1920's -Spending/Good Economic times Tues. Oct. 29th, 1929 - NY Stock Market Crashed Caused-G....
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Transcript of 1920's -Spending/Good Economic times Tues. Oct. 29th, 1929 - NY Stock Market Crashed Caused-G....
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1920's -Spending/Good Economic times Tues. Oct. 29th, 1929 - NY Stock Market
Crashed Caused-G. Depression last until 1942
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Stock MarketInvestors-purchased stocks; hope to make profitBanks loaned $$ to investors Investors only had to pay for 10% of the stock's at time of purchase-known as BUYING ON MARGIN, Balance paid at later date
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STOCK SPECULATION - Buy & sell stocks quickly to make quick $$$
b/c of buying & selling, stock value increased
Often inflated values Gave false sense of
security/confidence in American market
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Oct. 1929-Stocks prices began to drop
Invest. Confid. dropped
Invest. tried to sell Stocks
Bottom fell out of market = panic /RUSH TO sell… (many Inv. go bankruptcies as banks recall loans)
Ripple effect on the economy
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Effect of Stock Market Crash- Rush to sell stocksPeople withdrew money from banksBanks collapsedBanks loaned out no moneyBanks recalled loansBusiness collapsedFactories closed down
Unemployment rose no gov't assistance at first-No goods purchasedpurchasing power declined reduced productivity yet again (= ECONOMIC CYCLE)
DOMINO EFFECT
Unemployment
Purchasing Power Productivity
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1920's U.S. Eco. based on Productivity – Producing goods-Provided employement Goods produced -purchasing demand had to
be there:
Productivity-Purchasing-High employment =Healthy economy
1920-27, U.S. productive capacity doubled b/c of technological innovation (OVERPRODUCTION)
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Uneven Dist. of Wealth0.1% at top owned as much as bottom 42% of American families Middle Class -Bulk of pop. Not wealthy; job b/c of the industrialization & consumerization Depended on salariesProductivity declined lost jobsCut back on purchasingDecline in Consumption among the middle class ruined the whole country
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Pres. Hoover’s ResponseLAISSER FAIRE Attitude-Gov't say out of economy wouldn't create programs of gov' aid to individuals - "RUGGED INDIVIDUALISM
-Volunter $$ /Donations Persuaded bankers/business to VOLUNTER $$$$ Hoover organized private relief agencies for unemployedTax breaks in return for private sector economic investment
HOOVER MORATORIUM - Stop war Reparations payments-in return-Euro. countries purchase American goods to stimulate American economy
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HOOVER Passed
Passed Smoot Hawley Tax- Protect U.S. industry (stimulate purchasing of U.S. goods)
fatal error... Congress did not
understand that the world had become a GLOBAL ECONOMY
in retaliation European countries passed high tariffs on foreign goods coming into their country-
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Hoover increasingly unpopular….to little to late..
RECONSTRUCTION FINANCE CORPORATION
-Emergency loans to banks
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In 1931- Soviets flooded world market with cheap wheat
Resulted in -Global BANKERS’ PANIC
Bankrupt, wiped out life savings of thousands of Americans/Europeans
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Dairy Farmers frustrated w/low price of milk refuse to sell (dump it)
WW1 veterans (March on Washington = BONUS MARCH 1931,-reached Wash. Set up shantytowns = HOOVERVILLES (food scraps = HOOVER-MEALS…
Dispersed (MacArthur/Eisenhower)
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1932 ELECTION1 / 4 unemployed…nat'l income 50% less than in 1929Repubs. nominated Hoover no hopewinner by a landslide = FRANKLIN DELANO ROOSEVELT (Dem - N.Y. governor)
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The Great DepressionFDR’s “New Deal”
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Franklin Delano Roosevelt (FDR)
Eleanor Roosevelt
*A woman is like a tea bag- you never know how strong she is until she gets in hot water.
Eleanor Roosevelt - US diplomat & reformer (1884 - 1962)
*Great minds discuss ideas; Average minds discuss events; Small minds discuss people.
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.
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Revolution in American society - changed way gov't functioned
-FDR believed gov't involvement in economy was crucial to stimulate the economy
Banking Hoilday- shut down banks /gov't inspection-re-open when "healthy"- people's slowly redeposited-allowed banks to invest in the economy
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Brain TrustColumbia University
President Roosevelt's advisors, met with him at his home in New York state throughout the spring and summer of 1932 to come up with a solution for the Depression - wanted to modify and survey the United States' laissez-faire economy by advocating government and big business cooperation and beginning public works projects and state and federal funded relief programs to help future economic downturns.
http://www-rohan.sdsu.edu/~belier/brain_trust.htm
1. Black voters shift from Republican to Democrat2
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Stock Market Reform-Security Exchange Commission control & Regulate Stock Market
-Print $$$: Keynesian Economic Theory
(Cauz/= inflation), value of dollar less- gave gov't spending power
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NATIONAL INDUSTRIAL RECOVERY ACT (NIRA) / NATIONAL RECOVERY ADMIN (NRA) –
-Gov. regulates business/indust. -labor & business
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TENNESSEE VALLEY AUTHORITY (TVA) - Electricity/Hydroelectric power (nationalization v. privatization of elec.)
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The Annual MoveThe Annual Moveby Otis Dozier, 1936by Otis Dozier, 1936
The Annual MoveThe Annual Moveby Otis Dozier, 1936by Otis Dozier, 1936
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AGRUCULTURAL ADJUSTMENT ACT (AAA) - Aid formers- SUBSIDIES
Food Stamp Act of 1939 - gave away surplus food to poor, also guaranteed (small) farmers a market
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CIVILIAN CONSERVATION CORPS (CCC) - Set up to establish work for young men -in areas of reforestation, soil conservation, flood control, road construction - also took them out of urban labor markets
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NATIONAL YOUTH ADMIN. (NYA) - created jobs for young in urban areas
National Labor Relations Act (aka Wagner Act)- legitimized unions & labor -collective bargaining & collective action (strikes, etc...) - it outlawed BLACKLISTS & other anti-union practices
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Construction of the Construction of the DamDam
by William Gropperby William Gropper
Construction of the Construction of the DamDam
by William Gropperby William Gropper
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Social Security Act (1935)-Retirement/unemployemen
- "creeping Socialism"- WELFARE STATE - unemployment insurance, old age pensions
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ELECTION OF 1936 - FDR won easily
Reorganize Supreme
Court – to get New Deal legislations passed
FDR wants # of judges changed from 9 15 (to "pack the court") – with judges that approved New deal
but judges retired & FDR got to appoint new ones they approved all New Deal legislation
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1930's – new Qs arose… Forgein Issues-WWII
ELECTION OF 1940 - FDR broke with tradition & ran a 3rd time
Isolationist foreign policy- FDR won in 1940 (and again in 1944)
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INCREASED GOV’INTERVENTION
CREEPING SOCIALISM WELFARE STATE CONTROLLED BUSINESS
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a person, esp. an orator or political leader, who gains power and popularity by arousing the emotions, passions, and prejudices of the people.
Father Charles Coughlin“Social Justice”Hate Radio
Dr. Francis E Townsendof California“Senior Citizens”
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The way ofJefferson, Madison,& Lincoln
The way of Jefferson,Madison, and Lincoln
Radical shortcut