Unit 9 AP U.S. History “Boom and Bust”. Focus on while Reading: The Conservative Republican Presidents of the 1920s and the effect of their commitment.
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Slide 1
Unit 9 AP U.S. History Boom and Bust
Slide 2
Focus on while Reading: The Conservative Republican Presidents
of the 1920s and the effect of their commitment to Rugged
Individualism. The burst of economic activity and new mass-produced
products of the 1920s. The growing tension between Rural and Urban
America The renewal of nativism and racism combined with the rise
of the Red Scare. New forms of music, art, entertainment, sports,
and other cultural outlets.
Slide 3
Introduction to the Roaring Twenties: In many ways the
rebellion of youth, push for civil rights, and drive toward greater
womens rights makes the 1920s very comparable to the turbulent
1960s. The big difference comes when one realizes that women and
African Americans were still very much subordinated and that the
conservative Republican leadership kept the nation in adherence to
the status quo. New mass-producible products, the Jazz Age, modern
art, and professional sports (Baseball) made the Twenties roar.
Underlying all of this progress were the maladies of racism,
nativism, and the suspicion of foreigners, labor union leaders, and
political radicals that stemmed from the Red Scare. The 1920s was a
pivotal struggle between those that wished to leave the past behind
and move forward into the future and those that wished to find a
return to normalcy.
Slide 4
Unit 9.1: The Return to Normalcy- Harding, Coolidge, and Hoover
How did Warren G. Hardings emphasis on de- regulation begin the
process of destroying the American economy and crippling both
Hardings reputation and his personal health? In what ways did
President Coolidges minimal approach to the Presidency both benefit
and cripple the nation? Although it is wrong to say that Herbert
Hoover fundamentally caused the Great Depression, why is it correct
to state that his do-nothingism certainly did little to help ease
the suffering of the people?
Slide 5
Unit 9.1: The Return to Normalcy- Harding, Coolidge, and Hoover
How did Warren G. Hardings emphasis on de-regulation begin the
process of destroying the American economy and crippling both
Hardings reputation and his personal health? Ironically the 1920
Presidential Election, the 1 st that women were able to vote in,
represented a shift away from Progressive Reform. Harding
campaigned on the promise of a return to normalcy, a rejection of
the Progressive Movement, the League of Nations, and
Interventionist foreign policy in general. Hardings economic
policies reflected a post-war de-regulation of the economy. The
Jones Merchant Marine Act (1920) authorized the sale of
government-built ships to private bidders. The Esch-Cummins Act
(1920) returned ownership of the Railroads to private companies.
Domestically, Harding sought to cut taxes (particularly for the
wealthy), protect American industry from labor unions and foreign
competition, and reduce government spending. Hardings Presidency
was rife with scandal, the most important of which was the Teapot
Dome Scandal. The Teapot Dome Scandal involved the sale of U.S.
Naval Oil Reserves to private companies. Hardings Secretary of the
Interior Albert Fall was arrested and put in jail for his role in
the scandal. The Attorney General and Secretary of the Navy barely
escaped conviction. One of Hardings closest friends Jesse Smith,
who arranged the bribes and payoffs associated with the scandal,
committed suicide. Harding died suddenly in 1923 from heart
problems no doubt stemming from stress related to his corrupt
associates.
Slide 6
Slide 7
Unit 9.1: The Return to Normalcy- Harding, Coolidge, and Hoover
In what ways did President Coolidges minimal approach to the
Presidency both benefit and cripple the nation? Calvin Coolidge
became President when Harding died in 1923. Coolidge had been
Governor of Massachusetts and was best known for his handling of
the Boston Police Strike. President Coolidge believed, especially
with regards to the economy, that the best thing the President
could do for the nation was to do very little. Coolidge once said
that the Business of America is Business. Many of President
Coolidges critics asserted that he maintained business prosperity
by neglecting important social and economic concerns, such as civil
rights issues, labor unions, and the plight of the American farmer.
Coolidge cared little for the plight of the farmer, stating the
Farmer has always been poor, not much we can do about that. When
farm prices began falling and foreclosures began rising Congress
passed the McNary-Haugen Bill in 1927 and 1928 allowing the
government to purchase surplus crops in order to prevent prices
from dropping any lower. In both cases Coolidge vetoed the
Bills.
Slide 8
Slide 9
Unit 9.1: The Return to Normalcy- Harding, Coolidge, and Hoover
Although it is wrong to say that Herbert Hoover fundamentally
caused the Great Depression, why is it correct to state that his
do-nothingism certainly did little to help ease the suffering of
the people? Herbert Hoover had gained notoriety as the head of the
Food Administration during World War I and leading the Belgian
Relief effort to ease the suffering of Belgians after the invasion
of Germany. He campaigned in 1928 by promising to wage war on
poverty, however, only a few months into his Presidency the Stock
Market crashed and our nation was ravaged by poverty.
Unfortunately, the great humanitarian who did so much to increase
food production for the troops and ease the suffering of Belgian
citizens during World War I did very little to ease the suffering
of Americans after the crash. Hoover embraced a policy of rugged
individualism and volunteerism in the wake of the crash. He
believed it was up to the States and Private citizens to pull the
nation out of this crisis. He believed that increased government
involvement would only worsen the economic disaster. He also
refused to support any form of direct relief to the American
people, feeling hand- outs would create an entitlement state,
stifle motivation, and drive the nation toward socialism. He was
soon dubbed the Do-Nothing President
Slide 10
Slide 11
Unit 9.2: Nativism, Racism, and the Red Scare In what ways did
immigration patterns begin to change between 1890 and 1920 and what
impact did the shift have on the renewal of American Nativism? What
evidence suggests that World War I did very little to improve the
status of African Americans in American Society? What caused people
to launch into hysteria over the potential for a Communist
Revolution in the United States and how did this hysteria manifest
itself in civil rights violations and human rights abuses?
