prosperity and depression. the “return to normalcy” 1918-1921
TRANSCRIPT
Prosperity and Depression
The “Return to Normalcy” 1918-1921
• After World War I, disillusioned Americans wanted to return to the traditional foreign policy of isolationism.
• The 1920 landslide election of Republican President Warren Harding and Vice president Calvin Coolidge represented the American desire to remove themselves from the pressures of world politics.
Harlem Renaissance
Prosperity and Depression
• One of the most important cultural movements of the 1920’s was the Harlem Renaissance.
• This movement was led by a group of African-American writers in the New York City neighborhood of Harlem.
• These creative intellectual figures felt alienated from the society of the 1920s.
• In their works they called for action against bigotry and expressed pride in African American culture and identity.
• Outstanding literary figures of the Harlem Renaissance include:
W.E.B Du BoisLangston Hughes
Zora Neale HurstonAlain Locke
• The Great Depression of the 1930s ended the Harlem Renaissance, cutting sales of books and literary magazines.
The Jazz Age
Prosperity and Depression
• African American artists, musicians, and dancers also participated in the Harlem Renaissance.
• Black musicians in the South blended elements of African, European, and American music to create the distinctive sounds of jazz and the blues.
• Edward K. “Duke” Ellington is one of the towering figures in jazz.
• Besse Smith, known as the “Empress of the Blues,” was one of the most popular singers in the 1920s.
• This new music, to which people danced such daring new steps as the Charleston, became so popular that the period of the 1920s is often called the Jazz Age.
The Scopes “Monkey” Trial
Prosperity and Depression
• The 1925 Scopes Trial, held in Dayton, Tennessee, received nationwide attention because it pitted the scientific ideas of Darwinian evolution against the Protestant fundamentalist view of biblical creationism.
• John Scopes, a biology teacher, had deliberately violated a state law forbidding anyone to teach the theory of evolution.
• Ultimately, Scopes was convicted and fined $100 for his actions.
Coolidge Prosperity, For Some
Prosperity and Depression
• Calvin Coolidge became President when Harding died in office in 1923.
• Coolidge is best known for his laissez-faire approach to the economy and his strong commitment to business interests.
• Coolidge believed that government’s role was to serve business.
RECESSION
• The end of WWI was followed by a recession caused by the shift from a wartime to a peacetime economy.
• Production, farm income, and exports fell.• Unemployment rose, reaching 12% in 1921.
RECOVERY• In other sectors of the economy, however, a
period of economic recovery had begun by 1923, when Coolidge became President.
• The years between 1923 and 1929 were seen as a time of booming business.
• The Gross National Product (GNP) rose 40%.
Pro-Business Policies• Some groups,
especially big corporations and the wealthy, benefited greatly from Coolidge prosperity.
• For Example:• *By 1929, about 1300
corporations produced 3/4ths of all American manufactured goods, and 200 companies owned half the nation’s wealth
Economic Boom Bypasses Others
Prosperity and Depression
• Coolidge Prosperity was not beneficial for everyone.
• Key segments of the population failed to share in the general rise in living standards.
• These segments of society included:
• FARMERS-small farmers were hurt by the lowered demand after the war.
• NATIVE AMERICANS –during the 1920s Native Americans had the highest unemployment rate and the shortest average life span.
• AFRICAN AMERICANS –still earned less than white workers and experienced higher unemployment.
MASS CONSUMPTION
Prosperity and Depression
• The 1920s were a time of mass consumption-huge quantities of manufactured goods were available, and many people had more money to spend on them.
• Examples:Automobile Industry-real-estate boomElectrical Industry-stoves,
refrigeratorsRadio & Movies-popularized jazz
Shifting Cultural Values
Prosperity and Depression
• During the 1920s, American society experienced a struggle with social change as it became an urban, industrial nation.
• Changes in lifestyle, values, morals, and manners increased tension and conflict.
• Wealth, possessions, having fun, and sexual freedom, ideas influenced by the psychology of Sigmund Freud-were the new values.
• With a shorter work week and with more paid vacation, Americans had more leisure time.
