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The Fordney and McCumber Tariffs

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1 The Fordney and McCumber Tariffs
Warmup: Explain briefly in note form how each of the following contributed to the economic depression of 1929. The Fordney and McCumber Tariffs The desire of Harding and Coolidge to lower taxes and cut government spending. The decline in farm income The fact that 16 million families earned less than $2000 a year Value of building permits issued fell over 25% between 1925 and 1928. The stock market crash of October 1929 1300 banks failed in 1930; 3700 failed in 1931 – 1932.

2 No warmup today! Get ready for class!

3 Retreat from foreign affairs
Observers sent to LN Washington Naval Conference – 5:5:3 – to cut spending US would not fortify Philippines Japan slighted 9 Power Treaty to keep China open Kellogg Briand Pact: member nations agreed to not fight

4 New Economic Order Brief recession after ww1/demobilization
GNP soared from $70B in $100B in 1929 New Economy - based on consumer goods – cars, appliances, radios 60% of homes electrified 23M cars by 1930 (9% of the economy) Radios and networks

5 Business Practices Promoted Industrial Expansion!!!
Taylorism/Fordism Assembly lines Anti Union Activity and management violence but better wages Mergers (again) ½ business activity by 100 companies Republican caretakers “We care not what Democrats pass, if we can administer them” Probusiness men to advisory boards

6 Cars, Radios, Movies Radios – first commercial broadcast 1920; first networks 1926  mass culture Movies weekly attendance 80M! Cars dominated economy by M (more than tubs) Freedom from oversight True suburbs Decreased isolation of rural areas

7 Consumer Economy

8 CONSUMERISM – anti puritanism
advertising (image vs. utility) buying on credit chain stores Faragher, Out of Many, 3rd Ed.; Brinkley 11e IR General Electric ad; Electric appliances became commonplace in the 1920s and advanced the consumer economy. Note here the obvious link between a daughter and her mother, whose domestic tasks appear to be made easier and more appealing by an electric range, a vacuum cleaner, and an iron. (Picture Research Consultants & Archives) Pageant 13e Consumer Debt, 1920–1931 General Electric ad (Picture Research Consultants & Archives)

9 Advertising!

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11 Depression – Don’t….

12 A Booming Consumer Economy
GNP from 1922 to 1929 increased from 74B to 103% Wages up nationwide 21% Booming consumer economy

13 An Underlying Problem!!! Basic economics
S > D? What happens next?

14 Supply outraced demand in the 1920s!
Taylorism, fordism, increased supply Advertising and credit buying floated economy through most of the 1920s but…

15 What happened to demand?
Less government spending as tax rates were reduced – less spending on military (Washington Naval Conference and 10 year moratorium on ship building)

16 Foreign demand decreased due to tariff – Fordney McCumber and in 1930 Hawley Smoot (60%)

17 Sick Industries led to poverty
Railroad, coal and cotton Agriculture: boom years of the war led to drastic drop ( Farm Y in 1919 = 10B by 1929 = 4B. McNary Haugen bill vetoed twice. “Coolidge “farmers never had money. I don’t believe we can do much about it.”

18 Income distribution Wages up 21% but production up 30%
16M families less than the poverty level, 5% controlled 33% of the nation’s wealth whereas in 1920 they controlled 25% Inventories increasing, housing starts down before stock market crash

19 PROBLEMS FOR WORKERS Income Distribution, 1929
1% 40% of all U.S. families lived on >$1,500 per year – in poverty range 5% 29% 65% Source: Historical Statistics of the United States, Colonial Times to 1970 Source: Historical Statistics of the United States, Colonial Times to 1970

20 The Crash wiped out “fortunes” and banks
Stock fever: legalized gambling – not just wealthy but common people and banks. Every one won. Tax cuts freed up money for speculation: banks lent money. 1925 = 27B Early 1929 = 67B (Coolidge stocks “cheap at current prices.”) 10/29 -= 87B -10/24/29 sudden drop; banks tried to stop the panic 10/29 value of exchange fell - 16M shares Stocks fell 40B in 2 months

21 Loss of paper profits  less demand
Lower prices Less production Less employment Less demand Less building of homes and factories  Less employment and demand

22 Unemployment and underemployment 1929 – 3% 1933 – 25%
Toledo – 80%! No relief (in PA 13cents a day), cities could not meet payrolls Inequality

