Ch. 14-15 US History
food, clothing, and shelter
...
look at paper 15.2
...
look at paper 15.3
...
look at paper 15.4
...
look at paper 15.5
...
the supreme coutrt reacts
...
three fiery critics
...
waiting for FDR to take over
20th amendment was placed to move the inauguration to January, he worked with people to come up with the new deal
Hoover tries to reassure the nation
Americans thought that depression was a normal part of the business cycle, after fast economic growth is a severe depression, Hoover said that the government could play a limited role in helping to solve problems
the election of 1928
Herbert Hoover (republican) VS. Alfred E. Smith (democrat), people were happy with republican leadership and Hoover won
hoover backs up cooperatives
Hoover slowly softened his position on government intervention, he negotiated agreements among privet entities, tried to prop up the banking system y persuading the banks to establish the National Credit Union, which gave money to smaller banks to make sure they did not fall into bankruptcy
dust bowl
Kansas, Oklahoma, Texas, New Mexico, and Colorado dust storms and evictions
black tuesday
October 29 is when the bottom fell out of the market and the nation's confidence, shareholders frantically tried to sell before prices plunged even lower, 16.4 million shares were dumped and millions of shares could not find buyers, people who had bought stocks on credit were stuck with huge debts as the prices plummeted, while others lost most of their savings, by mid November investors and lost $30 billion, an equal to how much America spent in WW1
industries in trouble
Railroads, textiles, and steel barely made a profit, new forms of transportation (trucks, buses, cars) caused railroads to lose business, mining and lumbering which had expanded during wartime were no longer in high demand, coal mining was hit hard because of stiff competition from new forms of energy (hydroelectric power, fuel oil, natural gas) these supplied more than half the energy that had once come from coal, when housing starts to fall so do jobs in many related industries such as furniture manufacturing and lumbering
electing FDR
after Hoover everyone wanted a new president badly, Hoover tried to run two terms, house of representatives democrats won 3/4 of the seating
bank and business failures
after the crash many people panicked and withdrew their money from banks, but some couldn't get their money because the banks had invested it in the stock market, because the government did not protect or insure bank accounts, millions of people had lost their savings, about 90,000 businesses went bankrupt, railroads and automobile companies failed, millions of people lost their jobs, unemployment rates went from 3% to 25%, those who had jobs faced pay cuts and reduced labor,
living on credit
although Americans appeared to be prosperous during the 1920 in fact they were living beyond their means, they often bought goods on credit- an arrangement in which consumers agreed to buy now and pay later for purchases, this was often in form of an installment plan (usually in monthly payments) that included interest charges, by making credit easily available businesses encouraged Americans to pile up a large consumer debt, many people then had trouble paying off their growing debts, faced with debt many consumers cut back on spending
democrats win in 1930 congressional election
as the economy worsened people turned against Hoover and the republicans, the republicans lost control of the house of representatives, farmers were frustrated y the economy that they spilled milk into highways, burned crops, had farm holidays, they hoped that destroying the produce would increase prices, many people lived in Hoovervilles, people once though Hoover was great but not anymore, he refused to support direct relief and other forms of federal welfare,
Patman bill
authorized the government to pay a bonus to WW1 veterans who had not be adequately rewarded for their wartime service, was supposed to be paid by 1945 $500 but now they want it in 1932, but it was voted down
the patman bill denied
bonus army- WW1 veterans and their family that demanded their bonuses, but it was voted down and they still stayed and marched
consumers have less money to spend
by the 1920s Americans were buying less mainly because of rising prices, stagnant wages, unbalanced distribution of income, and overbuying on credit in the proceeding years, production had also expanded much faster than wages, resulting in an ever-widening gap between the rich and the poor
direct relief
cash payments or food provided by the government to the poor
race relations
conditions for African Americans and Latinos were especially difficult, their unemployment rates were higher, they were the lowest paid, delt with increasing racial violence from unemployed whites competing for the same jobs, whites demanded Latinos to be deported, this war worse for Mexicans and Mexican-Americans living in the Southwest
McNary-Haugen Bill
congress passed this to help farmers, gave price supports for key products like wheat, corn, cotton, and tobacco (the government would buy surplus crops at guaranteed prices and sell them on the world market), president Coolidge vetoed the bill twice and said that farmers were always poor
farmers need a lift
during WW1 prices rose and international demand for crops such as wheat and corn soared, farmers had planted more and taken out loans for land and equipment, after the war demand fell and crop prices declined 40%, farmers boosted production in the hopes of selling more crops but this only depressed prices further, farmers had gone into debt had difficulty paying off their loans, many farmers lost their farms when banks foreclosed and seized property as payment for the debt, many farmers began to default on their loans, many rural banks began to fail, auctions were held to recoup some of the banks' losses, congress tried to help farmers with a piece of legislation called the McNary-Haugen Bill gave price supports to farmers which key products like wheat, corn, cotton, and tobacco
