Brian Surkan ~ The Walker School

Post World War I through Hoover1919 – 1932

Aftermath of WW I

Disillusioned Veterans Return Home

Influenza Pandemic (1918 – 19)

Sacco and Vanzetti (1920)

Bomb on Wall Street (1920)

Palmer Raids (1919-’20)

Philosophic Choices

Progressivism

Gradually creating utopia on earth,

one step at a time.

Prohibition•“After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited. “•- Amendment 18 (1919)

Female Suffrage“The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of sex. “

- Amendment 19 (1920)

Socialism

The needs of the many outweigh the needs of the

few.

Socialism: Eugenics (1921)

Socialism: Communism vs. Fascism

• All property communal• Temporary dictatorship• Equality of pay•Gov’t directs production•Heavy, progressive taxes•Dissenters killed•Goal: Benevolent Anarchy

• Private property• Strong central government•Gov’t regulated contracts•Gov’t directs production•Heavy, progressive taxes•Dissenters persecuted•Goal: Enlightened Dictatorship

Communism Fascism

Communist Party of America (1919)

Nationalsozialismus (1920)

Fascism and Communism Popular

Mussolini in Italy (1922)

Post-War Economy

U.S. Recession (1919 – 1921)•Gold Standard: deflation of 13 - 18%•Federal Reserve lowered interest rates•Andrew Mellon cut Taxes (1921)•Fordney-McCumber Tariff (1922)•Stocks and goods purchased on credit

German War Reparations: Vicious Cycle

USA

Germany

Allies

Repara

tions

Loan

Repay

German Hyperinflation

German Hyperinflation

Roaring Twenties Culture

Flappers

Jazz (Louis Armstrong)

The Jazz Singer – “Talkie” (1927)

Technology

Radio (1920)

Ice Box

Refrigerator

Electric Vacuum

Ringer Washer Machine

Model T Ford

Telephone

Charles Lindbergh (1927)

Out of Gas?

Post-war Recessions Worldwide•Federal Reserve postpones post-war depression• Artificially low interest rates stimulate economy (1921 – 28)• Increases interest rates rapidly to slow inflation (1928 – 29)• Stock market collapses (1929) / deflation follows•Worldwide economy heads into a depression

Economic Distress: Banks•Growing losses from bad loans•Forced banks / investors to contract credit•Forced businesses and consumers to reduce debt•Stock Brokers to issue margin calls

Economic Distress: Employment•Demand for goods decline -> price deflation•Fewer goods -> companies cut production•Lower production -> led to layoffs•Layoffs lead to less consumption

Post-Crash of 1929 Problems1.Growing Unemployment2.Deflation3.Failing Banks4.International Distress (Debt Payments)5.Vocal (Socialist) Opposition to Capitalism

Enter Herbert Hoover•Wealthy businessman in global mining• Extensive private charity work during / after WWI• Brought food and clothing relief to poor• “To Hoover” meant to do good in Finland• “Hoover Lunches” were free food for kids in need• Secretary of Commerce (1921 – 1929)• President (1929 – 1933)• Conflicted by opposing personal desires to:• Actively help people in need• Not expand government to provide charity• Regulate business activity centrally

Hoover Responds (1929 – 1930)•Wanted to keep wages, prices and employment high• Tried to convince business leaders to ignore market forces•Agricultural Marketing Act (1929 – before stock crash)• Authorized Federal Farm Board to buy/sell farm products

• Protectionist Hawley-Smoot Tariff Act (1930)•Raised prices on over 2,000 imported goods• 1,028 Economists signed petition against the bill• Foreign countries responded with tariffs on American goods

• Public works construction - boost employment (1930)

Hoover Admin. Responses (1931 – 1933)•Democrats took control of House of Reps (1931)•Small Republican Senate majority•Some Republicans were Progressives (left)•1-year moratorium: war loan repayment (1931)•Affects U.S. Banks / Lending institutions• Japan Conquers Manchuria in China (1931)•Breaking Washington Naval Treaty of 1922

Hoover Responses (1932 – 1933)• Fends off “Bonus Army” with real army (July 28, 1932)•WWI Veterans promised bonuses in 1945 but wanted them early

• Revenue Act of 1932•Marginal tax rate raised from 25 to 63%• Doubled estate taxes• Raised corporate taxes by 15%• Reconstruction Finance Corporation (1932)• Loans made to banks/businesses (esp. RR) in distress• Norris-La Guardia Anti-Injunction Act (1932)• Begged FDR to boldly state his intentions (1933)• Anything is better than uncertainty in business

Response to Hoover•Hoover blamed for distress•“Hoovervilles” – shanty / tent towns of homeless•“Hoover wagons” – cars pulled by horses•“Hoover blanket” – old newspaper used as blanket•“Hoover flag” – empty pocket turned inside out•“Hoover leather” – cardboard replaces shoe sole •Conservatives accused him of being a socialist•Socialists accused him of not going far enough•Canadians did same to leader: “Bennet Buggies”

Hoover Takes the Blame

Economic Distress? Change Parties!• Franklin D. Roosevelt: “Conservative” Democrat• Accused Hoover of recklessly expanding government power• Promised reduced expenditures & balanced budget• Keep a “sound currency” (gold standard) “at all hazards”• Regulation of banks, holding companies, utility rates• Unemployment and old age protection “under state laws”• Sought to appear bold, but without specific policies• Willing to change only “foolish” traditions• Surrounded himself with a “Brain Trust” of intellectuals• Repeal Constitutional Amendment 18 (Prohibition)• Sought to help “the forgotten man at the bottom”• 1932: BIG Democratic Victory: FDR / House / Senate

Sourceshttp://www.hyperhistory.com/online_n2/connections_n2/great_depression.htmlhttp://www.historyplace.com/worldwar2/timeline/ww2time.htmhttp://en.wikipedia.org/wiki/Events_preceding_World_War_II_in_Europehttp://en.wikipedia.org/wiki/Timeline_of_World_War_IIhttp://en.wikipedia.org/wiki/Transatlantic_flighthttp://www.presidency.ucsb.edu/medialist.php?presid=32http://www.pbs.org/wgbh/amex/rails/timeline/index.htmlhttp://www.yourememberthat.com/files/119811e40fad3bb9.jpghttps://woodward8.wikispaces.com/file/view/Hoovervilles.jpg http://images.businessweek.com/ss/07/04/0426_dow/image/2_great_depression.jpg http://farm4.static.flickr.com/3159/3109349739_d46051931f.jpg http://www.subprimeblogger.com/wp-content/uploads/2008/12/depression-vs-recession.jpg

http://www.loc.gov/exhibits/treasures/trm203.htmlInfluenza:• http://www.britannica.com/blogs/2009/05/influenza-ah1n1-swine-flu-update/