Politics in the 1920’s Conservatism, Dominance of the Republican Party Conservatism

Andrew Mellon Secretary of the Treasury enacted a policy of reducing the level of taxation in the US economy. Form 1921-1929 Top tax rate was reduced from 65% to 20%, 80% of individuals no longer paid income tax, ended the excess profits tax and reduced the surtax.

The reduction in Tax income had three effects

1. It created excess savings, which was used for investment, high income earners have a lower marginal propensity to consume that low income earners, thus save more as a percentage of their income than low income earners, by 1929 the top 0.1% had 34% of all of the US’s savings. These savings contributed to the 1928-1929 stock market bubble ‘surplus capital (of which there was a great deal in the wake of the Mellon Tax cuts and rebates’ often found lending money on Wall Street’ (McElvaine 1993)

2. It reduced the level government spending, and therefore control over the economy, reduced the government’s ability to expand or contract demand

3. It reduced the redistributive power of the government, the government allowed the wealthy to increase their wealth, doing nothing to redistribute the wealth to low income earners. This created growing inequality, and the purchasing power of low income earners did not keep pace with that of high income earners, ‘purchasing power of workers and farmers was not enough to sustain prosperity’ (Leuchtenburg, The Perils of Prosperity 1955). The declining relative purchasing power was not enough to keep demand at a level sufficient to keep the economy growing, thus a slowdown in consumption and production occurred, thus causing the Great Depression.

The Republican policies favoured big business and high tariffs, the policies they enacted benefitted big business, but places the US economy in a position where it was weak in 1929, thus prone to the downturn that occurred.

1. The Republicans policies favoured businesses because ‘by allying the government with business, the Republicans believed that they were benefiting the entire nation’ (Leuchtenburg, The Perils of Prosperity, page 103), Republicans believed benefitting businesses would increase production and commerce, thus growing the economy. The Republicans were unable to remove anti-trust legislation because of progressive opposition in Congress, so Republican President Harding, Coolidge and Hoover appointed Conservatives to the Supreme Court, Department of Justice and Federal Trade Commission who would not prosecute businesses for breaches of Anti-trust legislation. The result of this policy was a growing monopolisation of industry in the US; by 1929 200 corporations owned more than 49% of America’s corporate wealth. This caused a lack of competition, which led to increasing prices and inflexibility in responding to demand. The result of this was after spending slowed in 1929, corporations did not decrease prices, but decreased production, resulting in increasing unemployment and a decrease in demand. This increasing unemployment and decreasing demand continued which made the Great Depression worse after the crash of 1929. Thus the Republican policies in regards to businesses did contribute to the causes of the Great Depression

Republican Tariff and International Business policies

Republican tariff and international business policies helped cause the Great Depression.

• 
  Republicans pursued a policy ‘to be the world’s banker, food producer and manufacturer, but to buy as little from the world in return’ (McElvaine), however ‘these ‘beggar they neighbour tactics were suicidal’ (McElvaine).
  
• 
  The Republican created high tariffs on imported goods, reducing the volume of European goods sold in the US, which meant European economies were unable to gain sufficient income from sales in the United States, and they were unable to rebuild capital that was destroyed in WWI.
  
• 
  This situation was summed up by historian Robert McElvaine ‘If the United States would not buy from other countries, there was no way for other countries to buy from Americans, or to meet interest payments on American loans’.
  
• 
  After the downturn of 1929, US businesses were unable to find sufficient export markets in Europe to supplement the decrease in demand in the United States, as said by Historian Robert Edsforth ‘In retrospect... if the United States had been able to find or create growing markets for American farm produce and industrial goods overseas, the Great Depression may have been avoided’.
  
• 
  The Smoot-Hawley Tariff Act 1930 made this situation worse, by raising tariffs further on foreign goods, causing retaliatory tariff increases from Europe, which made it impossible for US business to be competitive in Europe Markets. This caused retaliatory tariff increases in foreign nations, significantly decreasing global trade.
  
• 
  Thus the Republican tariff and international business policies helped cause the Great Depression, and after the crash of 1929, they made them worse.
  

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  The Over speculation in the Stock market was a cause of the Great Depression.
  