Slide 12
Unit 9.2: Nativism, Racism, and the Red Scare In what ways did
immigration patterns begin to change between 1890 and 1920 and what
impact did the shift have on the renewal of American Nativism?
Around 1890, due mainly to political/social/economic unrest in
Europe and Asia, the numbers and nations of origin of immigrants
arriving in America began to dramatically increase. Many of the New
Immigrants began arriving from Southern and Eastern Europe as well
as from China and Japan. These new immigrants did not fit in with
mainstream American society and caused overcrowding and increased
job competition in Northern Cities. They came to build the
Transcontinental Railroad and the Skyscrapers of New York City and
other Northern Urban centers. They came to escape political
persecution and seek religious freedom. They came because they were
starving to death and needed a fresh start (Irish Potato Famine).
They were the tired, the poor, the huddled masses yearning to be
free Reaction to this new wave of immigration was negative, coming
in the form of intense nativism.
Slide 13
Unit 9.2: Nativism, Racism, and the Red Scare In what ways did
immigration patterns begin to change between 1890 and 1920 and what
impact did the shift have on the renewal of American Nativism?
Reaction to this new wave of immigration was negative, coming in
the form of intense nativism. Nativism stemmed back to prior to the
American Civil War when the Know-Nothing Party was created with the
sole purpose of limiting immigration. The new immigrants of the
late 1800s and early 1900s were shunned because they looked
different, spoke unfamiliar languages, were mainly Catholic or
Jewish, typically arrived impoverished with little to no job skills
of any merit, and did not fit in with the cultural norms of
American society. Because they came from impoverished conditions
they would work for extremely low wages, for which they were
resented by native-born American workers. Nativist legislation and
organizations included: oThe Chinese Exclusion Act: banned the
immigration of Chinese workers until, essentially, 1965. oThe
Gentlemens Agreement with Japan: banned the immigration of Japanese
workers in exchange for desegregation of California public schools
for Japanese-American students. oThe Emergency Quota Act: meant to
set limits on the numbers of immigrants that could come from
Southern and Eastern Europe. oThe Immigration Restriction League: a
group formed to determine what nations represented desirable and
undesirable immigrants.
Slide 14
Slide 15
Unit 9.2: Nativism, Racism, and the Red Scare What evidence
suggests that World War I did very little to improve the status of
African Americans in American Society? W.E.B. Du Bois had hoped
that African American service during World War I would lead to
greater freedom at home. He was sadly disappointed. After World War
I, Du Bois wrote a poem entitled Returning Soldiers in which he
detailed the discrimination, oppression, and inequality that
African Americans still faced under Jim Crow segregation, de facto
segregation in the North, and daily lynchings all over the country.
Marcus Garvey was so disillusioned with the African Americans
chance for success and equality in America that he amped up efforts
in Black Nationalism. Garvey stressed Black Pride and self-respect.
He founded the Universal Negro Improvement Association and tried to
build the Black Star Line to take African Americans back-to-Africa.
Garveys emphasis on Black Pride would serve as a foundation for the
Black Panthers, Malcolm X, and the Black Power Movement of the
1960s.
Slide 16
Slide 17
Unit 9.2: Nativism, Racism, and the Red Scare What caused
people to launch into hysteria over the potential for a Communist
Revolution in the United States and how did this hysteria manifest
itself in civil rights violations and human rights abuses? Weve
mentioned that monopoly capitalism had created such a steep divide
between rich and poor in the United States that most people
acknowledged that a revolution could spark at any moment dating
back to the 1880s. After World War I, and the subsequent
termination of the National War Labor Board, there was a record
number of labor strikes. Add to this the worst Race Riots in our
history (most notably in Chicago, Illinois) and Anarchists send
pipe bombs to politicians in the mail and you have the makings of
your revolution. In March 1917 the Bolsheviks took over Russia and
began advertising its support for Communist Revolutions around the
world.
Slide 18
Unit 9.2: Nativism, Racism, and the Red Scare What caused
people to launch into hysteria over the potential for a Communist
Revolution in the United States and how did this hysteria manifest
itself in civil rights violations and human rights abuses? This
paranoia and hysteria related to the possibility of a Communist
Revolution in the United States became known as the Red Scare.
After a pipe bomb exploded outside the home of Attorney General A.
Mitchell Palmer, he launched a series of raids and illegal searches
that became known as the Palmer Raids. The Palmer raids resulted in
thousands of illegal deportations, authorized without due process.
They targeted many law abiding Socialists who should have been
protected by first amendment rights. Soon the Red Scare became an
excuse to attack foreigners, union members, and any anti-Capitalist
political group. Other events associated with the Red Scare
included: The reemergence of the Ku Klux Klan The rise of the
Hundred Percenters who backed immigration restriction and
isolationist foreign policy. The trial and execution of Sacco and
Vanzetti less for the actual evidence in their case and more for
the fact that they were immigrant radicals.
Slide 19
Slide 20
Unit 9.3: The Roaring Twenties In what ways did new technology
extend into the American home and drive a new wave of
mass-advertising consumerism? How did the Jazz Age influence the
development of cultural change in American Society and
fundamentally shift the nature of womens expectations of social
norms? In what ways did the Harlem Renaissance combine political
activism with cultural arts during the 1920s? How did
industrialization lead to the growth of professional sports, most
importantly Baseball, and how did these leisure activities unify
the nation?
Slide 21
Unit 9.3: The Roaring Twenties In what ways did new technology
extend into the American home and drive a new wave of
mass-advertising consumerism? After rebounding from a recession in
1921 and 1922, the economy rebounded leaving many Americans with
surplus income with which to launch a wave of consumerism.
