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Effect of the Great Depression on Minorities and Children 

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Effect of the Great Depression on Minorities and Children 

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Roosevelt historian David Woolner shines a light on today's issues with lessons from the past.
As we celebrate Black History Month and reflect on the decades of struggle that was required to bring the African American community into the mainstream of American life, it seems fair to ask what impact, if any, the New Deal had on the movement to secure equal rights for Blacks during the difficult years of the 1930s and beyond.

Judged from the standards of today, of course, there is much we can criticize about the New Deal/Roosevelt era. It did not bring to an end the tremendous injustices that African Americans had to suffer on a day-to-day basis, and some of its activities, such as the work of the Federal Housing Administration, served to build rather than break down the walls of segregation that separated black from white in Jim Crow America. Yet as Mary McLeod Bethune once noted, the Roosevelt era represented "the first time in their history" that African Americans felt that they could communicate their grievances to their government with the "expectancy of sympathetic understanding and interpretation." Indeed, it was during the New Deal, that the silent, invisible hand of racism was fully exposed as a national issue; as a problem that at the very least needed to be recognized; as something the county could no longer pretend did not exist.

This shift in attitude, as Havard Sitkoff, the noted historian of the African American experience in the New Deal observes, helped propel the issue of race relations onto the national stage and usher in a new political climate in which "Afro-Americans and their allies could begin to struggle with some expectation of success." In short, the New Deal, and the rhetorical support given to the cause of civil rights by both Franklin and Eleanor Roosevelt gave the African American community hope; the chance to dream of a better future, no matter how difficult the struggle might be along the way.

It is also important to recognize that this hope was not merely based on empty promises of change, but on the actual words and deeds spoken by Franklin and Eleanor Roosevelt and taken by the federal government at a time when racism was deeply seared into the American psyche. With respect to the critical issue of employment, for example, we know that by 1935, the Works Progress Administration (WPA) was employing approximately 350,000 African Americans annually, about 15% of its total workforce. In the Civilian Conservation Corps, the percentage of blacks who took part climbed from roughly 3% at its outset in 1933 to over 11% by the close of 1938 with a total of more than 350,000 having been enrolled in the CCC by the time the program was shut down in 1942. The National Youth Administration, under the direction of Aubrey Williams, hired more black administrators than any other New deal agency; employed African American supervisors to oversee the work the agency was doing on behalf of black youth for each state in the south; and assisted more than 300,000 Africa American youth during the Depression. In 1934, the Public Works Administration (PWA) inserted a clause in all government construction contracts that established a quota for the hiring of black laborers based on the 1930 labor census and as a consequence a significant number of blacks received skilled employment on PWA projects.

African Americans also benefited from the Federal Music Project, which funded performances of black composers; from the Federal Theatre and Writing Projects, which hired and featured the work of hundreds of African American artists; and from the New Deal's educational programs, which taught over 1 million illiterate blacks to read and write and which increased the number of African American children attending primary school.

As the leader of a political party that was heavily represented in Congress by racist Southern Democrats who supported segregation and even opposed the adoption of a federal anti-lynching law as an infringement of state's rights, FDR had to choose his battles carefully and at times appears timorous in the face of racial injustice-especially when viewed from today. But this is the President who appointed a far greater number of blacks to positions of responsibility within his government than any of his predecessors, so much so in fact that this group became known as the "Black Cabinet" or "Black Brain Trust" in the press. FDR was also the first president to appoint an African American as a federal judge; to promote a black man to the rank of Brigadier General in the Army; and, incredible as it might seem, the first president to publicly call lynching murder - "a vile form of collective murder"-which W.E B. Dubois applauded as something that sadly was long overdue. Overall FDR's administration tripled the number of Africa Americans working for the federal government, including thousands of black engineers, architects, lawyers, librarians, office managers, and other professionals, and under his leadership, and with the strong support of Eleanor Roosevelt, the Democrats included the first specific African American plank in the party platform at the 1936 convention.

The New Deal was not perfect. It could not and did not eliminate segregation, or the pernicious discrimination in employment, wages, and working condition that plagued so many African Americans during the difficult years of the 1930s. Moreover, in spite of the best efforts of federal officials like Harry Hopkins to forbid discriminatory practices among neighborhood relief agencies, such practices often continued at the local level, especially in the South. But in spite of these and other shortcomings, the willingness of the Roosevelt Administration to recognize the existence of a racial problem in American and to take steps at the federal level to ameliorate that problem, was, as Sitkoff notes, unprecedented. It made it clear that the federal government had a responsibility to ensure the civil rights of all Americans were protected; rendered civil rights a core part of the liberal agenda; and inspired a generation of African American leaders to continue to pressure not only the federal government, but also the federal courts, to strike down the laws that underpinned the widespread racial injustice that African Americans had endured since the promise of reconstruction.