uneven distribution of income
during the 1920's the rich got richer and the poor got poorer, between 1920 and 1929 income of the wealthiest 1% of the population rose by 75%, compared with a 9% increase for Americans as a whole, more than 70% of the nation's families earned less than $2,500 per year, men and women bought a new outfit of clothes once a year, half of the homes in many cities had electric lights or a furnace for heat, only 1 in 10 homes had a refrigerator, an unequal distribution of income meant that Americans could not participate fully in the economic advances of the 1920s, many people did not have the money to purchase the flood of goods that factories produced, the prosperity of the era rested on a fragile foundation
an important fireside chat
fireside chat- radio talks about issues of public concern explaining clear simple gauge his New Deal measures, these informal talks made Americans feel like they were talking to FDR, he explained why they should no talk money out of the banks, Americans complied and returned their savings to the bank
Hoover's philosophy
he believed that is was the government's chief function was to foster cooperation between competing and interests in society, government's role was to encourage and facilitate cooperation not to control it, Americans valued rugged individualism- the idea that people should succeed through their own efforts, they should take care of themselves and not depend on the government to bail them out, Hoover opposed any form of federal welfare or direct relief to the needy, he believed that any handouts would weaken people's self-respect and charities, when the depression hit Americans were frustrated and suffered
Hoover disbands the bonus army
he was nervous that the army would become violent so he smoked them out and killed some people
Hawley-Smoot Tariff Act
highest tariff in US history, was designed to protect american farmers and manufactures from foreign competition, it reduced the flow of goods into the US, it prevented other countries from earning american currency to buy american goods, made unemployment worse in industries that could no longer export goods to Europe, many other countries retaliated by raising their own tariffs
Hoover takes cautious steps
his political philosophy caused him to take a cautious approach to the depression, after the stock market crash he called together key leaders in the fields of business, banking, and labor, he urged people to work together to find solutions to the nation's economic woes and act in ways that would not make the economic situation worse, he asked employers not to cut wages, he asked labor leaders not to demand higher wages or go on strike, he created a special organization to help private charities generate contributions for the poor, none of these changes made much of a difference, the economy was still shrinking a year after the crash, employment was still rising, more companies went out of business, soup kitchens became a more common sight, and general misery continued to grow, shantytowns arose in every city and hoboes continued to roam
the stock market crashes
in early September 1929 stock prices peaked and then fell, confidence in the market started to waver, some investors quickly sold their stocks and pulled out, on October 24 the market took a plunge, panicked investors unloaded their shares
the hundred days
intense activity during his first 100 days, congress passed more than 15 major pieces of legislation, these expanded the government's role in the nation's economy, most Americans had lost faith in banks after the crash, they had a bank holiday to stop the withdrawals, he passed the emergency banking relief act that authorized the Treasury department to inspect banks an those that were sound could reopen, people now had faith that the open banks were in good financial shape
bread lines
lines of people waiting to receive food provided by charitable orgnizations
shantytown
little town consisting of shacks
direct intervention
many people saw that these measures failed, Hoover wanted the congress to pass laws that provided mortgage relief and funnel more federal money into business investment, the federal home loan bank act which lowered mortgage rates for homeowners and allowed farmers to refinance their farm loans and avoid foreclosure, the reconstruction finance corporation authorized up to $2 billion for emergency financing for banks, life insurance companies, railroads, and other large businesses, Hoover thought that the money would trickle down to the citizens through job growth and higher wages, some poor people could not wait that long and some believed that it would only help only corporations, too little too late
farming
most farmers could grow food for their families, thousands of farmers lost their land to falling and rising debt, 400, 000 farms were lost through forecloser, many farmers turned to tenant farming and barely scarped out a living, many farm families, moved west to California
soup kitchens
offers free or low cost food for poor people
buying on margin
paying a small percentage of a stock's price as a down payment and borrowing the rest
family life
people put off getting married, raising large families or having kids at all, achieving financial security became the primary focus in life, families helped other families, family stood as a source of strength, the direct relief gave families $2.39, people thought that women were poor while actually they were starving in attics and not on curbs looking for jobs like men