Purchasing on credit allowed Americans to buy now and pay later and
drove consumers out to buy the latest gadgets available. Mass
advertising campaigns convinced consumers that they needed all the
latest technologies and Mail Order Catalogs (Sears Roebuck and
Montgomery Ward) brought them right to their homes. The most
notable consumer item of the decade was the automobile. Henry Fords
use of assembly line technology made the automobile affordable for
American families (20% of Americans owned a car by 1930). Fords $5
day made it possible for his own workers to purchase his cars,
which you could get in any color you wanted as long as it was
black. Fords automobile spurned many other developments: Highway
and Interstate construction Suburbanization (Levittowns later in
the 1950s) Rubber, Oil, Insurance, and Advertising Industries Many
in the Middle Class based their status on the automobile they drove
The advance of the automobile industry meant the decline of the
Railroad industry, which would have disastrous effects by the end
of the decade.
Slide 22
Slide 23
Unit 9.3: The Roaring Twenties How did the Jazz Age influence
the development of cultural change in American Society and
fundamentally shift the nature of social norms? The Prohibition Era
caused the growth of organized crime, speakeasies, and bootlegging.
Collectively these contributed to the Era of Lawlessness during
which many American youths became disillusioned with traditional
heroes (police officers, ballplayers, elected officials, etc.) The
Flapper culture represented a cultural shift for women. They began
challenging social norms by wearing shorter hair (the Bob), shorter
skirts, and drinking and smoking in public. The new rhythms of Jazz
Music became the soundtrack of the 1920s. A group of writers
(Hemingway, Fitzgerald, Sinclair Lewis, T.S. Eliot, and Ezra Pound)
known as the Lost Generation began expressing the disillusionment
of society with war, materialism, and religion.
Slide 24
Slide 25
Unit 9.3: The Roaring Twenties In what ways did the Harlem
Renaissance combine political activism with cultural arts during
the 1920s? After World War I, African Americans began migrating in
large numbers to the Northern Cities (what became known as the
Great Migration) where even though they still faced discrimination
and oppression they could expected greater earnings and standard of
living. Harlem, a section of New York City, became home to 200,000
African Americans (many of whom were talented artists, musicians,
and writers). Despite the fact that the talents of Louis Armstrong
and Duke Ellington (Jazz Musicians), Bessie Smith (Blues Singer),
Paul Robeson (actor and singer), and poets Langston Hughes, Claude
McKay, Countee Cullen, and James Weldon Johnson earned them all
acclaim from integrated audiences they still faced segregation off
the stage. The great hope was that the Harlem Renaissance could
bring people together through the arts, that by developing an
appreciation for African American culture, whites would become more
open to the integration of society.
Slide 26
Slide 27
Unit 9.3: The Roaring Twenties How did industrialization lead
to the growth of professional sports, most importantly Baseball,
and how did these leisure activities unify the nation? With the
rise of the Stock Market Bubble, increased standards of living
stemming from industrialization, and all the disposable income
created by installment plan purchasing Americans now had money and
time to entertain themselves. Sports like Professional Tennis,
Boxing, College Football, and swimming became very popular during
the 1920s. No professional sport gained more or lost more from the
Roaring Twenties than Baseball. The 1920s was the beginning of
Baseballs becoming Americas Game. That status was nearly crushed by
the Chicago Blacksox Scandal (when players took bribes to fix the
World Series including the great Shoeless Joe Jackson). However,
the crackdown on gambling, thuggish play, and wild living initiated
by the reign of Judge Kennisaw Mountain Landis began the resurgence
of the game. But no one did more for any sport during this time
than Babe Ruth, who emerged as the first great Sports superstar
during the 1920s and into the 1930s. Baseball was again truly
Americas game and united the people around their citys team.
Slide 28
Unit 9.4: The Battle between Urban and Rural values produces a
new sectionalism. In what ways was life in the cities rapidly
separating from life in the agricultural sectors of the American
population? How did the Arts drive this rift between city and
country further apart? What role did science and religion play in
further dividing the American public along the battle lines of
urban vs. rural?
Slide 29
Unit 9.4: The Battle between Urban and Rural values produces a
new sectionalism. In what ways was life in the cities rapidly
separating from life in the agricultural sectors of the American
population? By the 1920s the majority of Americas population now
lived in the city. Rural America saw the cities as centers of vice
and sin. Ironically enough, one of the most important issues of the
1920s was the ban on alcohol known as the Prohibition Era (largely
supported by Rural America). Established by the 18 th Amendment and
enforced by the Volstead Act, Prohibition banned the sale,
manufacture, and transportation of alcohol. The creation of
speakeasies (illegal saloons), bootlegging networks, and Organized
Crime only reinforced Rural Americas view that the cities were
vile, crime-ridden, and centers of debauchery. The culture of
fashionably breaking the law, bribery of public officials,
gambling, and risk-driven living was destroying the traditional
values that many rural Americans held dear to their hearts.
Eventually Prohibition would be repealed by the 21 st Amendment.
FDR cited that the cost of enforcing an unpopular law (The
President had his own private wine cellar) wasnt prudent during the
hardship of the Great Depression.
Slide 30
Slide 31
Unit 9.4: The Battle between Urban and Rural values produces a
new sectionalism. How did the Arts drive this rift between city and
country further apart? At the Armory Show in New York City in 1913
the controversial modern art of Pablo Picasso and other modern
artists was put on display. The traditionalists were outraged over
the exhibition of Marcel Duchamps Nude descending a Staircase. Much
of the resistance to modern art was driven by nativist sentiment
and was eventually overcome. The Museum of Modern Art opened in New
York City in 1929. Other forms of modern art included
impressionism, cubism, and geometric abstract.