23 Unemployment 1929 = 3. 2%: 1930= 8. 7%: 1931 -= 15. 9%: 1932 = 23
Unemployment 1929 = 3.2%: 1930= 8.7%: = 15.9%: 1932 = 23.9% 1933 = rates varied by city, region and race, relief nonexistent

24 Effects on Business & Industry
GNP – $104 billion in 1929 to $56 billion in 1933 Total national income – fell by over 50% Business failures: 100,000 between 1929 and 1933 Brinkley 10e

25 Effects on Business & Industry
Bank failures about 20% all banks (over 6000) between 1929 and 1933) over 9 million savings accounts lost($2.5 billion) Depositors gathering outside a bank, April 1933 Bank Failures, Graph: Divine America Past and Present Revised 7th Ed. Outside Bank: American Journey Online 1932

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29 Effect on workers and families
Malnutrition Disease: tuberculosis, typhoid and dysentery. City & state relief systems in industrial Northeast and Midwest collapse soup kitchens and bread lines Soup kitchen, Chicago, 1930 (Chicago) Soup kitchen, 1931 (Cleveland)

30 Effect on workers and families
Women Working - 25% more New Deal – lower pay Women’s Rights Movement - lowest point in a century Families Housing Stress - divorce Health – disease, suicide Migrants - from South and Midwest to West Women in Workplace: Brinkley 10e; This photograph was taken by Resettlement Administration (RA) photographer Carl Mydans (b. 1907) in March 1936.  It shows a woman and her two children in the abandoned chassis of a Ford automobile--their home--on U.S. Route 70 in Tennessee. [ajo] Mother and two children living in an abandoned car in Tennessee, 1936 Women in Workplace

31 Effects on Farmers “Dust Bowl” “Okies” Grapes of Wrath Dust Bowl
Resettlement Adminstration Pageant 13e Dust Bowl Dust storm, Springfield, CO, 1935

32 Dust storm, Elkhart, KS, 1937

33 The Dust Bowl Aftermath of dust storms, South Dakota, 1936
Abandoned house, Haskell County, Kansas“, By Irving Rusinow, April 1941; National Archives and Records Administration, Records of the Bureau of Agricultural Economics, 83-G-41906) Dust Bowl farm. Coldwater District, north of Dalhart, Texas. This house is occupied; most of the houses in this district have been abandoned. Lange, Dorothea, photographer June 1938 (LOC AmMem FSA-OWI( Abandoned house, Kansas, April 1941 Dust Bowl Farm, Texas, 1938

34 Migrants “Okies” migrate west in 1939
A Destitute Family in the Ozark Mountains. 1935 “Okies” migrate west in 1939 This impoverished family in the Ozark Mountains region of northwestern Arkansas was photographed in October 1935 for the Resettlement Administration (RA) by Ben Shahn ( ) “Okies” - “Covered Wagon” - Dorthea Lange, “Covered Wagon Again” 1935

35 Migrants in California
"Cheap Auto Camp Housing for Citrus Workers“; By Dorothea Lange, Tulare County, California, February 1940; National Archives and Records Administration, Records of the Bureau of Agricultural Economics, (83-G-41555) Migratory family in auto camp. California. Dorothea Lange 1936 (LOC Am Mem FSA/OWI) "Cheap Auto Camp Housing for Citrus Workers“; Dorothea Lange, Tulare County, California, Feb. 1940 Migrant Auto Camp, California, 1936

36 Effects on African Americans
High Unemployment – up to 50%: Last hired, first fired Competition for jobs Exclusion from relief programs Help from the New Deal? This photograph, taken in January 1939 by Arthur Rothstein ( ), a photographer with the federal Farm Security Administration (FSA), shows a mother and child, their spring mattress propped up behind them, along U.S. Route 60 in New Madrid County, Missouri.  The woman and her family were sharecroppers evicted by their landlord at the height of winter. Evicted Sharecroppers along Highway 60 in Missouri. Rothstein, Arthur [ajo] African American family during Great Depression in Scott’s Run, Virginia Evicted Sharecroppers along U.S. 60 in Missouri, 1939

37 Effects on Mexican Americans
Braceros - over 400,000 deported

38 Responding to the Depression
Previous Depressions VanBuren/Whigs Grant Sec/Treasury Mellon Hoover “the depression made flesh” What did Roosevelt say? “He is certainly a wonder. There could not be a better one [president]. a Roosevelt advisor admited, … practically the whole New Deal was extrapolated from programs that Hoover started”

39 Hoover’s Trickle Down! Public pronouncements
Urged businesses to keep wages and employment up Supported anti-injunction act Supported tariff and tax cuts. However Hawley Smoot tariff highest in history. Supported state funded public works 2.25B on federal public works - limited, self-liquidating projects Government’s share of GNP increased from 16 to 21% Reconstruction Finance Corporation – to lend money to banks, businesses, and even states

40 Evaluation of Hoover’s Response
Modern Evaluations: reluctance to spend large amounts of federal funds, expand the role of the federal government. willing to intervene in the economy to an unprecedented degree. Commitment to “ rugged individualism” and trickle down.

