midterm iii study guide

8/2/2019 Midterm III Study Guide

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HIST 364: History of American BusinessMidterm III: Wednesday, March 28Comprehensive through Friday, March 23Study Guide

This mid-term will include short-answer questions and ID questions. We will distribute the short

answer questions on a separate hand-out, on which you should write the answers (and yourname)and you should write the ID questions in a bluebook. Please bring a bluebook to class.

The short-answer portion will require you to answer multiple choice and matching-type questions.

Some questions may ask you to put important events in chronological order. Whats most

important is that you understand the flow of historyhow events and processes fit together

historically.

The ID questions will give you a choice of terms. For each term, you should write 3 to 4 sentences

that defines the term (or person or event) as specifically as you can, situates it in time (if you dont

know the exact date, give as much historical context as you can), and, most importantly, explainsthe relevance of the term in the context of this course .

The exam will cover all material discussed in lecture and your readings through February 1.

To help you prepare for both sections of the midterm, please consult the following list of terms.

American Liberty League: politicalorganization formed by conservativeDemocrats in 1934 to oppose FDRs NewDeal policies. They dissolved following

Roosevelts landslide victory in the 1936election.

Andrew Mellon: third wealthiest man in the1920s, behind Rockefeller and Ford. BecameSecretary of the Treasury under Harding in1921, and continued under both Coolidge andHoover until 1932. Proponent of supply-sideeconomics. Suggested that high taxationlevels were self-defeating, because theywould lead the wealthy to subvert the tax

system.

Associationalism: the idea that governmentsprimary role should be to encourage privateactors to associate amongst each other andcollaborate to solve economic and socialproblems. Advocated by Herbert Hooverduring his presidency (1929-1933). Closely

related to voluntarism, which holds thatpeople and companies need to be persuaded,not forced, to take certain actions.

Bank Holiday: a government-mandatedclosure of commercial banks within theUnited States. Used to prevent the publicfrom executing a run on the bank, whichhelps in easing the effects of a financialpanic. FDR did this immediately upon takingoffice in 1933.

Black Tuesday: October 29, 1929, the startof the Great Depression. The Dow lost 12%.

Buying on Margin: had proliferated as ameans of increasing the size of investmentsby the late 1920s. Led to an inflation of thevalue of the stock market in comparison tothe value of its actual underlying assets (see:bubble).Conglomerate Wave: occurred between thelate 1950s and the late 1960s. Companies


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formed conglomerates, which were largemulti-divisional companies that dealt inlargely unrelated products. They representedthe most extreme form of diversification,which was started by GM and Du Pont

during the 1920s.

Congress of Industrial Organizations: afederation of industrial unions that wasestablished in 1935 in response to the passageof the Wagner Act. Was like the AFL in thatit was primarily composed of skilled workers,but differed in that it was home to manypolitical radicals (esp.socialists/communists). Gained substantialpower due to the labor unrest in the mid-

1930s.

Du Pont: large chemical company that beganto employ decentralized managementstrategies in the 1920s. This allowed them tosimply tack on new divisions for exploringpromising ideas that R&D generated. Servedas a model for corporate diversification.

Fair Labor Standards Act: enacted in 1938.Established a national minimum wage,provided for time-and-a-half overtimecompensation, and prohibited child labor.Helped establish basic worker rights withinAmerican industry.

FDIC: government corporation created bythe Glass-Steagall Act in 1933 to insuredepositors in the event of a bank failure.This served as a hedge against bank runs,and, coupled with adequate liquidity levelswithin the asset pools of banks, prevented thecollapse of banks as had been seen during theearly stages of the Depression and at otherpoints, such as the Panic of 1907.Franklin D. Roosevelt: 32nd POTUS. Inoffice from 1933 to 1945. Was primarilyconcerned with bringing America out of theGreat Depression when he entered office, andtook action towards this goal most famously

through his New Deal policies, which aimedto provide both a tangible boost in Americanemployment and its accompanying increasein national morale. The effectiveness ofthese measures in accomplishing their goal is

hotly debated. Presided over the majority ofthe United States involvement in WWII.

GI Bill of Rights (Servicemen's

Readjustment Act of 1944):provided a range of benefits toreturning American soldiersincluding low-cost mortgages,startup loans for businesses andfarms, funding to attend collegeand one year of unemployment

benefits. Considered a majorsuccess, both politically and interms of its boosting effect on theavailability of human capital.

Glass-Steagall Act: enacted in 1933. Hadtwo functions: forced investment banks andcommercial banks to separate theiroperations, and established the FDIC tohedge against bank runs.

Gulf and Western Company: aconglomerate formed after the MichiganBumper Companys 1958 takeover of theMichigan Plate and Stamping Company.Was involved in over 70 mergers between1958 and 1968, going from single-digitmillions to single-digit billions in sales. Wasa leading example of a participant in theconglomerate wave of the 1960s.

