Transcript OMU11new13
Roaring Twenties and Depressing Thirties Unit 11 The Second Industrial Revolution ? 1. Technological innovations made it possible to increase industrial output without expanding the labor force. 2. Driven by electricity and automated machinery, industry concentrated on producing consumer goods. 3. A housing boom further drove the economy. The Modern Corporation • A managerial revolution stressed scientific management and behavioral psychology. • To improve worker morale and reduce the challenge of unions, corporations employed “welfare capitalism.” (employee well-being) Business of America • Impact of the Automobile • Paved roads • Urban sprawl • Independence and economic revolution • Airplanes – Primarily use for commercial purposes • Introduction of Electric Conveniences • Radios ($75), washing machine ($150), sewing machine ($60) (TODAYS Value approximately 10x) • Advertising, credit, and consumer choices The Auto Age • The car symbolized the rise of the consumer economy. • By 1925, the assembly line at Henry Ford’s Highland Park plant completed a car every 10 seconds. • The auto industry spurred production of steel, rubber, glass, and petroleum. • Road building triggered commercial development along highways, promoting new businesses and changed social habits. Ford Model T and Model A Model T Model A 15 million produced by 1927 2 million people Viewed in NY on First day The Twenties Woman • Fashion • What do clothing styles reflect? • Actions • Smoking, dancing, and drinking • Relationships • • • • Marriage Double standard Birth Control – Margaret Sanger Sigmund Freud – Repression is unhealthy? • Work • 10 million women workers (24% of the total) Twenties Fashion History Repeats Itself • Parents feel their children are staying out too late • Crime is on the rise • Drunkenness is a serious problem • People are risking their savings on stocks • People are spending money on things they don’t need • Young people spend too much time listening to music • Young people don’t spend enough time on schoolwork • Women spend less time at home being wives and mothers • Young people are going out in cars and it is unsafe • Today’s new music is terrible and ruining young people • “Nice” girls shouldn’t smoke, wear tight clothes or drink Entertainment of the 1920’s • Sports Heroes • Baseball – Babe Ruth (60 HR in 1927) • Boxing – Jack Dempsey vs. Gene Tunney (150,000 viewers @ $2.7 million) • Football – Notre Dame & Knute Rockne (Five undefeated seasons) • Swimming – Gertrude Ederle – first woman to swim the English Channel Tunney vs. Dempsey More Entertainment • Charles Lindbergh’s Flight – first nonstop solo flight across the Atlantic (34 hours = $25,000 prize) • Movies – from silent to sound • Music & Literature • George Gershwin – composer • Sinclair Lewis – first American Nobel Prize for literature • Ernest Hemingway • Newspapers and weekly magazines (Time, Reader’s Digest) Domestic Challenges • Prohibition • What’s the Volstead Act? • Federal enforcement of Prohibition • Why did Prohibition fail? • Significance of the Immigration Acts • KKK • Why is it so popular? • Impacts of the Scopes trial The Prohibition Experiment 1920-1933 • Causes • Various religious groups thought alcohol was sinful • Need to protect the public’s health • Alcohol leads to crime, domestic abuse, and job issues • Nativism – against foreign born brewers and immigrants that used alcohol • Effects • Widespread disregard for the law • Increased smuggling and bootlegging • New source of criminal income • Birth of organized crime Prohibition Immigration Act of 1924 • AKA the National Origins Act, Asian Exclusion Act or the Johnson-Reed Act • Limited the number of immigrants who could be admitted from any country to 2% of the number of people from that country who were already living in the United States in 1890. • Excluded immigration to the US of Asian laborers, specifically Chinese immigrants and had the effect of preventing Japanese Americans from legally owning land. • The law was aimed at further restricting the Southern and Eastern Europeans who had begun to enter the country in large numbers beginning in the 1890s, as well as East Asians and Asian Indians, who were prohibited from immigrating entirely. • It set no limits on immigration