The Great Depression Notes

The economic crisis following the 1929 crash was unprecedented in duration and severity. 

After a decade of prosperity, the U.S. economy suddenly halted, with a significant decline in borrowing and purchasing. 

Industries reliant on consumer debt faced reduced sales, leading retailers to lower prices and lay off workers. 

A vicious cycle of unemployment and decreasing sales ensued, worsening the economic downturn. 

By 1933, nearly 25% of Americans seeking jobs were unemployed, and many who were employed worked part-time. 

Farmers struggled financially, leading to wasted crops while the nation faced widespread hunger. 

People depleted their savings, relied on family, and sought charity, which also became insufficient. 

Unemployed individuals and farmers defaulted on debts, causing banks to fail and panic among depositors. 

The economy nearly ground to a halt due to a lack of transactions and lending. 

Government measures, including higher tariffs and immigration restrictions, failed to revive the economy. 

In the 1932 presidential election, Franklin D. Roosevelt defeated incumbent Herbert Hoover, advocating for a New Deal. 

Roosevelt's election marked a significant transformation in U.S. government and public perception, despite the New Deal's mixed results. 

Date of Stock Market Crash: October 24, 1929, marked a sudden plummet in stock market prices. 

Financial Impact: Approximately $10 billion in investments (about $100 billion today) vanished quickly. 

Investor Reaction: Panic led to selling, causing stock values to drop significantly; investors crowded the New York Stock Exchange for answers. 

Bankers' Response: Leading bankers, including J. P. Morgan, raised funds to stabilize the market by buying stocks at inflated prices, temporarily halting the decline. 

Continued Decline: Following the initial stabilization, fears led to further selling, culminating in Black Tuesday (October 29) and a continued drop in stock values. 

Major Stock Value Drops: U.S. Steel shares dropped from $262 to $22; General Motors shares fell from $73 to $8. 

Impact on Wealth: J. D. Rockefeller lost four-fifths of his fortune. 

Underlying Economic Issues: The crash revealed deeper problems in the economy, including rising inequality, declining demand, rural collapse, overextended investors, and speculative bubbles. 

Inequality and Income Distribution: While overall per capita income rose 10% from 1920 to 1929, the wealthiest 75% saw income growth of 75%. 

Pro-Business Policies: Conservative politics and fiscal policies favored the wealthy, leading to low taxes and easy credit, exacerbating wealth disparity. 

Market Saturation: By the late 1920s, the market for durable goods was saturated, particularly in the automobile sector. 

Economic Cycle: Unsold goods led to increased layoffs, reducing consumer purchasing power and creating a downward economic cycle. 

Unemployment Rate: Despite growth in the 1920s, unemployment remained around 7%, limiting consumer spending. 

American farmers faced economic hardship before the market crash in 1929. 

Farm prices in the South and West declined due to increased production and stagnant demand for agricultural products. 

Soil exhaustion on western farms worsened the situation, leading to loan defaults among farmers. 

By 1929, farm families were financially overextended and unprepared for the economic downturn. 

Many Americans believed the economy would recover despite foundational economic problems. 

President Herbert Hoover made optimistic statements about the economy, claiming "the depression is over." 

Hoover signed the Smoot-Hawley Tariff in 1930, aiming to protect American farmers but worsening the global economic situation. 

International trade plummeted from $36 billion in 1929 to $12 billion in 1932; American exports fell by 78%. 

Panic contributed significantly to the Great Depression, leading to bank runs and failures. 

The Federal Reserve's overcorrection raised interest rates and tightened credit, causing further financial distress. 

In 1930, 1,352 banks failed; by 1932, nearly 2,300 banks collapsed, affecting personal savings and credit. 

The Great Depression resulted from a combination of structural flaws, speculative bubbles, harmful policies, and human panic. 

Republican fiscal policies contributed to wealth inequality and stifled international trade but were initially popular. 

Many Americans lacked the foresight to reject the culture of easy credit and speculation, hoping to survive the economic crisis. 

The Great Depression led to public blame directed at President Herbert Hoover and the Republican Party. 

Hoover won the presidency in 1928 with high approval ratings, following Calvin Coolidge's administration of relative government inaction. 

By October 1929, the economic collapse began to overwhelm Hoover’s presidency. 

