Ameria 1920-1973: Opportunity and Inequality - Americans' experience of the Depression and the New Deal

What was the short term causes of the Wall Street Crash?

When Herbert Hoover became President in 1929, people thought he would increase tariffs because he had promised to do this in the election campaign. This boosted trading in shares on the stock market, which pushed prices up further. When the Senate blocked Hoover's plans on tariffs people began selling their shares. This meant prices started to drop sharply. Experienced investors knew the American economy was slowing down and that shares were over-valued. In September 1929, their lack of confidence in the price of shares meant they began selling them in large numbers. This caused prices to drop further.

What was Black Thursday?

On 24 October, Black Thursday, 12.8 million shares were sold. Prices plummeted and the stock market began to crumble. On 29 October 1929, Black Tuesday, the collapse of the economy was complete. 16 million shares were sold at a fraction of their price. Thousands of people saw their fortune invested in shares, or any money they had in the bank, disappear. Those who had bought "on the margin" were in great trouble. The stock market in New York had now collapsed.

What was 'buying on the margin'?

Paying a small percentage of a stock's price as a down payment and borrowing the rest

How did the overproduction and under consumption in agriculture lead to the Wall Street Crash?

As farming techniques improved, farmers started producing more food. However, the demand for grain fell in America because of Prohibition and changes in tastes in food. There was also less demand from Europeans for food from America because they were growing their own crops and there was a tariff war. Overproduction led to falling prices. Thousands of farmers fell into crippling debt, could not pay their mortgages and so became unemployed after having to sell their farms or being evicted Sharecroppers in the south, who were mostly black Americans, were often evicted when the white-owned farms had financial problems

How did the overproduction and under consumption of consumer goods lead to the Wall Street Crash?

By the end of the 1920s, there were too many consumer goods unsold in the USA. Mass production methods led to supply outstripping demand. People who could afford items, such as cars and household gadgets, had already purchased them. Also, people in agriculture and the traditional industries, who were on low wages, could not afford consumer goods. This meant workers were laid off, which reduced demand for goods even further.

How did protectionism lead to the Wall Street Crash?

America tried to sell its surplus goods in Europe. However, the Fordney-McCumber Tariff Act 1922 had led to European countries imposing tariffs on American goods. This meant American goods were too expensive to buy in Europe and, as a result, there was not much trade between America and Europe.

How did the increase of debt lead to the Wall Street Crash?

A lot of Americans bought goods on hire purchase. As a result, they owed money to shops and credit companies. Many of these businesses went into financial difficulties when people failed to pay their debts. House prices increased a great deal in the early 1920s. However, after 1926, house prices fell leaving some Americans owning houses that were worth less money than what they had paid for them.

How did the policy of laissez-faire lead to the Wall Street Crash?

The laissez-faire policy of the Presidents meant there were not enough safeguards in the economy, especially on the banks and the stock market. Banks were not regulated. There were very few large banks in America, but there was a huge number of small ones which were unstable and did not have the financial resources to cope with the rush for money when the Wall Street Crash happened. Many banks had already closed even before the crash, leaving thousands of customers with no money at all.

How many banks went bust in 1929?

659

How many banks were bust by 1931?

2294

What was life like for people as a result of the Great Depression?

People could no longer buy consumer goods, such as cars and clothes. As a result, workers were made redundant. Unemployment rose to 25 per cent of the national workforce and in some regions, it was much higher. In Denora in Pennsylvania in March 1932, only 277 people out of nearly 14,000 had jobs. There was no work at all in the coal mines of Illinois. Unemployment and distress were highest among immigrants and black Americans.

How were ordinary shareholders affected by the Great Depression?

Millions of investors lost a fortune. They tried to pay back bank loans by selling valuables. As a result, some struggled to pay rent and faced homelessness.

How were the rich affected by the Great Depression?

Some rich people lost part of their wealth because they had invested in shares or owned factories that closed. However, many owned lots of property and land and were not affected greatly.

How were businessmen and their workers affected by the Great Depression?

After the Crash, people had less money to spend, so fewer goods were sold. Factory owners cut production, wages and finally, jobs. Closures affected local businesses too: for example, few workers eating at restaurants near factories meant some restaurants closed too.

How were farmers affected by the Great Depression?

Farmers with bank loans for equipment had to pay back the money. Some couldn't afford to pay their debts or mortgages and faced losing their farms and sacking their workers.

What was the 'Dust Bowl'?

