AP US HistoryFebruary 28 - March 3-2017

Continue the 1920s independent study assignment. It will be due in class by Wednesday March 1st Remember that this is a test score so it should be a good grade. If you do not have it that day, you will face the standard -30 late penalty.

Don’t forget the AP application process will close next week. If you’re planning to take AP Euro with me, then simply submit a previous essay.

MONDAY and TUESDAY (sources) Examine the causes of the Great Depression 1929 – 1938 (WXT-6,8) (WOR-7) Examine early actions by the Hoover Administration to stem the disaster. (WXT6,8) Analyze primary sources on the Depression

Materials Strategy/FormatPpt and primary sources Lecture-discussion L.CCR.4

Analysis of sources R.CCR.1and 3Student Skill TypesChronological Reasoning (1,2,3)Comparison and Context (4)Historical Arguments (6)Historical Interpretation (8)

Introduction The crash of the stock market on Black Tuesday October 24, 1929 was merely the most obvious symbol of

a greater problem. The nation’s economy and indeed those of the industrialized west had been teetering on the brink since 1919. Indeed, the impact of WWI went a long way in explaining why the Depression occurred. Many European markets had never recovered from the war. Germany was saddled with tremendous reparation payments in the trillions. France and to a lesser degree Britain had budgeted their

A study in contrasts: The Roaring 20s and the Great Depression of the 1930s

national economies based upon the payments in gold. As Germany defaulted so did France. Britain had wisely budgeted far less for the income of revenue from Germany.

The Coolidge Administration had refused to reschedule loan repayment from our allies further deepening their problems. Hoover would forgive some debt and reschedule payments under the Dawes Plan but it was too little too late. The idea was to reduce German reparations to only that amount necessary for Britain and France to repay their American loans.

To understand the series of events that created a global depression we have to look at key economic indicators. Many of these still today are part of a checklist that defines the health of our economy. You will see several examples of why our current recession occurred.

ProcedureThe Agricultural sector

You will recall that since the Wilson administration there had been some bipartisan support for farm aid. These measures had been blocked by Coolidge under the McNairy-Haugan Act. The farm sector had been stalling for a while. Once again WWI played a role.

There was an unnatural economy of the war years and early 1920s. American farm products flowed overseas while Europe was at war. The American farmer received a higher price for their goods from

1914 – 1918. In addition, the Federal government purchased millions of tons of food. Then suddenly the war ended and so did favorable market. The result was overproduction and falling prices. However, at the same instant, farmers had taken out new loans for seed and equipment.

The inability to pay back loans and the driving up of other farm related businesses weakened an important sector of the economy. There will be no true bounce back until World War Two.

In the Midwest small farmers were forced to sell out to corporate farms and banks repossessed homes and land that had been for generation in the same families (This is what the book Grapes of Wrath by John Steinbeck was all about). Part of the culprit here was man-made and natural disasters resulting in huge dust storms known as “black blizzards”(more on this later).

The Industrial Sector Similarly with the agricultural sector there was serious overproduction in major industries. Some of this

was war related but much more of it came from a new modern day form of financing, credit and installment plans. Here is why this was a problem: In the 1920s the middle class exploded in growth. Cars, houses, and appliances became more affordable because of installment plans. This is not new today and the problem of credit is a constant threat to your future if you are not careful.

After a meteoric rise in the early 1920s there was a general decline in durable goods demands. Many people had already purchased these items and needed no more for while. Yet factories continued to produce. By the later 1920s unemployment was rising and demand for big ticket items was falling.

Demand for American goods in overseas markets dwindled also as Europe got back to work and could compete with the U.S. again. The fears of the old imperialists were being realized.

International Trade Policies As said above war repayments and failure to renegotiate loan payments created a major problem as

European powers could not both pay off debt and grow their own economies which were now globalized. In 1924 some understanding seemed to exist that trade limitations hurt the global economy. In 1924 the Dawes and Young Plans did reduce German debt payments to Britain and France in 1:1 ratio. This was supposed to also allow Britain and France flexibility in loan repayment. This did in fact help increase global trade but Republicans in Congress would not remove tariff restrictions.

To make matters worse tariffs returned. At precisely the moment that Europeans need a cash stream from selling in America, Republicans shut off the faucet with restrictive tariff measures.

Banking and Finance A familiar story……speculation and bad loaning practices were a major cause of the depression. The

Federal Reserve and Federal Trade Commission both turned a blind eye to unsound banking practices. The boom of the early 1920s was simply too irresistible. There were some warnings that the economy was superheating and that interest rates should be raised. Belatedly the Federal Reserve did realize the problem.