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African Americans and the New Deal: A Look Back in History - Roosevelt Institute

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Roosevelt historian David Woolner shines a light on today's issues with lessons from the past. As we celebrate Black History Month and reflect on the decades of struggle that was required to bring the African American community into the mainstream of American life, it seems fair to ask what impact, if any, the New Deal...

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Printable Version Until the New Deal, blacks had shown their traditional loyalty to the party of Abraham Lincoln by voting overwhelmingly Republican. By the end of Roosevelt's first administration, however, one of the most dramatic voter shifts in American history had occurred. In 1936, some 75 percent of black voters supported the Democrats. Blacks turned to Roosevelt, in part, because his spending programs gave them a measure of relief from the Depression and, in part, because the GOP had done little to repay their earlier support.

Still, Roosevelt's record on civil rights was modest at best. Instead of using New Deal programs to promote civil rights, the administration consistently bowed to discrimination. In order to pass major New Deal legislation, Roosevelt needed the support of southern Democrats. Time and time again, he backed away from equal rights to avoid antagonizing southern whites; although, his wife, Eleanor, did take a public stand in support of civil rights.

Most New Deal programs discriminated against blacks. The NRA, for example, not only offered whites the first crack at jobs, but authorized separate and lower pay scales for blacks. The Federal Housing Authority (FHA) refused to guarantee mortgages for blacks who tried to buy in white neighborhoods, and the CCC maintained segregated camps. Furthermore, the Social Security Act excluded those job categories blacks traditionally filled.

The story in agriculture was particularly grim. Since 40 percent of all black workers made their living as sharecroppers and tenant farmers, the Agricultural Adjustment Administration (AAA) acreage reduction hit blacks hard. White landlords could make more money by leaving land untilled than by putting land back into production. As a result, the AAA's policies forced more than 100,000 blacks off the land in 1933 and 1934. Even more galling to black leaders, the president failed to support an anti-lynching bill and a bill to abolish the poll tax. Roosevelt feared that conservative southern Democrats, who had seniority in Congress and controlled many committee chairmanships, would block his bills if he tried to fight them on the race question.

Yet, the New Deal did record a few gains in civil rights. Roosevelt named Mary McLeod Bethune, a black educator, to the advisory committee of the National Youth Administration (NYA). Thanks to her efforts, blacks received a fair share of NYA funds. The WPA was colorblind, and blacks in northern cities benefited from its work relief programs. Harold Ickes, a strong supporter of civil rights who had several blacks on his staff, poured federal funds into black schools and hospitals in the South. Most blacks appointed to New Deal posts, however, served in token positions as advisors on black affairs. At best, they achieved a new visibility in government.

Copyright 2019 Digital History

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Printable Version Until the New Deal, blacks had shown their traditional loyalty to the party of Abraham Lincoln by voting overwhelmingly Republican. By the end of Roosevelt's first administration, however, one of the most dramatic voter shifts in American history had occurred. In 1936, some 75 percent of black voters supported the Democrats.

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Critics of the New Deal

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And here is an excellent resource with lots of facts from the Harlem Renaissance and it also has multiple resources here too!

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And here is an excellent resource with lots of facts from the Harlem Renaissance and it also has multiple resources here too!

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The Harlem Renaissance was a period in American history from the 1920s and 1930s. During this time, many African-Americans migrated from the South to Northern cities, seeking economic and creative opportunities. Within their communities creative expression became an outlet for writers, musicians, artists, and photographers, with a particular concentration in Harlem, New York. This guide provides access to selected Library of Congress digital and print resources as well as links to external websites on the Harlem Renaissance:

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African-American expressions of writing, music, and art during the 1920s and 1930s are well represented in the vast collections of the Library of Congress.

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Here is a good website on Hoover's presidency.

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Here is a good website on Hoover's presidency.

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"Herbert Hoover's Tragic Presidency"

President Hoover has gone down in history as a totally uncaring chief executive who, while he presided over economic disaster, cared little about his fellow citizens, accepted the Great Depression as inevitable and something to simply be endured regardless of the level of suffering it caused, and who refused to do absolutely anything to alleviate the incredible suffering all around him for three and one-half long years. While this image was particularly widespread during the 1930s and persists even to this day, it is totally fallacious, misleading, and unjustified.

A More Balanced Historical Perspective

Herbert Hoover was in the right place at the wrong time. He could well have been a good - if not great - president had he served at another time. His ideological beliefs were such that he could well have launched the country in a more progressive direction than his predecessors in the 1920s had not the Great Depression intervened. He was far more committed to active government than either Calvin Coolidge or Warren Harding. However, as the presiding chief executive when the Depression began, he has received the blame for the Depression from his fellow countrymen both at the time and from subsequent generations. While he really was a "progressive" in his own way and probably did more to end the Depression than any preceding president in previous economic collapses, what he did failed to alleviate the situation and therefore he gained a reputation that was only partially deserved.