A long drought in the plains in the 1930s. As a result of the drought and poor farming methods, huge dust storms blew away 20 million acres of dry topsoil, making it impossible to farm.

How many farmers had been evicted by 1932?

1 in 20

How many people lost their jobs by 1932?

13 million - 25% of the labour force.

How many people lost a job in a day in 1932?

12,000

How many companies had closed by 1932?

20,000

How many Americans stopped paying their mortgages in 1932?

250,000, which led to their evictions.

What were Hoovervilles?

Shanty towns that sprung up nationwide during the Great Depression. They were mainly comprised of homeless or unemployed who lived in tents or their cars. The settlements where affectionally named after the man they thought did this to them, Herbert Hoover.

What was Hoover's response to the Great Depression?

He believed in rugged individualism, and was convinced that America would recover soon. Hoover tried to help with the Depression however, such as introducing the Hawley-Smoot Tariff, establishing the Reconstruction Finance Corporation and cutting taxes by $130 million. He also made $300 million available to states to help the unemployed, but only $30 million was given out.

What was the Hawley-Smoot Act?

An act that increased tariffs by 50% on imported manufactured items (foreign goods), aimed to help industry sell more home-produced goods

What was the Reconstruction Finance Corporation?

This was established in 1932 which provided loans totalling $1,500 million to rescue businesses, banks and insurance companies. It also gave out small loans to farmers.

Why did Hoover's actions not halt the Great Depression?

The Hawley-Smoot Act meant foreign countries retaliated by taxing American goods coming into their areas, so trade fell even further. The loans did not save enough companies. The additional taxes on business did not help balance the budget, plus they made the survival of firms more difficult. Industrial production continued to drop.

What did factory production drop by between 1929 and 1932?

45%

What did house building drop to between 1929 and 1932?

80%

What did people begin to rely on as a result of the Great Depression?

Charity and Relief schemes; America did not have unemployment benefits. Hoover eventually had to lend billions of federal monies to them in 1932 to fund public works schemes. Charities and wealthy individual stepped in to organise soup kitchens and cheap meals centres. Even Al Capone gave money for a soup kitchen in Chicago. In several cities, the unemployed organised themselves into groups to support each other.

What was the Bonus Army 1932?

The First World War veterans demanded early payment of their $1,000 war bonuses, which were not due until 1945. With their wives and children, 15,000 of them set up a camp on Anacostia Flats, Washington. Hoover accused them of being communists and ordered their removal. They were dispersed by armed troops, cavalry, tanks and tear gas. Two babies died and many children were injured.

What was Hoover's political party, background and career?

He was a republican, and believed in typical republican policies like laissez-faire and rugged individualism. He made his fortune in the mining industry and became a multi-millionaire by the age of 40. He retired from mining to enter politics. He had an excellent early career in politics, especially during the first world war. He was elected president in 1928, during the economic boom.

What was laissez-faire and what was Hoover's views on this?

Laissez-faire meant the government would limit its intervention in the economy. Hoover said too much interference would mean economic normality would not return.

What was rugged individualism and what was Hoover's views on this?

Rugged individualism meant people were expected to overcome problems and succeed by their own efforts. They were not to depend on help from the government. Hoover thought aid would encourage idleness and damage morals. He was a self-made millionaire and expected others to be self-reliant.

What was voluntarism and what was Hoover's views on this?

Voluntarism meant help for the homeless and hungry should be from charities, businesses, churches and local government, and not the federal government. Balancing the budget meant ensuring the government spent no more than it earned in taxes

What did Hoover promise to the Americans about the Great Depression?

He promised that 'Prosperity is just around the corner', but many people did not believe this,

What was FDR's political party, background and career?

He was a democrat; people believed his wife Eleanor may have persuaded him to become a democrat as his family is republican. He was a privately educated only child from a very rich family. He helped organise the the navy during WWI. He also contracted polio, which almost killed him in 1921. As a result, he had to use a wheelchair for the rest of his life. He re-entered politics in 1928, becoming Governor of New York.

What was Roosevelt's ideas for helping with the Great Depression?

During his election campaign, Roosevelt made a number of pledges: He promised a "New Deal" for everyone. He said the government would have a more active role in the economy, and would stop the rich exploiting the poor. He promised more public works and relief schemes. He declared he would experiment with new ideas to revive agriculture and industry.

How was Roosevelt's campaign different to Hoover's?

He ran a positive and energetic campaign. He travelled around America to bring his message to ordinary people, in spite of his disability from polio. He was much more approachable and charismatic than Hoover, and a more confident public speaker

What were Roosevelt's Three Rs?

