CHAPTER 3- THE ROARING 20S AND THE GREAT DEPRESSION (UNIT 5)
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3A. THE GREAT MIGRATION
The Great Migration was the movement of 6 million African Americans out of the rural American South to the urban Northeast, Midwest, and West Coast. It began around 1916 and would continue for several decades. It was caused primarily by white supremacist violence, poor economic opportunities, and racial segregation in the South, where Jim Crow laws were upheld.
In every U.S. Census prior to 1910, more than 90% of America's Black population lived in the South. By the end of the Great Migration however, that number dropped to just over 50%.
When America entered World War 1 in 1917, there was an immediate need for workers in northern steel mills, railroad companies, meatpacking plants, and factories for war industries.
The pull of jobs in the north was strengthened by the efforts of labor agents sent to recruit southern workers. Northern companies offered special incentives to encourage Black workers to relocate, including free transportation and low-cost housing.
Many African Americans saw this as an opportunity to escape segregation, growing racist ideologies, widespread lynching (nearly 3,500 African Americans were lynched between 1882 and 1968), and lack of social and economic opportunities in the South.
Between 1910 and 1930, the African American population increased by about 40% in Northern states as a result of the migration, mostly in the major cities. The cities of Philadelphia, Detroit, Chicago, Cleveland, Baltimore, and New York City had some of the biggest increases in the early part of the 20th century. Tens of thousands of African Americans were recruited for industrial jobs, such as positions related to the expansion of the Pennsylvania Railroad.
The changes were concentrated in cities, where millions of European immigrants had arrived just earlier. Tensions were often most severe between recent Irish immigrants, who had a low social standing in America, and the incoming Black population. Resentment rose as both groups competed for jobs and scarce housing.
In the late summer and autumn of 1919, racial violence across the country increased to the point of being called the Red Summer. Returning soldiers from World War 1 led to increased competition for jobs at home. At least 26 cities saw and some rural areas saw violent racial riots, predominantly from white mobs.
The race riots peaked in Chicago, where 38 people were killed, more than 500 injured, and over 1,000 Black people left homeless. The violence there began after a Black teenager inadvertently drifted into a "whites only" area of Lake Michigan, was pelted with rocks, and drowned.
The Red Summer enlightened many to the America's growing racial tension. Returning Black soldiers from World War I also hoped to enlighten America's government to the issue, pressing for anti-lynching laws.
Membership in the National Association for the Advancement of Colored People (NAACP) increased quickly and the New Negro Movement called for outspoken advocacy of dignity and a refusal to submit quietly to Jim Crow segregation.
3B. THE PROHIBITION ERA
The Prohibition Era in America began when the 18th Amendment took effect in 1920, banning the production, importation, transportation, and sale of alcohol nationwide. It was the culmination of a decades-long campaign to ban alcoholic beverages known as the temperance movement.
The temperance movement was led by evangelical Christians. They believed alcohol was the root of problems beyond alcoholism, including family violence, unemployment, and political corruption.
Many communities introduced alcohol bans in the late 19th and early 20th centuries, and enforcement of these laws became a topic of debate. Prohibition supporters, called "drys", presented it as a battle for public morals and health.
The movement was taken up by some Progressives and gained a national grassroots base through the Woman's Christian Temperance Union. After 1900, it was coordinated by the Anti-Saloon League.
Opposition from the beer industry mobilized "wet" supporters from wealthy Catholic and German Lutheran communities, but the influence of these groups receded following America's entry into World War 1.
The 18th Amendment was first proposed by Congress in 1917. After passing both the Senate and House of Representatives, it was sent to the states for ratification. This was achieved on January 16, 1919 when Nebraska became the 36th of the 48 states to ratify the amendment. Eventually, 46 states ratified the Amendment (all except Connecticut and Rhode Island).
Under the terms of the 18th Amendment, Prohibition began in January 1920, one year after the amendment was ratified.
The Volstead Act set down rules for enforcing the federal ban and defined the types of alcoholic beverages that were prohibited.
Not all alcohol was banned. For example, religious use of wine was permitted. Private ownership and consumption of alcohol were not made illegal under federal law, but local laws were stricter in many areas, with some states banning possession outright.