from Latin America. Immigration Changes Red = North/West Europe Blue = South/East Europe Return of the Klan • By 1924 membership = 4.5 million • Beliefs • Keep “blacks in their place” • Drive Catholics, Jews, and foreign-born out of the country • Enforce prohibition • Oppose labor unions Picnic with the Klan Milwaukee We promise a “hot” lunch!! Welcome note to a Madison, WI African-American What is the symbolism? Science vs. Religion • Fundamentalism – literal interpretation of the Bible • Adam & Eve or a Monkey? • Evolution theory • Creation theory • The Scopes Trial • Bryan vs. Darrow The Defendant The Lawyers The Outcome • Scopes – Guilty $100 fine • Darrow wins verbal war by: Asking Bryan if God created the world in 6 days (as we know a day) Bryan’s answer cast doubt on the length of the day (which weakens the fundamentalist argument) The Harding Administration • • • • • Republican views of the economy Labor Issues Washington Conference Kellogg-Briand Pact Tariffs and Scandals Republican version of Laissez-Faire • Government should stay out of business unless it can ‘aid’ business • Removal of progressive reforms • Self regulation through cooperation (Hoover) • No help for Labor • Bonus Bills for Vets Anti-Labor Movements • Unions tied to Communist beliefs • Decline in Union Membership • Rise in immigration • Movement from rural areas • Exclusion of African-Americans “If Capital & Labor Don’t Pull Together” – Chicago Tribune Consequences of Labor Unrest “While We Rock the Boat” – Washington Times Coal Miners’ Strike 1919 “Keeping Warm” – Los Angeles Times Steel Strike - 1919 “Coming Out of the Smoke” – New York World “He gives aid & comfort to the enemies of society” – Chicago Tribune Boston Police Strike - 1919 “Striking Back” – New York Evening World Isolationism in the New World • Washington Conference • Reduce Naval Arms race • Limit base building in Far East • Kellogg-Briand Pact • International agreement against using war as an instrument of national policy • Small problem: • No way to enforce • No provision for military or economic sanctions against any nation that violated the pact Double Trouble • Economic isolationism = Tariff Walls • Thirty two increases in six years • Pressures Europe to respond in kind • Future outcomes? • Teapot Dome (or the Return of Grant) • Secretary of the Interior Fall leases oil lands to private business in exchange for $400k (loans) • More scandals – pardons for sale, liquor exemptions etc. Broken Heart? Official cause of death – “A stroke of apoplexy (cerebrovascular accident) 1924 Election / Silent Cal • 1924 Election • Who, what, and why • International Debt • 1928 Election • Hawley-Smoot Tariff 1924 Election – Republican Candidates Calvin Coolidge – Incumbent President Charles G. Dawes Vice-President 1924 Election – Democratic Candidates John Davis Presidential Candidate Won the Nomination on the 103rd Ballot Compromise Candidate • Charles W. Bryan (WJB brother) and governor of Nebraska was the V.P. candidate • Sorry no picture! 1924 Election What happened to the Progressives? Debt, Debt, and more Debt • Creditor status • $16 B owed: how to collect? • Allies issues • Tariffs reduce sales which reduce payments • Reparations from Germany • French occupation of the Ruhr Valley • Cripples economy – hyperinflation • Dawes Plan Dawes Plan Main points of The Dawes Plan were: 1. The Ruhr area was to be evacuated by Allied occupation troops. 2. Reparation payments would begin at 1 billion marks for the first year and should rise over a period of four years to 2.5 billion marks per year. 3. Foreign loans (primarily from the United States) would be made available to Germany. Goal: Repayment of debts by Allies to US (BIG CIRCLE) African-Americans • Great Migration • By the end of the 1920’s almost five million African-Americans lived in cities (40%) • Huge numbers of race riots (25 in 1919) • Goals – NAACP • Protest racial violence • Promote legislation to protect AfricanAmerican rights Marcus Garvey • Founded Universal Negro Improvement Association • Promote African-American businesses • Support a ‘Back to Africa’ movement • Black Star Line • Colonize a nation • Convicted of mail fraud and jailed • Legacy = black pride, economic independence and reverence for Africa Harlem Renaissance • Literary and artistic movement celebrating African-American culture • Why Harlem? • Mix of southerners, West Indies, Cuba, Puerto Rico, and Haiti • World’s largest black urban community • Key figures • • • • Claude McKay – militant poet Langston Hughes – poet Louis Armstrong – Jazz musician Duke Ellington – Jazz musician Sacco-Vanzetti Trial • Details • 4/15/20 – A $ 15k payroll was stolen by two armed men (2 guards died) • Both men were Italian and known anarchists • Found guilty 7/21 • Executed 8/27 Remaining Issues: Class Struggle? Fairness of Trial? Movie 1928 Election Republican Herbert Hoover President Charles Curtis V.P. Democrat Alfred Smith President Joseph T. Robinson V.P. 1928 Election Where did the Democrats go? The Stock Market • What is stock? • Individual ownership of a portion (share) of a company that is publicly traded (bought and sold) • How do you make money? • Buy low and sell high (difference = profit) • Buy and hold (company value increases over time) • What are the risks? • No insurance or guarantees of return Issues with the Stock Market • No rules!!! • Speculation – buying and selling with the intent of making quick, large profits • Buying on margin – buying a stock with a small down payment and borrowing the rest (up to 75%) • See any problems????? Two Decades of the Stock Market Hoover’s Early Actions • Help the Farmers (McNary-Haugen) • Buy surplus = boost prices • Problems with this plan? • Hawley-Smoot Tariff • • • • Highest protective tariff in peacetime Decreases foreign purchases Raises foreign tariffs Fuels anti-American attitudes Crash and Hoover • • • • Immediate impacts Review of causes Hoover’s reaction Bonus Army Causes of a Sick Economy • U.S. Issues • Decline in Industry • Foreign Competition • Decreased Demand • New sources of energy threaten coal industry • Outdated machinery • Decline in Home Construction • Impacts all associated businesses More Causes • Agricultural Crisis • Decline in demand for farm goods • Falling prices • Rising farm foreclosures • Easy consumer credit • Rising debt creates reduced consumer spending • Uneven distribution of income • More goods than consumers The Stock Market Crash – The Final Straw!!! • Crash – 10/29/29 (16 million shares traded) • By mid-November investors lost $30 Billion • By end of December investors lost $10 Billion more…….. Short Term Effects 1929-33 • Bank Failures • By 1933, 6000 banks closed (25% of all banks) • 9 million individual savings accounts lost • Manufacturing output cut in half • 85,000 businesses went bankrupt • Unemployment • 1929 – 3% of eligible workers unemployed • 1933 – 25% of eligible workers unemployed • Remaining workers take reduced pay and hours Impacts – Urban Areas • Widespread homelessness • • • • Creation of shantytowns (Hoovervilles) Begging, soup kitchens, bread lines Destruction of families “Riding the rails” > 2 million men • Increased racial tensions • Competition for employment Homeless Unemployed Sleeping in the Park Unemployment March Camden, NJ Soup Lines / Bread Lines Waiting for the Train Impacts in Rural Areas • Huge numbers of farm foreclosures (over 400,000 between 1929-1932) • Environment issues • Overproduction destroys soil • Extreme drought creates ‘Dust Bowl’ • Migrant families • Farmers move West for work Rural America President Hoover’s Reactions • “Any lack of confidence in the economic future…..is foolish” • Remain optimistic! • Rugged individualism – succeed through effort • Limited government involvement in economy • Federal building projects – Boulder Dam • Federal Farm Board – help raise farm prices • Reconstruction Finance Corp – loan money to banks, industries, etc. (up to $2 billion) Dust Bowl Dust Bowl • Creates massive relocation of Plains farmers to West Coast • Migrant farmers • Regional protection from “Okies” The Bonus Army • WWI veterans scheduled to receive a ‘bonus’ in 1945 (about $500 each) • 20,000 march to Washington in 1932 • WE WANT OUR BONUS NOW!!!! • Created a shantytown outside of Washington • Hoover orders them to leave (most obey) • 2000 stay and are removed by US Army with force (gas and bullets) • Nation is shocked! Bonus Army Bonus Army at the Capitol FDR and Reform • Election of 1932 • FDR’s New Deal • Reality of the R’s • Relief programs • Recovery programs • Reform programs Election of 1932 Rep – Herbert Hoover Dem – Franklin D. Roosevelt *Promised to end Prohibition Election of 1932 1928 – No more Democrats!!! 