Chapter 24 (The Great Depression and the New Deal)

Chapter 24 Flashcards

Crash of the Stock Market (What were the weaknesses in the economy?)

1. Farmers, Coal/Textile Workers suffered from low prices
2. Large inequality in wealth distribution
3. Depressed consumer purchasing power—high unemployment and slacking industries
4. Speculation
5. Structural weakness in financial & banking systems
6. Bad economic relations with Europe due to high tariffs

Hoover Reaction

Had an optimistic to prevent panic and worked to stop further disorder:


1. Agricultural Marketing Act of 1929 to help farmers (but failed)
2. Conferences with business/labor leaders, and mayors/governors
3. Created agencies and boards (National Credit Corporation and Emergency Committee for Employment)
4. Supported the tax cut to stimulate spending
5. Went on the radio to reassure the American people

Signs of Economic Distress

1. Stock market declines increasingly
2. Increase in failed banks
3. Factories cutting back on production/closing & wage cuts (high unemployment rate overall)
4. Evictions and foreclosures
5. Starvation

Hooverville

Shanties near all large cities—called that blaming President Hoover for the depression in America

Reconstruction Finance Corporation (RFC)

An attempt to organize private money to rescue banks and businesses near failure by mortgaging loans to banks, insurance companies, farm mortgage companies and railroads

Federal Home Loan Bank Act of 1932

Hoover’s attempt to make mortgages more readily available

Glass-Steagall Banking Act of 1932

Expanded credit to make more loans available to businesses and individuals

Bonus Army (Hoover, McArthur)

Angry WWI veterans who marched to Washington from the “Bonus City” to protest the government’s inaction in paying their bonuses.

* Fails and causes many to return home dejected
* Those who remained in the “Bonus City” were eventually attacked by the U.S army, ending up becoming a fiasco and showed the failure of the “American Dream”

First New Deal

* Focus on recovery and relief
* Aided businesses, farmers, labor & authorized public work projects + putting Americans back to work
* No single ideological position unified the program
* Conservative and cautious, Franklin Roosevelt did not promote socialism or nationalization of banks

“New deal for the American people”

* FR promise to help the American people during the depression
* Campaign slogan during his presidential election

Fireside Chat (“the only thing we have to fear is fear itself”)

* Roosevelt’s inaugural address to calm the American people
* Showed FR’s confidence and ability to communicate with ordinary Americans
* “Fireside Chats” - Radio talks explaining to the American people on what he was doing to solve the nation’s problems—endeared himself—people wrote in thousands to him

FDR Cabinet (Harold Ickes, Francis Perkins, Henry Wallace, “brain trust,” Eleanor Roosevelt)

* Intelligent and innovative advisors
* Ickes (secretary of interior—Republican lawyer)
* Wallace (plant geneticist and agricultural statistician—secretary of agriculture)
* Perkins (first woman to cabinet post—secretary of labor), former secretary of the NY Consumers League)
* Eleanor Roosevelt (first lady who wrote a newspaper column, made broadcasts, traveled widely. gave speeches, and listened to concerns of Americans)

100 Days

* Large number of bills that were passed during the first 100 days of the Depression—most innovative periods in American history

Bank Crisis (four-day holiday, Emergency Banking Relief Act, Banking Act of 1933 → FDIC)

* Called for a bank holiday (closing of banks) & passed the Emergency Banking Relief Act—gave president the power over financial transactions, prohibited hoarding of gold, and allowed reopening of sound banks (some with loans from the RFC)
* FDIC insured individual deposits and passed additional legislation that gave the federal gov. more regulatory power over the stock market

Economy Act, Beer-Wine Revenue Act (21st Amendment)

Economy Act:

* 15% reduction in government salaries & reorganization of federal agencies to save money + cut veteran’s pensions

Beer-Wine Revenue (21st Amendment):

* Legalized 3.2 beer and light wines + taxes on both—repealed the 18th amendment and ended prohibition