After the laws went into effect, many Americans embraced bootlegging (the illegal manufacture and sale of alcohol). In just the first six months of 1920 alone, the federal government opened 7,291 cases for Volstead Act violations.
Secret bars opened across many cities which became known as speakeasies. A password would be required to get in and the owner would often have bribed local police to stay away.
Eventually, criminal gangs gained control of the beer and liquor supply in many cities. By the late 1920s, a new opposition to Prohibition emerged nationwide. Critics attacked the policy as causing crime, lowering local revenues, and imposing "rural" Protestant religious values on "urban" America. When the Great Depression began in 1929, more Americans turned against Prohibition, believing that it hurt the economy.
Prohibition officially ended with the ratification of the 21st Amendment, which repealed the 18th Amendment on December 5, 1933, though prohibition continued in some states. To date, this is the only time in American history in which a constitutional amendment was passed for the purpose of repealing another.
3C. ROARING 20S CULTURE
The Roaring Twenties was a period of economic prosperity and great cultural changes in America, particularly in major cities like Chicago and New York.
New artistic and cultural movements blossomed including new forms of art, movies, and music. African American jazz and blues exploded onto the scene and the flapper redefined the modern look for American women.
In the wake of the patriotism of World War I, President Warren G. Harding promoted a "return to normalcy". However, the spirit of the Roaring Twenties was marked by breaking with tradition and new, modern tastes.
Everything seemed possible with modern technology. This included automobiles, moving pictures, and radio that brought "modernity" to a large part of the population. At the same time, jazz and dancing rose in popularity, in opposition to the mood of World War I. As such, the period often is referred to as the Jazz Age.
Aviation became a business and Charles Lindbergh became an international celebrity after making the first nonstop flight from New York City to Paris in 1927.
Demand for new technology shot upward as many Americans took advantage of new credit cards to purchase items they never could before. The media, funded by the new industry of mass-market advertising driving consumer demand, focused on celebrities, especially sports heroes and movie stars. Cities rooted for their home teams and filled majestic new cinemas and gigantic sports stadiums.
Among the most popular figures of the 20s was baseball's Babe Ruth, who broke every home run record in the sport. He came to transcend baseball and became a national icon, epitomizing the "rags-to-riches" American Dream.
In boxing, it was Jack Dempsey who set financial and attendance records, including the first million-dollar gate. In football, "The Galloping Ghost" Red Grange helped legitimize the new National Football League.
The 1920s brought new styles of music into the mainstream of culture, but it was jazz that became the most exciting form of music. Primarily centered in a Black community of New York known as Harlem, major performers included Louis Armstrong, Duke Ellington, and Jelly Roll Morton.
New dances like the Charleston became the rage to go along with the music. The development of urban and city blues also began in the 1920s with performers such as Bessie Smith and Ma Rainey.
The Roaring Twenties was a period of literary creativity as well. F. Scott Fitzgerald's The Great Gatsby is often described as the ultimate novel of America's Jazz Age.
At the beginning of the decade, movies were silent. In 1927, The Jazz Singer became the first movie with sound. Josephine Baker became the first Black woman to star in a major motion picture that year as well, after starting her career as a dancer during the Harlem Renaissance.
Baker was just one of many women who epitomized the new "flapper" style who danced, drank, smoked and voted. These women cut their hair in bobs, wore make-up, and partied out on the town.
New careers also opened for single women in offices and schools, with salaries that helped them to be more independent. With their desire for freedom and independence, came changes in fashion.
One of the more dramatic post-war changes in fashion was the woman's silhouette; the dress length went from floor length to ankle and knee length.
Flappers would wear these to "speakeasies" - secret bars that sold alcohol illegally. These sprouted up across the country during the prohibition era of 1920-1933.
3D. THE HARLEM RENAISSANCE
The Harlem Renaissance was an intellectual, social, and artistic explosion centered in a majority Black section of Harlem in New York City during the 1920s.
The period is considered to have been a rebirth of the African American arts, with music, literature, and art all seeing significant achievements.
It began following the Great Migration, when millions of African Americans fled the Jim Crow South for cities in the North.
A new way of playing the piano called the Harlem Stride helped to change traditional jazz bands into something more lively and exciting. Its popularity soon spread throughout the country.
