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Chapter 25

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A PEOPLE and A<br />

NATION<br />

EIGHTH EDITION<br />

Norton • Katzman • Blight •<br />

Chudacoff • Paterson • Tuttle •<br />

Escott • Bailey • Logevall<br />

<strong>Chapter</strong> <strong>25</strong>: The<br />

Great Depression<br />

and the New Deal,<br />

1929–1941


Ch. <strong>25</strong>: Great Depression & New<br />

Deal, 1929–1941<br />

• In response to widespread human suffering,<br />

FDR promise vigorous government action<br />

• New Deal = willingness to experiment<br />

• Expand US Gov’t in response to crisis of<br />

capitalism<br />

• Even though depression continue until<br />

WWII, New Deal help many Americans<br />

• New Deal maintain existing economy/society<br />

• FDR’s goal = save capitalism<br />

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I. Hard Times, 1929–1933<br />

• GNP drop by 50%<br />

• Corporate profits fall from $10 to $1 billion<br />

• 100,000 businesses close<br />

• By early 1933, <strong>25</strong>% of workforce out of<br />

work<br />

• Millions more work only part-time<br />

• Industrial wages cut by ⅓<br />

• Millions suffer hunger, malnutrition,<br />

illness, inadequate heat, & poor housing<br />

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I. Hard Times, 1929–33 (cont.)<br />

• Homeless form “Hoovervilles”<br />

• Couples delay marriage & parenthood<br />

• Farm crisis (1920s) deepen as farm<br />

prices continue to drop<br />

• Farmers suffer overproduction, low<br />

prices, drought, insects, debt/foreclosures<br />

• Many leave land & migrate<br />

(Montgomerys)<br />

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II. Marginal Workers<br />

• Blacks suffer more than whites<br />

• By 1932, black unemployment = 50%<br />

• Whites take jobs from blacks & Hispanics<br />

• USA deport 82,000 Hispanics (1929-35)<br />

• Whites coerce almost ½ million more to leave<br />

• Women suffer low pay, segregation (“women’s<br />

jobs”), & claims they take jobs from men<br />

• Although most female workers single,<br />

economic crisis force some married women to<br />

take jobs<br />

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III. Middle Class;<br />

Hoover’s Initial Response<br />

• Suffer less than others, but still suffer<br />

• “Make do” with less<br />

• All Americans face uncertainty/fear for<br />

future<br />

• Hoover initially resist any US Gov’t<br />

activity<br />

• Prefer “associationalism”<br />

• Call on charities to respond to crisis<br />

(POUR)<br />

• Crisis too large for charities to handle<br />

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IV. Hoover’s Limited Solutions<br />

• Hoover reject direct relief; adamant that aid<br />

to individuals will undermine character<br />

• Slowly activate gov’t with a few public works<br />

• Raise tariffs with Hawley-Smoot Tariff (1930)<br />

• Further weaken international trade<br />

• RFC loan money to banks, railroads,<br />

insurance<br />

• Try direct assistance to private industry<br />

• Lots of popular anger at Hoover<br />

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V. Protest and Social Unrest<br />

• Most Americans respond with<br />

bewilderment<br />

• Scattered urban/rural protest emerge<br />

• Farmers’ Holiday Association call for<br />

strike by farmers to raise food prices<br />

• Some farmers block foreclosures<br />

• Communist Unemployment Councils<br />

organize jobless to protest; some<br />

protests turn violent<br />

• Racial violence also increase (e.g. KKK)<br />

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VI. Bonus Army<br />

• March on DC (1932) to lobby for<br />

immediate payment of promised bonus to<br />

WWI vets<br />

• Hoover refuse<br />

• Use army to evict by force veterans &<br />

families<br />

• Many fear fate of capitalism & democracy<br />

• Worry poor might turn to dictator for help<br />

• Hitler’s rise (Germany) add to sense of<br />

crisis<br />

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VII. FDR, the 1932 Election, & Launching<br />

the New Deal<br />

• Advocate direct relief/active response to<br />

crisis<br />

• Win presidency & majorities in Congress<br />

• Disability increase his strength of character<br />

• Not take office until March 1933<br />

• “Bank runs” threaten full collapse of<br />

economy<br />

• FDR promise to wage war on crisis<br />

• Proclaim bank holiday & call Congress to DC<br />

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VIII. First Hundred Days (1933)<br />