1932 – No more Republicans!!! *African-Americans switch to Democratic Party in BIG numbers Franklin Delano Roosevelt • Promised “A New Deal for the American People” • Three goals: • Relief for the needy • Economic recovery • Financial reform • Used radio broadcasts (fireside chats) to explain goals to the people Financial Reform • Emergency Banking Relief Act of 1933 • Close all banks (bank holiday) • Only financially secure banks reopened • Support stable banks with Federal Treasury (print more money) • Glass-Steagall Banking Act of 1933 – provide federal insurance for individual accounts (FDIC) • Call in the gold supply • Temporarily take US off gold standard • Treasury buy gold at market price Relief for the Needy • Jobs • Civilian Conservation Corp (CCC) provided jobs for young men building roads, parks, and planting trees • Federal Emergency Relief Administration (FERA) – payments to states for direct relief or wages for work projects • Civil Works Administration (CWA) provided construction and teaching jobs – short term • Works Progress Administration (WPA) – created jobs for 8 million people in everything from construction to music teachers More Relief for the Needy • Direct Relief • Federal Housing Administration – government loans for home mortgages • Agricultural Adjustment Act – raise prices by lowering production and loans to meet mortgages Critics • Huey Long (Kingfish) • Share the Wealth Program (REDISTRIBUTION) • Tax Rich • $5000 per family initially • $2000 minimum annual income • Government support for pensions, education, and veteran’s benefits FDR labels him as one of the two most dangerous men in America! More Critics Father Coughlin 1/3 of Americans listened to his weekly radio broadcasts “The great betrayer and liar, Franklin D. Roosevelt, who promised to drive the money changers from the temple, had succeeded [only] in driving the farmers from their homesteads and the citizens from their homes in the cities. . . I ask you to purge the man who claims to be a Democrat, from the Democratic Party, and I mean Franklin DoubleCrossing Roosevelt." Economic Populist with an Anti-Semitic twist* More Critics Dr. Francis Townsend $200 per month per Senior Citizen Economic Reform • National Recovery Act – promote fair business practices • Set competitive prices • Establish work standards for hours and child labor • Provide workers with the right to unionize and conduct collective bargaining • Ruled unconstitutional (unanimously) by Supreme Court – “Sick Chicken” Decision Sick Chickens Schechter Poultry Corp. v. United States (1935) • Schecter Poultry was alleged to have sold unfit chicken to a butcher. Schecter and the butcher are both based in Brooklyn New York. Schecter did no out of state business. • Schecter Poultry Co. was charged by the federal government which argued that under the National Industrial Recovery Act Schecter Poultry can be regulated by the federal government which under the NRA set up codes in cooperation with various industries. • Schecter Poultry argued that the NIRA was unconstitutional because the federal government had no right to regulate intrastate trade. • The Supreme Court citing Gibbons v Ogden as the precedent reversed the lower courts decision in Schecter and struck down the NIRA as unconstitutional. The Supreme Court thus said reaffirmed the fact that the federal government may not regulate intrastate trade only interstate trade. Who is Happy? Who is Sad? More Programs • Public Works Administration (PWA) provided money to the states for school and public building construction • Agricultural Adjustment Act – raise prices by lowering production • Subsidized scarcity or organized waste • Creates more unemployment • Taxing regulations ruled unconstitutional Financial Reform • Federal Securities Act requires companies to: • Provide complete factual financial information about the company • Created rules for ‘insider’ information 3/10/04 - Stewart convicted on all charges Tennessee Valley Authority • Massive Project intended to: • • • • Control flooding (20 dams) Generate electricity Stimulate impoverished region Create