• Movies such as The Ten Commandments and the first movie with sound, The jazz Singer, drew millions of people a week to theaters.
• Americans idolized Charlie Chaplin and Babe Ruth.
• The popular image of young women of the 1920s was the flapper, a young pretty women with bobbed hair and raised hemlines.
• She drank alcohol, she smoked, she thought for herself, and she took advantage of women’s new freedoms.
Planned Obsolescence
Prosperity and Depression
• In addition to the creation of new products, manufacturers began using a marketing strategy called planned obsolescence.
• In order to encourage consumers to purchase more goods, manufacturers purposely designed products to become obsolete, or outdated in short period of time.
Installment Purchase Plan
Prosperity and Depression
• In addition to advertising, industries provided another solution to the problem of luring consumers to purchase the goods produced each year: easy credit, or “a dollar down and a dollar forever.”
• The installment purchase plan enabled people to buy goods over an extended period, without having to put down much money at the time of purchase.
The Great Depression
Prosperity and Depression
The Great Crash
• The end of the prosperity of the 1920s was marked by a series of plunges in the U.S. stock market in 1929 known as the Great Crash.
• On October 29 (Black Tuesday) alone, stock values fell $14 billion.
• They dropped lower and lower in the weeks that followed.
• The Great Crash triggered the start of the Great Depression.
• It broke the national sense of optimism and confidence of the 1920s.
• The Great Crash dramatically exposed the fact that the national economy had serious weaknesses.
Causes of the Great Depression
• The Great Depression was caused by weaknesses in the economy-overproduction and under consumption, overexpansion of credit, and fragile corporate structures-combined with ineffective government action.
• The growing interdependence of international trade and banking made the effects even more damaging.
Other Causes• Weaknesses in the
economy had existed before 1929 and were expanding, such as:
1. Prices in worldwide agriculture dropped.
2. Unemployment levels steadily grew.
3. Automobile sales slowed.
4. Under consumption.
• Unequal distribution of wealth, for example: some 40% of all families had an income of less than $1,500-below the poverty line.
• The great Crash set off the collapse of the nation’s business structure.
• Some 6,000 banks failed in the 1920s.
Hoover the Hero!
Prosperity and Depression
Hoover’s Response To The Great Depression, 1929-
1933
• Herbert Hoover was the first President who had to deal with the deepening depression.
• Hoover was a good businessman, a self-made millionaire, and a humanitarian.
Hoover’s Economic Plan• Tried to restore
confidence in the American economy with such statements as “Prosperity is just around the corner.”
• Obtained voluntary agreements from businesses not to lower wages or prices.
• Allowed the organization of the Reconstruction Finance Corporation (1932) to lend money to railroads, mortgage and insurance companies, and banks on the verge of bankruptcy.
Failure of Hoover’s Program
• Despite these efforts, Hoover’s refusal to provide direct relief to U.S. citizens damaged his image as the nation’s leader.
• In the summer of 1932, thousands of unemployed WWI veterans and their families set up camps in Washington D.C., to demand early payment of the bonus due to them for their war service.
• When the bill was defeated by Congress, most of the Bonus Army, as they were called, refused to leave town.
• Hoover insisted that the veterans were influenced by the Communists.
• He called out the army to break up the Bonus Army’s camps and disperse the veterans.
• This destroyed what little popularity Hoover had left.
FDR and the New Deal
Prosperity and Depression
• In 1932, Franklin Delano Roosevelt (FDR) was elected the 32nd President.
• Historians rank FDR as one of the greatest Presidents in American history.
• He was a master politician-intelligent, energetic, self-confident, charming, and optimistic.
• Roosevelt often held press conferences and effectively used the radio for “fireside chats” with the American public.
• He involved the public emotionally in his explanations of what he was doing to solve the nation’s economic problems.
The New Deal in Action: Relief, Recovery,
Reform
• Roosevelt’s program to combat the problems caused by the depression was called the New Deal.
• The programs of the New Deal had the following goals: a) Relief for those people suffering, b) Recovery for the economy, and c) Reform measures to avoid future depressions.