41 Response to Hoover’s Response
Farmers “Farmers Holiday Association” “Bonus Expeditionary Force” Bonus Army camp, 1932 By an unknown Associated Press photographer, July 1932, NARA "Bonus Marchers" and police battle in Washington, DC, July 1932

42 Bonus Army Bonus Army camp in the Anacostia flats
(all) U.S. Army soldiers guarding Bonus Army camp Douglas McArthur directing removal of Bonus Army marchers

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47 Warmup: Drop off homework. Organize for class.

48 Warm Up: Who wrote the following? What was he saying?
"It is not an issue as to whether people shall go hungry or cold in the United States. It is solely a question of the best method by which hunger and cold shall be prevented "And there is a practical problem in all this. The help being daily extended by neighbors, by local and national agencies, by municipalities, by industry and a great multitude of organizations throughout the country today is many times any appropriation yet proposed. The opening of the doors of the federal treasury is likely to stifle this giving and thus destroy far more resources than the proposed charity from the government "To reinforce this work at the opening of Congress, I recommended large appropriations for loans to rehabilitate agriculture from the drought and provision of further large sums for public works and construction in the drought territory, which would give employment in further relief to the whole situation to increase federal construction work from a rate of about $275,000,000 a year prior to the depression to a rate now of over $750,000,000 a year "I am willing to pledge myself that if the time should ever come that the voluntary agencies of the country together with the local and state governments are unable to find resources with which to prevent hunger and suffering in my country, I will ask the aid of every resource of the federal government because I would no more see starvation amongst our countrymen than would any senator or congressman. I have faith in the American people that such a day will not come."

49 I  have just posted the notes for US foreign policy in the 1930s and World War II.  We will probably not discuss these notes in detail in class.  They are to supplement your reading on World War II in the textbook in chapters 34 and 25. We will test on this material and ALL of unit 7 on April 6 and 7.  There will not be an essay on this test but there will be college board short answers and stimulus based questions with the multiple choice.  (Remember the college board is not interested in battles and material that is strictly military.  The exam date is rapidly approaching. This is not the time to get spring fever or senioritis (you are juniors). We will begin review work shortll need to know through chapter 40 well.  There will be short answers and multiple choice on chapters 41 and 42 but no essay will be on material exclusively from those chapters.  Essays may include that material but not be based solely on that material.  We will work through chapter 40 in class but not 41 and 42.  For those of you with multiple exams you might want to use the break to work ahead.  We will be moving quickly.  The exam is May 7.  The exam is 29 class days away but you meet only every other day.   Use a review book or the material on the college board site to guide your preparation for the exam. 

50 1932 ELECTION Hoover “The Worst is Past"
"Prosperity is Just Around the Corner" New Yorker 1/16/1932 Alfred Frueh

51 1932 ELECTION Franklin D. Roosevelt
[ajo] Franklin D. Roosevelt, 1920 Vice Presidential nominee for Democratic Party Roosevelt Campaigning for Office in Kansas 1932

52 Roosevelt The Roosevelt promise “bold persistent experimentation” – various liberal and conservative campaign promises (only as a last resort would gov’t role increase, no reckless spending) Brain trust No specific program – desire to restore the nation to economic health within framework of capitalism – inspired by progressives! Pledged to new deal for “common man” INAUGURAL and FIRESIDE CHATS!