• Emergency Banking Relief Act reopen<br />

solvent banks & reorganize insolvent<br />

ones<br />

• Show conservative side of New Deal<br />

• First fireside chat assure people that<br />

banks safe<br />

• Bank runs end<br />

• FDR & Brain Trust lack coherent plan<br />

• Experiment with central planning & direct<br />

relief to spur economic recovery<br />

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IX. National Industrial Recovery Act<br />

(1933)<br />

• Respond to “destructive competition”<br />

• Attempt to stabilize prices & wages<br />

• NRA encourage businesses to cooperate<br />

via “codes” (limit production, set<br />

prices/wages)<br />

• Big businesses dominate code-writing<br />

process<br />

• Not deliver economic recovery<br />

• Supreme Court void NRA (1935) as too<br />

much US Gov’t power<br />

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X. Agricultural Adjustment Act<br />

(1933)<br />

• Pay farmers to reduce production<br />

• Hope to raise prices with less<br />

overproduction<br />

• Taxes on processors fund AAA payments<br />

• Food destruction in time of need confuse<br />

many<br />

• AAA favor landowners<br />

• Many tenants/sharecroppers move to<br />

cities<br />

• Later rewritten in response to Court<br />

objections<br />

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XI. Relief Programs (1933)<br />

• New Deal prefer “work relief” to dole<br />

• Civilian Conservation Corps = US Gov’t<br />

job program for young men (2.5 million)<br />

• Public Works Administration likewise use<br />

public works to pump money into<br />

economy<br />

• FDR use deficit spending to spur<br />

recovery<br />

• Fig. <strong>25</strong>.1: New Deal reduce<br />

unemployment<br />

• FDR & New Deal overwhelmingly popular<br />

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XII. Opposition to the New Deal<br />

• As economy improve, businesses &<br />

conservatives increase opposition to FDR<br />

• Oppose regulation, taxes, deficit spending<br />

• American Liberty League claim New Deal<br />

= radicalism<br />

• Others (populists) argue New Deal too<br />

favorable to big business<br />

• Want more done for common people<br />

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XIII. Demagogues<br />

• Demagogues manipulate popular prejudices<br />

• Fr. Coughlin blame global Jewish conspiracy<br />

• Dr. Townsend demand US Gov’t pensions<br />

for aged<br />

• Senator Long blame the rich for Depression<br />

• Advocate seizing all incomes over $1 million<br />

to fund annual payments to every US family<br />

• Socialists & Communists also criticize FDR<br />

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XIV. Shaping the Second New Deal<br />

• Eleanor emerge as key advisor to FDR<br />

• Lead social justice activists with in<br />

Administration<br />

• “Black Cabinet” also provide advice<br />

• FDR respond to concerns/pressures by<br />

extending New Deal<br />

• Provide “greater security for the average<br />

man”<br />

• Launch $4 billion (deficit spending) to<br />

help poor<br />

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XV. Emergency Relief Appropriation<br />

Act (1935)<br />

• Resettlement Administration build<br />

housing for destitute families<br />

• Rural Electrification Administration<br />

• National Youth Administration<br />

• Works Progress Adm provide 8.5 million<br />

jobs<br />

• Include actors, writers, musicians, artists<br />

• Provide jobs, bring culture, & celebrate<br />

lives/ labor of plain folk (slave narratives)<br />

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XVI. Social Security Act (1935)<br />

• Initiate old-age insurance, unemployment<br />

compensation, & aid to dependents<br />

• More US Gov’t responsibility, but<br />

conservative<br />

• Taxes on workers & employers fund SS<br />

• Social Security taxes regressive<br />

• Not cover many workers (agricultural<br />

labor, domestic service, public sector<br />

workers)<br />

• Often exclude people of color & women<br />

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XVII. FDR’s Populist Strategies<br />

• FDR increase criticism of big business<br />

• Wealth Tax (’35) raise taxes on rich/corps<br />

• Achieve slight redistribution of income<br />

(Figure <strong>25</strong>.2)<br />

• FDR defeat Landon by landslide (1936)<br />

• Cement coalition of unions, urbanities<br />

(new immigrants), Solid South, &<br />

northern blacks<br />

• Democrats dominate US Gov’t for next<br />

30 years<br />

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XVIII. Labor<br />

• Millions join unions & strike<br />

• Suffer violence by management<br />

• National Labor Relations Act (1935)<br />

grant workers right to unionize & bargain<br />

collectively<br />

• Creates NLR Board to punish antiunion<br />

actions by management & mediate<br />

disputes<br />

• Further alienate big business from New<br />

Deal<br />

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XIX. Rivalry b/t Craft & Industrial<br />

