Boom and Bust in America

1
Boom and Bust in America

• Unit 11
• US History
• Ms. Rybak

2
The Republican Presidents

• Harding (1921-1923)
• Harding was an inexperienced politician,
  Hardings Presidency is noted most for scandals
• The Teapot Dome Scandal is the most famous
  government owned petroleum reserves were leased
  out to private oil companies
• Other officials of his administration committed
  illegal acts to make profits
• Died in office (1923)

3
The Republican Presidents

• Coolidge (1923-1929)
• Wanted a return to normalcy and tried to make
  businesses stronger
• Appointed officials that would have the govt.
  help businesses if possible
• High tariffs were created so that foreign
  products would not compete with American products
• Income taxes and corporate taxes were reduced
  especially for the wealthy

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The Republican Presidents

• Coolidge (cont.)
• Businesses boomed the GNP rose 40 in the
  United States
• These times were known as the Coolidge
  Prosperity
• But the prosperity was not for everyone factory
  workers, farmers, and minorities didnt enjoy the
  benefits

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The Republican Presidents

• Hoover (1929-1933)
• Inherited the worsening economy and the
  beginnings of the Great Depression
• Tried to instill positive thinking and beliefs
  that the economy would turn around very soon
• He reluctantly tried to increase government help
  public works projects, bank protections, but
  most if it came too late to help
• When WW1 veterans protested for their bonus
  payments, his use of troops to break them up
  angered many Americans

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Social and Political Issues

• Entertainment
• In the 1920s marked the rise of a trend twoard a
  national identity with popular entertainment
• The development of an urban society, and the
  growing idea of leisure time helped generate new
  ways to entertain the public movies, organized
  sporting events, and music were all popular

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Social and Political Issues

• Scopes Trial
• A battle of Christian values was waged over the
  teaching of the Theory of Evolution in schools
• The modern media made this case a national event
  science v. religion

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Social and Political Issues

• Prohibition
• Continuing the battle over moral values the 18th
  Amendment banned the sale and consumption of
  alcoholic beverages
• The law became unenforceable organized crime,
  smuggling and bootlegging grew
• The 21st Amendment repealed prohibition

9
Social and Political Issues

• Red Scare
• A reaction to the Communist victory in the
  Russian Revolution of 1917
• Various conflicts, including labor strikes, urban
  riots, and unsolved bombings led to a national
  hysteria against foreign born persons, and a
  mistrust of communism in general

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Social and Political Issues

• Sacco and Vanzetti
• Tied to Red Scare these men were convicted of a
  murder from a bank robbery
• Many believe they were unfairly convicted because
  of their personal beliefs and Italian heritage
  the evidence against them was weak they were
  executed

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Social and Political Issues

• KKK
• A reaction to the rise of anti-foreign attitudes
  the Klan reorganized in the 1920s
• Originally against African Americans, the Klan
  became anti-Catholic, Jew, and Immigrant as well
• Supported only white, Protestant, American-born
  people (mostly men)

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Social and Political Issues

• Changing Moral Values
• Urban v. Rural, Religion v. Science
• New wealth, obtaining professions, having fun,
  sexual freedoms, lawbreaking were some of the
  conflicting and new social values

13
Social and Political Issues

• Literature
• Many of the new cultural values became expressed
  in the popular literature of the age
• Some authors protested the growth of business,
  the conformity of the times, Americans
  preoccupation with material possessions, and the
  devastation of war

14
Social and Political Issues

• The Great Migration
• Begun during WW1, African Americans moved from
  the south to the north in search of jobs
• The trend continued after WW1 as African
  Americans populated the industrial centers of the
  Midwest and Northeast

15
Social and Political Issues

• Harlem Renaissance
• A growth in popularity of African American
  writers, musicians, and artists
• Centered in Harlem in NYC
• W.E.B. DuBois, Langston Hughes, and Zora Neal
  Hurston were some influential writers

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Social and Political Issues

• Jazz Music
• A blend of African, European, and American sounds
• Began in New Orleans then up to Chicago then
  over to New York
• Born in the African-American experience, it soon
  became popular with white audiences
• The 1920s became known as the Jazz Age

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Economic Issues

• Mass Consumption
• Large quantities of manufactured goods were
  available in the 1920s
• Many people had more buying power at this time
• Assembly line productions made goods cheaper and
  more available

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Economic Issues

• Real Estate Boom
• Suburban areas grew most
• Installment Buying
• Once embarrassing, going in debt to purchase
  consumer goods became acceptable as wages and
  buying power increased