Slide 32
Slide 33
Unit 9.4: The Battle between Urban and Rural values produces a
new sectionalism. What role did science and religion play in
further dividing the American public along the battle lines of
urban vs. rural? The most important battleground between rural and
urban values was fought between Science and Religion. In 1925, a
Tennessee Science Teacher (John T. Scopes, encouraged by the
American Civil Liberties Union) was arrested for teaching the
theory of evolution in his Biology classroom. The case was never
about the guilt or innocence of Scopes (he was guilty), but about
the legitimacy of the law banning the teaching of evolution in an
attempt to silence critics of the Creation Theory. (Urban Modernism
vs. Rural Fundamentalism) William Jennings Bryan was brought in by
the State of Tennessee to prosecute Scopes. The ACLU sent Clarence
Darrow to represent Scopes. The National media seized on the case
as an opportunity to make fun of rural values and trivialize
Protestant Christians. The trial was nicknamed the Monkey Trial
because of its focus on evolution. Darrow even called William
Jennings Bryan to the stand to attempt to discredit the merits of
fundamentalist Christianity. The jury ruled against Scopes, but the
verdict was later overturned on appeal. The issue is still hotly
debated and controversial today.
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Slide 36
Practice Question #1 1. Politically, the decade of the 1920s:
A. Was dominated by Conservative Republican Presidents B.
Experienced one of the major reform periods in the nations history
C. Was dominated by Progressive Democratic Presidents D. Was
favorable to labor unions as government passed collective
bargaining laws E. Was dominated by women who had recently been
given the right to vote
Slide 37
Practice Question #2 2. The Eighteenth Amendment: A. Gave women
the right to vote B. Repealed Prohibition C. Made it illegal to
belong to a radical political party D. Made it illegal to purchase,
distribute, or consume liquor E. Made it legal to teach evolution
in public schools
Slide 38
Practice Question #3 3. The Volstead Act: A. Allowed the
government to purchase railroad companies from private corporations
B. Provided a tax cut to wealthy Americans C. Placed railroad
companies under combined government and private management D.
Restricted immigration E. Provided for the enforcement of the
Eighteenth Amendment
Slide 39
Practice Question #4 4. Which of the following is not
associated with the Harlem Renaissance? A. Countee Cullen B.
Langston Hughes C. James Weldon Johnson D. Jean Toomer E. Booker T.
Washington
Slide 40
Practice Question #5 5. A. Mitchell Palmer is associated with:
A. The Harlem Renaissance B. Prohibition C. The Motion Picture
Industry D. Baseball E. The Red Scare
Slide 41
Practice Question #6 6. Sacco and Vanzetti were: A. Leaders of
the Prohibition Movement B. Arrested and convicted for placing
bombs on Wall Street C. Trade Union leaders arrested by the
government for organizing illegal strikes D. Anarchists who were
controversially convicted and executed for murder E. Major League
Baseball players
Slide 42
Practice Question #7 7. The Teapot Dome scandal occurred during
which presidents administration? A. Calvin Coolidge B. Herbert
Hoover C. Franklin D. Roosevelt D. Warren G. Harding E. Woodrow
Wilson
Slide 43
Practice Question #8 8. A major reason why Al Smith was
defeated in the 1928 presidential race was because: A. Of his vocal
support for radical movements B. He had been president of a
militant trade union C. He had been involved in the Teapot Dome
Scandal D. He was associated with Wilsons idealism E. He was a
Catholic
Slide 44
Practice Question #9 9. Which of the following was considered
to be the symbol of post-World War I consumerism? A. Television B.
Automobile C. Refrigerator D. Phonograph E. Radio
Slide 45
Practice Question #10 10. The Hundred Percenters: A. Advocated
for the repeal of the Volstead Act B. Favored a loose immigration
policy C. Were rural Americans who condemned urban life D. Favored
immigration restrictions and isolationist foreign policy E. Opposed
the teaching of Darwins theory of evolution in public schools
Slide 46
Answer Key: 1. A 2. D 3. E 4. E 5. E 6. D 7. D 8. E 9. B 10.
D
Slide 47
Focus on while Reading: Storm Clouds that could have/should
have predicted the impending disaster of the Great Depression. The
extent of the economic collapse and the impact felt by the American
public. President Hoovers failures to effectively deal with the
crisis. The foundations of President Franklin Roosevelts New Deal
and basic components of his plan for Relief, Recovery, and Reform.
Opponents of the New Deal The legacy of the New Deal, including any
New Deal Programs that are still in effect today.
Slide 48
Introduction to the Great Depression and New Deal In terms of
intensity and duration the Great Depression was the worst economic
disaster in World History. The preservation of the Capitalist
system required, ironically enough, massive government intervention
and enormous increases in government spending. The causes of the
Great Depression were largely ignored by politicians and economists
in the interest of not stemming the booming 1920s prosperity.
Although FDRs New Deal did much to stabilize the economy and
provide relief to those suffering its effects, the rise of World
War II and the production increases that accompanied it ended the
Great Depression. The Cold War and subsequent increases in
peace-time defense spending helped prevent a Great Depression
2.0
Slide 49
Unit 9.5: Causes of the Great Depression What should the uneven
distribution of wealth in our nation have told us about the state
of the population? How does this demonstrate that our focus was
misplaced? How did the problems of under-consumption, inadequate
investment, and development of new technologies begin to shift the
nature of supply and demand? In what ways did the newly-embraced
policy of isolationism manifest itself in the economy and limit
foreign trade at a time when it was in deep need? How did
over-speculation and buying on margin contribute to the Stock
Market Crash? How did the fragility of the Banking System create a
ripple effect of economic disaster following the Crash?
Slide 50
Unit 9.5: Causes of the Great Depression What should the uneven
distribution of wealth in our nation have told us about the state
of the population? How does this demonstrate that our focus was
misplaced? First of all, in Capitalism there will always be haves
and have- nots, it is an inherent part of the system. By 1929 the
divide between the wealthy, middle class, and poor had become
disproportionately large. 1% of the nations population owned 50% of
the wealth, 4% of the population owned 80% of the wealth leaving
very little for an ever-growing poor. Most significantly, this
divide dramatically reduced the purchasing power of millions of
Americans, which should have signaled problems ahead. Restrictions
on labor unions, deregulation of business, and tax codes that
favored the rich only made matters worse.
Slide 51
Slide 52
Unit 9.5: Causes of the Great Depression How did the problems
of under-consumption, inadequate investment, and development of new
technologies begin to shift the nature of supply and demand?