Hawley-Smoot Tariff: fears of this werebehind the losses of Black Tuesday. Enactedin 1930. Aimed to protect American industryby establishing the highest tariff rates inhistory. This act and the retaliatory tariffsenacted by trading partners of the U.S.reduced American exports and imports bymore than 50%.


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Herbert Hoover: 31st POTUS. Held officefrom 1929 to 1933. Took a relativelyconservative approach to economicrevitalization, and believed that welfarebenefits would create a cult of leisure.

Presided over the largest peacetime taxincrease in American history, and raisedtariffs (Hawley-Smoot Tariff). Created theReconstruction Finance Corporation, whichmade selective loans to good companies.

Installment Credit: a one-time loan where adown payment is made, and then theborrower promises to make regularpayments, at the risk of the no-refundrepossession of the item bought on credit in

the case of default. This type of creditproliferated in use during the 1920s, andsince there was no default incentive due tothe lack of a refund, default rates were low.

Levittown: a pioneering New York suburbandevelopment, built between 1947 and 1951by developer William Levitt. Served as thearchetype for post-war suburbandevelopment in America. Fueled by theavailability of G.I. Bill benefits.

Managed capitalism: a form of capitalistinteraction that includes a level of centralplanning intended to promote stability andsustainability in an economy. Recoverymeasures during the New Deal era are a goodexample. John Maynard Keynes was a keyproponent of managed capitalism.

Mass tax: a tax paid by all segments of apopulation, instead of a tax on a particularsocioeconomic class. The United Statestransitioned to a mass tax during WWIIthrough revenue acts like the Victory Tax of1942 (5% on earnings over $640). By theend of the war, 70% of American householdspaid income tax.

National Recovery Administration:industry-focused collaboration of businessleaders, government officials, and labororganizers. Created by the NationalIndustrial Recovery Act in 1933. Set codes

for prices, production, wages, and workinghours. Declared unconstitutional bySCOTUS in 1935.

New Deal: economic recovery policypromoted by FDR. Multi-faceted. Somecritical pieces of it were the Wagner Act(1935), the Social Security Act (1935), andthe Securities and Echange Act (1934).Ultimately expanded the role of thegovernment in the lives of Americans,

strengthened unions, created social safetynets, established greater limitations onbusiness activities, and increased regulations.

Reconstruction Finance Corporation:created in 1932 under the Hooveradministration. Designed to ease the creditcrunch of the Depression by lending to goodcompanies. Modeled after WWIs WarFinance Corporation. Disbanded in 1941.

Research Triangle Park: created in 1959 asan outcropping of growth in high-techindustry in America. Formed through acollaboration of state and local government,nearby universities, and business interests.

Rosie the Riveter: an American cultural iconcreated as a propaganda piece in 1942 by J.Howard Miller. Became representative of theall-inclusive nature of the American wareffort, particular as related to industrial work.

Securities and Exchange Commission:enacted in 1934. Requires companies todisclose corporate information in an effort tofacilitate informed investment decisionmaking qhile reducing insider trading andavoiding reckless tendencies like those thatled to the Great Depression.


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Silicon Valley: the first major example ofresearch as a public-private venture.Stanford University led the development ofmany R&D projects in the 1940s and 1950s,

which resulted in the creation of firms suchas Hewlett-Packard. Also was responsiblefor the development of a large portion ofAmerican technology during the Cold War.

Social Ethic: one of the two key ethics ofAmerican business, according to WilliamWhytes The Corporation Man. Holds thattheres an ethos within organizations thatpushes individualism aside to make way forparticipation in something larger and more

important than yourself.

Social Security Act: enacted in 1935.Created a mechanism for the federalgovernment to give direct relief money tothree types of needy beneficiaries: oldage/survivors/disability (OASDI), theunemployed, and families with dependentchildren. Faced conservative criticism forincentivizing joblessness. Passed because itcreated a sense among workers that SocialSecurity represented an investment.

The Hundred Days: Roosevelts firsthundred days in office, beginning on March4, 1933. White House advisors began tocome up with ideas to combat theDepression, and a panicked DemocraticCongress passed them without hesitation.Created Emergency Banking Act of 1933,Glass-Steagall Act, Agricultural AdjustmentAct, Civilian Conservation Corps, FederalEmergency Relief Administration, and TVA.Served as the foundation for the Americanwelfare state.

The Organization Man: published byWilliam Whyte in 1956. Held that two typesof ethical codes dominated Americanbusiness: the Protestant ethic, which

suggested that success came as a result ofhard work and thriftiness, and the socialethic, which said that individualism took asecondary role to the greater good inAmerican industry.

Tracy Jordan Meat Machine: a fictionalmachine, seemingly based on the GeorgeForeman grill, from 30 Rock. AlecBaldwins character proceeds to show TracyJordan the extensive corporate tree underwhich a subsidiary of GE will produce themeat machine.

Wagner Act: enacted in 1935. Formallyrecognizes the rights of workers to organize

and participate in collective bargaining.Strengthened unions and empoweredworkers. Enforced its provisions through theNational Labor Relations Board, anindependent federal regulatory agency.

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