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  The stock market boom began in 1928, and it attracted large amounts of capital at a time where production and consumption in the US economy was beginning to slow. Yet the Dow Jones Industrial Average increased from 191 in early 1928 to 381 in September 1929, doubling in less than two years.
  
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  The increase in the stock market was fuelled by speculation and ‘the stock market had entered a fantasy world’ (Tindal and Shi). Credit was provided by Banks to investors to fund the purchase of stock, margin lending increased from $5 billion in the middle of 1928 to $8.5 billion in September 1929, and as a result US Banks were exposed to any losses made on the stock market.
  
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  This allowed the boom of the 1920’s to extend for another two years ‘by 1928 the Stock Market was carrying the whole economy’ (Leuchtenburg), and thus the crash of October 1929 inevitably dragged down the entire US economy as well.
  
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  Compounding this was that the crash of 1929 caused the Dow to halve by November 1929, causing the wealth of the United States to fall by billions, individuals and businesses that purchased stocks on margin were left with depreciating assets and massive unpayable debts.
  
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  As a result the Major US Banks were ‘loaded with dubious assets’ (Leuchtenburg) which was a major factor in the massive bank losses and collapses that occurred from 1930-33. The Bank collapses destroyed 15% of all bank deposits in the USA, and described by Historian William Leuchtenburg ‘Nothing did more to turn the stock market crash of 1929 into a prolonged depression than the destruction of business and public morale by the collapse of the banks’, which dragged the US economy further into Depression.
  
• 
  Thus the Wall Street Crash and Over speculation were causes of the Great Depression
  

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  During the 1920’s manufacturing and consumption increased rapidly, Manufacturing output increased by 42% between 1919 and 1929, because of increasing productivity and new industries such as the automobile industry.
  
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  However during the 1920’s, an extreme Misdistribution of Income developed, in which the ‘purchasing power of workers and farmers was not enough to sustain prosperity’ (Leuchtenburg).
  
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  Whilst real wages increased 22% from 1922-29, ‘Profits got the lion’s share of the rewards’ (Sparks), showing that developing in the 1920’s was an extremely unequal distribution of income in the, in which the wealthiest 10% of individuals in the USA had the same amount of wealth as the bottom 70%.
  
• 
  Despite real wages growth workers ‘received wage increases disproportionate to the increases in profits’ (Leuchtenburg), resulting in declining relative purchasing power, meaning that there was not enough income received by the average worker to keep demand for goods and services growing.
  

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  Therefore the higher levels of production and productivity were not complemented by an equal increase in real wages, which would have enabled American workers to increase their consumption of manufactured goods. The lower relative purchasing power meant that the supply of goods and services exceeded the demand for them, thus there was overproduction.
  
• 
  The gap that formed between consumption and production meant that businesses were discourages from investing or producing new stock. This overproduction forced businesses to cut back on production, which forced them to lay off workers, which decreased the demand for goods and services, thus beginning the downward economic cycle that caused the Great Depression. Thus the Overproduction Gap between production and consumption was a cause of the Great Depression
  

One of the Major Republican economic policies was the reduction, achieved under the Republican appointed Secretary of the Treasury Andrew Mellon.

• 
  Mellon enacted the policy of reducing the level of taxation in the US economy, form 1921-1929 Top tax rate was reduced from 65% to 20%, ended the excess profits tax, gift tax and estate tax.
  

• 
  The effect of this policy was that effectively a large amount of income was transferred from the Federal Government to Wealthy Americans and this created excess savings, which was used for investment, high income earners have a lower marginal propensity to consume that low income earners, thus save more as a percentage of their income than low income earners, by 1929 the top 0.1% had 34% of all of the US’s savings.
  
• 
  These savings contributed to the 1928-1929 stock market bubble ‘surplus capital (of which there was a great deal in the wake of the Mellon Tax cuts and rebates’ often found lending money on Wall Street’ (McElvaine 1993).
  
• 
  This savings was also used for capital investment, particularly in the Automobile and the manufacturing sectors ‘the prosperity of the 1920s had been sustained in very large part by two great industries(Automobiles and their related industries) which provided millions of jobs and absorbed huge quantities of investment capital’ (Leuchtenburg).
  