Jazz performers and composers at the time such as Jelly Roll Morton and bandleaders like Duke Ellington, Louis Armstrong and Fletcher Henderson were extremely talented, skillful and inspirational.
Duke Ellington in particular gained popularity during the Harlem Renaissance. He wrote more than 1,000 compositions and many of his pieces have become standards.
After moving from Chicago to New York in 1924, Louis Armstrong went on to become the first great jazz soloist with his trumpet and unmistakable gravelly voice.
Thousands of Black and white city dwellers flocked to famous nightclubs like the Cotton Club in Harlem that hosted incredible performers. The improvisational nature of jazz music meant that no two performances were ever the same.
Singers such as Billie Holiday and Bessie Smith pioneered blues and jazz vocals and a new way of manipulating phrasing and tempo. Others like Cab Calloway popularized energetic scat singing in front of big bands.
African American literature also blossomed during the Harlem Renaissance through writers like Langston Hughes, Zora Neale Hurston, Claude McKay, and Countee Cullen.
Langston Hughes is usually identified as the key literary figure of the Harlem Renaissance. He is most famous for his jazz poetry. His first published collection of short stories was The Ways of White Folks, which revealed humorous and tragic interactions between Black and White Americans.
Zora Neale Hurston portrayed racial struggles in the South through her novels like Their Eyes Were Watching God. Claude McKay and Countee Cullen were both prolific poets of the period, with many works focused on theme of race in America.
Visual artists of the Harlem Renaissance included William H. Johnson and Jacob Lawrence. Their works portrayed scenes of everyday life for African Americans. Through often bright and intense colors, their works told stories and brought the African American experience to life on canvas.
Other famous figures of the period included intellectuals like W.E.B. Du Bois and Marcus Garvey.
These and other figures of the Harlem Renaissance transformed African American culture and made it the epicenter of all American culture. The fashion, music, and literature they created defined "cool" in America.
The movement instilled pride in African Americans across the country, along with an awakened social consciousness and commitment to political activism that would influence the civil rights era.
3E. FLAPPERS AND JAZZ
Flappers were the living symbol of the Roaring Twenties. The term describes the generation of young, stylish women in the 1920s. They wore short skirts (at the knee, which was short for that era), bobbed their hair, listened to jazz, and flaunted their disdain for what was considered "acceptable behavior".
Flappers were seen as brash for wearing excessive makeup, drinking alcohol, smoking cigarettes in public, and otherwise flouting social norms. As automobiles became available, flappers gained freedom of movement and privacy.
One cause of the change in young women's behavior was World War I which ended in November 1918. The death of large numbers of young men in the war combined with the 1918 Spanish flu epidemic which killed millions more, inspired in young people a feeling that life is short. Young women wanted to enjoy their lives and freedom rather than stay at home and wait for a man to marry them.
Political changes were another cause of the flapper culture. Women finally won the right to vote in the United States on August 26, 1920. Women wanted to be the social equal of men. They were faced with the difficult realization of the larger goals of feminism: individuality, full political participation, and economic independence.
In addition, many women had more opportunities in the workplace and had even taken traditionally male jobs such as doctors, lawyers, engineers and pilots.
The rise of consumerism promoted the ideals of "fulfilment and freedom", which encouraged women to think independently about their garments, careers, and social activities.
The evolving image of flappers was of independent young women who went by night to jazz clubs such as those in Harlem, which were viewed as scandalous.
Jazz music originated in the African American communities of New Orleans in the late 19th and early 20th centuries.
It gained in popularity during the during the 20's in cities like Chicago and New York.
Similar to flappers, jazz began to get a reputation as being immoral, and some older generations saw it as threatening their cultural values and promoting the new decadent values of the Roaring Twenties.
Ruth Gillettes, a 1920s singer, had a song called "Oh Say! Can I See You Tonight?" which expresses the new behavior of girls in the 1920s.
Prior to this era, it was considered impossible for a woman to call a man to suggest a date. But in the 1920s, many girls seemed to play a leading role in relationships, actively asking boys out or even coming to their homes.
While flappers were often regarded as threatening to conventional society at the time, today flappers are something of a cultural heroine. The flapper stands as one of the enduring images of youth and women in the 20th century.