Hoover and his advisors initially viewed the economic decline as a temporary issue, assuming it was part of a boom-bust cycle. 

Unemployment began to rise, new-car registrations fell by nearly 25%, and consumer spending on durable goods dropped by 20% in 1930. 

When Americans sought help, Hoover relied on volunteerism, urging business leaders to maintain investments and local charities to assist those in need. 

He established the President’s Organization for Unemployment Relief (POUR) to coordinate private relief efforts. 

Private charities were overwhelmed by demand; many closed due to lack of funds, and existing charities could provide minimal assistance. 

Hoover embraced a business progressivism approach called associationalism, which relied on voluntary cooperation rather than direct government aid. 

He believed that direct government aid would undermine work ethic and self-initiative. 

Despite pressure from advisors and the public, Hoover resisted direct government intervention due to his conservative ideology. 

By 1932, facing a stagnant economy and re-election concerns, Hoover created the Reconstruction Finance Corporation (RFC) to provide emergency loans to industries, which was a shift from his usual laissez-faire approach. 

The RFC was criticized as a “millionaire’s dole” for prioritizing industrial and financial interests over direct aid to struggling Americans. 

In 1934, a woman from Humboldt County sought help from First Lady Eleanor Roosevelt for her unemployed husband, highlighting their struggles during the Great Depression. 

The family faced financial hardship as the woman prepared to have a baby, emphasizing the need for temporary assistance to avoid a home filled with worry. 

The Great Depression caused widespread economic collapse, affecting individuals, families, and communities across the U.S. 

Many Americans faced unemployment, poverty, and reduced wages, leading to drastic cuts in personal expenses. 

Wealthier individuals could defer expenses, while middle- and working-class families relied on credit, borrowing from relatives, or sharing living spaces. 

Public assistance and private charities became overwhelmed by the scale of the crisis, leading to widespread need for support. 

Many unemployed individuals resorted to living in makeshift shantytowns known as "Hoovervilles" and relied on food lines. 

The crisis impacted traditional family structures, with women and children entering the workforce, but married women faced greater employment discrimination. 

The economic downturn disproportionately affected women, particularly married women, who were often seen as less deserving of employment. 

Nonwhite Americans faced even harsher conditions, with Black workers experiencing higher unemployment rates and wage cuts compared to their white counterparts. 

The racial disparities in employment during the Great Depression highlighted existing inequalities, with Black workers often last hired and first fired. 

Hoovervilles: Desperate, chronically unemployed Americans formed shantytowns known as "Hoovervilles" on public or marginal lands, relying on bread lines and street peddling. 

Impact of Hunger: Many people fainted from hunger in public, highlighting the severe impact of food scarcity. 

Male Breadwinner Ideal: The concept of the "male breadwinner" was unrealistic for poor Americans; during the crisis, women and children had to enter the workforce. 

Discrimination Against Married Women: Employers were less likely to hire or retain married women, adhering to traditional views on male employment. 

Women’s Vulnerability: Women, especially those without regular work, faced increased risks of sexual violence and relied on each other for protection. 

Racial Disparities: Nonwhite Americans, especially Black individuals, faced harsher consequences during the Great Depression, as their economic struggles predated the crisis. 

Employment Inequality: Black workers were often last hired and first fired, with unemployment rates for Black individuals reaching up to 50% during the Depression. 

Wage Cuts: Even those Black workers who retained their jobs experienced significant wage reductions. 

Environmental catastrophe worsened the agricultural crisis in America during the Great Depression. 

Severe droughts occurred from 1932 to at least 1936, affecting areas from Texas to the Dakotas. 

Droughts were exacerbated by years of agricultural mismanagement, including the plowing of natural ground cover. 

The lack of rain led to the exposure of fertile topsoil, which then turned to dust. 

Rolling winds created massive dust storms, impacting air quality and health across a wide region, including as far as Washington, D.C. and New England. 

The phenomenon became known as the Dust Bowl, highlighting the urgent need for conservation efforts. 

Farmers in the affected regions faced foreclosures and declining commodity prices, leading to significant economic hardship. 

Many displaced individuals sought better opportunities in California, resulting in a mass exodus. 

Oklahoma experienced a loss of 440,000 people, or 18.4% of its 1930 population, due to outmigration. 

Dorothea Lange's "Migrant Mother" is a significant image from the Dust Bowl era, captured in 1936. 