The Self-Made Man

Orphaned at an early age, Hoover had made a success out of himself - according to his pre-Depression legend and hype - by dent of his own hard work. Working his way through Stanford University to a degree in mining engineering, he went on to found his own business and became a multimillionaire. During the Great War he served in a voluntary capacity as director of the Food Administration Board, assigned the task of overseeing the production and distribution of foodstuffs required for victory. Following World War I, he headed up a private relief campaign to provide Europeans - literally facing the prospect of starvation - with food. His efforts were highly publicized and there was even talk in 1920 of him being the Republican candidate for president. While Warren Harding would be the nominee of a brokered convention, Hoover would serve as Secretary of Commerce during the next eight years. Escaping any involvement in the Teapot Dome scandal and receiving a great deal of positive publicity - much of it self-generated - for his supposed role in engineering the economic boom of the 1920s, Hoover entered the presidency in 1929 with a great deal of ballyhoo. During the 1928 presidential campaign his political handlers built this reputation up to phenomenal heights. Thus, when the Depression began and Hoover's efforts to deal with it were unsuccessful, his fall from grace was that much more spectacular because the publicity had built expectations up to a totally unrealistic level.

Hoover himself was apparently aware of the potential problem. As president-elect in late 1928 he confided his fears in this respect to a confident, William J. Abbot who was editor of the Christian Science Monitor. He purportedly said: "My friends have made the American people think me a sort of superman, able to cope successfully with the most difficult and complicated problems. They expect the impossible from me and should there arise in the land conditions with which the political machinery is unable to cope, I will be the one to suffer".

Hoover certainly felt by 1932, after over three years of the worst economic depression the country had ever known, that his declining approval rating and popularity were the result, at least in part, of this public image as a superman. He said that he had been "absolutely oversold". To a Republican senator he said: "No man can live up to it".

Responding to the Crisis

Despite an undeserved, fallacious, but enduring reputation as a do-nothing who simply accepted the Depression as an unpleasant fact of economic life that simply must be endured, President Hoover did try to end the Great Depression and, in fact, probably did more to deal with it than any preceding president had ever done in time of economic catastrophe. Hoover applied a conservative business-oriented approach that stressed voluntary efforts by Americans rather than governmental interference in the economy. What he tried was unsuccessful and sometimes poorly handled and out of this grew his public reputation.

Having taken at least partial credit for the economic boom of the Twenties when he campaigned for the presidency in 1928, Hoover had trouble personally accepting the end of the boom or fathoming just how bad the crash and Depression would be. He, however, was not alone in this. Hoover initially felt that the Depression was a temporary aberration in the economic cycle caused more by psychological fears than economic realities. Therefore, President Hoover responded to the crash of the stock market and the beginning of the Depression by counseling confidence....as long as Americans didn't let panic cause them to take intemperate and unwarranted action, the country would witness a brief and limited recession and then resume its economic boom. Confidence was the key.

The President waged a campaign to convince businessmen to keep wages up so that consumption levels would not decline. This approach was less than successful. While businessmen maintained wage levels temporarily, they cut back on the number of their employees because of dropping consumption levels. Hoover also failed in his confidence campaign to convince consumers to keep purchasing. Seeing other workers laid off and fearing for their own future, laborers cut back on purchases thus guaranteeing further layoffs.

Hoover's confidence campaign, while well intentioned, simply did not work. The economy continued its downward spiral - workers cut back on consumption, more workers were laid off, workers cut back further on consumption, etc., etc.

In order to understand Hoover's long-term reaction to and efforts to end the Great Depression, one must understand Hoover's idea of "Progressivism" - with which he consciously identified. President Hoover felt that while government intervention in the private sector was sometimes necessary in the modern industrial era, such intervention should be kept to an absolute minimum. This philosophy was a curious cross between the "old" and the "new". As Robert McElvaine puts it: "What Herbert Hoover was grappling with was one of the fundamental problems of the twentieth century: how to apply our Jeffersonian heritage in a highly concentrated, urban industrial setting". "His ideal remained people ruling themselves, through voluntary cooperation".

President Hoover felt the key to economic recovery was restoring the confidence of the business community in the economy of the United States. Only if businessmen reinvested their capital in the economy would the country be able to recover. Therefore, he pursued for three plus years a conservative business-oriented approach to recovery.

A fiscal conservative, he fought desperately to maintain a balanced federalbudget. This was extremely difficult given the demands placed on the government to launch various relief programs and a shrinking revenue base because of unprecedented deflation. Hoover however said: "The course of unbalanced budgets is the road to ruin". The logic of this position was that the business community would be discouraged and delay reinvestment if the government were unable to operate in the black. As McElvaine points out: "The President therefore devoted much of his energies in 1931 and 1932 to the goal of a balanced budget, which was hopeless under the circumstances. Yet, as Hoover himself had recognized in less frantic times, cutting spending and raising taxes diminished purchasing and made the situation worse".

