This committee will begin in January of 1932. In December of 1931, the 4th largest bank in the U.S., the Bank of America collapsed. In 1932, Hoover had low popularity and FDR began the presidential campaign that would lead to him winning the election in November of the same year. It is your job as delegates to navigate this election, its outcome, and the outcome of the depression itself.
Crisis notes will be framed along the historically accurate timeline of the Great Depression and possibly new events created by our Crisis Directors, it will be a great help to understand the evolution of that period to anticipate how to react to crisis notes in a beneficial way. We expect to see well-researched debate and resolutions utilizing the background guide and outside research.
Starting in 1929, the Great Depression was the longest and most impactful economic downturn in the western world. As a result of a multitude of events and circumstances such as financial panic, government policies, and shifting consumer demand. From 1929 to 1933, industrial production in the United States declined by 47 percent, and the United State’s GDP went down by 30 percent.
Many say that the Great Depression’s core cause was the decline in spending which resulted in a decline in production, which many suspect was caused by the 1929 U.S monetary policy that limited the stock market. In more detail, these limitations ensured a raising of interest rates in order to slow the rapid rise of stock prices, which reduced production in industries such as construction and automobiles. On October 24th, 1929, also known as “Black Thursday”, as a result of stock market declines and distrust in the safety and consistent capabilities of the stock market, many traders began panic selling. Ensuing even smaller values of stock value and forcing some investors to liquidate their holdings. Between September and November of that year, U.S. stock prices dropped by 33 percent, many historians refer to this drop as the “Great Crash of 1929”. The “Great Crash of 1929” occurred 8 months into the administration of Herbert Hoover, and did not reflect well on his leadership. As the depression continued to worsen, the U.S. population expressed their worries about Hoover's refusal to involve the federal government in forcing fixed prices or taking any other substantial action. As a result of Hoover’s unpopularity and unsupported statements, Hoover was defeated by Franklin D. Roosevelt in 1932.
In 1933, almost 13 million Americans had lost their employment - most of these individuals were in the construction industry and blue-collar jobs. Many farmers lost their lands and homes because of foreclosure and the drop in consumer abilities. The massive increase in homelessness and poverty created communities called “Hoovervilles”. “Hoovervilles” (named after president Herbert Hoover) were towns made of packing crates, and abandoned machinery and they began to appear across states in the U.S., some with as many as 15,000 residents. Residents would not have running water, sewage, or the lifestyle that they had before the economic collapse. Although some Hooverville residents were arrested for trespassing, in many cases judges would take pity -- in one instance, a judge suspended the sentences of 22 men and gave $2 to each of them out of his own pocket.
Black and Asian Americans faced double the amount of employment discrimination, facing substantial biases, xenophobia, and racism. During these times, many migrants left the United States or sought states with more improved conditions. Because of this intense poverty and economic decline, there were considerable mental health crises, an increase in the suicide rate, and domestic violence multiplying.
The Dust Bowl was an extended period of dust storms that struck the American (and Canadian) prairie regions throughout the 1930s. The Dust Bowl primarily affected states that were part of the High Plains region (a subsection of the Great Plains), such as Montana, Kansas, Wyoming, South Dakota, Nebraska, Colorado, and New Mexico. Early European/American settlers originally nicknamed the Great/High plains the “Great American Desert” as they thought it was not suitable for agriculture. Later on, in the early 20th century as the region experienced more favorable weather, it proved to be able to sustain large scale agriculture. However, the methods that many farmers in the late 19th/early 20th centuries used (such as burning cotton stubble to control weeds and leaving fields bare in the winter) deprived the land of the nutrients and moisture it needed. In the 1920s, farming weather in the region was unusually good which provoked increased settlement, however a switch seemingly flipped and in the summer of 1930 the region was drier than it had been in decades. This drought was so severe that it dried the first layer of soil across most of the plains and made it almost powdery, rendering indigenous grasses unable to grow. The lack of grasses combined with the strong winds that the plains normally experienced resulted in the topsoil being picked up and creating massive dust storms. April 14, 1935 otherwise known as Black Sunday marks some of the worst storms of the entire Dust Bowl that swept all the way from Canada to Texas; it earned the name Black Sunday due to reports that the amount of dust was so severe that the sky turned dark.