Relief: Help for the old, sick, unemployed and homeless; Recovery: government schemes to provide jobs; Reform: To make America a better place for ordinary people and ensure another Depression could not happen.

What were Roosevelt's 'Fireside Chats'?

Between 1933 and 1944, he addressed the nation with 30 radio broadcasts. In these speeches he addressed a wide range of subjects, from banking to European politics. They were well received by the American people.

What was the Emergency Banking Act 1933?

This closed banks for a four-day bank holiday. Every bank was inspected and only honest, well-run banks could re-open. When the banks re-opened people put money back in their accounts. Well-run banks could now lend money to well-run businesses - this would create jobs as businesses expanded.

What was the Economy Act 1933?

This cut the pay of everyone working for the government and the armed forces by 15%. This saved nearly $1 billion.

What was the Beer Act 1933?

This made it legal to produce and sell alcohol again. Legalising alcohol put the gangsters out of business and the government could also raise money by taxing alcohol.

What were 'Alphabet Agencies'?

Agencies created by the New Deal to deal to solve problems from the Great Depression such as unemployement.

What was the FCA?

Farm Credit Administration. They lent money to farmers who could not keep up with loan payments. $100 million loaned out in 18 months.

What was the AAA?

Agricultural Adjustment Act. The government paid farmers not to grow certain crops and to destroy food. This was done to end the over-production and falling agricultural prices that had crippled American farmers.

What was the TVA?

Tennessee Valley Authority. This scheme brought hydro-electric power to seven states in the Tennessee Valley, one of the worst affected areas of the country. Dams and power-plants were built, creating many jobs.

What was HOLC?

Home Owners Loan Corporation. Gave loans to people whom were struggling to pay their mortgages. It helped 300,000 in its first year.

What was the NRA?

National Recovery Administration. This helped industry and factory workers by increasing wages and improving hours and conditions. It also gave workers the right to join a trade union. However, it was a voluntary scheme and many employers refused to join, which led to strikes.

What was the CCC?

Civilian Conservation Corps. This department provided jobs to large numbers of young men aged 18-25 in conservation schemes in the countryside. The CCC created jobs for 2.5 million men.

What was the FERA?

Federal Emergency Relief Administration. This helped the poor in a number of basic ways, such as giving clothing grants and setting up soup kitchens for the poor. $500 million was given to the homeless and starving.

What was the CWA?

Civil Works Administration. This created temporary jobs for 4 million people by paying them to build schools, bridges and dams

How did the New Deal affect women?

Many women found work in the Alphabet Agencies or were helped by the SSA (Social Security Act). Women faced discrimination in all sorts of ways. Some of the NRA codes set wages for women lower than those of men.

What was the average yearly wage for a women in 1937, compared to a man?

$525 compared to just of $1000 for a man

How did the New Deal affect workers?

The New Deal created jobs. For example, 2.5 million 18-25 year-olds got to work in the CCC. However, the New Deal did not solve unemployment and there was always at least one in ten people unemployed in the USA throughout the 1930s. The Alphabet Agencies gave workers a basic wage. However, the Supreme Court ruled that many of the NRA's wage codes were illegal. FDR introduced the Wagner Act which gave workers the right to join a trade union.

One out of how many people were unemployed throughout the 1930s?

1 in 10

How many days were lost to strikes in 1930, 1932 and 1934? What does this show?

In 1930 3 million days were lost to strikes. 1932, this rose to 15 million. By 1934, 20 million days were lost to strikes. These figures can often show how satisfied workers are, less strikes \= happier workers.

How did the New Deal affect farmers?

FDR introduced measures to help raise the price of crops and make loans available to farmers and help save them from eviction. However, most help for farmers went to large-scale farmers. Small farmers or farm workers did not see much benefit. There was still severe poverty and poor farmland in parts of Kansas, Oklahoma, Texas and Colorado (known as the dustbowl) meant that many farmers had to look for work elsewhere

How did the New Deal affect African Americans?

200,000 African-Americans did gain jobs in the CCC, and one African-American woman, Mary McLeod Bethune, was appointed to an important post in the government. However, many Alphabet Agencies continued to discriminate against African-Americans. CCC campsites were segregated and African-Americans were not allowed to live in the newly built town or Norris in the Tennessee Valley. Roosevelt refused to take steps to end discrimination.

How many African-Americans gained jobs under the CCC?

200,000

Who was Mary McLeod Bethune?

The first African-American woman put in government position

How did the New Deal affect Native Americans?