Gold Standard Issue

* Issue of currency—free & unlimited coinage of silver (inflation & higher prices) vs. bankers & businessmen who feared inflation
* FR chooses to take the US off the gold standard—many fear it would be the “end of the Western Civilization”
* Devalued gold and inflated the dollar slightly—country settles on slightly inflated money

Federal Emergency Management Administration (FERA)

* Granted direct grants of about $500 million to cities and states

Civil Works Administration (CWA)

* Put 4 million people to work on various state, municipal, and federal projects—experimented with work relief programs but was later closed down by FR who feared it cost too much and would create a permanent class of relief recipients

Public Works Administration (PWA) - Harold Ickes

Built hospitals, courthouses, and school buildings—constructed structures like bridges and libraries as well as aircraft carriers, planes, and low-cost housing for slum dwellers

Agricultural Adjustment Act (AAA)

* Sought to control the overproduction of basic commodities so farmers would regain purchasing power before WWI (“parity prices” - average prices would be controlled by paying farmers to reduce their acreage)
* TLDR; attempt to limit production and raise agricultural prices
* Drought did more than the AAA to do this and it was later declared unconstitutional—however it later led to the idea that the government should subsidize farmers to limit production

National Industrial Recovery Act (NIRA) → National Recovery Administration (NRA)

* NIRA:
* Designed to help businesses, raise prices, control production, and put people back to work
* Guaranteed labor’s right to organize and bargain collectively + see that workers’ rights were respected
* NRA:
* Power to set fair competition codes in all industries
* Faced suspicion and complaints—later declared unconstitutional but some ideas were picked up later by the National Labor Relations Act

Civilian Conservation Corps (CCC)

* Put men 18-25 years old to work on reforestation, road and park construction, flood control, and other projects
* Complaints:
* Some complaints that the CCC was militarized and took away all the “good men”
* Didn’t do much to help young unemployed women

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Tennessee Valley Authority (TVA)

* Expanded to a regional development plan
* Independent public corporation with the power to sell electricity and fertilizer and promote flood control/land reclamation
* Built major/minor dams
* Allowed (Tennessee) valley residents cheaper electricity and changed lifestyles
* Government officials feared it would lead to socialism and private utility companies complained it gave unfair competition to private industry

Critics of FDR

Liberty League, Communists, Farm-Labor Ticket, Dr. Francis Townsend, Charles E. Coughlin, Senator Huey P. Long

Liberty League

supported conservative/anti-New Deal candidates for congress

Communists

increase in supporters (capitalism failed during the time)—protest marches and reached out to the oppressed/unemployed working class, writers, intellectuals, and college students

Farm-Labor Ticker

Easy solutions to poverty and unemployment (anti capitalist)

Dr. Francis Townsend

Townshend Old Age Revolving Pension Plan: $200 a month to all unemployed citizens over 60 if they spent it in the same month (utopian scheme)

Followers organized in thousands across the country in Townsend Pension Clubs

Father Charles E. Coughlin

* First supported Roosevelt’s policies but then attacked New Deal as excessively probusiness
* Mixed religion with socialism/a society without bankers & businessmen
* Anti-semitic sentiment (he was Roman Catholic) and took nativist fury away from catholics to Jews

Senator Huey P. Long

* Charismatic governor of Louisiana (1928) who promoted a “Share the Wealth” which taxed oil refineries and huilt hospitals, schools, and new highways
* Personally controlled the police and the courts of the state
* Talked about guaranteed $2000-3000 income for all American families, pensions for elderly, and college educations for others by taxing rich and liquidating big fortunes
* Would have been a threat to FR if he wasn’t assassinated (September 1935)

Second New Deal

* FR’s move toward social reform/justice in response to discontent lower middle class and threats of utopian schemes
* 1935-1936 flurry of legislation also called the “Second New Deal” and helped farmers

Works Progress Administration (WPA)

* First massive attempt to deal with unemployment and its demoralizing affects
* Employed millions of people a year to help in public work projects (bridges, airports, libraries, and golf courses) although they earned lower wages
* Supported writers, artists, actors, and musicians through experimental theater, guides, and murals
* Had criticism for being communist, lazy people, and useless but the program was far from useless