The ecological effects of the Dust Bowl only exacerbated the way the Great Depression was felt in the region. Many people were forced to uproot their lives and move elsewhere to seek work, as the area was mostly agricultural and the Dust Bowl marred that. The widespread outward migration lead to poverty and hunger in the Plains and more than 500,000 people were left homeless because of the Dust Bowl. As part of FDR’s New Deal the Soil Conservation and Domestic Allotment Act was passed along with many other programs and acts to help combat the Dust Bowl. However, the Dust Bowl still had a long term economic impact; land value in many high-medium erosion counties went down by up to 28% in the 1940s, in high erosion areas less than 25% of agricultural losses were recovered, and farmers were unable to shift to more sustainable crops due to the failure of banks in the Dust Bowl region.
FDR and the New Deal:
FDR’s New Deal was a series of social welfare and financial programs along with regulations throughout 1933-1939 to help combat the Great Depression. The New Deal included both executive orders made by FDR as well as laws passed by Congress. The economy hit rock bottom during March of 1933, however thanks to the New Deal it was able to make up to a 57% recovery by July of the same year. The New Deal took a multi-faceted approach towards combating the Great Depression, including the economic, social, and agricultural aspects of it.
The New Deal’s fiscal policy first took form by the Economy Act (March 15, 1933), which aimed to regulate the federal budget as well as pensions to veterans and saved up to $500 million per year, and served to prove that FDR was fiscally responsible. Bank losses greatly destabilized the economy: this was kicked off by investment banking losses, followed by bank runs. Bank runs are when a relatively large number of patrons withdraw deposits because they believe the bank may collapse, which only prompts more people to withdraw. In order to combat this, FDR passed the Emergency Banking Act (March 9, 1933), which allowed banks to reopen under Treasury supervision and provided federal loans. The government suspended the Gold Standard to stop the outflow of gold due and mandated that large amounts of gold be converted to the fixed U.S. dollar, which would allow the Federal Reserve to increase circulation of the dollar if needed. FDR also repealed prohibition, which allowed states an extra source of revenue.
Roughly 1⁄3 of the population was hit extremely hard by the Great Depression and Relief was immediately employed to help them under FDR. While many relief programs in the past had been used to create job opportunities for the unemployed, FDR’s relief included: building schools, constructing waterworks, sewers, streets, and parks. The Public Works Administration (PWA) helped to provide funding for many government buildings and important pieces of infrastructure, which also helped to provide more jobs. The rural United States was hit extremely hard by the depression, the Dust Bowl affected many rural communities and in the South many people living in rural areas were severely below the poverty line. The farming industry was severely affected by the depression, and FDR believed that the US would not fully return unless farming did. He passed a variety of legislation that responded to the needs of those in rural areas and farming communities throughout the 1930s.
In all the below questions we urge you to use the history and stances of past conflicts to guide how you will react and stand in the committee; utilize these questions when playing your position in the committee as well as when writing your position paper.
How can you use your portfolio powers to influence the committee?
What effect did the Great Depression have on racially marginalized communities?
Agree or disagree with FDR’s new deal? If not, push for something different?
How did the dust bowl affect the depression?
Who was hit the hardest by the depression?
Is there anyone/anything to blame for the Great Depression? If so, who/what?
Who supports your ideas?
(Portfolio Powers will be given in the first session of the committee; please know how to correctly pronounce your position’s and all other positions’ names.)
Franklin D. Roosevelt, Politician
Andrew Mellon, United States Secretary of Treasury
Irving Fisher, Economist
Huey P. Long, Governor of Louisiana
Francis Townsend, Political Activist and Physician
Eleanor Roosevelt, Wife of Franklin D. Roosevelt
John Maynard Keynes, Economist
Walter Francis White, Leader of NAACP
Herbert Hoover, President of the United States
Adolph Ochs, Owner of the New York Times
Charles Hamilton Houston, Chief Strategist of the NAACP
Edward Beale McLean, Publisher and Owner of the Washington Post
John Nance Garner, Politician