physical health
people stopped going to the doctor and dentist because they couldn't afford it, poor diets and lack of money for healthcare led to serious health problems, rise in malnutrition and diet related diseases
housing
people were evicted from their homes and ended up in the streets, some wrapped themselves in newspapers to stay warm, others built makeshift shacks and lived and shanty towns
Glass-Stegall Act
separated investment from commercial banking and would prevent another crash
dreams of riches in the stock market
some economists had warned of weakness in the economy but most Americans maintained the utmost confidence in the nation's economic health, increasing numbers those how could afford to invested in the stock market, the stock market had become the most visible symbol of a prosperous american economy, the Dow Jones Industrial Average was the most widely used barometer of the stock market's health, through most of the 1920s, stock prices rose steadily, the Dow has reached a high of 381 points nearly 300 more points higher than it had been five years earlier, eager to take advantage of the bull market- a period of rising stock prices, Americans rushed to buy stocks and bonds, many were already wealthy but others hoped to strike it rich, in 1929 about 3% of the nation's population owned stocks, people were engaging in speculation- they bought stocks and bonds on the chance of a quick profit while ignoring risks, many began buying on margin- paying a small percentage of a stock's price as a down payment and borrowing the rest, with easy money available to investors the unrestrained buying and selling fueled the market's upward spiral, the government did little to discourage such buying or to regulate the market, these rising prices did not reflect companies' worth, if the value of stocks declined people who had bought on margin had no way to pay off the loans
emotional health
suicide rates rose 30%, three times as many people were admitted to state mental hospitals
causes of the great depression
tariffs and war debt polices that cut down the foreign market for american goods, a crisis int he farm sector, the availability of easy credit, an unequal distribution of income, falling demand of consumer goods, government kept interest rates low, this allowed companies and individuals to borrow easily and build up large debt, some of the money was used to buy the stocks that later lead to the crash
rural assistance
the Agricultural Adjustment Act (AAA) sought to raise crop prices by lowering crop production, they paid farmers not to seed part of there land, they also destroyed some crops, this raised crop prices and gave farmers money, the TVA Tennessee Valley Authority gave people jobs in redirecting water and flood control, they made hydroelectric power also
providing work projects
the CCC Civilian Conservation Corps put young men ages 18-25 to work building roads developing parks and help prevent soil erosion and flood projects, they planted trees to prevent the dust bowl. the PWA public works administration create the National Industrial Recovery Act (NIRA)which gave money to states to create jobs chiefly in the construction of schools, but this is not work very well and FDR made the cIvil Works Administration CWA which was very successful
promoting fair practices
the NIRA sought o promote industrial growth by establishing codes of for practice for individual industries...
the Dow Jones Industrial Average
the most widely used barometer of the stock market's health, is a measure based on the stock prices of 30 representatives large firms trading on the New York Stock Exchange
financial collapse
the stock market crash signaled the beginning of the great depression the period from 1929 to 1940 in which the economy plummeted and unemployment skyrocketed
worldwide shock waves
the united states was not the only country gripped by great depression, much of Europe had suffered through the 1920s, European countries trying to recover from the ravages of WW1 faced high was debts, Germnay had to pay war reparations, the great depression compounded these problems by limiting American's ability to import European goods, this made it difficult to sell American farm products and manufactured goods abroad, in 1930 the Hawley-Smoot Tariff Act established high protective tariff in US history, within a few years world trade had fallen more than 40%
regulating banking and finance
they established the Federal Deposit Insurance Corporation (FDIC) that provided federal insurance of individual accounts which reassured Americans that their money was safe, the Federal Securities Act required corporations to provide complete information on all stock offerings and made them liable for misrepresentations, they made the Securities Exchange Commission (SEC) which regulated the stock market by having the people with inside information having that be illegal, people could now drink and FDR made a tax on beer to they could get some money
boulder dam
was a dam created on the Colorado River, Hoover (Hoover dam)proposed to fiance the dam's construction by using profits from sales of the electric power that the dam's would generate, regular waster supply to California's massive agricultural economy
speculation
when Americans bought stocks and bonds on the chance of a quick profit, while ignoring risks
employment
young people gave up going to college, people lost their jobs, many whites wanted to deport the Mexicans taking their jobs, men had a difficult time coping with unemployment, mostly men became hobos and traveled to find work all over, most places did not hire women because they thought the husband had a job so they had enough money already