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

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 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.

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.

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?

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.

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.

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 handouts would create an entitlement state, stifle motivation, and drive the nation toward socialism. He was soon dubbed the Do-Nothing President

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?

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.

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.

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.

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.

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.

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?

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.

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.

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.

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.

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?

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.

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.

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.

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

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

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

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

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

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

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

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

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

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

Answer Key: 1. A 2. D 3. E 4. E 5. E 6. D 7. D 8. E 9. B 10. D

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.

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

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?

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.

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.

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.

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.

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.

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?

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.

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.

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.

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.

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

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?

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.

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.

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.

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.

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.

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.

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.

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.

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?

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.

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.

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.

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.

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

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.

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

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

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

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

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

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

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

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.

Answer Key: 11. B 12. D 13. C 14. A 15. E 16. D 17. D 18. C 19. D 20. C

Documents

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