3F. THE FIRST RED SCARE
While the stereotype of the Roaring 20s is that of freewheeling jazz music and dancing, it was also a period of tension and fear for many Americans.
After World War 1, America experienced a period of widespread fear of communism and anarchism while at the same time seeing a rise in white supremacist terrorism and racial riots.
Concerns over the effects of radicals in America led to the beginning of the first Red Scare in 1919. That summer was called Red Summer by the civil rights activist James Weldon Johnson due to anti-Black riots in more than 30 cities.
The Red Scare had its origins in the hyper-nationalism of World War I as well as the Russian Revolution. In 1917, Vladimir Lenin led the Bolshevik Revolution in Russia. Communism had existed since the writings of Karl Marx 70 years earlier.
However, Russia's saw the world's first successful communist revolution. Bolsheviks murdered Russia's czar and his family and completely reorganized the country into the new Soviet Union.
American authorities saw the threat of a communist revolution in the actions of organized labor, including major strikes in Seattle, Boston, and other cities in 1919. Also contributing to fears were 36 mail bombs sent by an anarchist group to prominent politicians and businessmen.
Attorney General A. Mitchell Palmer, whose house was bombed, responded with the Palmer Raids. These raids rounded up and deported many suspected radicals. They targeted Italian and Eastern European immigrants along with union organizers and labor leaders.
Palmer appointed a young Justice Department staffer named J. Edgar Hoover to lead his General Intelligence Division that investigated supposed radical groups. This would go on to become the FBI and Hoover served as FBI director from 1924 to 1972.
The Palmer Raids were conducted in November 1919 and January 1920 and were popular at first. However, they eventually faced a backlash for the exaggerated rhetoric, illegal searches and seizures, and unwarranted arrests and detentions.
In 1921, two Italian immigrants - Nicola Sacco and Bartolomeo Vanzetti - became the face of the Red Scare.
The two were arrested for murder after an armed robbery in Braintree, Massachusetts. Despite the authorities having little evidence, Sacco and Vanzetti were convicted and sentenced to death.
Both men maintained their innocence and protests were held across the country on their behalf. The men were known anarchists and many felt they were stereotyped for their beliefs and background.
Appeals followed, showing conflicting evidence and another men confessed to the crime in 1925. Still, all appeals were denied and Sacco and Vanzetti were executed in the electric chair in 1927.
The first Red Scare faded after J. Edgar Hoover told the nation to prepare for a mass uprising on May Day but it passed without incident.
Racial Violence and Red Summer
Around the same time, white supremacist terrorism and racial riots took place in more than 30 cities across the United States, as well as in one rural county in Arkansas.
Around the same time, white supremacist terrorism and racial riots took place in more than 30 cities across the United States, as well as in one rural county in Arkansas.
In most instances, attacks consisted of white-on-Black violence. However, numerous African Americans also fought back, notably in the Chicago and Washington, D.C. race riots, which resulted in 38 and 15 deaths, along with even more injuries, and extensive property damage in Chicago.
Still, the highest number of fatalities occurred in the rural area around Elaine, Arkansas, where an estimated 100-240 Black people and five white people were killed—an event now known as the Elaine Massacre.
The anti-Black riots developed from post-World War I social tensions. Black and white soldiers returned to the country and often competed for work and housing. Returning Black veterans also expected to be treated with respect for serving their country, only to be disappointed when whites saw them as second-class citizens.
The labor unrest also contributed to the violence as Black men were recruited by factory leaders as strikebreakers, further garnering the resentment of white workers.
The Washington DC riot began after rumors spread that a Black man had assaulted a white woman. In Chicago, it was after a Black teenager was killed for drifting in the water from the Black section of the beach over to the whites-only beach.
Baltimore, Philadelphia, Norfolk, and many other cities saw similar incidents break out into multi-day riots. Often, Black populations fought back in ways that they never had before.
Countless African Americans were lynched, lost their homes, or suffered in the Red Summer of 1919. However, after standing up to white supremacy, a shared sense of purpose developed that laid the foundation for the later civil rights movement.
3G. THE SCOPES TRIAL AND TEACHING EVOLUTION
The Scopes Trial, also known as the "Monkey Trial", was a massively-followed legal case in July 1925 that became known as the "Trial of the Century".