Studies show that in 1929 78% of the nations population lived at or
below what was called the minimum comfort level with 42% of the
population at or below the poverty line. Underconsumption leads to
overproduction, which leads to increased surpluses, decreased
demands, and decreased profits. Decreased profit, in turn, leads to
layoffs and downsizing, which increases unemployment. If the people
are not able to buy stuff, then capitalism doesnt work as it is
supposed to work. With the decline in profitability came the
decline in capital investment. Businessmen invest capital when they
believe they will return a profit. New labor-saving technologies
employed to cut cost caused unemployment to rise. The use of
machines also increase the problems of overproduction and
underconsumption.
Slide 53
Slide 54
Unit 9.5: Causes of the Great Depression In what ways did the
newly-embraced policy of isolationism manifest itself in the
economy and limit foreign trade at a time when it was in deep need?
We have already mentioned the arms reduction treaties signed at the
Washington Naval Conference. These arms reductions represent cuts
in defense spending and decreased availability of foreign military
contracts to stimulate the economy. Under the leadership of
conservative Republicans, the United States began to raise tariffs
(taxes on imports), which led our trade partners to respond in
kind. The Fordney-McCumber Tariff (1922) raised tariff levels to an
unprecedented new high. The inability of European nations to sell
their goods in the United States made it virtually impossible for
them to pay off their wartime debts to the United States. Matters
worsened when Congress passed the Hawley-Smoot Tariff raising the
tariff to the highest levels ever in United States history.
Slide 55
Slide 56
Unit 9.5: Causes of the Great Depression How did
over-speculation and buying on margin contribute to the Stock
Market Crash? By 1929, a substantial amount of money invested in
the Stock Market was purchased with money borrowed on margin (money
paid up front for the stock purchase). The stock brokerage or banks
would cover the balance of the stock purchase and charge uniformly
high interest rates on the loans. The practice of buying on margin
inflated stock prices to historic levels, in some cases more than
quadrupling the stocks original price. As long as the original
price remained stable or increased the buyer was safe. If stock
prices fell at all, the creditor was authorized to demand full or
partial payment of what was loaned. On October 24 th exactly that
happened. Stock prices began to drop and panicked creditors
demanded repayment of their loans. On October 29 th, 1929 a history
16.5 million shares were dumped on the stock exchange, shattering
the market. Banks closed, investors who had sunk all they had in
the market to cash in on the incredible Bull Market were ruined,
and business closings were rampant. The Crash had a particularly
devastating effect on the elderly, African Americans, children,
elderly, the working class, and the poor.
Slide 57
Unit 9.5: Causes of the Great Depression How did the fragility
of the Banking System create a ripple effect of economic disaster
following the Crash? The Banks had been swept up in the Bull Market
and overextended themselves doling out too many bad loans. When the
market crashed many banks were forced to close having lost their
capital through failed stock purchases and defaulted loans. Fearing
a prolonged collapse of the Banking system many Americans began
pulling their money out of the banks and hoarding their money at
home. Without a healthy banking system the loans and stable
currency that was needed to jump start the economy again were
absent. Consequently, Bank failures led to business failures, which
led to record high unemployment, starvation, and suffering on a
scale never before witnessed in the United States.
Slide 58
Unit 9.6: The extent of the Crash and Hoovers response What
were some of the economic ramifications of the Stock Market Crash
and economic downturn? What were some of the social effects of the
Stock Market Crash and economic downturn? In what ways did
President Hoover attempt to deal with the crisis? In what ways did
President Hoover fail to deal effectively with the crisis? How did
Franklin D. Roosevelt go about providing the nation with an
alternative to Hoover and his do- nothingism in 1932?
Slide 59
Unit 9.6: The extent of the Crash and Hoovers response What
were some of the economic ramifications of the Stock Market Crash
and economic downturn? GNP fell from $104 Billion in 1929 to $56
Billion in 1933 Per Capita disposable income fell from $678 in 1929
to $369 in 1933. 400,000 farmers lost their land to foreclosure by
1933 By 1933 the nation faced 25% unemployment (as high as 33% when
you include those that had quit looking for work and the
underemployed). Some communities banned married women from working.
New investments, exports, and new building construction all fell
dramatically. Between 1930 and 1933 there were 1700 bank closings
per year. When a bank failed all savings were simply lost through
failed investment and defaulted loans. Hunger, homelessness, and
mental depression increased dramatically. Capacity utilization
(number of functional factories in use) decreased from 91% in 1925
to 46% in 1933.
Slide 60
Slide 61
Unit 9.6: The extent of the Crash and Hoovers response What
were some of the social effects of the Stock Market Crash and
economic downturn? Americans (oftentimes women and children because
men were too proud) were forced to beg or panhandle for money just
to feed their families. The Homeless gathered into makeshift
shantytowns (known as Hoovervilles). Almost everything that was
indicative of the suffering of the Great Depression took Hoovers
name in some way (Hoover Blankets, Hoover flags, etc.) American men
(hoboes) left their families and took to the railroad lines to move
across the country desperately looking for work. American youth
(the Lost Boys) ran away from home and roamed the country seeking
employment and taking advantage of the independence that came with
preoccupied parents. The suicide rate dramatically increased during
this period.
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Unit 9.6: The extent of the Crash and Hoovers response In what
ways did President Hoover attempt to deal with the crisis?
President Hoover created the Federal Farm Board to store surplus
grain and cotton, but the program was far too modest to handle the
continued overproduction of American farmers. Hoover created the
Federal Home Loan Bank Act to provide loans to prevent home
foreclosures. Again the program was far too modest. Hoover created
the Reconstruction Finance Corporation to prop up traditional
industries (railroads, banks, insurance companies, and other key
industries) in hopes that the stability of these industries would
trickle down to smaller businesses. Hoover did authorize Public
Works Projects to create jobs such as Boulder Dam in Colorado
(later renamed Hoover Dam). The main problem with all of these
measures was that they were too little too late. Where Hoover would
spend millions of dollars to stimulate the economy, Franklin D.