But in move similar to the old “specie circular” of the 1837 Panic, here too the brakes were stomped and this panicked investor.

There were a few banks in trouble even before the Depression because they had made unsecured loans. Soon, there would be a phenomena known as a “run on the bank” when investors, upon hearing rumors of a bank’s insolvency, rushed to remove their money before all was lost. (There was not yet deposit insurance).

Housing Starts One of the most critical economic indicators is housing starts and new building in general. This is so crucial

because vast segments of the economy are tied to this. There was a post war housing boom in the early 1920s as soldiers returned. This will be even more

remarkable after WWII. However, just as we have seen with other sectors, the market started slowing down by the mid-late 1920s. Just like our current recession banks had played a role in the earlier frenzy offering cheap rates with almost no collateral.

Personal Finance and Unemployment Personal savings were going down as consumers leveraged their future against a materialistic present.

Advertising and other cultural factors ramped up credit buying. But then, as the unemployment rate rose, people faced repossessions.

There was a growing gap between wealthy and poor was growing. The modern day Republican idea of “trickle-down” or “supply side economics” calls for job creation by low taxes which encourage the business sector to create jobs. But, if that sector instead pockets the revenue instead of making capital investments, then the trickle becomes a slow drip.

Unemployment was not surprisingly rising as producers laid off workers which of course led to a decline in consumer spending, declining from early 1920s.

The Stock Market And so we return to the crash of the stock market in 1929. There had been several small declines in the

1920s already known as “corrections.” Fluctuations in stock values are common but in the 1920s a new crop of buyers were in the market, the small investor.

In the early 1920s the idea of Margin lending developed. There was an up and down side to this process. Loans from brokers stimulate buying from small investors. The brokers got loans from banks and the whole idea floated on a sea of credit. Of course, this brought greater wealth to the market and increased to overall strength of the economy. But the speculation on margin was made worse by the constant presence of “Watered stock” offerings. The “correction” that came on Black Tuesday was deep. Wise and wealthy investors had already sold and gotten out. But, the small investor, the greedy, and the incredulous were left to freak out. And freak they did! The frenzied sell-off dropped the market to all time lows.

The Hoover administration tried to convince wealthy Americans like JP Morgan to restore public confidence by buying large sums of stock.

Hoover Takes Action The president appealed to industry to keep wages high in order to maintain consumer purchasing power.

Nevertheless, while businesses did maintain wages for skilled workers, it cut hours and wages for unskilled workers and installed restrictive hiring practices that made it more difficult for under qualified younger and older workers to get a job. By April 1, 1933, U.S. Steel did not have a single full-time employee.

Hoover persuaded local and state governments to sharply increase public works spending. However, the practical effect was to exhaust state and local financial reserves, which led government by 1933 to slash unemployment relief programs and to impose sales taxes to cover their deficits.

In much the same way that FDR’s New Deal would do during the early days of the Great Depression, Hoover launched the largest public works projects. The Hoover Dam (named after the President) later was one of the largest publicly sponsored building projects in American History. Yet, he continued to believe that problems of poverty and unemployment were best left to "voluntary organization and community service." He feared that federal relief programs would undermine individual character by making

recipients dependent on the government. He did not recognize that the sheer size of the nation's economic problems had made the concept of "rugged individualism" meaningless.

By 1932 Hoover seemed finally to understand the enormity of the problem. created the Reconstruction Finance Corporation (RFC) to help save the banking and railroad systems. Loans offered under the program funded public works projects and the first federally-supported housing projects. Originally intended to combat the Depression, the RFC lasted 21 years and was authorized to finance public works projects, provide loans to farmers and victims of natural disasters, and assist school districts

Hoover’s Darkest Days It’s hard to imagine now that Hoover would want to be re-elected but he announced that he would in 1932.

Misery was everywhere though. People lived in camps because they had lost their homes or were wandering the countryside looking for work. These camps were sometimes called “Hoovervilles.” Perhaps the worst point of his Presidency came in 1932 about 6 months before the election.

In May of 1932, some 15,000 veterans, many unemployed and destitute, descended on Washington, D.C. to demand immediate payment of their wartime pensions promised ironically for the year 1945. They proclaimed themselves the Bonus Expeditionary Force but the public dubbed them the "Bonus Army." Raising ramshackle camps at various places around the city, they waited. The veterans made their largest camp at Anacostia Flats across the river from the Capitol. Approximately 10,000 veterans, women and children lived in the shelters built from material

By July 28, Attorney General Mitchell ordered the evacuation of the veterans from all government property, Entrusted with the job, the Washington police met with resistance, shots were fired and two marchers killed. Learning of the shooting at lunch, President Hoover ordered the army to clear out the veterans. Infantry

and cavalry supported by six tanks were dispatched with Chief of Staff General Douglas MacArthur in command. Major Dwight D. Eisenhower (future Allied commander in WWII and 2 term President) served as his liaison with

Washington police and Major George Patton (future general in WWII African, Italian, and French campaigns) led the cavalry.