The case involved a high school teacher, John T. Scopes, accused of violating Tennessee's Butler Act, which had made it unlawful to teach human evolution in any state-funded school. The trial was deliberately staged in order to attract publicity to the small town of Dayton, Tennessee, where it was held.
The famed scientist Charles Darwin described his theory on humans and evolution in his 1859 book On the Origin of Species. Slowly over the next 70 years, America's Christian churches debated whether to accept the findings of science or continue to follow the teachings of their scripture.
In the Roaring '20s, many in Americans found that they could reconcile Darwin's theory with the Bible. However, many Southern and rural preachers preferred a stricter interpretation of the Bible and did not want Darwin's ideas taught in their schools.
After Tennessee prohibited the teaching of Darwin's theories on evolution with the Butler Act, other Southern states followed suit.
However, Tennessee also required teachers to use an assigned textbook that included a chapter on evolution.
The American Civil Liberties Union (ACLU) offered to defend anyone accused of teaching evolution in defiance of the Butler Act. They argued that teachers were essentially required to break the law.
In April 1925, a group of Dayton businessmen met with the superintendent of schools and convinced him that the controversy of such a trial would give Dayton much needed publicity.
They summoned 24-year-old Mr. Scopes, a local science and math teacher and asked him to admit to teaching the theory of evolution. Scopes was unsure whether he had ever actually taught evolution, but he incriminated himself purposely so the case could have a defendant.
The ACLU hired the famous lawyer Clarence Darrow to defend Scopes, while William Jennings Bryan, three-time presidential candidate and former secretary of state, volunteered to argue for the prosecution. The "Great Commoner" was the perfect representative of the rural values he dedicated his life to defend.
The trial served its purpose of drawing intense national publicity, as national reporters flocked to Dayton to cover the big-name lawyers who had agreed to represent each side.
Entrepreneurs sold food, souvenirs, Bibles, and stuffed monkeys to the massive crowds that gathered outside the courthouse each day. The trial became the first ever to be broadcast on radio.
In the most famous episode of the case, Bryan took the stand to support the Bible, while Darrow questioned him on whether everything in it is factual.
The trial publicized the Fundamentalist–Modernist controversy, which set Modernists, who said evolution was not inconsistent with religion, against Fundamentalists, who said the Word of God as revealed in the Bible took priority over all human knowledge. The case was thus seen both as a theological contest and as a trial on whether modern science should be taught in schools.
Clearly, Scopes had purposefully violated the law by teaching evolution. He was found guilty and fined $100 (equivalent to $1,500 today), but the verdict was overturned on a technicality.
However, the battle that played out before the nation proved a victory for supporters of evolutionary theory and was representative of the cultural changes taking place during the 1920's.
3H. BLACK TUESDAY AND THE STOCK CRASH
The Wall Street Crash of 1929 occurred in late October of that year. Shares of stock dropped sharply in value and billions of dollars were lost. The crash was most devastating on two days: October 24th, which became known as Black Thursday, and October 29th, called Black Tuesday. The event marked the beginning of the Great Depression, a worldwide decade-long economic depression. It would take 25 years for the market to regain the value lost.
The crash had three main causes: buying on margin, overproduction of goods, and laissez-faire government policies.
A month before the crash, the stock market was booming due to strong demand for American goods overseas after World War I. The market peaked when the Dow Jones Industrial Average, an index used as a benchmark to track market performance, hit 381.
People were overconfident that the market would continue to grow, leading many people to “buy on margin.” Buying on margin means purchasing shares with mostly borrowed money. People were overconfident about the market and felt comfortable taking on loans and banks felt comfortable issuing them.
There was also overproduction of goods in manufacturing and agricultural industries. Because factories produced more goods than there was demand for, there was an oversupply, which led to lower prices. Many companies suffered losses due to this, which led to their share prices plummeting.
In the background of all of this was the government’s laissez-faire economic philosophy by Republican presidents. According to the laissez-faire economic philosophy, the government should not interfere in the market, because the market can correct itself and government regulation will only restrain economic growth.
Under the Republican administrations of Warren Harding, Calvin Coolidge, and Herbert Hoover, there was very little regulation of financial institutions and corporations. Combined with low taxes and decreased federal spending, these policies led to a severe wealth gap in American society. The government was not well-equipped to prevent and react to the crash. It wasn’t until after the Great Depression had begun that President Hoover attempted to intervene in the market, which was ultimately too late.