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Economic Issues

• Bull Market
• Rising business optimism led to a rise in
  investment activity in the stock market as well
• Many investors were so confident in a continuous
  bull market that they even invested in
  speculation often at dangerous levels

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Economic Issues

• Farmers Plight
• Small Farmers did not prosper like the rest of
  American workers earned 1/3 less than others
• New machinery could produce more but cost more
  as well and earnings did not rise
• Changing markets in the US and abroad did not
  support the farm community

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The Great Depression
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Causes

• Weak Economy
• Overproduction in farm and industry led to low
  prices and poor profits
• An unequal distribution of wealth led to little
  money available to be spent
• American had built huge debt with easily
  available credit

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Causes

• Weak corporate and banking structures
• Corporate holding companies were fundamentally
  weak
• Banks were closing in mass numbers in the 1920s
  because they couldnt support the borrowing

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Causes

• Poor Government Policies
• Government did not regulate the stock market in
  any way
• Corporate mergers were not regulated or
  challenged
• Poor decisions by the Federal reserve on the
  interest rate

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Causes

• Weak World Economy
• Especially in Europe still troubled by debt and
  rebuilding from WW1
• Other nations were buying few American goods

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Characteristics of the Depression

• Low Production
• The cycle of overproduction and low purchasing
  power led to shut downs of production which in
  turn led to
• High Unemployment
• Layoffs were overwhelming
• African-Americans were hit hardest
• Men in manufacturing were hit hard
• Many were underemployed paid less for hours
  instead of being totally laid off

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Characteristics of the Depression

• Low Prices
• A surplus supply, and low demand, equals low
  prices and profits further complicating the
  economy
• Bank Failures
• Banks had made credit easy and too many loans
  went unpaid

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Characteristics of the Depression

• Morale
• Many men fathers and husbands felt shamed
  that they could not fulfill their duty as
  bread-winners
• Family Issues
• There were many changes, families often had to
  move in with relatives or had to move to new
  areas to seek work

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Symbols of the Great Depression

• Soup Lines
• Shantytowns
• Dust Bowl
• Panhandling
• Hobos

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Hoovers Response

• Rugged Individualism/Charity
• Much of personal beliefs influenced how he
  handled the problems of the depression
• He believed individuals should work hard to help
  themselves
• He believed volunteer organizations should help
  those in need
• He had great faith that the economy would fix
  itself

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Hoovers Response

• Reconstruction Phase
• Hoover believed in the trickle down theory of
  economics
• He asked Congress to set up the Reconstruction
  Finance Corporation to make loans to banks,
  railroads, and farming
• Hoover hoped the spread of new money would
  trickle down to the people through jobs
• It didnt work well enough

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Hoovers Response

• The Bonus Army
• Name given to veterans of WW1 that needed, and
  demanded, their bonus pay from service in the war
• After Congress did not pass the payment, many of
  the protesters stayed and camped on the Mall in
  Washington DC
• Hoover sent in the army and the camps were
  destroyed the publicity was very bad for Hoover
• Hoovervilles Name given to the make-shift
  shanty communities built by homeless people in
  city parks became a symbol

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The New Deal

• Election of 1932
• In response to Hoovers reaction to conditions,
  American voters elected the Democratic Partys
  candidate Franklin Delano Roosevelt (FDR), a
  Governor from New York, as President
• Roosevelt brought new energy, ideas, and
  confidence that made Americans feel more hopeful

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The New Deal

• A name given to the new ideas Roosevelt had to
  help end the problems of the Depression
• During the Roosevelt administrations first
  weeks, known as the Hundred Days, Congress
  passed 15 major acts of legislation together
  they began Roosevelts New Deal
• The focus of these acts were on 3 important
  areasthe 3 Rs

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The 3 Rs of the New Deal

• Relief
• Congress passed legislation to help people
  suffering because of the depression
• Most of the acts were passed to create jobs for
  the unemployed

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Examples

• Emergency Banking Act Closed nations banks and
  reopened sound ones restored confidence
• Federal Emergency Relief Act money given to
  states and cities
• Public Works Administration (PWA) provided jobs
  in construction (schools, bridges, housing, etc.)