In the name of restoring business confidence, President Hoover also rejected ever-louder demands by Americans that the currency system be inflated. Many Americans reasoned that since the economic disease the country suffered from was unprecedented deflation (as hundreds of millions of dollars were withdrawn from circulation and investment) then the appropriate prescription was inflation. They urged the government to abandon the gold standard and flood the economy with printed currency. Hoover rejected such demands arguing that a stable or "hard" currency system had always been a prerequisite for business investment. If the currency system was inflated by the government, businessmen would refuse to reinvest their funds in the economy. This would simply delay the day when economic recovery could begin. Thus, Hoover refused to give in to the demands for inflation.

President Hoover was also supportive of protective tariffs to shield American businessmen from foreign competition. Tariffs had been used pretty consistently since the end of the Civil War to encourage industrial investment and development. In 1930 the United States Congress passed and President Hoover signed into law the Smoot-Hawley Tariff. Only partially a response to the crash of the stock market and the beginning of the Depression, this was the highest tariff in American history, "with ad valorem rates jumping from an already high 33 percent to more than 40 percent". While Hoover hoped the tariff would help economically, it worsened the situation. "Other nations quickly retaliated and the world depression grew worse".

As businesses failed or slashed production levels, unemployment skyrocketed. As more and more millions lost their jobs, the unemployed looked to the federal government for relief of poverty. They demanded that the federal government institute relief or welfare payments for the needy. President Hoover rejected such demands for both ideological and financial reasons. He felt relief should be handled by the private sector - Community Chest, United Way, the Salvation Army, churches, individual philanthropy, etc. If government had to deal with this problem, it should be state and local governments - where the programs would be more democratic, cheaper, and less bureaucratized. Hoover also refused to the end of his presidency to begin federal relief or welfare programs because such a program would, he argued, be incredibly expensive, would unbalance the federal budget requiring deficit financing, and would cause businessmen to lose confidence thus delaying reinvestment and the beginning of economic recovery.

Hoover's position overlooked the fact that the problem of unemployment and the resultant poverty was too big for the private sector and state and local governments to handle adequately. By 1932 unemployment had reached 24.9% nationwide. This was so massive a problem that only the federal government, with its borrowing power and its ability to print currency, could cope with it. Nonetheless, Hoover refused to budge.

President Hoover did increase federal spending on public works as a way of trying to lessen unemployment. $700 million on such projects in 1931 was unprecedentedly high. However, he grew more hostile with the passage of time believing "a huge work relief program might be as demoralizing as a dole". When Congress passed the Emergency Relief and Construction Act in 1932, Hoover's administrators did everything in their power to limit its impact through the implementation process.

Hoover acted boldly in calling for and obtaining the Reconstruction Finance Corporation - a government lending agency that made long-term low interest loans to banks and big businesses in hopes of prompting economic recovery. While RFC loans did forestall the peaking of the banking crisis until 1933, they failed to promote economic recovery. As McElvaine points out - "Given the paucity of purchasing power, businesses were not interested in obtaining loans. Expansion was the last thing on the minds of most businessmen in 1932". Therefore, businesses didn't borrow to expand, workers weren't rehired, and thus there was no increase in consumption by rehired laborers.

While the RFC was an innovative step, note that it was in line with Hoover's conservative business-oriented philosophy and approach. The loans went to banks and big businesses not to the unemployed, homeless, or needy.

Evaluation

Herbert Hoover once told his old friend Julius Barnes: "No president must ever admit he has been wrong". During the last two years of his presidency as it became more and more apparent that the Depression was worsening and his program of confidence, voluntarism, and business support wasn't working, President Hoover set his feet in concrete. He refused to recognize that his philosophy and programs weren't working. Rather than try something different, he clung rigidly to his program, became more and more defensive, tried to convince himself and Americans that things were getting better, and lost the support of the nation. Why?

Partly, it was his personality. Joan Hoff Wilson, a Hoover biographer, maintains that Hoover was always unable to admit defeat or failure throughout his entire life. She points to a business venture launched by Hoover that very clearly failed but that he always maintained was a success. According to Wilson, Hoover had no reason to fudge the truth - he was a successful businessman who made millions and that many business ventures fail. He just couldn't admit defeat or failure.

He had a great capacity for self-delusion where failure was involved. Note the denial of reality in these words he wrote to a friend shortly after leaving office: "This country started out of the Depression in August 1932.....and all the rest of the principal commercial countries started out at the same time....all of them have gone along smoothly making steady progress; [only] the United States slipped backwards and came into a banking panic because the New Deal began on November 9,1932".

Hooverís refusal to abandon his business-oriented, small government approach to the Depression was also the result of the fact that he was an ideologue rather than a pragmatist. As McElvaine puts it -"It is impossible to understand Herbert Hoover and his reaction to the Depression without seeing that he was that rarest of politicians, a man of principle. He was an idealist who firmly (and rightly) believed that means cannot be separated from ends. This was admirable up to a point. But his method proved disastrous during the Great Depression when crisis conditions demanded results without much concern about method".