Roosevelt would spend billions.
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Unit 9.6: The extent of the Crash and Hoovers response In what
ways did President Hoover fail to deal effectively with the crisis?
Hoover was absolutely opposed to the idea of direct relief to those
suffering the effects of the Great Depression. He believed hand
outs would create a Federal Welfare State that addicted the people
to entitlements. Hoover believed this sort of government
intervention would create a dangerous precedent and turn political
races into a competition to see who can buy the most votes with
lucrative handouts. Hoover believed in localism, volunteerism, and
Rugged Individualism. Localism: issues related to unemployment and
poverty were the responsibility of local and state governments, not
the Federal Government. Volunteerism: Charitable organizations
would see people through difficult times, Big Business would
voluntarily fix wages and prices, workers would voluntarily
sacrifice in the form of pay cuts and reduced hours for the good of
the company. Rugged Individualism: Through hard work, sacrifice,
and determination Americans would weather this storm. The people
shouldnt rely on the government, but themselves, to stimulate
recovery. Many critics of Hoover suggest that he was a prisoner of
his ideologies (laissez-faire economics and Social Darwinism),
which kept him from formulating an adequate response to this
crisis.
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Unit 9.6: The extent of the Crash and Hoovers response How did
Franklin D. Roosevelt go about providing the nation with an
alternative to Hoover and his do-nothingism in 1932? FDR recruited
experts and intellectuals (many from Columbia University) to form
his core of advisors. The press dubbed this group the Brain Trust.
With the aid of the Brain Trust FDR formulated what he called the
New Deal. The New Deal had two main goals: Maintain Americans
loyalty to the government and to the capitalist system. Create
conditions favorable to capital accumulation FDRs approach was
pragmatic and methodical, he once likened the New Deal to a batting
average (if he succeeded 3 out of 10 that was a major success). The
New Deal was based on the concepts of Relief, Recovery, and Reform.
The New Deal would come in three stages: The First Hundred Days The
First New Deal The Second New Deal
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Slide 68
Unit 9.7: The New Deal How did the First New Deal strive to
address the needs of the people and provide for Relief and Recovery
in this time of crisis? How did the Second New Deal strive to
address the need for reform in order to preserve the Capitalist
system? What was Keynesian Economics and what impact does it have
on national politics?
Slide 69
Unit 9.7: The New Deal How did the First New Deal strive to
address the needs of the people and provide for Relief and Recovery
in this time of crisis? The First Hundred Days and First New Deal:
I shall ask Congress for the one remaining instrument to meet the
crisis broad executive power to wage a war against the emergency as
great as the power that would be given me if we were invaded by a
foreign foe. Many of the early actions were intended to deal with
the Banking crisis. Emergency Banking Relief Act (National Banking
Holiday): FDR closed all the nations banks for four days and took
the United States off the Gold Standard. The Banks were inspected
and reopened if viable, provided loans by healthy banks and
reopened if not. The move was meant to stimulate confidence in the
Banking system. The Glass-Steagall Act: Forbade Banks from
excessive speculation, added $1 Billion in gold to the economy, and
created the Federal Deposits Insurance Corporation to guarantee
bank deposits up to $5000. Homeowners Refinancing Act: created the
Home Owners Loan Corporation to assist in refinancing mortgages and
prevent home foreclosures.
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Slide 71
Unit 9.7: The New Deal How did the First New Deal strive to
address the needs of the people and provide for Relief and Recovery
in this time of crisis? The First Hundred Days and First New Deal:
Other projects were intended to get Americans back to work Federal
Emergency Relief Act: provided funds for unemployment relief and to
subsidize public works projects that could create jobs. Civilian
Conservation Corps: put young, single males to work on conservation
projects (planting trees, soil erosion, irrigation, etc.) and began
to inject much needed funds back into the economy. The Civil Works
Administration: employed workers for government construction
jobs.
Slide 72
Unit 9.7: The New Deal How did the First New Deal strive to
address the needs of the people and provide for Relief and Recovery
in this time of crisis? The First Hundred Days and First New Deal:
Other New Deal programs provided assistance to rural areas: The
Agricultural Adjustment Act: the most controversial part of the
first New Deal, the law paid farmers to destroy crop surpluses,
livestock surpluses, and leave fields unplanted. The measure was
intended to drive up farm prices, but was later ruled
unconstitutional by the Supreme Court. In 1936 Congress passed a
second Agricultural Adjustment Act that better fit the Supreme
Courts rulings. Tennessee Valley Authority: The TVA constructed
hydroelectric dams to provide electricity to rural areas in the
Tennessee River Valley.
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Slide 74
Unit 9.7: The New Deal How did the First New Deal strive to
address the needs of the people and provide for Relief and Recovery
in this time of crisis? The First Hundred Days and First New Deal:
Still other parts of the New Deal dealt with Industry and
Construction. The Federal Housing Administration: meant to provide
funds to stimulate the construction of new homes. The Securities
and Exchange Commission: Created an agency to regulate the Stock
Market, prevent wild speculation, and prosecute cases of insider
trading. The National Industrial Recovery Act: Created the National
Recovery Administration to oversee regulations on price and
production guidelines and fair competition codes. It formally
recognized the right of labor unions to organize and use collective
bargaining. The NRA also created the Public Works Administration,
which employed hundreds of thousands of Americans to build roads,
bridges, etc. These types of programs were called pump priming
programs. The intent was to stimulate both capital investment and
consumer demand at the same time through building projects and
decreased unemployment.
Slide 75
Slide 76
Unit 9.7: The New Deal How did the Second New Deal strive to
address the need for reform in order to preserve the Capitalist
system? With clear Democratic victories in the 1934 midterm
Congressional elections FDR decided to move forward with The Second
New Deal focusing primarily on Relief and Reform. Start with
continued efforts to assist rural communities: The Resettlement
Administration: provided assistance to small farmers,
sharecroppers, and tenant farmers. The Rural Electrification
Administration: brought electricity to rural areas not served by
private companies.
