The American Yawp Chapter 23: The Great Depression

Overview of the Great Depression

• The Great Depression began in late 1929 after a decade of economic prosperity.

• Herbert Hoover’s optimistic statement in late 1928 contrasted sharply with the economic collapse that followed.

• By 1932, unemployment reached 25%, with devastating effects across American society.

Causes of the Great Depression

• Stock Market Crash (1929): Known as 'Black Tuesday,' the market lost 10% of its value, and within a month, stocks had halved in value.

• Lack of Diversification: The economy heavily relied on a limited number of sectors.

• Maldistribution of Wealth: The rich became richer, while the poor lacked purchasing power, contributing to the economic collapse.

• Misguided Policies: Protectionist measures like the Smoot-Hawley Tariff worsened the situation.

• Banking Issues: Speculation and poorly managed banks played a significant role in the economic downturn.

• Global Factors: European economies post-WWI and the inability of Central Powers to pay reparations influenced the global market.

Impact on American Society

• Unemployment: 9,000 banks failed within three years; unemployment reached 25% by 1932.

• Rural America: One-third of farmers lost their land; the Dust Bowl exacerbated rural hardships.

• Migration: Drought conditions led families, particularly from Oklahoma, to migrate westward in search of work, earning them the nickname "Okies."

• Social Displacement: Major societal shifts included an increase in urban migration from African Americans and difficulties for minorities and women in job markets.

Cultural Responses to the Depression

• Escapism in Media: Radio and films provided relief from daily struggles. Popular radio shows included Superman and The Lone Ranger.

• Film Industry: Movies like Gone with the Wind and Walt Disney cartoons offered comfort by harkening back to an idealized America.

Political Landscape and Radical Responses

• Rise of the Communist Party: During the Depression, the Communist Party organized protests and offered a radical alternative to the mainstream political response.

• Political Left: Many Americans turned to socialism and other progressive movements as economic conditions worsened.

Herbert Hoover's Presidency

• Hoover's Approach: Initially relied on voluntary cooperation and minimal government intervention, struggled to provide effective solutions.

• Public Perception: Hoover became a symbol of failure as Americans blamed him for their suffering, leading to the term "Hoovervilles" for shantytowns.

• Bonus Army Incident (1932): A march by WWI veterans demanding their bonuses led to violent clashes with the military.

Franklin Delano Roosevelt and the New Deal

• Election of 1932: FDR's approach contrasted Hoover’s, focusing on direct governmental assistance and reform.

• First New Deal: Included measures like the Emergency Banking Act and creation of the SEC to restore banking and stock market confidence.

• Agricultural Adjustment Act: Aimed to stabilize crop prices but favored larger landholders.

• National Recovery Administration (NRA): Sought to regulate industry standards but was later deemed unconstitutional by the Supreme Court.

Second New Deal Initiatives

• Social Security Act (1935): Established a pension system for the elderly and aid programs for the needy.

• Works Progress Administration (WPA): Put millions to work on public projects, including infrastructure, and supported the arts.

• Populist Critiques: Influential critiques from individuals like Dr. Francis Townsend and Father Charles Coughlin prompted a more radical platform for FDR's policies.

Labor Movement During the Great Depression

• Rise of Industrial Unions: Workers formed large industrial unions that successfully organized strikes and challenged corporate practices.

• Sit-Down Strikes: Notable method of protest that led to significant workplace changes, with success seen in industries such as auto manufacturing.

• Memorial Day Massacre (1937): Marked the violent clashes during labor strikes, indicating the widespread struggle within the labor movement.

Economic Recovery and Political Changes

• Court-Packing Plan: FDR attempted to reform the Supreme Court to secure support for his New Deal programs, met with significant opposition.

• Roosevelt Recession: In 1937, a setback pushed FDR to refocus on job creation and emergency funding.

• Fair Labor Standards Act (1938): Established national labor standards like minimum wage and limited child labor.

Long-Term Effects of the New Deal

• The New Deal reshaped American society, established the welfare state, and altered the relationship between the government and its citizens.

• Many programs remained to stabilize the economy and labor markets.

• By the late 1930s, while some critiques persisted, FDR had garnered substantial support from diverse societal groups, leading to a significant political realignment towards the Democratic Party.