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Examples

• Civilian Conservation Corp (CCC) work for
  younger people mostly men in the field of
  preserving natural resources
• Works Progress Administration (WPA) Similar to
  the PWA gave jobs to 25 of Americans
• Tennessee Valley Authority (TVA) Meant to
  provide jobs, electricity, and flood protection
  to 7 southern states (called socialism by some)

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Recovery

• In order to help the economy of the nation
  improve, Congress passed acts that focused on
  industry, home ownership, and agriculture

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Examples

• National Industrial Recovery Act Supposed to
  set a code of fair competition was eventually
  declared unconstitutional
• Home Owners Loan Corporation (HOLC) provided
  new loans at lower interest rates to help people
  keep their homes

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Examples

• Federal Housing Administration (FHA) created to
  insure bank mortgages
• First Agricultural Adjustment Act (AAA) Created
  to help raise farm prices by helping farmers NOT
  grow certain crops
• Second Agricultural Adjustment Act (AAA) Helped
  farmers store crops until prices rose again

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Reform

• Congress also passed legislation to help make
  sure another depression never happened again!
  Mostly aimed at banks, the stock exchange, and
  labor

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Examples

• Glass-Steagall Act Created the FDIC (Federal
  Deposit Insurance Corporation) guaranteed bank
  deposits up to 5000 (now 250,000)
• Securities Exchange Act Created the SEC
  (Securities and Exchange Commission) which
  regulates the stock exchange and investment
  advisors

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Examples

• Social Security Act Provided old-age insurance,
  unemployment insurance, assistance to dependent
  children, elderly, ill, and handicapped
• National Labor Relations Act (Wagner Act) right
  to form unions
• Fair Labor Standards Act Set minimum wage,
  maximum work week, banned child labor in
  interstate commerce

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Controversies

• Constitutional Issues
• Schechter Poultry Corp. v. United States (1935)
  The Supreme Court struck down the NRA, saying it
  was unconstitutional for Congress to regulate
  intrastate commerce
• Court Packing Roosevelt tried to change the
  number of supreme court judges in order to pick
  more judges for the court so that they would
  approve his ideas

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Controversies

• Constitutional Issues
• Third term In the election of 1940, Roosevelt
  ran for a 3rd term. He felt that a change in
  leadership would not be good for the country
• 22nd Amendment After Roosevelts presidency,
  including a 4th term, Congress passed an
  Amendment limiting a President to 2 terms

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Creeping Socialism

• Much of the criticism directed at the New Deal
  was over the concern of the growing involvement
  of the federal government in business and in the
  private sector. To many, these activities were
  too similar to socialism

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Franklin Delano Roosevelt

• Communicator gifted speaker who held fireside
  chats with the American people on the radio
• Eleanor Roosevelt His wife and his eyes and
  ears who traveled the country for him. She
  greatly influenced his political decisions and
  became a national figure.

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Franklin Delano Roosevelt

• Provided Hope His easy style and personality
  helped Americans feel more hopeful
• Women in Government Roosevelts appointment of
  Francis Perkins as Secretary of Labor put the
  first female in the cabinet
• 4 Terms Roosevelt ran for, and won, 4
  consecutive terms of office this feat was never
  repeated

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New Deal Opposition

• Huey Long
• A candidate for the poor the governor of
  Louisiana was a popular opponent of the rich.
• He could take votes away from Roosevelt in an
  election

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New Deal Opposition

• Father Coughlin
• A priest from Detroit
• Host of a popular radio show
• He called for heavy taxes for the rich, another
  threat for Roosevelts votes in an election

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New Deal Opposition

• Dr. Townsend
• Proposed paying the elderly a monthly amount of
  money which they would be required to spend
• He hoped to free up jobs for unemployed and
  increase spending in the economy

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Impact of the New Deal

• Power of the President Expanded
• Roosevelt demonstrated what a strong Executive
  could do
• The Executive branch became the leading power in
  the Fed. Govt.
• System reform to prevent future problems
• Government put many measures in place to help
  prevent future economic problems again
• The New Deal is credited with helping to save the
  Free Enterprise system

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Impact of the New Deal

• Strengthened the FED
• FED Federal Reserve System
• New deal gave the FED increased ability to
  prevent a future depression
• Securities and banking regulated
• New deal regulated banking
• It made Americans feel more safe about putting
  money into US banks again

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Impact of the New Deal

• Size of the Federal government
• Roosevelt expanded the system of agencies to
  protect groups of citizens and bring recovery and
  reform
• Welfare state the idea that govt. was
  responsible for well being of citizens
• Democrats in power
• Many Americans started voting and began
  supporting the Democratic party
• New Deal democrats would later influence social
  issues of the next generation

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Impact of the New Deal

• Support of African-Americans
• African Americans did not benefit much from
  direct actions of FDRs administration because he
  did not want to anger Southern Democrats
• African Americans did benefit within the programs
  often
• Much of their support came from the influence of
  Eleanor Roosevelt
• Many African Americans became Democrats after the
  New Deal rather than remaining Lincoln
  Republicans