53 1932 ELECTION Results Electoral Shift, 1928 and 1932
Electoral Shift: Martin, America and its Peoples 5e Electoral Shift, 1928 and 1932

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55 FDR: A “NEW DEAL” “A New Deal for the American People”
Goals: “Three R’s” - relief, recovery, reform Confidence, optimism! (Reaganesque?) American Journey Online Roosevelt Delivering a Fireside Chat, 1935

56 FIRST HUNDRED DAYS “Bank holiday”
Emergency Banking Relief Act Civilian Conservation Corps (CCC) (Mar. 31) Federal Emergency Relief Act (FERA May 12) Tennessee Valley Authority (TVA) (May 18) Dams: flood control, electricity, development Here, Civilian Conservation Corps workers plant seedlings to reforest a section of forest destroyed by fire. Before its demise in 1942, the CCC enrolled over two million young men. In addition to its work in conservation, the CCC also taught around thirty-five thousand men how to read and write. (UPI/Bettmann ) (Pageant 13e) Civilian Conservation Corps workers plant seedlings to reforest a section of forest destroyed by fire.

57 Henretta, America’s History 4e from http://www. bedfordstmartins
TVA

58 FIRST HUNDRED DAYS Agricultural Adjustment Act (AAA) (May 12) parity prices No help for sharecroppers National Recovery Administration (NRA) The National Industrial Recovery Act (June 16 Codes of fair compettion ) Collective bargaining Schechter v. U.S. (1935) PWA Glass-Steagall Act (Banking Act of 1933) (June 16) Federal Deposit Insurance Corporation (FDIC) Farm Credit Administration (June 16) Home Owners’ Loan Corporation (June 13) Martin (List); NRA: NRA Member--We Do Our Part. Unknown [ajo]

59 “New Deal Remedies” In this drawing by Clifford Berryman ( ), Franklin D. Roosevelt ( ) is portrayed as a country doctor dispensing a variety of remedies to an ailing Uncle Sam as Mrs. Sam--Congress--looks anxiously on. New Deal Remedies. Berryman, Clifford ca [ajo]

60 Challenges from Right and Left
Chamber of Commerce/American Liberty League complained of creeping socialism, regulations! Hoover “new deal an attack on individual liberty” Charles Coughlin – radio audience of 40M called for anti-Semitism, nationalization of banks Francis Townshend - $200 monthly to 60+ to open jobs and stimulate economy

61 “Come along, We’re going to the Trans-Lux to hiss Roosevelt.”

62 Share Our Wealth – every man a king!
Huey Long of LA Corrupt populist Share Our Wealth – every man a king! 100% tax on incomes over 1M: appropriation of fortunes over 5M A home, car, education and old-age benefits for all Hoover had only promised a chicken in every pot! R on L: “the smartest lunatic I ever saw” L on R: “quote me as saying that imperial bastard will never set foot in LA… I am not using profanity but referring to the circumstances of his birth.”

63 A “SECOND” NEW DEAL 1935 Revenue Act – soak the rich
Emergency Relief Appropriation Act  WPA “work dole” 8M jobs!, deficit spending which worked (Keynesian economics although not specifically endorsed) 640,000 miles of roads, 125,000 public buildings Writers projects, theater projects Works Progress Administration (WPA) New AAA National Labor Relations Act of 1935 (Wagner Act) National Labor Relations Board (NLRB) Rural Electrification Administration (1935) Social Security Act (1935) domestics and farmers not covered SSI - This poster urges eligible Americans to apply promptly for their Social Security cards. (Library of Congress) Kennedy American Pageant 13e [History Companion] WPA - This photograph shows a Michigan artist, Alfred Castagne, sketching four construction workers as they build a sidewalk beside a new roadbed.  Both Castagne and the construction workers were employed by the Works Progress Administration (WPA)--the laborers, some of the millions of jobless workers (both skilled and unskilled) who received work relief under the WPA; Castagne, one of the 9,000 unemployed artists and art teachers who were put to work by the Federal Art Project of the WPA. [ajo] WPA Artist Sketching WPA Construction Workers

64 ELECTION OF 1936 - NATIONAL REFERENDUM ON THE NEW DEAL
Alf Landon Result: greatest landslide in US history FDR 61%, Landon 36 % (Maine and VT) new Democratic coalition: urban working classes Northern urban blacks Traditional progressives Southern rural whites

65 1936 – Tremendous Approval!

66 End of New Deal No end to depression until lend Lease and WWII
New slump in 37 due to SS act and budget cutbacks. FDR blamed. (15% Unem. Rather than 25%) Opposition grew after peak support in 36 Concern with court reorganization/packing of ’37. new justice for each justice over 70. plan failed but court changed. Coalition of republicans and southern democrats who saw FDR as too liberal and too sympathetic to Af-Ams slowed FDR - concerns with “bureaucratic meddling” Concern with new budget deficits after adaptation of Keynesian economics in 1937

67 New Deal Legacies Rise of Organized Labor
Membership jumped form 3 to 10 million New militant industrial unions. John Lewis (mineworkers) walked out of AFL and created CIO in 1935 1937 large organizing strikes in industries including auto workers the first sit down strike in Flint (workers defended themselves against police and deputies, eventual success Sit-down strike deemed unconstitutional in 39.