The photograph features a young mother with a worried expression at a migrant farmworker camp in Nipomo, California. 

The mother left Oklahoma to seek work in California, reflecting a larger migration trend during the mid-1930s. 

She is depicted cradling an infant and supporting two older children, symbolizing the struggles of many families during this time. 

Westward migrants, derogatorily called "Okies," were driven by rumors of job opportunities across the country. 

By 1932, millions of men were traveling in search of work, often abandoning families and resorting to hitchhiking or freight hopping. 

Stories of displaced individuals were prevalent in popular media, including films and literature like Steinbeck's "The Grapes of Wrath." 

The period marked a reversal in migration patterns, with many urban dwellers moving to rural areas in search of employment. 

Relief efforts struggled, leading to barriers against migrants, such as laws making it a crime to bring poor migrants into certain states. 

States like California, Florida, and Colorado implemented "border blockades" to limit migration and competition for jobs. 

Billboards warned potential migrants from Oklahoma about the lack of jobs in California, advising them to stay away. 

Sympathy for migrants increased during the Great Depression, influenced by Steinbeck's "The Grapes of Wrath." 

The Joad family's struggles highlighted the difficulties faced by Depression-era migrants. 

Congress established the Select Committee to Investigate the Interstate Migration of Destitute Citizens after the film's release. 

The committee held public hearings starting in 1940, but by then, the focus shifted due to World War II's demand for labor. 

Economic fears led to apprehension about foreign workers competing for jobs during the Depression. 

The Hoover administration implemented strict immigration policies to limit foreign workers amidst rising unemployment. 

Visa issuance for Europeans dropped by 60% between 1930 and 1932, while deportations increased significantly. 

Exclusionary measures disproportionately affected Mexican immigrants, with efforts to reduce their immigration from 1929 onwards. 

Deportation raids and voluntary repatriation efforts were conducted in the Southwest, leading to a significant decrease in the Mexican-born population in certain states. 

Franklin Roosevelt's New Deal policies were somewhat less anti-immigrant than Hoover's, yet job scarcity and hostility still led to a decline in immigration and an increase in deportations. 

More individuals left the U.S. than entered during the course of the Depression. 

In summer 1932, over 15,000 unemployed veterans and families gathered in Washington, D.C. to demand cash bonuses for World War I veterans. 

The bonuses were originally set to be paid in 1945 but were sought immediately due to the economic hardships of the time. 

The veterans created a tent city in Anacostia Flats, known as a "Hooverville," reflecting the struggles of homeless Americans. 

They formed the Bonus Expeditionary Force (Bonus Army), marching and protesting for their bonuses. 

The veterans criticized the government, stating there was "billions for bankers, but nothing for the poor." 

President Hoover opposed the immediate payment of bonuses due to concerns about the federal budget, and the Senate ultimately voted down the bill. 

Many veterans left in defeat, but some remained, leading Hoover to label them as “insurrectionists” and order their eviction. 

General Douglas MacArthur led a military operation to disperse the Bonus Army, resulting in violence, including tear gas and fatalities. 

The media coverage of the raid led to public outrage over Hoover’s treatment of struggling Americans. 

Hoover’s inability to effectively address the economic crisis and his conservative ideology contributed to his declining presidency. 

Despite the lack of relief from the government, the public continued to seek assistance. 

The early years of the Great Depression were disastrous, with unemployment peaking at 25% in 1932. 

Americans turned to the government for assistance as private firms and charities were overwhelmed. 

The 1932 presidential election was highly consequential, resulting in the defeat of Herbert Hoover by Franklin Delano Roosevelt. 

Roosevelt came from a privileged background and had a political career that included serving as assistant secretary of the navy during WWI. 

He contracted polio in 1921, which left him a paraplegic, but he continued to pursue a political career with the support of his wife, Eleanor. 

As governor of New York, Roosevelt responded to the Depression by establishing the Temporary Emergency Relief Administration (TERA) to provide jobs and aid. 

Frances Perkins, who served under Roosevelt, advocated for significant labor reforms, including workplace safety and child labor laws. 

Roosevelt's acceptance speech in July 1932 introduced the phrase "new deal," which became associated with his plans to combat the Depression. 

His proposed initiatives included jobs programs, public works, higher wages, unemployment insurance, and banking regulations. 