Hooverís reputation, in many ways, grew out of his intransigence. Despite every indication that his approach to ending the Depression was not succeeding, he tenaciously continued down the path he had trod since the stock market crash in 1929. However, the presidentís genuine efforts to engineer recovery were and are largely overlooked because he suffered from an ever-deepening image problem. While he counseled optimism, his rigid and dour personality imparted a sense of gloom and despair. He also failed to use the media effectively to communicate with the populace and he seemed isolated from his fellow citizens and the real world. At the depth of the national catastrophe in 1932, two incidents forever fixed Hooverís public image. In the summer of that year, Movietone News crews filmed the president feeding his dog T-bone steak in the Rose Garden at the White House. This footage played over and over again in movie theaters across the country and was disastrous for a chief executive up for reelection who claimed that federal relief would destroy the American character. On top of this came the governmentís treatment of the Bonus Army. General Douglas MacArthur violated a direct presidential directive from Hoover not to attack the veterans of the Great War encamped at Anacostia Flats in the nations capital. Hoover, however, took the blame for this public relations nightmare.

In the seventy years since his administration ended in failure, Hooverís ratings and reputation have improved little. In part this was because he was the incumbent when disaster struck. Like all incumbents, his reputation was in many ways simply a reflection of events. Incumbents get the credit when things go well, whether they had anything to do with it or not. Conversely, incumbents get the blame when things go bad whether or not they were truly responsible. Hooverís historical reputation, however, has remained so fixed because he suffered from the extreme contrast in personality with his successor, Franklin D. Roosevelt. Hoover seemed so much more of a failure because Roosevelt convinced millions of Americans that things were getting better once he assumed office and launched the New Deal program. Finally, the Democratic party ran against Hoover for a half century. At election time, every Republican candidate was likened to Herbert Hoover. It was an effective partisan technique for attracting votes but it converted the "forgotten progressive" into a caricature of his true self.

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All quotations unless otherwise noted are from Robert S. McElvaine, The Great Depression: America, 1929-1941, Time Books (New York, 1984).

Suggested Readings:

David Burner, Herbert Hoover: A Public Life , Knopf (New York, 1979).

Martin I Fausold, The Presidency of Herbert Hoover, University Press of Kansas (Lawrence, Kan., 1985).

Herbert Hoover, The Memoirs of Herbert Hoover: The Great Depression, 1929-1941, Macmillan (New York, 1952).

Gene Smith, The Shattered Dream: Herbert Hoover and the Great Depression, William Morrow & Company (New York, 1970).

Harris Gaylord Warren, Herbert Hoover and the Great Depression, Norton Library (New York, 1967).

Joan Hoff Wilson, Herbert Hoover: Forgotten Progressive, Little, Brown, and Company (Boston, 1975).

© L. Patrick Hughes, 1999

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"Herbert Hoover's Tragic Presidency" President Hoover has gone down in history as a totally uncaring chief executive who, while he presided over economic disaster, cared little about his fellow citizens, accepted the Great Depression as inevitable and something to simply be endured regardless of the level of suffering it caused, and who refused to do absolutely anything to alleviate the incredible suffering all around him for three and one-half long years.

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Hey everyone! If you need anymore help with the new deal here is a great link!

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Hey everyone! If you need anymore help with the new deal here is a great link!

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https://livingnewdeal.org/

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How did Roosevelt's New Deal go about fixing the problems of the Great Depression?

FDR came into office with no clear or specific plan for what to do. Roosevelt used to say "try something, if it doesn't work try something else." He and his brain trust recognized, at least, that they must try to do something. These attempts at least gave Americans the hope that something was being done. Roosevelt's basic philosophy of Keynesian economics manifested itself in what became known as the three "R's" of relief, recovery and reform. The programs created to meet these goals generated jobs and more importantly, hope. They also generated what refer to today as "alphabet soup;" a series of acts and agencies that created a huge federal bureaucracy.

I. The New Deal

A. What did Roosevelt mean by relief, recovery and reform?

1. Relief - Immediate action taken to halt the economies deterioration.

2. Recovery - "Pump - Priming" Temporary programs to restart the flow of consumer demand.

3. Reform - Permanent programs to avoid another depression and insure citizens against economic disasters.

Relief

Immediate action taken to halt the economies deterioration.

Recovery

"Pump - Priming" Temporary programs to restart the flow of consumer demand.

Reform

Permanent programs to avoid another depression and insure citizens against economic disasters.

EARLY NEW DEAL MEASURES

FAIR LABOR STANDARDS ACT -- provided minimum wage for workers.

CIVILIAN CONSERVATION CORPS -- provided work for jobless males between 18 & 25 in reforestation, road construction, prevention of forest erosion. Ended in 1941.

AGRICULTURAL ADJUSTMENT ACT -- established principle of government price support for farmers and guaranteed farm purchasing power.

