23.4, 23.5, 24.1The State, The Economy &

Business

1920s

Warren G. Harding “Return to Normalcy”

1. Ohio (R)

2. Had “look” but little experience

3. “Ohio Gang”

4. Plagued by scandals…

5. Died while in office

(1921-1923)

Sec. of Treasury Andrew Mellon

1. Served Harding, Coolidge and Hoover

2. Gov’t s/b run like a business

a. Cut federal budget

b. Cut taxes..

c. Mostly benefited high income & businesses

Calvin Coolidge“Silent Cal”

1. Vermont (R)

2. “The Business of America is Business”

3. Very small gov’t

4. Agenda

5. Appreciated experience of wealthy; let them make economic decision

1923-1929

Herbert Hoover1. Iowa (R)2. Sec. of Commerce

a. Business would act in interest of public

b. Nat’l Trade Assoc – cooperation between businesses = increased efficiency and decrease competition…

c. 200 largest co. owned 50% of corp. wealth

War Debts &Reparations

1. US largest creditor globally

2. NY Financial Capital

3. Anti-Amer. Sentiments overseas; US wants some of it’s loans repaid…

4. Dawes Act

Dawes Plan

Keeping Peace: Kellogg-Briand Pact

renunciation of war as an instrument of national policy

Ineffective…

The New Negro & Harlem

Harlem Renaissance1. Finding meaning and

self-identity for AA

2. Celebration of AA artists, writers, and musicians

3. Represented social and cultural change of 1920’s

4. WritersLangston Hughes

Zora Neale Hurston

The Savoy

The Cotton Club

Ella Fitzgerald & Louis Armstrong

Marcus Garvey

1. Wanted separate society for blacks

2. Promoted businesses

3. Advocate of returning to Africa

4. “Black is Beautiful”

A. Election of 1928

Herbert Hoover (R) vs. Alfred Smith [(D) and Catholic]

“We in America are nearer to the final triumph over poverty than ever before.”

“A chicken in every pot and two cars in every garage”

Wins by a landslide*- life was good in the 1920s

Hooverville Nation

The Bull Market

1. Dreams of becoming Rich via Stocks

2. Speculation

3. Buying on Margin

4. Corporations invest in market instead of research

BLACK TUESDAY! OCTOBER 29, 1929

1. What happened? 2. “The bottom fell out of the market!”3. loss of confidence in market = some investors

sell4. prices dropped = thousands sell their shares5. Savings lost =$30 Billion/16 million shares6. How does Hoover and Mellon respond?

Causes of the Depression

1. Overproduction

2. Farmers in debt

3. Low wages; high debt

4. Unequal distribution of income

5. Trickle-effect…

soup kitchens and bread lines(psychological effects)

Hoover’s Presidency during the Depression

“Business as usual”Did not want to go into deficit spending!Work hard; gov’t should not give handouts

Negotiated w/businesses and unions Reconstruction Finance Corporation (RFC) & Emergency Relief Act (ERA)

emergency financing to large businesses trickle-effect

Shantytowns/Hoovervilles

Bonus Army Camp

Who were they and what did they want?

Want bonus now not in 1945 ($500/$1000)

Patman Bill rejected

Election of 1932

Hoover’s actions with the Bonus Army seals his fate: Franklin D. Roosevelt becomes the newly elected president

Day OneBank Holiday

a. Closed banks before bank runs bankrupt them

b. Emergency Banking Relief Act = Inspected by gov’t to ensure they were secured

c. Restores confidence to the people

Helping America’s Farmers 1. Agricultural

Adjustment Acta. Gov’t will pay subsidyb. Lower production =

_____ pricesc. Set prices at pre-

depression rated. Commercial farmers

benefited moste. Sharecroppers and

tenant farmers lost jobs and homes (AA)

2. Later ruled unconstitutional

Helping Industry:

National Industrial Recovery Act a. Self-regulating: established fair practice codes and

regulations

b. Allowed for unions = increase in membership

c. Considered unconstitutional - Why?

Critics and the Second New Deal

CriticsGov’t too big

Socialistic

Not doing enough

Huey Long

Second New DealJobs, retirement, housing

Social Security Act• Pension

• Unemployment benefits

• Disability insurance

• Farmers/domestic workers not covered

National Labor Relations Act AKA Wagner Act

Legalized unions = increase in unions

Fair labor practices

New Deal in the South & West

Does little for sharecroppers and tenant farmers

Does help with modernizing the regionsTennessee Valley Authority

Rural Electrification Administration

Dust Bowl(1933-1936)

Lack of water, overproduction, and windy conditions added fuel to the fire

Resulted in a westward migration

Dust Bowl(1933-1936)

“Okies”

New Deal and the Dust Bowl

1. Resettlement Administration

2. Crop and seed loans

3. Gave direct aid to sharecroppers and tenant farmers

4. Conservation techniques: water, soil

5. Crop rotation

Southwest Farmers

Who was the worst affected?

Court-packing Deal

Wanted to set a retirement age for SCJ

Goal?

backfired

Anna Eleanor Roosevelt

Social ReformerAnti-lynching

Health ins

Child labor

Discrimination

Advantage/influence?

People of Color and the New Deal

FDR cautiousGains

Mary M. BethuneRobert WeaverPWACIO

Setbacks: eligibility requirements for PWA

(noncitizens)

Roosevelt Recession

Initially worked

Tried reducing deficit by cutting programs and constricting credit = recession

Stock collapse again

Decreased industrial output

Farm prices decrease

Unemployment up 20%

Ultimately, what ends the depression?