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  By 1927, the vast quantity of automobiles in the USA indicated that all consumers who had the means of purchasing an automobile had purchased one, the market was saturated and sales were declining, which was also the case for many other consumer goods in America.
  

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  In 1929 the investment in these sectors was saturated, whilst consumption was declining, the industries of the American economy ‘the automobile industry- and satellites like the rubber-tire business-were badly overbuilt’ (Leuchtenburg) by over investment and savings.
  

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  Since large amounts of capital and labour was employed in the Automobile sector, when it declined due to overproduction and a saturated market, thousands would become unemployed and the value of the investments and assets would decline.
  
• 
  This decline of the Automobile and Manufacturing sector was significant because millions of Americans were relied on the these industries for their income, the decline of industry was contagious, spreading to other sectors of the US economy, plunging American into the Great Depression.
  

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  A key factor that turned a normal recession into the Great Depression was the Weakness of the US Banking Sector. During the 1920’s ‘no other industrial nation in the world had as unstable or as irresponsible a banking system’ (Leuchtenburg)
  
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  This was a result of most states in the USA had ‘unit banking laws’, that prohibited the expansion of banks through branches. This meant that most of the Banks in America were small banks, limited to one branch operating in one city or community, relying on a small collection of deposits for solvency and venerable to problems if a small group of debtors is unable to pay.
  
• 
  The result was that from 1929-1933, as unemployment increased and farm income decreased, small banks were unable to collect their debts causing them to collapse. From 1929 to 1933 5000 Banks in the United States collapsed, along with their depositor’s money, further reducing the income of individuals and compounding the downward economic spiral of the Great Depression.
  
• 
  States without unit banking laws suffered comparatively little small and medium sized Bank closures.
  
• 
  As a result the Major US Banks were ‘loaded with dubious assets’ (Leuchtenburg) which was a major factor in the massive bank losses and collapses that occurred from 1930-33. The Bank collapses destroyed 15% of all bank deposits in the USA, and described by Historian William Leuchtenburg ‘Nothing did more to turn the stock market crash of 1929 into a prolonged depression than the destruction of business and public morale by the collapse of the banks’, which dragged the US economy further into Depression.
  
• 
  Thus the Wall Street Crash and Over speculation were causes of the Great Depression
  

• 
  Failures of US Monetary Policy, both before and after the crash caused a normal recession to turn into the Great Depression. Prior to the Crash, the US Federal Reserve held their discount rate (the Rate the Reserve charges US Banks) low, reducing interest rates creating cheap credit and increased consumption which created the economic boom of the Roaring 1920’s. However a large amount of the investment was ‘malinvested’, particularly in the Automobile sector, and Real Estate and Stock market speculation.
  
• 
  During 1928 and 1929 the Federal Reserve raised their discount rate from 3.5% to 6%, causing an increase in borrowing costs for investors, making profitable investments unprofitable.
  
• 
  The effect of this was a removal of money from the Stock market in October 1929, causing the Wall Street Crash, and the beginning of the Great Depression.
  
• 
  However what turned ‘a normal run of the mill recession into a Depression’ (Friedman) was further failures of US Monetary Policy by the Federal Reserve. This was explained by Nobel Prize Winning economist Milton Friedman, that the Federal Reserve that it allowed the quantity of Money in America to decline by a third, because one third of US Banks failed. The Federal Reserve failed, instead of increasing the quantity of money to prevent deflation and a downward economic spiral, the Federal Reserve did nothing.
  
• 
  Deflation in the US economy resulted in lower agricultural and consumer prices, resulting in a decrease in industrial production, and farm income which created massive increases in unemployment that reached 24.9% in 1933.
  
• 
  Thus the mismanagement and failures of the Federal Reserve resulted the Great Depression
  

Republican Tariff and international business policies helped cause the Great Depression.

• 
  The Republicans aimed to maximise exports and minimise imports through a tariff and trade policy ‘to be the world’s banker, food producer and manufacturer, but to buy as little from the world in return’ (McElvaine).
  
• 
  The Republican created high tariffs on imported goods, reducing the volume of European goods sold in the US, which meant European economies were unable to gain sufficient income from sales in the United States, and they were unable to rebuild capital that was destroyed in WWI.
  