TENNESSEE VALLEY AUTHORITY ACT -- federal construction and ownership of power plants regional development of Tennessee Valley (7 State Area)

FEDERAL SECURITIES ACT -- required full disclosure of information related to new stock issues.

NATIONAL EMPLOYMENT SYSTEM ACT -- created US employment service.

HOME OWNERS REFINANCING ACT -- use of government bonds to guarantee mortgages.

BANKING ACT OF 1933 -- created Federal Deposit Insurance Corp., guaranteeing the safety of bank deposits.

NATIONAL INDUSTRIAL RECOVERY ACT -- minimum wages and self regulation of industry --- ended in 1935.

PUBLIC WORKS ADMINISTRATION -- appropriated funds to construct roads and other federal projects.

SECURITY AND EXCHANGE ACT -- federal regulation of the operation of stock exchange.

NATIONAL HOUSING ACT -- federal housing administration insured loans of private banks and trust companies for construction of homes.

COMMUNICATIONS ACT -- federal housing administration insured loans of private banks and trust companies for construction of homes.

HOME OWNERS LOAN ACT -- government financing of home mortgages.

NATIONAL HOUSING ACT -- construction of low cost public housing and slum clearance.

SOIL CONSERVATION ACT -- established federal soil conservation services.

RESETTLEMENT ADMINISTRATION -- built new model communities for low income city workers

RURAL ELECTRIFICATION ADMINISTRATION -- created and administered program of bringing electricity to rural areas.

NATIONAL YOUTH ADMINISTRATION -- federal work relief and employment for young people.

NATIONAL LABOR RELATIONS ACT -- encouraged collective bargaining and formation of unions to be supervised by the National Labor Relations Board.

SOCIAL SECURITY ACT -- created Social Security System -- old age and survivors insurance; aid to dependent children etc.

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How did Roosevelt's New Deal go about fixing the problems of the Great Depression? FDR came into office with no clear or specific plan for what to do. Roosevelt used to say "try something, if it doesn't work try something else." He and his brain trust recognized, at least, that they must try to do something.

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The Great Depression of 1929 devastated the U.S. economy. A third of all banks failed. Unemployment rose to 25%, and homelessness increased. Housing prices plummeted, international trade collapsed, and deflation soared. It took 25 years for the stock market to recover.

While the Great Depression took a huge toll on the U.S., there were a few good things that came from it. For example, the New Deal programs installed safeguards to make it less likely that the Depression could happen again.

Overall, the Great Depression had a tremendous impact on nine principal areas of the U.S. economy, which are outlined below.

Economy and Gross Domestic Product (GDP)

During the first five years of the depression, the economy shrank by 50%. In 1929, economic output was $105 billion, as measured by gross domestic product (GDP). That's equivalent to more than $1 trillion today.

The economy began shrinking in August 1929. By the end of the year, one-third of all banks had failed. In 1930, the economy shrank by another 8.5%, according to the Bureau of Economic Analysis (BEA). GDP growth declined 6.4% in 1931 and 12.9% in 1932. By 1933, the country had suffered at least four years of economic contraction. It only produced $57.2 billion, half what it produced in 1929.

Part of the contraction was due to deflation. According to the Bureau of Labor Statistics (BLS), the Consumer Price Index (CPI), which is used as a measure of inflation, fell by 25% between 1929 and 1933. Falling prices sent many firms into bankruptcy.

New Deal spending boosted GDP growth by 10.8% in 1934. It grew by another 8.9% in 1935, 12.9% in 1936, and 5.1% in 1937.

Unfortunately, the government cut back on New Deal spending and the depression returned, causing the economy to shrink by 3.3% and the unemployment rate to jump to 19% in 1938.

Preparations for World War II sent growth up by 8% in 1939 and by 8.8% in 1940. The next year, Japan bombed Pearl Harbor, and the United States entered World War II. Annual GDP growth jumped to 17.7%.

The New Deal and spending for World War II shifted the economy from a pure free market to a mixed economy. It depended much more on government spending for its success. The timeline of the Great Depression shows this was a gradual-though necessary-process.

The Depression affected politics by shaking confidence in unfettered capitalism. That type of laissez-faire economics is what President Herbert Hoover advocated, and it had failed.

As a result, people voted for President Franklin D. Roosevelt (FDR). His Keynesian economics promised that government spending would end the Depression. The New Deal worked. In 1934, the economy grew, and unemployment declined.

But FDR became concerned about adding to the U.S. debt. In 1933, the national debt was $22.5 billion, and by 1934, it was $27 billion. He cut back government spending by 1938, and the Depression resumed.

No one wants to make that mistake again. Politicians now tend to rely instead on deficit spending, tax cuts, and other forms of expansionary fiscal policy. Because of that, the U.S. national debt has increased to a very high level.

The Depression ended as government spending ramped up for World War II at the end of the 1930s and early 1940s. This change in spending led to the belief that military spending is good for the economy. However, since then, the government and economists have found that military spending is not a top way to create jobs.

