Transcript Elaborate on the cycle of economic boom and bust in the

Michael Quinones, NBCT
www.socialstudiesguy.com
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Was president of the United States
for only 2 years.
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He succeeded President Wilson.
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His stated goal was for the United
States to Return to Normalcy [to
get back to normal] after a very
costly world war.
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His openness and optimism was
appreciated by the nation.
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Unfortunately Harding was in very
poor health unbeknownst to him.
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He died in the middle of a
conversation with his wife.
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It was most likely a heart attack or
stroke.
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Unfortunately before President Harding died several corruption
scandals were uncovered that embarrassed him and the federal
government.
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The first was the Forbes Scandal when an army colonel was accused
of selling scarce medical supplies from Veterans’ hospitals and
keeping the cash.
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The worst scandal was the Tea Pot Dome scandal which involved
Albert Fall the Secretary of the Interior being bribed with $300,000 to
allow American oil companies to drill in Wyoming at a U.S. Navy oil
reserve.
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President of the United States for
7 years.
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He finished Harding’s term then
was re-elected.
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He was known as a “friend to
business” because of his Laissez
Faire policies.
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Many people because of his
economic views the United
States headed toward a reckless
financial path.
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Hoover was elected president in 1928. He believed in Laissez-Faire
economics [limited regulation].
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Without strict regulation banks and investment houses lent money to
people who could not repay loans.
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Stock brokers [people who sell stocks] allowed investors to buy on
margin [buy stocks now and pay for them later].
When stock dropped in value investors could not repay and banks went
out of business. Thousands of people lost their life savings.
 People move into shack towns called Hoovervilles.
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Prices of stocks started to plunge in value in October of 1929.
 Bad loans that were not repaid and speculation [rumors] led
to a furious sell off of stocks and the U.S. Stock dropped in
value by more than half.
 Most people lost their life savings. Many people committed
suicide.
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Many U.S. businesses believed it was best to protect American
markets buy having high tariffs [taxes on foreign imported goods].
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As a result of corporate pressure the Hawley-Smoot Tariff raised the
average tariff rate to the highest point in U.S. history.
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In retaliation foreign countries raised their tariffs and as result
American exports plunged and domestic companies suffered as did
the U.S. economy.
U.S. Senators Willis
Hawley and Reed
Smoot
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Millions of U.S. citizens pleaded with local and state governments for
financial assistance.
Bread and soup lines streamed down city streets throughout the
United States.
Local and state governments quickly ran out of funds to handle the
crisis.
Finally in 1932 outgoing President Herbert Hoover signed the
Emergency Relief and Construction Act which provided direct relief
financially for citizens by creating public works jobs [usually
construction] and emergency loans.
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Easy Credit-During the “roaring 20s” many banks and financial
institutions gave credit and loans to people who were not really able to
pay it back. These loans were very risky.
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Overproduction-Many companies were manufacturing an over supply
of goods that inevitably forced prices to plunge.
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Installment Plan-People who bought goods on credit paid their loans in
installments [separate payments over time ]. The problem with this was
that people had no money to buy other goods. Therefore, businesses
suffered and laid off workers.
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Hoovervilles-Towns where entire villages of shacks were built by
people who lost their homes.
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Soup Kitchens-Locations where poor, hungry people could
receive free hot soup from churches and relief agencies.
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Bread lines-Locations where poor, hungry people could receive
bread that was often hard and stale. The lines were usually very
long.
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Discharged World War I veterans were also suffering from the
effects of the Great Depression.
They were promised cash bonuses by 1945 after WWI but they
wanted them early.
In the summer of 1932 43,000 men [17,000 veterans] marched on
Washington, D.C. and camped out until they received pay.
The protestors were forced to leave but given jobs in the C.C.C.
and given early payments in 1936 by President Roosevelt.
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During the 1930s there were prolonged droughts that devastated
farmers’ crops on the Midwest.
Farmers were unable to repay their loans and most of them had
land foreclosed.
Farmers were forced to move elsewhere for better opportunities.
The suffering was described in John Steinbeck’s novel about the
Dust Bowl the Grapes of Wrath.
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After his election as president of
the United States in 1932 F.D.R.
introduced a plan [legislative
Agenda] to return the nation to
prosperity called the New Deal.
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President Franklin Roosevelt’s
New Deal sought to repair the
nation’s economy and image by
using the Three Rs:
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Relief
Recovery
Reform
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All of F.D.R.’s programs from 19331936 were intended to support his
New Deal.
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F.D.R. needed to spend tax
money to improve the lives of U.S.
citizens.
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When there was little money the
U.S. had to borrow money in the
form of bonds from citizens.
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When a government spends more
money then it takes in its called
deficit spending.
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There were also millions of elderly
people who had their life savings
wiped out by the Great
Depression. The Social Security
Act was passed in 1935 to provide
modest pensions [monetary
retirement payments] to people
over 65 years of age.
Agricultural Adjustment Act-Farmers were encouraged to destroy
their crops or simply not grow their crops to lower the supply thereby
raising the market price.
 National Industrial Recovery Act-this law relaxed the regulations on
businesses that were related to the Sherman Anti-Trust Act. The
N.R.A. [National Recovery Administration] was told to post the Blue
Eagle on their windows and doors. The federal government gave
incentives to people who bought from companies who cooperated.
 National Labor Relations Act [Wagner Act]-this law gave the right to
collectively bargain to unions.
 Fair Labor Standards Act-this law guaranteed a minimum wages of
$.40 an hour, guaranteed overtime pay [time and a half], and most
child labor.
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S.E.C. Security and Exchange Commission-fed agency created to
monitor and prevent banks and brokerage houses from
manipulating the stock markets.
C.C.C. Civilian Conservation Corps-fed agency created to provide
jobs for men at a $1 per day, gave free room and board to combat
the Great Depression.
P.W.A. Public Works Administration- fed agency that trained and
hired men to build infrastructure such as roads, schools and bridges
throughout the United States [the jobs created were called pick and
shovel jobs].
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F.D.I.C. Federal Deposit Insurance Corporation-fed agency created
to guarantee the deposits [savings] of each bank account holder up
to $100,000.
T.V.A. Tennessee Valley Authority-federally sponsored electric
company that produced very low cost electricity for the
Southeastern United States. Also provided were construction and
service jobs for thousands of American workers.
W.P.A. Works Progress Administration-fed agency that employed
unskilled workers who built parks and other public projects. Similar to
the P.W.A.
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Huey P. Long-a governor and U.S senator from Louisiana from 19281935 he was avowed advocate of the poor and disadvantaged. His
policies such as the Share Our Wealth program sought to limit the
wealth of the richest U.S. citizens with progressive income taxes in
order to fund the standard of living for the poorest Americans.
Father Charles Coughlin [speech on Youtube]-was a Detroit area
Catholic priest who criticized F.D.R.’s New Deal Programs as not
going far enough to help the poor and that the president was too
close to Wall Street bankers.
Frances Perkins-the first female member of a president’s cabinet. As
Secretary of Labor she championed the central New Deal programs
such as the Minimum Wage, Social Security Act and Public Works
Administration.
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http://en.wikipedia.org/wiki/File:Calvin_CoolidgeGaro.jpg
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