By 4:45 P.M. the troops were massed on Pennsylvania Ave. below the Capitol. Thousands of Civil Service employees spilled out of work and lined the streets to watch. The veterans assuming the military display was in their honor, cheered. Suddenly Patton's troopers turned and charged. "Shame, Shame" the spectators cried. Soldiers with fixed bayonets followed, hurling tear gas into the crowd.

This was a public relations disaster for Hoover made worse by the fact that two babies among the crowd were killed from inhaling tear gas. In the minds of the electorate almost anyone was better than Hoover.

Another Republican mistake that Hoover made was the signing of yet another tariff. The Hawley Smoot Tariff of 1931 brought immediate retaliation from Europe. This may have largely doomed farmers while Republicans thought that they were protecting them

The 1932 Presidential ElectionFranklin Roosevelt, who like his cousin Theodore was the former governor of New York. He proposed a "New Deal" for Americans, a program with emphasis on states' rights, opposition to too powerful central government, opposition to big government which should be cut down to its proper size, opposition to high taxes, unbalanced budgets, and government debts. In pre-election speeches, Roosevelt stressed the rights of the states so much so as to urge that public welfare relief, old age pensions and unemployment insurance should be administered by the states, and that the federal government would merely aid the states with relief funds and serve as collection agent for social insurance. Above all Roosevelt decried the shocking spending habits of the Republicans and the mounting public debt. He called Herbert Hoover "the greatest spender in history." He said of the Republican Party : "It has piled bureau on bureau, commission on commission ... at the expense of the taxpayer." He told the people: "For three long years I have been going up and down this country preaching that government, federal, state and local, costs too much. I shall not stop that preaching."

Troops prepare to evacuate theBonus ArmyJuly 28, 1932

HomeworkMonday and TuesdayComplete the 1920s packet due in class tomorrow!

WEDNESDAY Analyze the key aspects of the “first hundred days” of the New Deal (WXT6,7,8) (GEO-2)(POL-4,5)

Materials Strategy/FormatPpt lecture-discussion L.CCR.4

Student Skill TypesChronological Reasoning (1,2,3)Comparison and Context (4)

Introduction

To say that there was a note of urgency for FDR was an understatement. His election campaign against Hoover had been rather bitter and it showed during the inauguration ceremonies. Hoover was very clearly

As you can plainly see, this was one of the most lopsided elections in U.S. History. Hoover was able to take PA and some of New England but even this is somewhat surprising.

uneasy sitting next to the smiling and ebullient FDR. One wonders why FDR would even want the job considering the mess. The stock market had plunged 85% from its high in 1929, and nearly one-fourth of the workforce was unemployed. In the cities, jobless men were lining up for soup and bread. In rural areas, farmers whose land was being foreclosed were talking openly of revolution. The crowd that gathered in front of the Capitol that day to watch Franklin D. Roosevelt's Inauguration had all but given up on America. They were, a reporter observed, "as silent as a group of mourners around a grave."

Roosevelt's Inaugural Address was a pitch-perfect combination of optimism ("The only thing we have to fear is fear itself"), consolation (the nation's problems "concern, thank God, only material things") and resolve ("This nation asks for action, and action now"). The speech won rave reviews. Even the staunchly Republican Chicago Tribune lauded its "dominant note of courageous confidence." F.D.R. had buoyed the spirits of the American people. Nearly 500,000 letters to him at the White House in the following week expressing the hope of the people in FDR’s promise of a “New Deal.”

A series of unprecedented moves commenced when FDR gathered his Cabinet (Whom he branded the “Brain trust”) in his White House office and had Justice Benjamin Cardozo swear them in as a group, the first time that had ever been done. F.D.R. joked that he was doing it so they could "receive an extra day's pay," but the real reason was that he wanted his team to get to work immediately.

The First Hundred Days is a measuring stick that historians use to gauge Presidents. For FDR it was an amazing series of 15 major bills being passed by Congress and a host of minor ones. Fears had leveled the political playing field and, while some conservatives called FDR a socialist; most still supported his early moves.