Relief Legislation of the New Deal
Congress passed a wide range of relief legislation as part of
the New Deal.Relief legislation consisted of:
Emergency Banking Act
• Roosevelt’s first act as President was to close the nation’s banks by declaring a bank holiday in order to stop the collapse of the national banking system.
Federal Emergency Relief Act (FERA)
• Between 1933 and 1935, some $500,000 was provided for distribution by states and cities for direct relief and work projects for hungry, homeless, and unemployed people.
Public Works Administration (PWA)
• Operating from 1933 until 1939, the PWA provided jobs through construction projects, such as bridges, housing, hospitals, schools, and aircraft carriers.
Civilian Conservation Corps (CCC)
• Between 1933 and 1941, the CCC provided work for 2.5 million young men ages 18 to 25 conserving natural resources.
• Only 8,000 young women joined the CCC.
Works Progress Administration (WPA)
• From 1935 until 1943, the WPA provided temporary jobs for 25% of adult Americans.
• WPA workers built roads, bridges, airports, public buildings, playgrounds and golf courses.
Tennessee Valley Administration (TVA)
• The federally funded TVA provided jobs, cheap electricity, and flood control to poor rural areas of seven states through dam construction on the Tennessee River and its tributaries.
Reform Legislation of the New Deal
Congress also passed a wide range of recovery legislation
as part of the New Deal.Such legislation included:
National Industrial Recovery Act (NIRA)
• The National Recovery Administration (NRA) set “codes of fair competition” within industries to maintain prices, minimum wages, and maximum hours.
Home Owners Loan Corporation (HOLC)
• This agency was created to help homeowners save their houses from foreclosure.
• It provided funds to pay off mortgages and provided new long-term mortgages at lower, fixed interest rates.
Federal Housing Administration (FHA)
• The FHA was created by the National Housing Act to insure bank mortgages.
• These mortgages were often for 20 to 30 years and at down payments of only 10%.
1st and 2nd Agricultural Adjustment Act (AAA)
• The aim of the AAA was to raise farmers’ income by cutting the amount of surplus crops and livestock.
• The government paid farmers for reducing the number of acres they planted.
• This would help to maintain high demand.
Reform Legislation of the New Deal
Congress also passed a wide range of reform legislation as
part of the New Deal.Such legislation included:
Glass-Steagall Act
• This law created the Federal Deposit Insurance Corporation (FDIC), which guaranteed individual bank deposits up to $5,000.
Securities Exchange Act (SEC)
• This act created the Securities and Exchange Commission, which had the authority to regulate stock exchanges and investment advisers.
Social Security Act (SSA)
• The 1935 Social Security Act was a combination of public assistance and insurance.
• The act set up a system of pensions for elderly, unemployed, and the handicapped.
National Labor Relations Act (Wagner Act)
• The Wagner Act guaranteed laborers the right to form unions and to practice collective bargaining.
• The act also ensured that elections were conducted fairly.
Fair Labor Standards Act• This law set a
minimum wage (originally 25 cents per hour) and a maximum work week (originally 44 hours) for workers in industries involved in interstate commerce.
• It also banned child labor.
Supreme Court Reaction to the New
DealIn a series of decisions, the Court ruled that several key New Deal
laws were unconstitutional.
Supreme Court and the NRA
• The National Recovery Act (NRA) was declared unconstitutional in Schechter Poultry Corporation vs United States (1935)
• The Court ruled that the law illegally gave Congress power to regulate intrastate commerce (commerce within a single state).
FDR’s Court Packing Plan
Prosperity and Depression
• Supreme Court opposition to FDR’s programs continued with the Supreme Court consistently vetoing New Deal legislation.
• FDR asked Congress to approve a law that would permit the President to increase the number of judges from 9 to 15 if the Supreme Court judges refused to retire at the age of 70.
• The Judicial Reorganization Bill or the “Court-Packing” plan, as its opponents called it, was intended to make the Supreme Court approve the New Deal laws.
• However, it never became law because it was a threat to the separation of powers.