jobs SSA 1935 • Social Security Act provided: • Retirement insurance – supplemental insurance for retirees 65 or older • Unemployment compensation • Aid to families with children and the disabled • Financed by a payroll tax on employers and employees Labor Reforms • National Labor Relations Act (Wagner Act) • protects workers from unfair labor practices • reaffirms the right to organize and bargain collectively • Committee for Industrial Organization (CIO) • John L. Lewis forms union of unskilled labor • Successful with GM, USS • Fair Labor Standards Act – set modern labor rules on hours, ages, and minimum wages Candidates for 1936 Dem – FDR Rep – Alf Landon Campaign Cartoon Election of 1936 Election Trivia • FDR won 46 of 48 states • 98.5% of Electoral Votes (two party record) • FDR won almost 61% of popular vote (record at that time) • George Gallup accurately predicated the winner using a ‘scientific’ poll for the first time • FDR believes the landslide equates to complete public support for New Deal The Issue with the Court • "A part of the problem of obtaining a sufficient number of judges to dispose of cases is the capacity of the judges themselves. This brings forward the question of aged or infirm judges--a subject of delicacy and yet one which requires frank discussion. In exceptional cases, of course, judges, like other men, retain to an advanced age full mental and physical vigor. Those not so fortunate are often unable to perceive their own infirmities. . . A lower mental or physical vigor leads men to avoid an examination of complicated and changed conditions. Little by little, new facts become blurred through old glasses fitted, as it were, for the needs of another generation; older men, assuming that the scene is the same as it was in the past, cease to explore or inquire into the present or the future." • FDR note to Congress proposing legislation to allow the Executive to add judges to courts where sitting judges were 70 or older and refused to retire The Court 1937 Supreme Court The Public’s View After 6 months of debate, Congress voted against changing the Constitution. However, most Court decisions after the debate supported New Deal legislation. Controversial New Deal • Keynesian Economics (Deficit Spending) • Successes and Failures of the New Deal • Long Term impacts Keynesian Economics 1,2,3 1. Modern economies are driven by demand for goods and services. When demand is high, the economy is healthy. When demand drops, the economy goes into recession. 2. When an economy goes into recession, it might recover by itself, but it might not. Sometimes demand needs to be stimulated. 3. There are three segments of the economy that drive demand, and each responds to different stimuli: • Consumers. For the most part, consumers simply spend what they earn, so there's not much that can be done to stimulate consumer demand (though this has changed since 1936 — see below for more details). • Business. Spending by businesses can be stimulated by lowering interest rates so that loans for capital equipment are cheaper. This is the first line of attack during a downturn. • Government. If that's not enough, government can pick up the slack by running deficits and buying more goods and services itself. This is the second line of attack. More on Keynesian Economics • Of course, the opposite is also true: if the economy is overheating, you can cool it down by raising interest rates or running a budget surplus. The basic idea is simply that aggregate demand drives the economy, so the goal of fiscal policy should be to manage demand in order to achieve sustainable long term growth rates. National Debt • Debt doubles from $19.5 B to $40.4 B in eight years! • Lots of critics • Brain trust = commies • Pro Jewish • Handout state Success or Failure? No end to the Depression but what did it accomplish? Long Term Impacts of the New Deal 1. Deficit spending 2. Expanding government’s role in the economy 3. Protection of workers’ rights 4. Banking and Finance Reform 5. Social Security 6. Environmental protection End of the Depression? • Although the New Deal programs relieved the nation’s suffering and provided hope for the American people…….. • The massive spending for equipment and supplies for WWII truly ended the Great Depression!!!