1920’s in Review

• A Cultural Battlefield- a decade of great social change and deep social conflict. Roots of modernism established and urban culture shaping the American way of life.

• (evolution, creation, immigration, race, nativism, communism, alcohol, gender, morality…)

• Evident in rise of a consumer orientated society, mass entertainment, revolution in morals, manners, dress and a defined youth culture

• Problems: false sense of security and prosperity

The Triumph of Herbert Hoover, 1928

• In 1928, Calvin Coolidge said, “I do not choose to run,” and his logical successor immediately became economics genius Herbert Hoover.

• Hoover was opposed by New York governor Alfred E. Smith, a man who was blanketed by scandal (he drank during the Prohibitionist era and was a Roman Catholic).

• Radio turned out to be an important factor in the campaign, and Hoover’s personality sparkled on this new medium (compared to Smith, who sounded prepared and boyish).

“A Chicken in every pot” Campaign Slogan

The Great Crash Ends the Golden Twenties

• Hoover confidently predicted an end to poverty very soon, but on October 29, 1929, a devastating crash caused by overspeculation and overly high stock prices struck the nation.

• Recap: causes of the Great Depression

Rugged Times for Rugged Individualists

• Response: Hoover did not believe in government tampering of the economic machine, and he felt that depressions like this were simply parts of the natural economic process. He called upon voluntary action from the community instead of government intervention

• Economic philosophy: free market capitalism (laissez-faire video)

• Public perception placed the brunt of the blame for the Great Depression on Hoover and his administration for failing to act swiftly to the crisis, but he did pass measures that made the depression less severe than it could have been.

• Critics noted that he could feed millions in Belgium (after World War I) but not millions at home in America.

• However, by the end of his term, he had started to take steps for the government to help the people

Herbert Hoover: Pioneer for the New Deal

• Hoover wouldn't involve himself in any programs of direct gov'tal aid to individuals -didn't want to erode Americans sense of "RUGGED INDIVIDUALISM

• Eventually Hoover voted to withdraw $2.25 billion to start projects to alleviate the suffering of the depression.

• The Hoover Dam of the Colorado River was one such project.

• The Muscle Shoals Bill, which was designed to dam the Tennessee River and was ultimately embraced by the Tennessee Valley Authority, was vetoed by Hoover.

• Early in 1932, Congress, responding to Hoover’s appeal, established the Reconstruction Finance Corporation, which became a government lending bank.

• However, giant corporations were the ones that benefited most from this, and the RFC was another one of the targets of Hoover’s critics.

Herbert Hoover: Pioneer for the New Deal

• In 1932, Congress passed the Norris-La Guardia Anti-Injection Act, which outlawed anti-union contracts and forbade the federal courts to issue injunctions to restrain strikes, boycotts, and peaceful picketing.

• Remember that in past depressions, the American public was often forced to “sweat it out,” not wait for government help.

Routing the Bonus Army in Washington

• Many veterans which had not been paid their compensation marched to Washington, D.C. to demand their entire bonus/

• The “Bonus Expeditionary Force” erected unsanitary camps and shacks in vacant lots, creating health hazards and annoyance.

• Riots followed after troops came in to intervene (after Congress tried to pass a bonus bill but failed), and many people died.

• Hoover falsely charged that the force was led by riffraff and reds, and the American opinion turned even more against him.

Reflect

• 1. How did Hoover respond to the Great Depression? His philosophical point-of-view.

• 2. What happened in the conflict with the Bonus Army?

• 3. What work projects are attributed to Hoover?

FDR and the Election of 1932

• FDR’s Rise-• Physical challenges

w/ polio• Political career as

NY legislator & governor

• Charismatic but unfaithful to his wife

• Campaign-• Sponsored heavy

state spending to relieve suffering-Keynesian Economics

• Pledged a “New Deal” to the people

• 1 out of four unemployed

• Landslide victory

VISUAL: New Deal Legislation

THE NEW DEAL• it was a revolution in American

society - changed completely the way the gov't functions

• the first phase of the New Deal dealt exclusively w/ eco. reform - unlike Hoover, FDR believed gov't legislation/involvement was crucial to stimulate the economy –FAMOUS FIRST 100 DAYS

• step 1 - dealt w/ the banking crisis - BANKING HOLIDAY- banks shut down and subject to gov't inspection, allowed to open when "healthy"- people's confidence returned they redeposited, allowing banks to invest in the economy

• step 2 - stock market reform- Security Exchange Commission est. to police the NYSE (first chmn. was Joseph P. Kennedy)- practice of buying on margin was regulated

• step 3 - to put more $ in circulation, FDR went off the GOLD STANDARD (gov't could print more $ than Fort Knox gold reserves would allow)- w/ more $ in circulation, wages and prices increased(= inflation), causing dollar value to lower- gave gov't spending power to stimulate the economy (Keynesian economics)

SPECIFIC PIECES OF LEGISLATION (direct gov't intervention in the eco.)(called "Alphabet Soup")