The First New Deal (The "First 100 Days")

FDR launched into his plan to save the economy with what he called the “Three Rs” or “Relief, Recovery, and Reform.” This is almost like a refresher course of economic, political, and some social issues that had long been problems. Perhaps the most important fundamental change was the realization that the gold standard was dead! The British economist John Maynard Keynes had asserted that Depressions could be controlled and perhaps avoided altogether with deficit spending by governments. In other words, if the government throws its resources into creating jobs, then this would gradually get the economy moving again. The New Deal programs depended upon creating jobs and giving government paychecks. But this cannot be done if gold backs the currency.

Another key part of the New Deal was the simple marketing of the ideas. This started with FDR’s fireside chats. Utilizing the power of radio, the President clearly and calmly explained his programs and ideas to listeners. Support for his programs was cultivated by posters as Creel had done in World War One.

If you think back to the economic problems that led to the Depression, it’s easy to see what FDR was trying to accomplish.

Banking and Finance The immediate crisis involved the banks. Thousands had failed, costing families their life savings. The

failures had prompted bank runs: people rushed to take out their money, causing more banks to become insolvent. By March 4, all 48 states had ordered their banks closed. This was euphemistically called a “bank holiday.” Within days, the Roosevelt Administration drafted an Emergency Banking Act. Congress rushed to pass it, even though there were no finished copies available to read. The new law authorized the Treasury Department to begin reopening the banks when they could prove they were healthy. Barely a week after the Inauguration, the banking system was operating again. Roosevelt's closest aide, Raymond Moley, later said that "capitalism was saved in eight days. The Glass-Steagall Act (1933) created more stringent rules for banking (especially regulating practices ignored by the Federal Reserve)

To get the solvent banks to become stronger the Federal Deposit Insurance Corporation (FDIC) was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s. This did help inspire confidence in banks as depositors were now protected.

The Farm Sector The greatest problem facing farmers was that the prices of farm goods was so low, that harvesting and

planting was worthless. So, the government embarked upon one of its most controversial program, the Agricultural Adjustment Act (1933) or the AAA. The government sought to raise farm prices by creating

scarcity. In essence, farm products were destroyed and livestock actually killed. All this while people in the cities were near starvation! Then, the government was going to regulate the prices by setting production quotas. This concept, outlined in the AAA, was known as "parity." AAA controlled the supply of seven "basic crops" – corn, wheat, cotton, rice, peanuts, tobacco and milk – by offering payments to farmers in return for taking some of their land out of farming, not planting a crop.

In 1937, the Supreme Court ruled that the AAA was unconstitutional (Schechter v. U.S.), but the basic program was rewritten and again passed into law. This time the government paid subsidies to farmers to not grow crops. Even critics admitted that the AAA and related laws helped revive hope in farm communities.

Unemployment and Jobs Programs1. It is in the vein that Keynesian Economics is most evident. Several jobs programs were created to

do all types of urban and rural projects. The most famous of these was called the Civilian Conservation Corps (CCC). It's ironic that the first "C" in the CCC refers to the "Civilian" Conservation Corps because the program was actually run by the U.S. Army. The CCC was a public works program that put more than three million young men and adults to work building roads and trails in parks, building conservation dams, building campgrounds, planting trees, draining swamps, replanting grazing land, renovating historic buildings and stringing telephone lines. One important aspect of the program was that it employed Native and African Americans. This “color blind” nature of hiring is one of the major reasons why there was a shift among African-Americans to the Democratic Party. At most camps, the days were long and hard. But in the evening, there was time for games, education classes, and even plays and variety shows put on by the enrollees. Most of those who adjusted to the military discipline re-enlisted when their six months was up. The men could stay in the CCC up to two years.

2. The Public Works Administration (PWA) It was created by the National Industrial Recovery Act in June 1933 in response to the Great Depression. It built large-scale public works such as dams, bridges, warships, hospitals and schools. Its goals were to spend $3.3 billion in the first year, and $6 billion in all, to provide employment, stabilize purchasing power, and help revive the economy. Most of the spending came in two waves in 1933-35, and again in 1938.The work of this agency was incredibly important in developing the nation’s infrastructure.

3. The Civil Works Administration (CWA) was established by the New Deal during the Great Depression to rapidly create manual labor jobs for millions of unemployed workers. The jobs were merely temporary, for the duration of the hard winter. President Franklin D. Roosevelt unveiled the CWA on November 8, 1933 and put Harry L. Hopkins in charge of the short-term agency. Roosevelt was convinced that jobs were much better for everyone than cash handouts. The CWA was a project created under the Federal Emergency Relief Administration (FERA). The CWA created construction jobs, mainly improving or constructing buildings and bridges. It ended on March 31, 1934, after spending $200 million a month and giving jobs to 4 million people.

