The Great DepressionOctober 1929 – stock market crashContinued for the next 4 yearsStock market stopped growing in summer 1929Many great political debates are traced back to the 1930’sWorst depression in American historyDust BowlMost of the central US, all the farmlandSparked by a droughtHouses and farmland would be buried in dustShips in atlantic as far as 300 miles off shore would report having mud showersCausesOverproduction – too much food in production and the prices of crops were plummeting. Buying on credit/selling people goods before they could afford them.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.Low Regulation – 30% of market was bought on margin. As soon as stock market started falling it bankrupt individuals and companiesBanking 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?Economic indicatorsStock market lost 40% of it’s valueStock prices, unemployment (25% in 1920’s compared to 10% in the 2008 crash)Production was cut in half, banks closing by the thousandsSocial indicatorsMarriage rates dropped by 30% (couldn’t afford to get married and support a family) and birth rates dropped, US population stagnatedCrime rates in the US. National murder rate tripled. Bank robberies.Responses to the Great Depression: Herbert HooverHoover took the blame for the depressionwon the election in 1928Stanford UniversitySuccessful series of jobs as mechanical engineerWas in Europe when WWI broke out, helped organize the removal of American citizensBonus MarchersGroup of WWI veteransHandling of bonus marchers was one of the worst moves by HooverLaw was going to give veterans a pay bonusA clause was passed that postponed this paymentBonus marchers came downtown and demanded their payment nowHoover called in current army to disperse them and kicked the veterans out of DC.Hoovers policiesLimited in scope and not real extremeIdea of “voluntary cooperation”Encouraged different leaders of banks, businesses, farmers to work together and help each otherNational Credit CorporationReconstruction Finance CorporationGive money to large institutions and be able to create jobs and the money would “trickle down” to consumers and average people“Self Liquidating” venturesSummary: too little, too lateNot enough to stop the crash of the economyGrowing government roleHooverites – towns of poor people1932 election – FDR beat HooverFDR and the New DealFDR had a lot of mistressesThe press stayed out of the President’s business and didn’t give them a bad wrapGot polio and the press never videoed or photographed him of his weakness during his illnessIn order for democrat to win he had to win the southern vote and the vote of urban workers, unionists.Democratic CoalitionDeep south, rural whites, blue collar workers, unionists, African AmericansA solid base for the democratic partyAlphabet SoupTendency for three letter acronymsRelief and RecoveryFERA (Federal Emergency Relief Administration)Soup kitchensNRA (National Recovery Administration)Reduce competition among AmericansEstablished price fixingRecognized the rights of trade unions, brought businesses and trade unions together and helped raise pay for workersPWA (Public Works Administration)Work projects to be deemed to public interestPut people back to work and increase money back into circulationCCC (Civilian Conservation Core)Trails, state parks, forest serviceThe largestEarned $30 a month but $25 would go back to their familyAAA (Agricultural Adjustment Association)Overproduction on farmsPaid farmers not to farm, to decrease production and increase pricesFarm and Homeowner Mortgage ActsGave aid to farmers and homeowners to help pay for mortgageGlass Steagal Act and FDICCombated people from pulling their money out of banksCreated insurance for people that invest their money in a bankSECSecurity and Exchange Commission to regulate the stock marketWhat percentage of banks could be bought on marginTVATennessee Valley AuthorityRegional project that built hydro damsMany people in backwoods got electricityRise of hunting and fishing lodgesAlso pushed congress to suspend prohibition and got the 21st amendment passedRoosevelt was overall very popularUse of the radio allowed FDR to reach people in their homesVast majority of Americans had never heard the voice of or seen their presidentNew Deal Cont’d:Fireside chatsSocial SecurityCrop InsuranceFarmers could by insurance against their crops incase of drought, or pests eating their cropsWPARiver walk, San Jacinto monument, Easterwood airportWorks progress administrationMission was to build things for the public good and put people back to workFair Labor Standards ActPut more restrictions on child laborInstituted a federal minimum wage for the first timeMandated overtime paySet a working week of 44 hours, anything over got paid 1.5%Taxation rose: 63% was the highestNational Labor Relations ActMost of support was in the north, minoritiesLegalized collective bargaining for unionsPressured large companies to listen to their union workersInitial ResultWildly popular, people felt like Roosevelt was making a changeDemocrats won both houses of congress in 1934 and Roosevelt was reelected in 1936 (48 out of 50 states)Economic impact was strongHistorians credit New Deal policies with stopping the crashHowever, there was a growing national debtSocial ReactionsConspiracy theories were popping upRise in socialism and socialist ideas in 1930’sFrancis TownsendTownsend Plan: Retirement plan. Everyone over 60 to get mandatory check every month of $200, had to spend it all before next paycheck.Father CoughlinTalk show, social ideas. Rants on radio of big businesses and banks. Started as supporter of FDR but then turned on him.Huey LongPolitician 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 increasedSoviet Union was industrializing like crazy1930’s was the high point of Soviet Union popularityConservative BacklashHoover and conservatives were saying FDR