Hoover criticized Roosevelt's plans as a departure from American principles, warning they aligned with European communism. 

Despite Hoover's warnings, Roosevelt won the election in a landslide, gaining more counties than any previous candidate. 

Between his election and inauguration, Roosevelt assembled a team of advisors known as the Brain Trust to develop his strategies. 

In his first inaugural address on March 4, 1933, Roosevelt emphasized the need to overcome fear to progress. 

Roosevelt's immediate action against the economic crisis was crucial to his reassurance during the Great Depression. 

In his first days in office, he worked with advisors to enact numerous laws aimed at alleviating the crisis. 

The administration focused on stabilizing the banking system, which was collapsing. 

Roosevelt declared a national "bank holiday" to close banks and pushed the Emergency Banking Act through Congress. 

He used radio addresses, known as Fireside Chats, to explain New Deal legislation and encourage public confidence in government actions. 

The first Fireside Chat successfully encouraged Americans to trust banks, leading to increased deposits. 

The Glass-Steagall Banking Act was passed in June, establishing federal deposit insurance and separating commercial and investment banking. 

Roosevelt's First Hundred Days also focused on relief for struggling Americans, with Congress passing various relief measures. 

Key programs included the Civilian Conservation Corps (CCC), Federal Emergency Relief Administration (FERA), and Tennessee Valley Authority (TVA). 

The Agricultural Adjustment Administration (AAA) and National Recovery Administration (NRA) were central to Roosevelt's recovery efforts, aiming to stabilize and coordinate the economy. 

The AAA offered cash incentives to reduce farm production and raise prices for agricultural commodities. 

The NRA allowed businesses to coordinate prices and production levels while providing fair wages and labor rights. 

Programs from the First Hundred Days stabilized the economy and initiated a recovery, despite persistent high unemployment. 

The Civil Works Administration (CWA) and Works Progress Administration (WPA) created jobs through local government projects. 

The Public Works Administration (PWA) funded large infrastructure projects, benefiting both employment and public welfare. 

The New Deal significantly reshaped the nation during this period. 

The poster promotes a meeting to defend the Scottsboro Boys, including a photo of the boys and their attorney. 

The Scottsboro Boys faced controversial rape accusations in 1932, sparking national debate. 

The South was severely impacted by the Great Depression, with the lowest average per capita income in the nation ($365 in 1929). 

Southern farmers earned significantly less than their counterparts in other regions, with many trapped in low-profit crop production. 

New Deal programs aimed to alleviate southern poverty but often failed to help those in need. 

The Agricultural Adjustment Act (AAA) sought to reduce cotton production but primarily benefited landowners, leaving farmworkers worse off. 

Roosevelt's initiatives included the National Industrial Recovery Act (NRA), which improved wages and working conditions and limited child labor. 

The Fair Labor Standards Act established a national minimum wage, benefiting low-paid southern workers. 

The National Labor Relations Act (Wagner Act) protected workers' rights to unionize and bargain collectively, supporting labor movements in the South. 

The Tennessee Valley Authority (TVA) aimed to improve the Tennessee River region through hydroelectric power, education, and economic development. 

Roosevelt initially aligned with conservative southern Democrats but later addressed economic inequalities in the South through progressive initiatives. 

He endorsed a report highlighting the South's economic challenges and positioned the New Deal as a solution for the region's problems. 

Roosevelt's initial relief programs were conservative and cautious, operating within presidential authority and seeking congressional cooperation. 

Unlike European nations moving towards state-run economies, Roosevelt's New Deal avoided radical changes to the country's economic and social structures. 

Critics, including Senator Huey Long, accused Roosevelt of not doing enough to address economic injustice. 

Long proposed the Share Our Wealth program, advocating for the redistribution of wealth from the extremely rich to the less fortunate. 

Over 27,000 Share the Wealth clubs emerged as Long campaigned across the country; his movement aimed at the presidency but ended with his assassination in 1935. 

Long's death prompted Roosevelt to intensify efforts against the Depression and inequality. 

Other critics included Francis Townsend, who advocated for old-age pensions, and Reverend Charles Coughlin, who attacked Roosevelt for his ties to banks and called for a more state-driven economy. 

Roosevelt faced significant opposition from conservative politicians, business leaders, and Southern Democrats who resisted his regulatory and spending policies. 