Slide 77
Unit 9.7: The New Deal How did the Second New Deal strive to
address the need for reform in order to preserve the Capitalist
system? Other parts of the Second New Deal focused on Industry and
Labor Unions: National Labor Relations Act (The Wagner Act):
Replaced the National Industrial Recovery Act, which had been ruled
unconstitutional by the Supreme Court. The Act created the National
Labor Relations Board and reaffirmed the right to form labor unions
and collectively bargain. Tax Restructuring: placed a higher income
tax on the wealthy as well as creating a capital gains tax (tax
paid on money gained from investment aka stock dividends, business
profits, etc. Works Progress Administration: A massive works
project, the WPA hired millions of workers that had been receiving
assistance from state and local governments. The WPA created the
Federal Arts Program and hired out-of-work musicians, artists, and
singers for federal projects.
Slide 78
Unit 9.7: The New Deal How did the Second New Deal strive to
address the need for reform in order to preserve the Capitalist
system? Possibly the most important New Deal program was the Social
Security Act: The Social Security Act created a trust fund, to
which workers and employers contributed. At age 65 workers could
retire and receive monthly payments. The Social Security Act also
created disability insurance and unemployment insurance. The main
problem with Social Security today is that it depends on more
people paying into the fund than taking out. Between advances in
medicine (leading to people living longer) and the population
explosion that accompanied the end of World War II (The Baby Boom)
Social Security is in real trouble today and may or may not be
there in its intended form when you retire one day.
Slide 79
Slide 80
Unit 9.7: The New Deal What was Keynesian Economics and what
impact does it have on national politics? Two of FDRs most trusted
economic advisors, Harry Hopkins and Harold Ickes, advocated what
became known as Keynesian Economics. According to John Maynard
Keynes the private sector was unable to prevent severe cyclical
downturns (recessions and depressions) in the economy. Consequently
he argued that it was imperative that the government play a major
role in the economy. The government becomes a major
consumer/purchaser of goods and services. The government should
encourage investment through a lower corporate tax rate. Government
should facilitate the growth of exports. The Government should make
use of deficit spending. Too much emphasis on balancing the budget
can prolong economic recessions. It is urgent that the government
spends more than it is taking in during economic stagnation. FDR
was never a fan of deficit spending, consequently he supported
Keynesian Economics only because of the severity of the situation.
When the economy appeared to finally be coming out of the
Depression in 1937 FDR made the ill- fated decision to balance the
budget and caused a renewed recession, spike in unemployment, and
dramatic decrease in capacity utilization. FDR never fully embraced
the Keynesian model until World War II demanded the kind of
spending programs that drove the Keynesian model.
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Slide 82
Unit 9.8: The Legacy of the New Deal What impact did the New
Deal have on African Americans, Women, Native Americans, and Latin
America? Who were the main opponents of the New Deal? How was the
Great Depression ended and what legacy did it leave behind?
Slide 83
Unit 9.8: The Legacy of the New Deal What impact did the New
Deal have on African Americans, Women, Native Americans, and Latin
America? African Americans revered Franklin Roosevelt, making him
the first Democrat to receive significant African American support
since Reconstruction. African Americans suffered greatly during the
Great Depression. They were typically the last hired and first
fired. African Americans were segregated in some New Deal programs,
excluded from others, and blatantly harmed by still others (African
American tenant farmers and sharecroppers were stripped of their
land by the AAA to reduce crop yields). African Americans were able
to find employment in the PWA and WPA, FDR created the Civil Rights
Division within the Department of Justice, and appointed the first
African American Federal Judge. The most important ally of African
Americans in the White House was the First Lady, Eleanor Roosevelt
who worked tirelessly to increase African American rights and raise
money for the NAACP. Many women still faced the obstacle of equal
pay for equal work. Women were typically paid less to do the same
job as a man. Women were able to find employment in some New Deal
programs and their job status was protected by the National
Recovery Administration. The first woman was appointed to a Cabinet
position when Francis Perkins was named Secretary of labor.
Congress passed the Indian Reorganization Act reinstituting the
Tribal System and creating the Bureau of Indian Affairs headed by
James Collier. Franklin Roosevelt established the Good Neighbor
Policy in an effort to improve relations with Latin America. In the
Good Neighbor Policy he pledged that no nation had the right to
intervene in the internal affairs of another.
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Slide 85
Unit 9.8: The Legacy of the New Deal Who were the main
opponents of the New Deal? Throughout the 1930s there was a growing
disillusionment not only with the Capitalist System, but also with
New Deal programs that were seen as ineffective. This feeling was
growing particularly prevalent within the farming and labor
communities. Conservative Business leaders were becoming
increasingly antagonistic towards the New Deal, which they saw as
an attack on laissez-faire capitalism. Leaders began to emerge with
alternative planned that seemed, at least at face value, to be
viable plans. Dr. Francis Townsend: Townsend proposed a Old Age
Revolving Pension Plan which would pay citizens over 60 a $200 per
month stipend, but that money had to spent (could not be put in
savings). This was intended to both allow older Americans to retire
and stimulate the economy. Father Charles Coughlin: A Catholic
Radio Priest, Coughlin created the National Union for Social
Justice and made weekly radio addresses criticizing the New Deal.
However, his increasingly anti-Semitic remarks caused the Catholic
Church to pull him off the radio. Huey Long: The Governor of
Louisiana proposed the Share-Our-Wealth program, which proposed to
redistribute the wealth of the nation by taking from the
millionaires and giving each family a house, radio, and car. He
also proposed a $2000 a year guaranteed annual salary. His views
could have been the only legitimate threat to FDR in 1936, but he
was assassinated by a constituent in 1935.
