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Great Depression

Great Depression. Ch. 33-34. Fordney-McCumber Tariff Law (1922). Americans feared the flood of cheap European goods after WWI Hiked tariff from 27% to 38.5% Europe needed to sell its goods in America to achieve economic recovery and repay war debts to the US

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Great Depression

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  1. Great Depression Ch. 33-34

  2. Fordney-McCumber Tariff Law (1922) • Americans feared the flood of cheap European goods after WWI • Hiked tariff from 27% to 38.5% • Europe needed to sell its goods in America to achieve economic recovery and repay war debts to the US • Spurred European nations to pass high tariffs of their own

  3. Harding Scandals • 1921 – Teapot Dome Scandal • Sec. of Interior transferred naval oil reserves to wealthy oilmen after receiving bribe • 1923 – head of Veterans Bureau embezzles $200 mil. in connection with construction of veterans’ hospitals • 1924 – Attorney General gets caught selling pardons and liquor permits

  4. Calvin Coolidge • Becomes president when Harding dies of pneumonia • Conservative businessman • Wanted to reduce taxes and debt • Laissez-faire

  5. Farmers Suffer • Hurt by their own efficiency • Went into debt purchasing machinery • Crop prices fall because of bigger harvests

  6. International Affairs • Allied war debts $10 bil. • Allies protest repayment • claimed tariffs made it impossible to pay debts • Germany must pay reparations to Brit. and France so they can repay the US • Germany starts printing money, causing hyperinflation

  7. Dawes Plan 1924 • Rescheduled German payments • Private American loans would be made to fix German hyperinflation

  8. Herbert Hoover • Elected in 1928 • Self-made business man • Believed in isolationism, industrialism, free enterprise and small government

  9. Hoover Administration • Setup Federal Farm Board to lend money to farmers • Hawley-Smoot Tariff (1930) – average tariff rate raised from 38.5% to almost 60%

  10. Great Depression • Oct. 1929 – some investors begin selling stock after Brit. Raises interest rates • Oct. 29, 1929 “Black Tuesday”

  11. Great Depression • 1930 – 4 mil. workers lost their jobs • 1932 – 6 mil. workers lost their jobs • 5,000 banks collapse (1929-1932) • People lose life savings

  12. Causes of Great Depression • US ability to produce goods greater than its ability to consume goods • Over expansion of credit created massive individual debt • European debts to US • Decreased international trade • Drought in Midwest

  13. Hoover’s Response • No gov’t handouts • Reconstruction Finance Corporation (1932) – assisted companies hoping to increase employment • Norris-La Guardia Anti-Injunction Act (1932) – outlawed “yellow-dog” contracts • Public Works Projects • Hoover Dam

  14. Bonus Army • 1932 – Veterans march on Washington demanding payment of a bonus that was due in 1945 • Evicted by Gen. Douglas MacArthur • Huge blow to Hoover PR

  15. FDR Campaign • “Brain Trust” – informal team of advisors • Campaign slogans • “Happy days are here again” • “The worst is past” • “Prosperity is just around the corner”

  16. Election of 1932 • First time blacks shift allegiance to Dem. Party • Voters voted as much against Hoover as they voted for FDR

  17. FDR and the 3 R’s

  18. FDR • Emergency Banking Relief Act 1933 • President could regulate banking transactions • Glass-Steagall Act • Set up Federal Deposit Insurance Corp. (FDIC) • Guaranteed banking deposits up to $5,000

  19. Creating jobs • Civilian Conservation Corps (CCC) • Gov’t camps for young men for reforestation, firefighting, etc. • Federal Emergency Relief Act (FERA) • $3 bil. to states for work projects • Agricultural Adjustment Act (AAA) • Paid farmers not to grow crops • Inadvertently created unemployment • Struck down by Supreme Court in 1936 • Civil Works Administration (CWA) • Provided temporary jobs during harsh winter

  20. Helping Industry and Labor • National Recovery Act (NRA) • Designed to assist industry, labor and the unemployed • Encouraged employers to hire more workers • Ex. Hire two men to work 30 hrs/week rather than one man to work 60 hrs/week • Established minimum wage

  21. Helping Industry and Labor (cont.) • Public Works Administration (PWA) • Provided industrial recovery and unemployment relief • Built Coulee Dam • 21st Amendment – repeals prohibition to tax alcohol

  22. The Dust Bowl • Caused by: • Drought • Wind • Poor crop rotation • No trees • Grapes of Wrath– John Steinbeck • Resettlement Administration • Moved poor farmers to new land • Planted trees

  23. Banks and Big Business • “Truth in Securities” Act • Can’t lie about how well a stock is doing • Securities and Exchange Commission (SEC) • Regulates stock market

  24. Housing and Social Security • Federal Housing Administration (FHA) • Provided loans and mortgages to individuals for improving homes and buying new ones • Social Security Act of 1935 • Provided money for unemployment insurance • Provided money for senior citizens, disabled, etc. • Funded by payroll tax

  25. A New Deal for Labor • National Labor Relations (WAGNER Act) • Boost to labor movement • Reassured rights to collective bargaining • Fair Labor Standards Act • Established 40 hour work week

  26. FDR v. Supreme Court • Supreme Court strikes down 7 of 9 New Deal cases • FDR wants new court in favor of his programs • Wants to add one new judge for every judge over the age of 70 • Congress and the American public disagree

  27. Roosevelt Recession • 1937 – people blame tax hike for Social Security • FDR’s solution: spend more money

  28. Impact of New Deal • Federal gov’t becomes largest employer • Republicans claimed the way out of Depression was less gov’t restrictions • Some argued it did not fix depression since farm surpluses still existed

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