History Exam 2 11 06 2014 The Great Depression October 1929 stock market crash o Continued for the next 4 years o Stock market stopped growing in summer 1929 Many great political debates are traced back to the 1930 s Worst depression in American history Dust Bowl o Most of the central US all the farmland o Sparked by a drought o Houses and farmland would be buried in dust o Ships in atlantic as far as 300 miles off shore would report having mud showers Causes o Overproduction too much food in production and the prices of crops were plummeting Buying on credit selling people goods before they could afford them o Mal distribution of wealth tariffs income in the US was good but wasn t very evenly distributed Money was in the hands of very few 1 of population was in stock market the top 1 of that had 43 of it Short sided tariff policies massive tariffs o Low Regulation 30 of market was bought on margin As soon as stock market started falling it bankrupt individuals and companies o Banking practices not protecting it s customers Could not cope with masses of people that were scared and came and pulled all of their money out What makes the great depression worst than any other stock market crash o Economic indicators Stock market lost 40 of it s value Stock prices unemployment 25 in 1920 s compared to 10 in the 2008 crash Production was cut in half banks closing by the thousands o Social indicators Marriage rates dropped by 30 couldn t afford to get married and support a family and birth rates dropped US population stagnated Crime rates in the US National murder rate tripled Bank robberies Responses to the Great Depression Herbert Hoover Hoover took the blame for the depression o won the election in 1928 o Stanford University o Successful series of jobs as mechanical engineer o Was in Europe when WWI broke out helped organize the removal of American citizens Bonus Marchers o Group of WWI veterans o Handling of bonus marchers was one of the worst moves by Hoover o Law was going to give veterans a pay bonus o A clause was passed that postponed this payment o Bonus marchers came downtown and demanded their payment now o Hoover called in current army to disperse them and kicked the veterans out of DC Hoovers policies o Limited in scope and not real extreme o Idea of voluntary cooperation Encouraged different leaders of banks businesses farmers to work together and help each other o National Credit Corporation o Reconstruction Finance Corporation Give money to large institutions and be able to create jobs and the money would trickle down to consumers and average people o Self Liquidating ventures o Summary too little too late Not enough to stop the crash of the economy Growing government role Hooverites towns of poor people 1932 election FDR beat Hoover FDR and the New Deal FDR had a lot of mistresses The press stayed out of the President s business and didn t give them a bad wrap Got polio and the press never videoed or photographed him of his weakness during his illness In order for democrat to win he had to win the southern vote and the vote of urban workers unionists Democratic Coalition o Deep south rural whites blue collar workers unionists African Americans o A solid base for the democratic party Alphabet Soup o Tendency for three letter acronyms o Relief and Recovery FERA Federal Emergency Relief Administration Soup kitchens NRA National Recovery Administration Reduce competition among Americans Established price fixing Recognized the rights of trade unions brought businesses and trade unions together and helped raise pay for workers PWA Public Works Administration Work projects to be deemed to public interest Put people back to work and increase money back into circulation CCC Civilian Conservation Core Trails state parks forest service The largest Earned 30 a month but 25 would go back to their family AAA Agricultural Adjustment Association Overproduction on farms Paid farmers not to farm to decrease production and increase prices Farm and Homeowner Mortgage Acts Gave aid to farmers and homeowners to help pay for mortgage Glass Steagal Act and FDIC Combated people from pulling their money out of banks Created insurance for people that invest their money in a bank SEC TVA Security and Exchange Commission to regulate the stock market What percentage of banks could be bought on margin Tennessee Valley Authority Regional project that built hydro dams Many people in backwoods got electricity Rise of hunting and fishing lodges o Also pushed congress to suspend prohibition and got the 21st amendment passed o Roosevelt was overall very popular Use of the radio allowed FDR to reach people in their homes Vast majority of Americans had never heard the voice of or seen their president New Deal Cont d Fireside chats Social Security Crop Insurance o Farmers could by insurance against their crops incase of drought or pests eating their crops WPA o River walk San Jacinto monument Easterwood airport o Works progress administration o Mission was to build things for the public good and put people back to work Fair Labor Standards Act Put more restrictions on child labor Instituted a federal minimum wage for the first time Mandated overtime pay Set a working week of 44 hours anything over got paid 1 5 Taxation rose 63 was the highest National Labor Relations Act o Most of support was in the north minorities o Legalized collective bargaining for unions o Pressured large companies to listen to their union workers Initial Result o Wildly popular people felt like Roosevelt was making a change o Democrats won both houses of congress in 1934 and Roosevelt was reelected in 1936 48 out of 50 states o Economic impact was strong Historians credit New Deal policies with stopping the crash However there was a growing national debt Social Reactions o Conspiracy theories were popping up o Rise in socialism and socialist ideas in 1930 s Francis Townsend Townsend Plan Retirement plan Everyone over 60 to get mandatory check every month of 200 had to spend it all before next paycheck Father Coughlin o o o o o o o o New o o o o o Talk show social ideas Rants on radio of big businesses and banks Started as supporter of FDR but then turned on him Huey Long Politician from Louisiana Advocated for more socialist policies Higher tax Taxing income of over 100 million to 100 Share our Wealth every family would have income of 5 000 every month Communist party membership increased Soviet Union was industrializing like crazy