Unions<br />

• Unlike craft unions, industrial unions<br />

unite all workers in specific industry<br />

(autos)<br />

• Open to women, people of color, unskilled<br />

• Lewis break with AFL to form CIO (1935)<br />

• UAW win recognition with sit-down<br />

strikes (‘36)<br />

• Memorial Day Massacre (1937) reflect<br />

cost of labor’s struggle<br />

• Unions improve conditions for workers,<br />

1930s<br />

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XX. New Deal in West<br />

• Change West with many dams & public<br />

works<br />

• Harness rivers for irrigation & cheap<br />

electricity<br />

• Buy land to combat Dust Bowl & overgrazing<br />

• Accelerate development of West & growth<br />

of large factory farms/ranches<br />

• FDR & Collier reverse Indian policy<br />

• Restore Indian lands to tribal ownership<br />

• Grant tribes some political autonomy<br />

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XXI. New Deal in South<br />

• Extensive poverty in South<br />

• Tennessee Valley Authority enhance<br />

economy, limit floods, & provide electricity<br />

• Damage environment (water & air pollution)<br />

• Southern leaders adamant on white<br />

supremacy<br />

• As in West, New Deal tie South more into<br />

national economy/politics/culture<br />

• US Gov’t more active in lives of its citizens<br />

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XXII. Mass Media and<br />

Popular Culture<br />

• Radio reduce regional boundaries<br />

• Foster increased national connections<br />

• Provide news as well as escape<br />

• Offer new set of shared experiences<br />

• Movies also increase shared popular<br />

culture<br />

• More teenagers remain in high school<br />

• Youth culture (1920s) continue to develop<br />

• Include music, dance, clothing, etc.<br />

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XXIII. Limits of New Deal<br />

(Reform over by 1938-39)<br />

• Court-packing plan (1937) backfire on FDR<br />

• But Court begin to uphold New Deal<br />

• FDR’s budget cuts cause recession<br />

(1937–39)<br />

• Resume deficit financing<br />

• Growing conflicts abroad take priority<br />

• FDR need conservative support for foreign<br />

policy<br />

• Relying on New Deal coalition, FDR defeat<br />

Willkie to win third term (1940)<br />

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XXIV. Race & the Limits<br />

of the New Deal<br />

• People of color benefit from New Deal,<br />

but not as much as whites (WPA pay<br />

blacks less)<br />

• Scottsboro Trials (1931) show era’s<br />

racism<br />

• FDR hesitate to offend southern whites<br />

• Some African Americans try direct protest<br />

• Randolph & Brotherhood of Sleeping Car<br />

Porters<br />

• Some blacks boycott white businesses<br />

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XXV. Assessment of New Deal<br />

• Historians vary in assessing FDR<br />

• Some praise his ability to inspire &<br />

experiment<br />

• Others criticize him for not doing more<br />

• FDR = capitalist, not radical<br />

• Reduce suffering & preserve capitalist<br />

economy<br />

• FDR strengthen US Gov’t, especially<br />

presidency<br />

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XXV. Assessment of New Deal<br />

(cont.)<br />

• Besides more regulation, New Deal<br />

move US Gov’t to take some<br />

responsibility for popular welfare<br />

• Under New Deal, US Gov’t becomes<br />

economic stimulator with deficit<br />

spending/pump priming<br />

• New Deal not end Depression<br />

• No repeat of depression because US<br />

Gov’t remain active<br />

• Liberal reform, not revolution<br />

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Summary: Discuss Links to the<br />

World & Legacy<br />

• Debate on ‘36 Olympics as link between USA<br />

and the world?<br />

• How boycott debate reveal anti-Semitism in<br />

USA?<br />

• African Americans win medals, but Hitler still<br />

gain public relations victory<br />

• Why Social Security a key legacy of New Deal?<br />

• Dramatically reduce poverty among aged<br />

• Current pressures on SS because of funding<br />

formula?<br />

• Increase in life expectancy?<br />

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