The Supreme Court, consisting of conservative justices, posed major challenges to the New Deal programs, declaring the NRA unconstitutional in May 1935 and later striking down the AAA in early 1936. 

The New Deal gained broad popularity, leading to significant Democratic gains in the 1934 midterm elections. 

Roosevelt faced rising opposition and rededicated himself to bold programs, resulting in the Second New Deal. 

The Works Progress Administration (WPA) was established in 1935 with a nearly five-billion dollar appropriation to employ millions on public works projects. 

The WPA contributed to building infrastructure, including roads, bridges, schools, and post offices, and aimed to provide a federal jobs guarantee. 

In 1935, the National Labor Relations Act (Wagner Act) was passed, offering federal legal protection for workers to organize unions. 

The New Deal's labor protections were revolutionary, prompting workers in industrial cities to demand rights. 

John L. Lewis led the formation of the Congress of Industrial Organizations (CIO) in 1935, breaking away from the conservative AFL. 

The CIO achieved a significant victory in 1937 with a "sit-down" strike at a GM plant, resulting in the recognition of the United Automobile Workers (UAW) and better pay. 

The recognition of the UAW allowed for rapid unionization across the auto industry. 

Unions and workers capitalized on New Deal protections to organize and secure major concessions from employers. 

The Fair Labor Standards Act was passed three years after the NLRA, establishing the modern minimum wage. 

The Second New Deal implemented a highly progressive federal income tax. 

It introduced new reporting requirements for publicly traded companies. 

The New Deal refinanced long-term home mortgages for struggling homeowners. 

Efforts were made to initiate rural reconstruction projects to boost farm incomes. 

The Social Security Act was a key component of Roosevelt's Second New Deal. 

It provided old-age pensions, unemployment insurance, and means-tested economic aid for the elderly and dependent children. 

Roosevelt emphasized financing social security through payroll contributions to avoid the stigma of welfare. 

Social security became a cornerstone of the modern American social welfare state. 

It addressed demands for reform and aimed to tackle poverty among marginalized groups. 

The act, however, excluded many, including domestic and farm workers, which disproportionately affected African Americans. 

Roosevelt acknowledged the need for future expansion and improvement of social security programs. 

Black Americans faced severe legal inequality and discrimination, particularly in the Jim Crow South. 

In 1931, nine young Black men, known as the "Scottsboro Boys," were falsely accused and subjected to sham trials, resulting in death sentences for all but one. 

The International Labor Defense (ILD) helped challenge the unjust sentencing, but the last accused did not receive parole until 1946. 

Franklin Roosevelt's New Deal programs did not specifically address the unique challenges faced by Black communities to avoid alienating southern Democrats. 

Proposals to abolish the poll tax and declare lynching a federal crime were rejected by Roosevelt. 

New Deal programs often perpetuated existing inequalities, particularly in the South, where pay scales favored white workers. 

Many Black workers in farm and domestic labor were excluded from New Deal benefits, exacerbating their economic struggles. 

The Social Security Act excluded domestic and farm laborers, disproportionately affecting African Americans and limiting their access to economic security. 

While women were included in some key positions within the New Deal administration, programs often reinforced traditional gender roles, limiting women's economic autonomy. 

New Deal welfare programs tended to favor men as primary beneficiaries, creating a two-tiered social welfare system and failing to address underlying inequalities. 

By the late 1930s, Roosevelt and the Democratic Congress transformed American government and party politics. 

Prior to World War I, the federal government was seen as a distant entity. 

The New Deal shifted perceptions, making the federal government viewed as an ally in daily struggles (e.g., employment, wages, agricultural pricing, union organization). 

Voter turnout in presidential elections increased significantly in 1932 and 1936, with newly mobilized voters solidifying loyalty to the Democratic Party into the 1960s. 

Despite post-war affluence, the memories of the Great Depression influenced the mindset of two generations of Americans. 

Historians debate the endpoint of the New Deal, with some citing the Fair Labor Standards Act of 1938, while others view wartime measures and the G.I. Bill as part of its legacy. 

Some consider the "New Deal order" as a lasting framework of ideas and policies that influenced American politics from Roosevelt to Lyndon Johnson and beyond. 

The legacy of the New Deal continues to shape American political dynamics today.