National Youth Administration (NYA)

* Supplemented the work of the WPA & assisted young men and women between 16-25 (mostly students)

Social Security Act of 1935

* A compromise by congress
* Old-age & survivor insurance paid for by a tax of 1% on employers/employees
* Unemployment compensation
* Federal grants to states in assisting/caring for the disabled/blind
* Aid to dependent children
* Would later expand to the largest federal welfare program

Resettlement Administration (RA)

* Relocated tenant farmers on land purchased by the government
* Limited effectiveness due to fears that the Roosevelt administration was trying to create a Soviet-style collective farm

Rural Electrification Administration (REA)

* 1935—lend money to cooperatives to generate and distribute electricity in isolated rural areas not served by private utilities which changed the everyday lives of farmers and gave them access to modern technology/utilities

Dust Bowl (Okies, Grapes of Wrath)

* Natural disaster in Oklahoma where drought and winds created dust storms (natural and caused by overgrazing/intense agriculture/lack of government regulation/planning)
* People suffered from illness due to a lack of food and due to “dust pneumonia”
* Houses and farmland reduced to wasteland—millions of people abandon their farms and migrate to California—later known as “Okies” (for any migrant farmer)
* Grapes of Wrath—John Steinbeck's novel which depicted the plight of farmers (later made into a move by Ford which made Americans sympathize and others to see the failed American Dream)

Taylor Grazing Act of 1934

* Restricted the use of the public range to prevent overgrazing and closed 80 million acres of grassland to further settlement
* New trees/drought-resistant crops + contour planning but it was too little and too late
* Government measures after the 1930 disaster to encourage farmers to return to raising wheat/other bad crops led to more dust bowl crises

Boulder Dam, Coulee Dam

* Large-scale water projects provided massive amounts of hydroelectric power and water that caused cities (i.e Boulder Dam in Los Angeles) to boom
* Coulee Dam: largest power project of all and provided cheap electricity for the Pacific Northwest + irrigated over 1 mil acres of arid land

Public Utility Holding Company Act (1935)

* Attempted to restrict the power of giant utility companies
* Gave gov. commissions the authority to regulate and control power companies
* “death sentence” clause gave companies five years to demonstrate its services were efficient or become dissolved

Raising taxes on the rich

* FR suggests steeper income taxes on wealthy groups and a larger inheritance tax (i.e gift taxes, estate taxes, and raising income tax rates at the top)
* Inheritance tax is dropped but the other parts pass—business community is angry with Roosevelt for going along with Long’s “Share the Wealth Scheme”

Wagner Act (AKA National Labor Relations Act → Labor Relations Board)

* Outlawed blacklisting (etc.) and reasserted labor’s right to organize and bargain collectively
* Made the federal government a neutral force/regulator in management-labor relations

Committee of Industrial Organization (CIO → “brass knuckle unionism,” “sit-down strike”)

* A section of the AFL that set out to organize workers in steel, auto, and rubber industries in an industry-wide union (like the Knights of Labor)
* Used new & aggressive tactics (turning off the switch and having spontaneous strikes—”brass knuckle unionism” which worked well in auto/rubber industries)
* “Sit down strike” strikes that occupy and takeover factory buildings
* Later expelled from the AFL but became the Congress of Industrial Organization and accepted unskilled workers and many others

“Memorial Day Massacre”

* Confrontation between police and peaceful pickets at Republic Steel plant ends up in 10 deaths
* Known as the “Memorial Day Massacre” after police fired without provocation into a crowd of workers & families who had gathered near the plant “in a holiday mood”

“Scottsboro Boys”

African-Americans and New Deal

“Black Cabinet”

Marian Andersen and Eleanor Roosevelt

Mexicans in the Southwest

Indian Reorganization Act of 1934 (John Collier)

Women and the New Deal

Election of 1936

Supreme Court Controversy

Third New Deal (What were some of the various programs?)

Automobiles, Electric Home, Leisure Time Activities

Literature - Grapes of Wrath, USA, Wolfe, Faulkner, Margaret Mitchell (Gone With the Wind)

Radio

Movies