• 
  This situation was summed up by historian Robert McElvaine ‘If the United States would not buy from other countries, there was no way for other countries to buy from Americans, or to meet interest payments on American loans’ and ‘these ‘beggar they neighbour tactics were suicidal’.
  
• 
  Because of these policies, after the downturn of 1929 US businesses were unable to find sufficient export markets in Europe to supplement the decrease in demand in the United States, as said by Historian Robert Edsforth ‘In retrospect... if the United States had been able to find or create growing markets for American farm produce and industrial goods overseas, the Great Depression may have been avoided’.
  
• 
  The Smoot-Hawley Tariff Act 1930 made this situation worse, by raising tariffs further on foreign goods, causing retaliatory tariff increases from Europe, which made it impossible for US business to be competitive in Europe Markets. This caused retaliatory tariff increases in foreign nations, significantly decreasing global trade.
  
• 
  The Republican foreign economic policies, whilst did not cause the Great Depression, prevented the development of international prosperity which would have allowed US businesses to develop new markets in the case of a severe downturn in America
  

• 
  Rationale
  
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    Reaction to communism/anarchism
    
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      Migrants, being impoverished, were susceptible to socialist ideas
      
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    ‘Alien slackers’
    
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    War demanded cultural homogenisation and nationalism
    
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    Targeted Catholic and Jewish immigrants from south-western Europe
    

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  Legislative Process
  
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    1917 literacy test – over Wilson’s veto
    
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    Emergency Quota/Johnson Act 1921
    
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      Quota of 3% of each nationality counted in 1910 census
      
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    National Origins/Immigration Act of 1924
    
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      Quota of 2% of each nationality counted in 1890 census
      
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      In 1927 top limit was dropped from 164000-150000
      
    • 
      Ambiguous ‘national origin’ terminology
      
      • 
        Administrative horror- D. Shannon
        
    • 
      65,721 (GB) vs 6,524 Poland or 5,802 (Italy)
      
    • 
      Did not prevent immigration from ‘Catholic’ Mexico, Cuba, French Canada
      
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  Key bodies
  
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    American Legion
    
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  Quotes
  
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    America must be kept American- Coolidge
    

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  John Scopes trial (monkey trial)) – Dayton 1925
  
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    Clarence Darrow & the ACLU v W Jennings Bryan
    
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    HL Mencken of the Baltimore Sun, and The American Mercury
    
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    Fined $100, paid by Baltimore Sun
    
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    Overturned by Tennessee Supreme Court on a technicality
    
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  Anti-Evolution League
  
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    Teaching of evolution banned in Oklaholma, Florida, Tennesee and North Carolina, Arkansas, Mississipi
    
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    T. T Martin – ‘Keep Hell out of the High Schools’
    
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  Revivalism
  
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    Aimee Semple McPherson – ‘Four-Square Gospel’
    
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  Al Smith lost 1928 election because of his Catholicism
  
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  Ku Klux Klan
  
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    Led by William J Simmons, Hiram W Evans
    
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    Significant clout in Texas legislature
    
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    Virtually owned Illinois
    

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  Precedent in Britain, France and Maine
  
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  Women’s Christian Temperance Union
  
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  Temperance Society of the Methodist Episcopal Church
  
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  Anti-Saloon League
  

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  Rural people, middle-class reformers
  
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  Volstead Act/the 18^th Amendment
  
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    Private stock not allowed to be confiscated
    
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  Hoover’s clout with the Belgian embassy
  
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  ‘Mississippi would vote dry and drink wet while ever it could stagger to the polls’ – Will Rodgers
  
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  Rationale
  
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    Poverty
    
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    Class Conflict
    
  • 
    Racial agendas (blacks and immigrants targeted)
    
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  Legislative Process
  
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    Webb-Kenyon Act 1913 – prohibited the transport of liquor into dry areas, over Taft’s veto
    
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    Lever Act 1917 – prohibited liquor production to conserve grain during the war
    
  • 
    Eighteenth Amendment adopted Dec 1, 1917
    
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      Ratified January 1919
      
  • 
    Volstead Act 1919 – after New Years 1920, illegalised beverages with over 0.5% alcohol
    