The Dow Jones average that was at 381 before the crash bottomed out at 41 in July 1932.
The Wall Street Crash of 1929 was not caused by one single factor, but this combination of causes. The crash led to a collective panic from the American people. As some banks closed due to their losses, many Americans rushed to withdraw all their savings. Banks had invested this money and didn't have enough available for the people to withdraw. This led to an economic spiral as thousands of banks failed and billions of dollars were lost.
3I. THE DUST BOWL
The Dust Bowl refers to a period of severe drought and dust storms that struck the Midwest and Central Plains regions from the summer of 1931 to the fall of 1939.
The Great Depression had already begun and the Dust Bowl made the harsh economic downturn even more devastating for many.
This environmental disaster affected 19 states, but the effects were most severe in Colorado, Kansas, New Mexico, Texas, and Oklahoma.
Many farmers, some inexperienced, lived in this area, in large part because of Congress’s passage of the Homestead Act in 1862, which had granted land to settlers to farm. After World War I, millions of acres in the Great Plains had been used for growing wheat.
In the 1930s, a combination of multiple factors – the overuse of the land for growing wheat and grazing livestock, poor land management practices, and severe waves of drought that lasted for years – leading to the Dust Bowl.
Heavy winds eroded the topsoil of the region, resulting in large dark blizzards of sand, dirt, and dust that blocked out the sun. This covered everything in feet of dust and sometimes blew dust all the way to the East Coast.
The large amounts of dust in the air also killed livestock and caused children to develop pneumonia. Combined with the lack of rain, farmers weren’t able to grow much on their farms.
Additionally, the Great Depression was suppressing prices for agricultural goods. Banks began foreclosing on farmers and auctioning off their farms and farming equipment.
In 1932, President Herbert Hoover sent emergency aid to the affected areas. In 1935, President Franklin D. Roosevelt set up drought relief programs, such as the Prairie States Forestry Project which employed local farmers to grow trees as a way to block some of the wind erosion.
Unable to farm in these conditions, approximately 2.5 million people, known pejoratively as “Okies,” migrated away from regions affected by the Dust Bowl, with most of them trekking to California.
By 1941, many of the affected areas were getting normal levels of rainfall. More importantly, the US learned many lessons about agricultural practices that made it ready for the next drought.
3J. RELIEF, RECOVERY, AND REFORM
President Franklin D. Roosevelt took office in 1933, in the midst of the Great Depression. As he promised in his campaign, Roosevelt quickly acted to provide aid to those in need and to help the economy.
FDR, as he was known, was elected for his campaign promise of a New Deal. This platform featured a range of federal programs to help provide the "Three Rs" – relief, recovery, and reform.
Much of FDR's New Deal legislation was enacted in the first three months of his presidency, also known as the Hundred Days.
"Relief" referred to immediate economic help for the people hurt by the Great Depression, namely the poor and unemployed.
FDR was quick to provide needed relief. Two days after he took office, Roosevelt declared a Bank Holiday, which suspended all banking activity for four days. Americans had been anxiously withdrawing their bank deposits and depleting many banks of all their cash.
During these four days, Congress passed the Emergency Banking Act, which worked to stabilize the banking system and insured bank deposits.
To alleviate high unemployment, two temporary job creation programs were created called the Civil Conservation Corp (CCC) and the Civil Works Administration (CWA). These provided a welcome solution for the many Americans desperate to find work.
In addition, the Federal Emergency Relief Act (FERA) provided grants to state agencies that, in turn, provided economic assistance to the people in those states.
“Recovery” referred to restoring the economy back to what it was by creating new jobs and spending federal money to revive the economy.
To stimulate the economy, FDR created temporary programs like the Agricultural Adjustment Act (AAA), which increased agricultural prices by controlling the amount of supply, and the National Industrial Recovery Act (NIRA), which controlled wages and prices.
The creation of the Home Owners Loan Corporation (HOLC) transformed the way mortgage loans were carried out and helped homeowners who were having trouble paying back their mortgage loans during the Great Depression.
Other recovery agencies and legislation included the Works Progress Administration (WPA), and the National Youth Administration (NYA), the Federal Housing Act (FHA).