FDR increased the amount of land owned by Native Americans. Loans were provided so that they could buy land, start businesses and buy farming equipment. This was allowed through the Indian Reserve Act 1934. However, many still lived in great poverty and suffered discrimination.

What was the Indian Reserve Act 1934?

This gave Native Americans the right to manage their own affairs, such as setting up their own law courts.

What other problems were there with the New Deal?

After his re-election in 1936 FDR grew worried about the increasing cost of his job creation schemes like the TVA. He cut down the amount of spending but this resulted in unemployment jumping to 3 million. By 1938, some people were commenting that America was sliding backwards towards Depression again. Unemployment had rose to 10.5 million and car and steel production had fell. FDR himself acknowledged that the New Deal came to an end by Jan 1939.

What did unemployment rise to in 1938?

10.5 million

What groups of people didn't like the New Deal?

The rich; Business people; The supreme court; Republicans.

Why didn't the rich like the New Deal?

They didn't like having to pay high taxes. Bitter because FDR's policies had taken away some of their power.

Why didn't business people like the New Deal?

They didn't like government getting involved in business. Didn't like FDR's support for Trade Unions and the campaign to raise wages Didn't want to pay social security contributions. Criticised NRA for allowing workers to join trade unions and forced employers to pay a minimum wage, improve living conditions and pay better wages.

Why didn't the Supreme Court like the New Deal?

They argued that Roosevelt had tried to impose the power of the federal government on state governments - and this was unconstitutional. As a result, Alphabet Agencies like the AAA and many codes of the NRA were declared illegal.

Why didn't Republicans like the New Deal?

Thought FDR was behaving like a dictator - like Stalin and that the NRA and TVA were like the communist economic planning of the USSR. Believed that Social Security Act would make people lazy and dependant on government help. Objected to the cost. Thought money was being wasted - e.g. CWA was paying people to do unnecessary jobs.

Who was Huey Long? Why did he oppose the New Deal?

Governor of Louisiana; He believed FDR's plan was not sufficient enough to help people living in poverty. He claimed that FDR had failed to share out the nation's wealth fairly and he announced his own plans to do this under the slogan, 'Share Our Wealth'. He said that FDR should confiscate the 'swollen fortunes' of the wealthy and use this to give every American household a car, a house and two to three thousand dollars a year

What did Huey Long propose for Americans?

Proposed a 'Share our Wealth' scheme - all personal fortunes over $5million should be confiscated and the money shared out. He promised every family $5000 to buy a radio, a car and a house as well as cheap food for the poor, houses for war veterans and free education.

Who was Francis Townsend? Why did he oppose the New Deal? What were his ideas?

He was a retired doctor from California. He proposed that everyone over the age of 60 should get a pension of $200 provided they gave up their jobs so that young people could have them.

Who was Father Charles Coughlin? Why did he oppose the New Deal? What were his ideas?

He viciously attacked FDR accusing him of failing to tackle the problems of the poor. Set up the National Union for Social Justice which attracted millions of members from across the country. This organisation promised work and fair wages for all. Coughlin criticised the New Deal for not doing enough and labelled FDR as 'anti-God' because he was not really helping the needy. His main influence came from his weekly broadcasts which attracted over 40 million listeners, especially from urban and lower middle-class America. However, many more people tuned in to FDR's 'fireside chats.'

Why did Father Coughlin lose support?

He made antisemitic speeches and attacked trade unions.

What is popular culture?

This refers to the common ideas, customs and behaviours of a particular group or country at a particular time in history.

What was popular culture like in the 1930s?

Despite the Great Depression 's devastating impact on many Americans, the 1930s witnessed the emergence of many influential cultural trends. Literature, arts, music, and cinema of the period became vehicles for establishing and promoting what would be presented as truly American traditions and values. Many New Deal programs were established to support artists, writers, musicians, and theatre professionals. Projects funded through these programs were often seen as serving an important mission of bringing culture and arts to the masses. The 1930s came to be known as the "golden age" of Hollywood. Many popular low-budget and epic expensive movies that reached the status of classic were produced during the period. The 1930s were also a very important and productive decade for American literature.

How did music influence popular culture in the 1930s?

Jazz remained very popular and artists such as Louis Armstrong, Duke Ellington and Billie Holiday sold huge number of records. Gramophones and vinyl became a popular way to listen to recorded music. By 1930, new forms and styles developed and swing emerged as a dominant form in American music. Swing music developed with corresponding swing dance.