The Dust Bowl drought destroyed farming in the Midwest. It lasted 10 years-too long for most farmers to hold out. To make things worse, prices for agricultural products dropped to severely low levels. As farmers left in search of work, they became homeless. Thousands of people with no money gathered in "cardboard shacks" called Hoovervilles.

In 1933, Prohibition was repealed. That allowed the government to collect taxes on sales of now-legal alcohol. FDR used the money to help pay for the New Deal.

The Depression was so severe and lasted so long that many people thought it was the end of the American Dream (the idea of guaranteed rights to pursue one's own vision of happiness). Instead, it changed that dream to include a right to material benefits.

Unemployment

In 1928, the final year of the Roaring Twenties, unemployment was 4.2%. That's less than the natural rate of unemployment. By 1930, it had more than doubled to 8.7%. By 1932, it had increased to 23.6%. It peaked in 1933, reaching up to around 25%. Almost 15 million people were out of work. That's the highest unemployment rate ever recorded in America.

New Deal programs helped reduce unemployment to 21.7% in 1934, 20.1% in 1935, 16.9% in 1936, and 14.3% in 1937. But less robust government spending in 1938 sent unemployment back up to 19%. It remained above 10% until 1941, as you can see when looking at the unemployment rate by year.

During the Depression, a third of the nation's banks failed. By 1933, 4,000 banks had failed. As a result, depositors lost $140 billion.

People were stunned to find out that banks had used their deposits toinvest in the stock market. They rushed to take their money out before it was too late. These "runs" forced even good banks out of business. Fortunately, that rarely happens anymore.

Stock Market

The stock market lost 90% of its value between 1929 and 1932. It didn't recover for 25 years. People lost all confidence in Wall Street markets. Businesses, banks, and individual investors were wiped out. Even people who hadn't invested lost money. Their banks invested the money from their savings accounts.

As countries' economies worsened, they erected trade barriers to protect local industries. In 1930, Congress passed the Smoot-Hawley tariffs, hoping to protect U.S. jobs.

Other countries retaliated. That created trading blocs based on national alliances and trade currencies. World trade plummeted by 66% (as measured in dollars) between 1929 and 1934. By 1939, it was still below its level in 1929.

Imports from Europe declined greatly between 1929 and 1932, dropping to $390 million from $1.3 billion at the start of the Depression. Exports to Europe also declined to $784 million from $2.3 billion during that same time.

Prices fell by 30% between 1930 and 1932. Deflation helped consumers whose income had fallen, but it hurt farmers, businesses, and homeowners because mortgage payments hadn't fallen by 30%. As a result, many defaulted on home loans. Homeowners lost everything and became migrants looking for work wherever they could find it.

Below you can see the CPI per year as an annual percent change:

Long-Term Impact

The success of the New Deal made many Americans expect that the government would save them from any economic crises. During the Great Depression, people relied on themselves and each other to pull through. The New Deal signaled that they could rely on the federal government instead.

FDR modified the gold standard to protect the dollar's value. That set a precedent for President Richard Nixon to end it completely in 1973.

The New Deal Public Works Administration (PWA) built many of today's landmarks. Iconic buildings include the Chrysler Building, Rockefeller Center, and Dealey Plaza in Dallas. Bridges include San Francisco's Golden Gate Bridge, New York's Triborough Bridge, and the Florida Keys' Overseas Highway. Other Depression-era public works include La Guardia Airport, the Lincoln Tunnel, and Hoover Dam. Also, three entire towns were constructed: Greendale, Wisconsin; Greenhills, Ohio; and Greenbelt, Maryland.

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How the Great Depression Still Affects You Today

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The Great Depression of 1929 devastated the U.S. economy. A third of all banks failed. Unemployment rose to 25%, and homelessness increased. Housing prices plummeted, international trade collapsed, and deflation soared. It took 25 years for the stock market to recover.

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After the stock market crash of 1929, the American economy spiraled into a depression that would plague the nation for a decade.

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The 1929 Stock Market Crash is well known as the most devastating crash in United States history. Here's a look at this historic event, which marked the beginning of the Great Depression.

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Great Article on The Great Depression

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After the stock market crash of 1929, the American economy spiraled into a depression that would plague the nation for a decade.

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Watch this guys this is THE GREAT DEPRESSION!!!!!

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The Great Depression: Crash Course US History #33

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Chapter 12 (The Great Depression) Vocabulary Words Flashcards | Quizlet

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Start studying Chapter 12 (The Great Depression) Vocabulary Words. Learn vocabulary, terms, and more with flashcards, games, and other study tools.

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Evelyn Palmour (left), and her sister, Doreene McCoy, remember when the Great Depression hit their Nebraska community and their family fled the state for the comfort of their grandfather's farm in Oklahoma.
Originally aired April 6, 2007, on NPR's Morning Edition.

