsend: An elderly California Physician who led a movement of 5 million people (many old men and women) to try to get monthly pension funds of $200 for the elderly.

Coughlin: Catholic Priest from the Detroit suburbs who achieved fame through radio sermons and wanted financial reforms like the remonetization of silver, issuing of greenbacks, and nationalization of banking. He supported Roosevelt until 1935 when he made his own organization, the National Union for Social Justice because he thought the president wasn’t being harsh enough with the “money powers.”

Long: Originally supported Roosevelt, but eventually advocated for the Share-Our-Wealth Plan, under which the government would use taxes to confiscate the surplus wealth of the rich and distribute it to everyone else. This would give every family a minimum “homestead” of 5K dollars and an annual wage of 2.5K dollars. He made the Share-Our-Wealth Society, which would get a large national following. A poll revealed that Long would get 10% of the vote if he ran for president as a third-party candidate.

Wagner Act; NLRB

The Wagner Act of 1935 gave workers a method of enforcement through the National Labor Relations Board, which could compel employers to cooperate with unions. FDR wasn’t completely happy with the bill, but he relented due to the political power of the workers.

CIO; Sit-Down Strikes

The CIO or Congress of Industrial Organizations was made by Industrial Unionist John Lewis and expanded the reach of the labor movement to new industries and minorities.

The Sit-Down Strikes were protests in which General Motors employees in Detroit would simply sit down and refuse to work or leave until the auto union of the UAW was recognized. By February 1937, strikers did this in 17 GM plants. When the state and federal governments refused to intervene General Motors became the first large manufacturer to recognize the UAW in February 1937.

Social Security

Passed in 1935 by Congress and supported by Roosevelt. It gave federally sponsored social insurance to the retired and unemployed. Presently unemployed people were given $15 monthly, while many workers were incorporated into a pension system that started in ‘42 and would only give them 10-85 dollars. This was a big first step in the nation’s most important social program for the elderly. It also made unemployment insurance and gave federal aid to disabled people and dependent children. The framers designed the act for insurance rather than welfare, but the act would end up giving direct assistance to elderly people, disabled people, and dependent children and their families. These programs would later expand in unforeseen ways.

WPA (p.640)

Works Progress Administration, established by Roosevelt in 1935. It made a big system of work relief for the unemployed. Under Harry Hopkins, it built or renovated 110,000 thousand public buildings and got an average of 2.1 million workers employed. It also had a lot of creative opportunities due to the Federal Arts, Music, Writers, and Theatre Projects. Unfortunately, half of its workers were cut by Roosevelt just a few weeks before another recession.

Court-Packing Plan

In February 1937, Roosevelt sent a message to Capitol Hill that he wanted to add six new justices because the courts were “overworked” and needed manpower and younger blood. In reality, he wanted to allow himself to appoint liberal justices to change the balance of the court. After the court adopted a newly moderate position by both upholding the Wagner Act and striking down the Social Security Act. This whole thing damaged FDR’s reputation among southern democrats and conservatives.

Fair Labor Standards Act (p.644)

One of the Roosevelt administration’s most ambitious pieces of legislation, it established a national minimum wage, a 40 hour work week, and restrictions on child labor.