  • 
    Baby Volstead Acts – state legislation, repealed by some
    
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  Ineffectiveness
  
  • 
    High degree of corruption in federal Prohibition Bureau
    
  • 
    Porous borders with Canada, Carribean
    
  • 
    ‘low capital requirements of bootleggers’ – David Shannon
    
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  Impact
  
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    Increased American contempt for law
    
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    Fuelled crime/corruption
    
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    Denaturants, methale/wood alcohol
    

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  Fuelled by prohibition
  

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  Black Americans
  
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    Prohibition was thought to apply to immigrants and blacks
    
  • 
    Jim Crow/segregation laws
    
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    Grandfather clauses in voting
    
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    Poll taxes
    
  • 
    Detroit race riots
    
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    Jazz culture
    
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    1 million blacks left in Great Migration (1910-1930)
    
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    Marcus Garvey – Back to Africa Movement, United Negro Improvement Association
    
    • 
      6 million members by 1923
      
  • 
    Booker T Washington, WEB Dubois
    
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    NAACP- National Association for the Advancement of Coloured People
    
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    Niagara Movement
    
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    Anti-lynching bill filibustered out of Congress
    
  • 
    Ku Klux Klan
    
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      Used consumer tactics, professional recruitment
      
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      Zeniths in 1924
      
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      Stephenson charged with manslaughter
      
  • 
    Bill against lynching gets filibustered out of Congress
    
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    Unions denied membership
    
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    Segregation in the armed forces
    
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    Segregated accommodation
    
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    Discrimination by Federal Housing Authority
    
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      If a neighbourhood is to retain its stability, it is necessary that properties continue to be occupied by the same social and racial classes.
      
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  Central and Southern European Migrant groups
  
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  Native Americans (Indians)
  
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    Largely on reservations, which were marginal lands
    
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    Segreation in armed services
    
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    Dawes Act 1887
    
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  Asian Americans esp Japanese
  
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    Race riots
    

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  Mail bombs/ Palmer bomb – April/June
  
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  Palmer raids
  
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    Habeus corpus suspended
    
  • 
    250 members of Union of Russian Workers arrested and beaten
    
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    Labor Department deported 249 aliens to Russia
    
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    6000 people arrested, 600 deported
    
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  Sacco-Vanzetti Case
  
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    Electrocouted in 1927
    
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  Socialist party
  
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  Communist Party of America
  
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    John Reed
    
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  Communist Labor party
  
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  Combined comprised <0.5% of population
  
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  Mayor Ole Hanson’s suppression of the Seattle Central Labor Council generals strike Feb 1919
  
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  League of Nations branded as Red internationalism
  
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  Five socialists expelled from NY legislature, despite Charles Evans Hughes
  
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  Constitutional rights violated, states enacted sedition laws
  

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  American Plan of employment, yellow dog contact, open shop, liberty of contract
  
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  Red Scare, strikes of 1919 led to linking unionism and subversion
  
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  Kill the unions with kindness, industrial democracy, welfare capitalism
  
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    Profit sharing, bonuses, pension, recreation, health programs
    
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  Clayton anti-trust act limited to injunctions against individual workers
  

• 
  25% unemployment nationally in America
  
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  65%in Detroit, 80% in Toledo and Cleveland
  
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  1/3 of banks failed, resulting in 15% of deposits being lost
  
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  25% wage cuts
  
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  reliance on state handouts, had to swallow pride
  
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  bonus army perceived as a quasi-communist revolution
  
  • 
    douglas marcarthur – ‘mob … animated by the essence of revolution’
    
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  psychological impact – men felt inadequate (something wrong with a man who can’t support his family)
  
• 
  monopoly board game became popular-get rich quick in your imagination
  
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  mining families in the mountains of Appalachia reduced to berries and dandelions
  
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  looked to cinema for distractions/ cinemas encouraged to produce ‘happy films’ by New York Mayor
  
  • 
    cinema key propaganda tool for NRA
    
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  National Mine Wroerks Union (communist)
  
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  Communism ‘gaining a foothold’ – Theodore Bilbo (Gov- MSS)
  
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  However party membership never rose above 100 000
  
• 
  Hunger marches
  

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  retained their employment moreso than men (23.2% unemployment vs 39% northern men)
  