The Industrial Sector1. The National Recovery Administration (NRA) to help revive industry and labor through

rational planning. The idea behind the NRA was simple: representatives of business, labor, and government would establish codes of fair practices that would set prices, production levels, minimum wages, and maximum hours within each industry. The NRA also supported workers' right to join labor unions. The NRA sought to stabilize the economy by ending ruinous competition, overproduction, labor conflicts, and deflating prices. By the end of the summer, the nation's ten largest industries had been won over, as well as hundreds of smaller businesses. All across the land businesses displayed the "Blue Eagle," the insignia of the NRA, in their windows. Thousands participated in public rallies and spectacular torchlight parades. The NRA, like the AAA will be ruled unconstitutional but will be resubmitted as the Wagner Act during the second New Deal. In 1935 workers gained important rights.

2. The National Labor Relations Act (NLRA) was passed in July of 1935. The broad intention of the act, commonly known as the Wagner Act after Senator Robert R. Wagner of New York, was to guarantee employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or

other mutual aid and protection.” The NLRA applied to all employers involved in interstate commerce except airlines, railroads, agriculture, and government.

3. In order to enforce and maintain those rights, the act included provision for the National Labor Relations Board (NLRB) to arbitrate deadlocked labor-management disputes, guarantee democratic union elections, and penalize unfair labor practices by employers. To this day, the board of five members, appointed by the President, is assisted by 33 regional directors. The NLRB further determines proper bargaining units, conducts elections for union representation, and investigates charges of unfair labor practices by employers. Unfair practices, by law, include such things as interference, coercion, or restraint in labor’s self-organizing rights; interference with the formation of labor unions; encouragement or discouragement of union membership; and the refusal to bargain collectively with a duly chosen employee representative. During the second New Deal this will be extended to also include minimum wage laws under the Fair Standards and Practices Act

4. For lack of a better place to put it, I included the 21st Amendment here which repealed Prohibition. It really was about getting a sector of the industrial economy going again. This was generally accomplished by the 1933 Beer Act.

Home Ownership

The Home Owners' Loan Corporation (HOLC) was a New Deal agency established in 1933 by the Home Owners' Loan Corporation Act under President Franklin D.

Roosevelt. Its purpose was to refinance home mortgages currently in default to prevent foreclosure. This was accomplished by selling bonds to lenders in exchange for the home mortgages. It was used to extend loans from shorter loans to fully amortized, longer term loans (typically 20–25 years). Through its work it granted long term mortgages to over a million people facing the loss of their home. It will be replaced by FHA.

The Tennessee Valley Authority

The TVA was one of the most lasting contributions of the New Deal. President Franklin Roosevelt needed innovative solutions if the New Deal was to lift the nation out of the depths of the Great Depression, and TVA was one of his most innovative ideas. Roosevelt envisioned TVA as a totally different kind of agency. He asked Congress to create “a corporation clothed with the power of government but possessed of the flexibility and initiative of a private enterprise.” On May 18, 1933, Congress passed the TVA Act.

From the start, TVA established a unique problem-solving approach to fulfilling its mission: integrated resource management. Each issue TVA faced — whether it was power production, navigation, flood control, malaria prevention, reforestation, or erosion control — was studied in its broadest context.

Homework for Wednesday NightLook over the class and web notes for Quiz tomorrowThis will include some information on 1920s as it related to the causes of the Great Depression!

THURSDAY Quiz on the causes of the Great Depression and the First New Deal (the First 100 Days)

Materials Strategy/FormatQuiz forms Assessment and Review

Instructions This will be an “old school” short answer quiz on the materials above. Be aware that while I will

not ask you to identify the acronyms for the New Deal Programs, you will still need to know what they did (or hoped to do).

This will be fairly detailed so be ready to work when we get into class!

HomeworkYou might want to start the quia.com review on the 1920s and early 1930s!!!!! for the weekend

FRIDAY Examine the nature of the Dust Bowl (View video) (GEO-2,5)

Materials Strategy/FormatVideo video/assessment

Student Skill TypesChronological Reasoning (1,2,3)Comparison and Context (4)Historical Interpretation (7,8)

Instructions The terrible drought that plagued the Midwest and southwestern U.S. was not caused by the

Depression but it certainly raised the misery index! What was worse than the human social and economic (and some cases physical devastation), it was largely self-inflicted.

Today we will view some video sections about the dust bowl disaster. The reading of the link last night will help to answer some of the questions after the video.

HomeworkQuia.com Quiz: A Review of the 1920 independent study. This will also include the class discussion on Presidents of the 1920s. There may also be a few questions that were not in your text. You will be able to save your progress on this quiz