The last "R", for "Reform" referred to implementing new regulations and permanent programs into the financial system to avoid another economic depression in the future.
This included the Securities Exchange Act, which created the Securities and Exchange Commission (SEC) to regulate the stock market. The Social Security Administration (SSA) provided and continues to provide economic assistance to the elderly and other more vulnerable populations. Today, social security is one of the most popular programs the government has ever created.
As a way to protect workers and enhance workers’ welfare, the National Labor Relations Board (NLRB) was created to guarantee the right of workers to enter into unions and engage in collective bargaining. Prior to this, employers could condition someone’s employment on a promise to not join a trade union.
Another major reform was the Federal Deposit Insurance Corporation (FDIC) that insures bank deposits up to $250,000. Today, if your bank went out of business, your money is insured by the government and you can get it back thanks to this New Deal program.
3K. THE NEW DEALS ALPHABET SOUP
Franklin D. Roosevelt's New Deal platform created an incredible number of federal agencies to carry out new policies and regulations.
Almost all of these agencies had an acronym like the CCC, TVA, or HOLC. Therefore, they came to be known as FDR's "Alphabet Soup Agencies" or just "Alphabet Agencies."
Here are some of the more well-known New Deal Alphabet Agencies:
Civil Conservation Corps (CCC)
The CCC was established on April 5, 1933, as a way to alleviate America's rising unemployment while also promoting environmental goals.
Unemployed, unmarried men from ages 18-25 were offered employment on environmental projects, such as fighting forest fires or planting trees.
The CCC was considered to be successful -- employing 3 million men over the lifetime of the program.
Tennessee Valley Authority (TVA)
The TVA was signed into law in May 1933. In 1916, work had begun on a hydroelectric dam, called the Wilson Dam, in Muscle Shoals, Alabama, a small town south of the Tennessee River. The dam was never finished.
The TVA was created to finish the project and also enhance the development of irrigation and energy production in the area. Today, the TVA continues to provide electricity to 10 million people in the southeastern region of the US.
Works Progress Administration (WPA)
The WPA was created by FDR’s executive order in 1935, when the unemployment rate had reached 20%. The WPA provided building and infrastructure jobs to unemployed and unskilled men. The program was successful in massively improving America's infrastructure. By the time the program ended in 1943, the WPA had overseen the building of 130 new hospitals, more than 4,000 schools, and 29,000 bridges.
Agricultural Adjustment Act (AAA)
The AAA was signed in May 1933 in direct response to the overproduction of agricultural goods. The Act subsidized farmers who cut their production of goods, which alleviated the agricultural surplus and led to higher prices. This provided relief for farmers, many of whom were also suffering from the effects of the Dust Bowl.
Social Security Administration (SSA)
FDR signed the Social Security Act in August 1935. The program was inspired by European models, in which people paid for their own future economic security by contributing a portion of their income.
The Act provided economic assistance to retirees, who were especially vulnerable during the Depression. In addition, the Act also created unemployment insurance, health insurance, and economic assistance for widows with children and the disabled.
Social Security remains popular today.
Federal Deposit Insurance Corporation (FDIC)
The FDIC was established by the Banking Act of 1933, which regulated both investment and commercial banks. When the stock market crashed in 1929, people panicked and began pulling their money from banks. Because many banks had invested money in the stock market, many banks ran out of money and went bankrupt.
In addition to providing oversight for banks, the FDIC insures bank deposits. Initially, the FDIC insured deposits of up to $2,500, and today, it insures up to $250,000 per person.
The FDIC is considered very successful in increasing people’s confidence about their deposits in banks.
Home Owners Loan Corp (HOLC)
In 1933, Congress passed the Homeowners Loan Act, which created the HOLC, transforming the way mortgages worked. The goal of the agency was to refinance home mortgages that were in default (meaning when a loan is not being paid back) or at risk of foreclosure (meaning when a bank sells the mortgaged property to recover the loan amount).
Before the HOLC, mortgage loans had terms that were only 5 to 10 years, meaning homeowners had to come up with a lot of money in a short period of time.
The HOLC offered refinancing for these strict loans and in turn, offered up to 25 years for repayment. These changes, among many others, contributed to the rise in homeownership in America.