• 
  women were usually breadwinners (services was stronger than industry)
  
  • 
    shift in domestic power balance, men did not take to this well
    
• 
  25% of workforce
  
• 
  federal agencies had anti-women employment policy despite efforts of Frances Perkins, Eleanor Roosevelt
  
• 
  unions were also unwilling to admit women
  
• 
  marriage rate/fertility rate dropped
  
  • 
    22% decline in marriages, 15% decline in births
    
  • 
    below replacement rate for first time in US history
    
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  divorce rate fell – divorce fee
  
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  1.5 million women were abandoned by their husbands – 1940 report
  
• 
  resurgence of conservative attitudes towards family unit
  
  • 
    the new ideas of the twenties – behaviourism/feminism undermined
    
  • 
    flappers ceased to exist as a cultural icon
    
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  Practically every woman, whether she is rich or poor, is facing today a reduction of income. –Eleanor Roosevelt
  
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  Women who sought relief or paid employment risked public scorn or worse for supposedly taking jobs and money away from more deserving men.-Susan Ware
  
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  Sweatshops, child labour – exploitation
  
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  Women’s fashion – less makeup, more affordable dresses, lower heels
  

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  750 000 farms abandoned
  
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  Penny (forced) Auction
  
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  Foreclosing magistrates threatened with lynching
  
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  Farmers Holiday association (militant)
  
  • 
    Block highways, empty milk cans, attacked deputies
    
• 
  Iowan governor placed six counties under martial law
  
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  Share Croppers Union
  
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  Pouring milk into the streets, blockading food going to market
  
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  Anti-Okie law in California
  
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  Dustbowl
  
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  43% of farmers were migrated, some of which were expatriated
  
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  keep warm by burning corn
  
• 
  
  

• 
  invariably first to be retrenched
  
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  women fared better than men as ‘domestic hands’
  
  • 
    jargon of ‘slave market’
    
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  New Deal programs such as Federal Music Project, Federal Theatre Project, Federal Writers facilitated Harlem Renaissance
  
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  Harry Hopkins (WPA) worked with NAACP to protect rights of blacks
  
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  Desert Republican Party
  
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  Anti-lynching bill filibustered 1937
  
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  a study in Harlem revealed that 65% of African-American children were malnourished.
  
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  Stealing jobs from ‘real’ Americans
  
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  Jim Crow laws refused African-Americans accommodation in hotels, motels
  
• 
  Blacks normally involved in textiles or sharecropping
  
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  9/10 African American women involved in worst hit industries – textiles
  
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  Scottsboro case – Share Croppers Union
  

President Hoover was a Republican and believed in laissez-faire capitalism, that the market must run its course and the crisis would resolve itself. This belief was not without precedent

• 
  The Panic of 1907 was relieved by sudden liquidation of bad loans and assets, and a combined Bank purchase/Bailout by J.P Morgan and his associated
  
• 
  Recession of 1921-22, severe recession yet resolved itself without government intervention, following the recession was the Roaring 1920’s
  

There was calls from the Financial sector for ‘ruthless deflation’ (Leuchtenburg), a deflationary monetary policy, Secretary of the Treasury Mellon said ‘liquidate real estate, liquidate stocks ... the whole system will be stronger in the end’.

However, later on; President Hoover ‘insisted on a more activist role’ (Leuchtenburg).

Hoover 1932-1933

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  Met with business leaders in early 1930, secured promises from them to keep wages high
  
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  Stepped up Federal Construction
  
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  Urged State and local governments to increase their spending
  
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  Reconstruction Finance Corporation, created in January 1932
  
  • 
    Created to lend funds to banks, railroads and financial institutions, probably saved some banks and railroad companies form collapse
    

• 
  Banks shored up
  
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  Big commercial banks bailed out
  
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  No local bank guarantees
  
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  Reconstruction Finance Corporation (RFC) made loans to railroads, life insurance, building, farm mortgages, banks
  
• 
  Smoot-Hawley passed to protect what remained of American industry
  
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  Government spending cut/taxes increased in order to balance the budget
  
• 
  Quit buying agricultural surpluses in 1931
  
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  Did not retire gold standard
  
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  Glass-Steagall Banking Act 1932
  