• NATIONAL INDUSTRIAL RECOVERY ACT (NIRA) and NATIONAL RECOVERY ADMIN (NRA) were established to end animosity b/n labour and business all was redirected to industrial growth fair labour codes established - wages, no child labour, shortened work hours- business people challenged the NRA, claiming it was communist

• they formed the LIBERTY LEAGUE - at LL's urging, the Supreme Ct. overturned the NIRA & NRA, claiming that fed. gov't was exceeding its authority (by interfering in state jurisdiction)

• AGRUCULTURAL ADJUSTMENT ACT (AAA) - passed in 1933 to aid farmers- its objective was to restore farmers' purchasing power and to restore the family farm - AAA had farmers cut back on crop production by paying them equivalent SUBSIDIES (paid not to produce) - bad side:

• 1) food production down when millions were starving

• 2) Black sharecroppers were hurt: white landowners paid not to farm so they got rid of Black tenant formers

• in 1935, AAA was declared unconstitutional by courts (too much control over individual states), so it was revised and introduced as new legislation

• EX: Food Stamp Act of 1939 - gave away surplus food to poor, also guaranteed (small) farmers a market

• UNEMPLOYMENT - still a major problem

• FDR like Hoover was wary of gov't handouts - he wanted people to earn their keep so gov't agencies were created - temporarily - to address the unemp. Problem thru work programs.

• CIVILIAN CONSERVATION CORPS (CCC) - in 1933 - set to establish work for young men (18-25) in areas of reforestation, soil conservation, flood control, road construction - also took them out of urban labor markets - but Blacks not permitted to enroll

• other agencies had specific mandates too...NATIONAL YOUTH ADMIN. (NYA) - created jobs for young in urban areas so they could keep going to school.

• FED. EMERGENCY RELIEF ACT (FERA) - aimed at older workers- these and other similar agencies worked well, but unemp. was still at 6 million in 1941(solution for this would be the industrial boom of WW2)

• NEW DEAL - SOCIAL REFORM ASPECT- after 1935, w/ immediate economic relief & reform addressed, New Deal turned to Social Welfare - more legislation...

• National Labor Relations Act (aka Wagner Act)- it legitimized unions and labor tactics such as collective bargaining & collective action (strikes, etc...) - it outlawed BLACKLISTS & other anti-union practices

• Social Security Act (1935)- feared by opponents as "creeping socialism"- this act typifies the WELFARE STATE - unemployment insurance, old age pensions

• Problem: it took some $ out of circulation (payroll deductions) at a time when purchasing power was already low- also, it only covered the unemployed

• ELECTION OF 1936 - FDR won easily (v Repub. Alf Landon - Kansas governor)

• this victory gave FDR a mandate to continue his New Deal policies

• first objective: to reorganize the Supreme Court - they disallowed some New Deal legislation

• FDR wants # of judges changed from 9 15 (to "pack the court") - great opposition, so FDR w/drew this proposal

• but judges retired & FDR got to appoint new ones they approved all New Deal legislation

• the late 1930's – new Qs arose…• FDR concerned w/ int'l issues• in 1939 he proposed no new

major domestic reform measures (1st time in his pres.)

• ELECTION OF 1940 - FDR broke with tradition & ran a 3rd time

• FDR v. Wendell Wilkie - the big issue here was American support of the Allies (G.B.), now embroiled in WWII v. Nazi Ger.

• both U.S. pol. parties wanted to support G.B. but to remain neutral - in fact a CONSENSUS had developed b/n the Dems. and Repubs.

• both parties approved of (most) New Deal legislation & wanted an isolationist foreign policy- FDR won in 1940 (and again in 1944)

IMPACT OF THE NEW DEAL

• a 3rd revolution in American culture and politics- more gov't involvement but w/in the context of traditional U.S. democracy

• New Deal helped in addressing the U.S. economy and fears, but only WWII would solve lingering problems unemployed found jobs in munitions factories and the military as the U.S. became the ARSENAL OF DEMOCRACY

• New Deal saw expansion of U.S. gov't in :1) eco. - gov't intervention/deficit spending 2) social reform - welfare state - after this

pt the U.S. gov't was expected to play a role in any economic crisis

• so FDR fundamentally reformed American society and led to the largest expansion of government power up to that point

Critics of the New Deal

• From the Left

• Huey Long- New Deal not a radical redistribution of wealth, proposed economic plan called “Share the Wealth” no more than a million no less than $4,000

• Francis Townsend- proposed instead a guaranteed income plan for seniors, co-opted with the Social Security Act

• Recent historian Howard Zinn- a radical left historian believed the New Deal was to preserve capitalism and did not go far enough in the redistribution of wealth

• From the Right

• Robert Taft- denounced the New Deal as socialism, harmed American business and gave ever increasing power to gov’t

• William Randolph Hearst- once supported FDR, broke away over FDR’s proposal to greatly increase taxes for the wealthy, close loopholes

• Later, Barry Goldwater-opposed expansion of gov’t welfare programs modeled after the New Deal