The Thirties

Chapter 21

Major Causes of the Great Depression

• No easy answers, but many contributing factors including

• Consumer debt• Loss of purchasing power• Decreased demand for products• Cuts in production in response to decreased

demand.

Major Causes of the Great Depression

• Laissez-faire capitalism• Government’s failure to intervene in the

economy• Unpaid debts of the Allies and Germany owed

to the U.S.• High tariffs leading to decline in international

trade.• Pessimism/fear in response to conditions

Major Causes of the Great Depression

• Over-valuation of stocks• Land speculation which did not meet

expectations• Unsecured bank loans• Too much government intervention (deficit

spending)

Herbert Hoover’s Efforts to Stimulate the Economy

• Cut taxes• Started spending government money on

public works • Asked big companies to keep their workers• Created the Federal Farm Board to buy up

farm surpluses and encourage production cuts• President’s Emergency Committee for

Employment (PECE)

More Hoover Efforts

• Organization for Unemployment Relief• National Credit Corporation to try to keep

banks from failing• Hoover, as most people, believed that “it was

the duty of private individuals, not the government, to reach out and help the needy with voluntary assistance.”

He did not want the government to go into debt.

Maintain a balanced budget: Revenue $10,000,000Expenses $10,000,000Balance = $0

Not a Deficit: Revenue $10 millionExpenses $15 millionDeficit = $5 million

More Government Involvement

• Reconstruction Finance Corporation• Smoot-Hawley Tariff –raised taxes to highest

levels in history, shut off foreign trade, stopped demand for U.S. products abroad. Basically a big disaster!

• Moratorium on European debt payments• Gave seed and feed to farmers

• In reality, Hoover’s interventions in the economy set precedents for Roosevelt and future administrations to intervene in the economy.

Economic Hardship

• GNP (Gross National Product) fell from $104 billion in 1929 to $41 billion in 1932.

• 5000 banks failed.• 86000 businesses closed their doors.• 250,000 people evicted from homes.• Estimated 28% of the population was without

income.

Economic Hardship

• Bonus Army – WWI veterans demanded that a bonus, voted for them in 1924, and payable in 1945 be paid to them early. They camped in Washington, DC (1932). Hoover wanted them out and sent in police who fired on the veterans, killing two and wounding others. Hoover then sent Gen. Douglas MacArthur in with teargas, tanks, and bayonets.

State delegations of veterans

“We done a good job in France; now you do a good job in America. We need the bonus.”

Burning of the Bonus Army “Hooverville”

• People were really sick of Hoover at this point and wanted change.

• Some entertained socialism and fascism. (http://en.wikipedia.org/wiki/Definitions_of_fascism) See Umberto Eco definition and anarcho-capitalist definition.

FDR

• Franklin Delano Roosevelt was elected president in 1932 on the slogan “I pledge…a New Deal for the American People.”

• Vice President – John Nance Garner of Texas

Banking Crisis

• Early weeks of 1933, a banking crisis erupted. Depositors were running the banks; the banks didn’t have enough to reserve deposits to give out.

• Roosevelt declared a bank holiday, closing the banks for 4 days. (Threatened to publish the names of people who had withdrawn money; many redeposited their money.

FDR’s New Deal

• Brain Trust – professor/advisors who tended toward socialism

• Called emergency session of Congress:– Emergency Banking Act– Took the nation off the gold standard– Civilian Conservation Corps– Agricultural Adjustment Administration– Legalized Beer

FDR’s New Deal

• Provided insurance for bank deposits (FDIC)• Regulated Wall Street investment houses• Provided mortgage refinancing• Regulated nation’s industries• Tennessee Valley Authority• Fireside Chats• “Relief, recovery, reform.

FDR’s New Deal

• Public Works Administration• Civil Works Administration• Works Progress Administration• National Recovery Administration• Social Security Act of 1935

Opposition to the New Deal

• Expensive• Dragging the nation into heavy debt• Using money that could have been used in

private business, industry• Government regulation• Socialistic• It wasn’t working. No recovery.

Opposition to the New Deal

• Supreme Court began to reject some New Deal legislation.

• FDR decided to add more justices (total of 12) to the Supreme Court who were favorable to the New Deal.

• Court-packing plan ruled unconstitutional.

Opposition to the New Deal

• Some liberals didn’t like the New Deal because they didn’t feel it was liberal enough.– Huey Long of Louisiana (assassinated 1935)– Dr. Francis Townsend– Father Charles Coughlin

1936 Election

• Republican challenger to the incumbent Roosevelt was Alf Landon of Kansas.

• All the polls showed that Landon was going to win. Roosevelt won in a landslide.

• The poll was based on telephone listings and automobile registrations.

• Why was the poll so flawed?

Labor Unrest

• John L. Lewis, president of United Mine Workers, organized the Congress of Industrial Organizations (CIO).

• United with the American Federation of Labor (AFL) to form the AFL-CIO.

• The unions protested and violence broke out between unions and police.

• People were disgusted by the violence and feared the socialistic views of the workers.

• “The New Deal did not rescue the nation from the depression, but it did install the framework for a burgeoning federal bureaucracy.”

Depths of Depression

• Hunger• Malnutrition• Private groups were overwhelmed by the

need.• Federally funded “bread lines”• Humiliation (not being able to provide)• Homelessness (Shanties – Hoovervilles)

Depths of Depression

• Half of all blacks were unemployed.• Black migration to cities of north and west• North wasn’t very welcoming.• Relief was mostly given to whites.• FDR tried to make sure blacks were treated

fairly.• Won black votes for Democrats.

Good Times for Others

• About 25% of the population was unemployed, but that meant that 75% was employed.

• These did not experience suffering as greatly as those without jobs. They didn’t have a lot, but they had the basics.

• People escaped their worries in books such as Margaret Mitchell’s Gone With the Wind which was made into a movie in 1939.

• People went to theaters to see many movies including Disney’s Snow White, which was released in 1938.

• Radio dramas were also popular: Lone Ranger, Amos & Andy, Little Orphan Annie

http://news.nationalgeographic.com/news/2005/06/0617_050617_warworlds.html

• One radio drama that captured the people was War of the Worlds, in which listeners, who didn’t catch the beginning announcement that it wasn’t real, really believed the earth was under attack by Martians.

• They were relieved when they learned that the spaceship which they believed had landed in New Jersey was fiction.

Real life drama:

• Lindbergh kidnapping; Bruno Hauptmann, a German immigrant was convicted and executed for the crime.

More real life drama

• Cops versus Gangsters.• Hindenburg disaster. Transatlantic airship

(Zeppelin). Made the trip in 2-1/2 days. First trip in 1936. It took a ship at least 5 days.

The Hindenburg

• Transatlantic airship (Zeppelin). Made the trip in 2-1/2 days. First trip in 1936. It took a ship at least 5 days.

• The Hindenburg carried passengers and a LOT of mail.

• Hindenburg left Frankfurt with 97 souls onboard; 62 survived the crash although many suffered serious injuries. Thirteen of the 36 passengers, and twenty-two of the 61 crew, died as a result of the crash, along with one member of the civilian landing party .

• The Hindenburg exploded and was consumed by flames in less than one minute on approach to its landing in Lakehurst, New Jersey on May 6, 1937.

• http://www.youtube.com/watch?v=F54rqDh2mWA

• http://www.vidicom-tv.com/tohiburg.htm

• As the 1930s drew to a close, there some signs were visible that the economy was pulling out of the depression.

• However, tension in Europe, specifically the rising tide of the Nazis, would once again trouble the United States and the entire globe.