How did the radio influence popular culture in the 1930s?

Those Americans who did not own a radio could still access one in their communities through friends or neighbours. Popular content spanned from comedy, with Bob Hope being one of the biggest comedic radio personalities of the time, and music, theatre, and soap operas, to news and political content.

How did the cinema influence popular culture in the 1930s?

A trip to the cinema was one of the most popular leisure activities of the 1930s. The 60 million people who went each week often wanted to escape the trouble of the Depression. Comedies starring Charlie Chaplin and Laurel and Hardy, Walt Disney cartoons and horror films such as Dracula were very popular. Adaptations of classic and best-selling literary works were popular. Among them are such classics of American cinema as King Kong (1933), Gone With the Wind (1939), and Grapes of Wrath (1940).

How many people were going to the cinema per week in the 1930s?

60 million

What entertainment genres were popular in the 1930s?

Comedy, horror and cartoons.

What was The Motion Picture (or Hollywood) Production Code of 1930

This forbade certain subjects from being addressed or portrayed in film.

How did comics influence popular culture in the 1930s?

Comics were bright, cheap, easy to read and provided an escape into a world of adventures. Pulp fiction magazines began to feature distinctive, gritty, adventure heroes that combined elements of hard-boiled detective fiction and the fantastic adventures of the earlier pulp novels. Near the end of the decade, two of the world's most iconic superheroes and recognizable fictional characters, Superman and Batman, were introduced in comic books.

How did literature influence popular culture in the 1930s?

Writers focused on blunt and direct representation of American life and offered social criticism, coming often from the perspective of leftist political views. John Steinbeck became the quintessential author of the era. He often wrote about poor, working-class people and their struggle to lead a decent and honest life. The Grapes of Wrath, considered his masterpiece.

What was the WPA?

Works Progress Administration. It provided work for unemployed artists of all kinds.

How did the arts influence popular culture in the 1930s?

Many of the works created under WPA belonged to Social Realism-an international art movement that depicted the everyday life of ordinary people, most notably, the working class and the poor. Actors were hired to put on free shows, artists to paint displays for schools etc. However, some people believed the WPA was a waste of taxpayers' money.

What was the policy of isolationism?

Keeping out of world affairs and focusing on building up an economy.

What was the 1935 Neutrality Act?

This banned the loan of weapons to countries at war.

What was FDR's 'Quarantine' speech?

He said peace-loving nations should stand up to aggressive nations. He said that he would break off relations with nations that were threating over nations.

What happened in September 1939? What did America do as a result of this?

The beginning of the Second World War. America declares support for Britain and France. FDR persuades congress to change the neutrality laws to allow the USA to help Britain and France.

What was the Cash and Carry plan? How did it benefit America's economy?

It was when America sold Britain and France weapons, warships and planes. This created valuable production jobs at a time of rising unemployment.

What was the Lend-Lease Act 1941?

It allowed the US to lend or lease supplies to Britain and other nations fighting the Nazi's. The Lend-Lease agreement was extended to China and the Soviet Union in FDR's words the Lend-lease agreement was the great arsenal of democracy.

What happened on December 7, 1941?

Japanese bombers attacked Pearl Harbour. 177 US planes were destroyed, 2000 men were killed. The next day America and Britain declared war on Japan. Three says later Germany and Italy declared war on America.

How did weapon making help with America being at war?

War Production Board (WPB) was created in 1942 to convert industries from peacetime work to wartime work. Each factory received all the materials it needed to produce the most war goods in the fastest times.

How many weapons did the US factories produce in 1943?

86,000 planes, and then 96,000 in 1944. This was 28,000 more than Germany and Japan combined.

How did unemployment change with America being at war?

Unemployment dropped as America started to rearm. By 1941, around 4 million had found jobs building fighter planes, battleships and tanks. When war broke out, unemployed men joined the armed forces. Farmers prospered because they supplied food to the military and traditional industries of coal, iron, steel and oil were boosted by war demand.

What was unemployment in 1939? What was this in 1944?

Unemployment was 9.5 million in 1939. In 1944, this had dropped to just 670,000.

How were the lives of women changed with America being at war?

Before war broke out women worked in traditional roles such as nursing or teaching. As millions of men began to fill their places in factories, women began to work in factories, railways and shipyards. Women occupied a third of all America's jobs and the transformation of industry was unprecedented.

How many women worked in shipbuilding in 1939? What was this number by 1942?

In 1939, just 36 women worked in shipbuilding. In 1942, that number had grown to 200,000.