• 
  Broadened commercial loans that Federal Reserve could support
  
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  Federal Home Loan Bank Act 1932
  
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  Relief for mortgage holders
  
• 
  Federal Farm Board
  
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  Emergency Relief and Construction Act 1932
  
• 
  300 million to state relief, 1.5 billion public works (state/fed)
  
• 
  offset by state/local cutbacks
  
• 
  Moratorium on war debts/reparations
  
• 
  -2.7 bill budget deficit 1932
  
• 
  vetoed federal relief and Emergency Committee for Employment proposal
  

• 
  In May 1933, Federal Emergency Relief Act, FERA, direct financial assistance to the unemployed, unemployment insurance, never been done by the Federal government before
  
• 
  May 1933, Agricultural Assistance Act, limited success, payments to farmers to not farm, 1937 farm income doubles, may have been because of Dust Bowl
  
• 
  Wagner Act 1935, gave workers the right to form unions and bargain collectively, employers forbidden to interfere in Union Activity. Total change in American Capitalism, government intervenes to support workers and Unions.
  
• 
  Social Security Act August 1935, paid by payroll tax on employers, ‘the most far reaching of New Deal Initiatives’ (Tindall and Shi)
  
• 
  Works Program Administration 1935, created work for the dole program, replaced FEMA, helped 9 million people over 9 years
  

• 
  The Depression of 1937 showed that the economy was NOT healed by New Deal policies, the recovery of 1933-1937 was unsustainable, the New Deal helped the economy recover as long as Government was inplace.
  
• 
  In 1939, 20% Americans were out of work
  
• 
  Henry Morgenthau, FDR’s Secretary of the Treasury ‘We have never made good on our promises. After 8 years we have just as much unemployment as when we started... and an enormous debt to boot!’
  

• 
  Employed 3 million
  
• 
  Paid wages of $30, $25 forwarded to families
  
• 
  Check crime rates
  
• 
  Racial segregation
  
• 
  Texas, 5% black because told only whites can apply
  

• 
  Directed by David Lilienthal
  
• 
  Damming: ‘Great Lakes of the South’
  
• 
  Hydroelectric infrastructure
  
  • 
    Cheap electricity
    
  • 
    Check utility price-setting power
    
• 
  Soil conservation, industry, forestry, river navigation, fertiliser
  
• 
  Exploit productivity of the Tennessee Valley in the long term
  
• 
  Work-relief, grassroots democracy, won local support
  

• 
  Aimed to increase agricultural prices through the destruction of farm surpluses, excess livestock and paying farmers not to cultivate their farmland
  
• 
  Did not achieve lasting recovering in the farm sector, did not provide relief to all farmers, economically questionable to raise prices by constricting supply, $100 million in handouts whilst destroying produce. Politically and socially wrong to be destroying food whilst people were starving
  
• 
  The dust bowl may have caused prices to rise because competitor farmers were destroyed in the states of Oklahoma, Kansas, Texas and others...
  
• 
  Declared Unconstitutional by Supreme Court in 1936
  

• 
  The NRA aimed to end ‘ruthless competition’, which was seen by Businessmen, Unions and government to be driving down prices, wages and deterring investment and an economic recovery
  
• 
  The NRA implemented codes which mandated certain prices, wages, quality controls and regulated business practises to end the ‘ruthless competition’. Also implemented the first minimum wage and limited working hours
  
• 
  Does not achieve industrial recovery, the codes increase the cost of business by 40%.
  
• 
  In the 6 months after the NRA began operating industrial production fell 25% after increasing 25% in the previous 6 months before the NRA was introduced
  
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  Strike rates increased as workers were unsatisfied with the NRA not assisting them
  
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  Black markets developed as businesses refused to operate under the codes
  
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  Declared Unconstitutional by the Supreme Court in 1936
  

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  Also government program to provide jobs for the Unemployed on public works ect...
  
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  In Kentucky WPA workers catalogued 350 ways to cook spinach, they were paid to do this, example of waste and mismanagement
  
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  ‘I’ve got 4 million at work, but don’t ask me what they’re doing’ Harry Hopkins, head of the WPA
  

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  Created Old Age, Unemployment, Disability insurance/pensions, funded by the creation of a payroll tax
  
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