3L. FDR'S FIRESIDE CHATS
When Franklin D. Roosevelt took office as America's new president in 1933, he wanted to connect with Americans who were suffering through the Great Depression.
FDR, as he was known, decided to use the relatively new medium of radio to address the nation. Radio broadcasting in America had begun in the 1920s and by the time FDR took office, most homes had a radio.
From 1933 - 1944, FDR regularly addressed the nation over the radio on various topics. These conversations were known as “fireside chats” because they were comforting and fairly casual.
For many Americans, it felt like FDR was sitting by the fire in their living room and chatting with them one-on-one.
FDR’s first fireside chat was on March 12, 1933, just a week after he was inaugurated. Throughout the first few years of his administration, he assured the American people that he was putting in place proper measures to combat the Great Depression.
He spoke about his New Deal and its programs designed to help provide employment and economic relief.
On April 28, 1935, FDR announced new policies that would be part of the Second New Deal, such as the Social Security Act and more work relief programs.
FDR explained that Social Security would help the elderly, who were struggling more during the Great Depression, and also provide unemployment insurance to help cushion the shock of unemployment.
As much of the administration’s focus started to move from the Great Depression to the start of World War 2, so did the focus of the fireside chats.
On September 3, 1939, when World War 2 was just beginning, FDR assured the American people that the US would try to remain neutral and stay out of the war. FDR also assured everyone that information would not be withheld and that the American people were “the best informed people in all the world.”
When the Japanese attacked Pearl Harbor on December 7, 1941, FDR addressed the nation in a fireside chat that night, informing everyone that America was officially joining World War 2 to fight for peace and liberty.
On October 12, 1942, FDR updated the American people about the war and also urged all people, including women and even high school students, to join the workforce to ramp up production for war materials.
FDR went on to broadcast a total of 31 fireside chats. It was the first time in history that the majority of people in a nation could listen directly their leader.
They made the American people feel like the president was talking directly to them. Though the topics were serious, many people felt comforted by FDR’s casual and conversational tone.
They helped inform people about what the federal government was planning and are often credited with helping keep Roosevelt's popularity high.
You can listen to his first fireside chat here:
3M. UNEMPLOYMENT DURING THE GREAT DEPRESSION
The Great Depression was the worst economic period in history. In the United States, unemployment rose to 25% at its highest level during the Great Depression. Literally, a quarter of the country's workforce was jobless.
This number translated to 15 million unemployed Americans in 1933. As the Depression spread across the globe, some countries saw unemployment as high as 33%.
There are several reasons why unemployment rose so high during this period.
First, people who had money invested in the stock market lost much of their savings during the Wall Street Crash of 1929. This caused them to spend less, which created lower demand for goods and services.
With businesses seeing a fall in spending, they cut back on output and employed fewer workers. This was particularly noticeable for luxury goods like motor cars.
The next major reason for unemployment also began with the stock market crash. When shares fell, many investors and ordinary people lost significant sums and went bankrupt.
Banks started to see loan defaults where people could not afford to pay their mortgages. There were concerns banks were running out of money. This led to well-publicized "bank runs" where lines of people sought to withdraw their savings before their bank closed. Many banks went bankrupt leading to people losing their entire savings. This led to a fall in the money supply and deflation (falling prices).
Another major reason for unemployment came from an agricultural recession. Less demand for goods led to lower prices and farming often became uneconomical. Dust storms in the Midwest also devastated farms. Many jobs were lost in rural areas, leading to a large migrant workforce seeking employment in new places, especially California.
The next reason for unemployment was a trade war. In response to worsening economies, countries began raising tariffs to protect their own industries. In 1930, the US passed the Hawley-Smoot Tariff, which placed tariffs on 20,000 imported goods. However, this led to retaliation as other countries placed tariffs on American exports. This led to a further decline in trade and new job losses, worsening the Depression worldwide.
Finally, poor government policies worsened unemployment. In 1930, the US Federal Reserve temporarily raised interest rates to try and protect the value of the dollar and the gold standard.
This was a counter-intuitive policy, but highlights a problem of the gold standard and trying to protect value of the currency – rather than provide monetary stimulus. If the government had instead lowered interest rates, it would have encouraged spending and helped promote the economy.