68 New Deal for Minorities
Indian Reorganization Act reversed Dawes Severalty Act AF-Ams: Discrimination by New Deal agencies – less pay by relief agencies (32 v. 19$) (CCC), segregation in programs No support for federal antilynching law and abolition of poll tax. BUT! Discrimination banned in WPA projects First black judge appointed to federal bench (William Hastie) Eleanor Roosevelt’s endorsement of Marian Anderson in 1939  realignment

69 Women: Women pushed from work force but the number of women working increased due to family need FERA – women to receive particular attention Women hired by WPA Women appointed to leadership positions in New Deal agencies and to the cabinet (F. Perkins)

70 LASTING IMPACT OF THE NEW DEAL: Political and Economic Results
increased power of the president Increased role of Federal government in society Party Realignment; Democratic coalition Economic: created the rudiments of the American welfare state aided the stabilization of the stock market and banking system established a power base for various disadvantaged groups to challenge the dominance of corporations

71 LASTING IMPACT OF THE NEW DEAL: Limits and Legacies
positive interpretations Saved capitalism? reformed capitalism, offering protection to disadvantaged completed process of progressive reform, then moved in direction of modern liberalism accomplished as much as it could against conservative forces negative interpretations Failed to end Depression radical departure from progressive tradition lacked a central, guiding philosophy missed many opportunities to help those groups most in need of assistance Hindered economy’s recovery – market forces more efficient

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73 Isolationism Retreat from engagement of the 1920s as Europe fell into war Growing concern with depression, some sympathy for Hitler and fascists, growing sense that World War I was futile Nye Committee concluded war was the fault of arms merchants and bankers – merchants of death (traditional western suspicion of banks and east)

74 Isolationism =Retreat?
Stimson Doctrine: US would not recognize forced territorial expansion (no action though) after J invaded Manchuria Neutrality Acts – go in effect if war was declared by foreign country 1935 – no munitions to belligerents 1936 – no loans to nations at war 1937 cash and carry only for non war materials Ludlow Amendment of 1938 – only direct intervention by FDR prevented passage No response to sinking of Panay Rejection of Roosevelt’s quarantine speech (“positive endeavors to quarantine aggressors”)

75 Roosevelt 11/39 – announced the beginning of cash and carry for war materials. America First! - isolationists who hoped to defend America by staying out of the war 1940 Defense budget increased First peace time draft Transfer of surplus military supplies to Britain 50 destroyers traded to Britain for 8 bases Still campaign promise that American boys would not be sent to war. Note statistical evidence on page 811

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77 1941 Lend Lease Naval Warfare Pearl Harbor
7Billion the first year – even Russia! Naval Warfare US escorted British merchant ships . The USS Greer was attacked by UBoat  shoot on sight policy. Pearl Harbor Remember tension predated war 1940 – US announced embargo on supplies to Japan 1941 Japanese assets frozen in response to invasion of Indochina Meeting between Japan and US US cracked Japanese code and knew attack was coming just not where.

78 Warm Up: Who wrote the following? What was he saying?
"It is not an issue as to whether people shall go hungry or cold in the United States. It is solely a question of the best method by which hunger and cold shall be prevented "And there is a practical problem in all this. The help being daily extended by neighbors, by local and national agencies, by municipalities, by industry and a great multitude of organizations throughout the country today is many times any appropriation yet proposed. The opening of the doors of the federal treasury is likely to stifle this giving and thus destroy far more resources than the proposed charity from the government "To reinforce this work at the opening of Congress, I recommended large appropriations for loans to rehabilitate agriculture from the drought and provision of further large sums for public works and construction in the drought territory, which would give employment in further relief to the whole situation to increase federal construction work from a rate of about $275,000,000 a year prior to the depression to a rate now of over $750,000,000 a year "I am willing to pledge myself that if the time should ever come that the voluntary agencies of the country together with the local and state governments are unable to find resources with which to prevent hunger and suffering in my country, I will ask the aid of every resource of the federal government because I would no more see starvation amongst our countrymen than would any senator or congressman. I have faith in the American people that such a day will not come."


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