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Evelyn Palmour (left), and her sister, Doreene McCoy, remember when the Great Depression hit their Nebraska community and their family fled the state for the comfort of their grandfather's farm in Oklahoma. Originally aired April 6, 2007, on NPR's Morning Edition.

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Stories from people of all backgrounds and beliefs

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http://www.history.com/topics/great-depression

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The Great Depression was a worldwide economic depression that lasted 10 years. It began in the United States on October 24, 1929, otherwise known as "Black Thursday," when panicked investors sold a record 13 million shares. Over the next four trading days, the Dow Jones Industrial Average, a popular proxy for the U.S. stock market, fell nearly 25%. It continued to decline for the next three years, losing nearly 90% between October 1929 and July 1932.

The stock market crash significantly reduced consumer spending and business investment. Consequently, U.S. GDP decreased dramatically in the first years of the Great Depression, dropping from $104.6 billion in 1929 to $57.2 billion in 1933. In comparison, GDP declined just 2% at the height of the Great Recession between 2008 and 2009.

Key Takeaways

Unemployment Reached 25%

The Great Depression affected all aspects of society. By its height in 1933, unemployment had risen from about 3% to nearly 25% of the nation's workforce. Some workers that kept their jobs saw their wages fall, many others had to work lower paying jobs that they were often overqualified for. From 1929 to 1932 the U.S. gross domestic product was nearly cut in half, dramatically decreasing from $104.6 billion to $57.2 billion, partly due to deflation. The Consumer Price Index fell 27% between November 1929 to March 1933, according to the Bureau of Labor Statistics.

Panicked government leaders passed the Smoot-Hawley tariff in 1930 to protect domestic industries and jobs, but it actually worsened the issue. World trade plummeted 66% as measured in U.S. dollars between 1929 and 1934.

The Depression's pain was felt worldwide, leading to World War II. Germans were already burdened with financial reparations from World War I. That caused hyperinflation. This added to the pressures that ultimately led the German people to elect Adolf Hitler's Nazi party to a majority in 1933.

Life During the Depression

The Depression caused many farmers to lose their farms. At the same time, years of over-cultivation and drought created the "Dust Bowl" in the Midwest, destroying agricultural production in a previously fertile region. Thousands of these farmers and other unemployed workers migrated to California in search of work.

Note

What Caused It

According to Ben Bernanke, a former chairman of the Federal Reserve, the central bank helped create the Depression. It used tight monetary policies when it should have done the opposite. According to Bernanke in 2004, these were the Fed's five critical mistakes:

1. The Fed began raising the fed funds rate in the spring of 1928. It kept increasing it through a recession that started in August 1929.

2. When the stock market crashed, investors turned to the currency markets. At that time, the gold standard supported the value of the dollars held by the U.S. government. Speculators began trading in their dollars for gold in September 1931. That created a run on the dollar.

3. The Fed raised interest rates again to preserve the dollar's value. That further restricted the availability of money for businesses. More bankruptcies followed.

4. The Fed did not increase the supply of money to combat deflation.

5. Investors withdrew all their deposits from banks. The failure of the banks created more panic. The Fed ignored the banks' plight. This situation destroyed any of consumers' remaining confidence in financial institutions. Most people withdrew their cash and put it under their mattresses. That further decreased the money supply.

The Fed did not put enough money in circulation to get the economy going again. Instead, the Fed allowed the total supply of U.S. dollars to fall by a third. Later research has supported parts of Bernanke's assessment.

What Ended the Great Depression

In 1932, the country elected Franklin D. Roosevelt as president. He promised to create federal government programs to end the Great Depression. Within 100 days, he signed the New Deal into law, creating 42 new agencies throughout its lifetime. They were designed to create jobs, allow unionization, and provide unemployment insurance. Many of these programs still exist. They aim to help safeguard the economy and prevent another depression.

Note

Many argue that World War II, not the New Deal, ended the Depression. Still, others contend that if FDR had spent as much on the New Deal as he did during the War, it would have ended the Depression. In the nine years between the launch of the New Deal and the attack on Pearl Harbor, FDR increased the debt by $3 billion. In 1942, defense spending added $23 billion to the debt. In 1943, it added another $64 billion.

Reasons a Great Depression Could Not Happen Again

While anything is possible, it's unlikely to happen again. Central banks around the world, including the Federal Reserve, have learned from the past. There are better safeguards in place to protect against catastrophe, and developments in monetary policy help manage the economy. The Great Recession, for instance, had a significantly smaller impact.

Some argue that the sizes of the U.S. national debt and the current account deficit could trigger an economic crisis. Experts also predict that climate change could cause profound losses.

Frequently Asked Questions (FAQs)

When did the Great Depression end?

How many people died during the Great Depression?

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What Happened During the Great Depression?

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The Great Depression of 1929 was a 10-year global economic crisis. Here are causes, impact, and chances of recurrence.

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When Herbert Hoover took office in 1929, he had no idea that the Great Depression was imminent.