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Slide 87
Unit 9.8: The Legacy of the New Deal Who were the main
opponents of the New Deal? The Supreme Court revealed its
opposition to the New Deal when it ruled the National Industrial
Recovery Act and Agricultural Adjustment Act unconstitutional.
Schechter Poultry Corporation v. United States: In the Sick Chicken
Case the court invalidated the NIRA partly on the grounds that the
Federal Government cannot regulate wholly intrastate commerce.
Butler v. United States: the Court invalidated the AAA on the
grounds that Congress could not tax to benefit one sector of the
population (farmers) and that agriculture was the responsibility of
the states not the federal government. FDR was furious, calling the
rulings horse and buggy thinking, and began looking for a way
around these obstinate justices: He settled on a scheme called the
Court-Packing Bill by its critics. The majority of current justices
had been appointed by Harding and Coolidge. FDR proposed to
reorganize the Court by increasing the number of justices from 9 to
15 (allowing him to appoint six new justices, who would obviously
be New Deal supporters) Before dying in office, FDR would go on to
appoint seven new justices to the Court including Felix
Frankfurter, William O. Douglas, and Hugo Black. The Supreme Court
would rule no other New Deal programs unconstitutional. The attempt
to pack the Court cost FDR a great deal of support. Growing
opposition from Southern Democrats and Conservatives cost the
Democrats seats in Congress in the 1938 mid-term election and
resistance a 4 th term for FDR was growing. Despite the growing
opposition, World War II would distract the public and return FDR
for a 4 th term restoring his status as a great American hero.
Slide 88
Slide 89
Unit 9.8: The Legacy of the New Deal How was the Great
Depression ended and what legacy did it leave behind? The Great
Depression ended with production increases related to and the
official entry of the United States into World War II. Improvement
began as early as the Lend-Lease Program that was designed to arm
the British and Soviets so they could fight the Axis powers and the
U.S. could remain neutral. The Draft pulled young men out of the
workforce and opened jobs for minorities and women. By 1942 one
third of the economy was dedicated to war production. By 1940
unemployment numbers were down to 10% (however that total seemed to
be lingering and was causing concern that the New Deal had done
what it could), prices/production/investment had all increased, and
wages had returned to near pre-Depression levels. Many Americans
accepted the idea that the Federal Government could play an
indispensable role in fighting the problems of industrial
capitalism and social injustice. Possibly the biggest legacy of the
New Deal is that it dramatically increased the level of government
intervention in almost every aspect of citizens daily lives.
Slide 90
Practice Question #11 11. Which of the following was not an
underlying cause of the Great Depression? A.
Underconsumption/Overproduction B. The Treaty of Versailles C. The
fragility of the Banking System D. The vastly unequal distribution
of wealth E. Inadequate Capital Investment
Slide 91
Practice Question #12 12. The Mellon Tax Plan: A. Helped lift
the nation out of the Great Depression B. Was adopted by FDR as a
remedy for underconsumption C. Distributed wealth equally between
the nations social classes D. Led to underconsumption and wild
speculation in the stock market through tax cuts for the wealthy E.
Was instituted to pay for the enormous cost of the New Deal
agencies.
Slide 92
Practice Question #13 13. The Hawley-Smoot Tariff: A.
Facilitated improved trade relations between the U.S. and its trade
partners B. Reduced the tax on imported industrial goods, thus
hurting American industry C. Was the highest tariff in the nations
history, and an underlying cause of the Great Depression D. Was
ruled unconstitutional by the Supreme Court E. Was vetoed by
Roosevelt, but passed by Congress over his veto
Slide 93
Practice Question #14 14. Which of the following is not
associated with Hoovers ideology in regards to addressing the
problems created by the collapse of the economy in 1929? A. Deficit
spending B. Localism C. Volunteerism D. Laissez-faire Economics E.
Rugged Individualism
Slide 94
Practice Question #15 15. Which opponent of FDR introduced an
alternative to the New Deal in the form of an Old Age Revolving
Pension Plan? A. Herbert Hoover B. Huey Long C. Calvin Coolidge D.
Father Charles Coughlin E. Dr. Francis Townsend
Slide 95
Practice Question #16 16. Which of the following programs was
instituted by President Herbert Hoover? A. Federal Deposit
Insurance Corporation B. Home Owners Loan Corporation C. Withdrawal
from the Gold Standard D. Reconstruction Finance Corporation E.
Tennessee Valley Authority
Slide 96
Practice Question #17 17. The U.S. Supreme Court ruled which
New Deal component unconstitutional during the 1930s? A. Home
Owners Loan Corporation B. Tennessee Valley Authority C. Federal
Deposits Insurance Corporation D. National Industrial Recovery Act
E. Federal Housing Administration
Slide 97
Practice Question #18 18. In order to address the problem of
rampant speculation in the stock market, FDR: A. Closed the stock
exchange for four days B. Placed a limit on how much money an
individual or company could invest in the stock market C.
Established the Securities and Exchange Commission D. Set a ceiling
on how high the price of a stock could go E. Established the
Reconstruction Finance Corporation
Slide 98
Practice Question #19 19. FDRs goal to reorganize the Federal
Judiciary: A. Provided him the opportunity to replace conservative
judges who had been appointed by the previous administrations B.
Was achieved, but it was ruled unconstitutional by the Supreme
Court C. Allowed him to bypass the Judiciary when considering new
programs and agencies D. Was described by angry critics as Court
Packing E. Was intended to give more power to the states
Slide 99
Practice Question #20 20. The Social Security Act: A. Was
designed to provide assistance to the agrarian sector of the
economy B. Employed musicians, artists, actors, and writers C.
Provided assistance to the elderly and handicapped and to dependent
women and children D. Established codes of conduct for corporations
and unions E. Allowed workers to form unions and engage in
collective bargaining.
Slide 100
Answer Key: 11. B 12. D 13. C 14. A 15. E 16. D 17. D 18. C 19.
D 20. C