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From Prosperity to Depression: 1920-33
Topics of Discussion
A. Role of the Federal Government
B. Democrats: Divided
C. Republicans: Pro-Business
D. Warren Harding, 1921-23
E. Calvin Coolidge, 1923-1929
F. Hoover Inherits a Troubled Economy
G. Stock Market Crash
H. The Great Depression Begins
I. Herbert Hoover, 1929-1933
“Normalcy” in the 1920s
J. Election of 1932 and FDR
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From Prosperity to Depression: 1920-33
Role of the Federal Government in 1920s
1. Limited Action
2. Funds to service the debt
3. Small army and navy
4. “If the Federal Government should
go out of business . . . “
5. Political participation declined
President Warren Harding playing horseshoes
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From Prosperity to Depression: 1920-33
Democrats Divided
1. Party of South
2. Urban North and Immigrants
3. Currency debate
4. Religion debate
5. Wets and Drys
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From Prosperity to Depression: 1920-33
Republicans: Pro-Business
1. Teddy Roosevelt’s Progressivism
2. Republicans of 1920 rejected TR
3. Conservative resurgence
TR on the Campaign Trail
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From Prosperity to Depression: 1920-33
Warren Harding, 1921-1923
1. Promised: “Return to Normalcy”
2. Laissez-faire domestic policy
3. Pro-business economic policy
4. Harry M. Daugherty
5. Fordney-McCumber Tariff
6. Teapot Dome Scandal
Thomas Edison, Warren Harding, and Henry Ford
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From Prosperity to Depression: 1920-33
Calvin Coolidge, 1923-1929
1. Conservative
2. Business of America is Business
3. Frugal
4. Opposed waterpower plants – too $$$
5. Appointed opponent of FTC to chair FTC
6. Liked to nap
7. Silent Cal
Calvin Coolidge
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From Prosperity to Depression: 1920-33
Hoover Inherits a Troubled Economy
1. Over production in factory and on farm
2. Unequal distribution of wealth
3. Left too few purchasers
4. Profits were invested in new production
5. Buying on Margin
Production in Industry
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From Prosperity to Depression: 1920-33
Stock Market Crash
1. 1928: Stock Prices Soar
2. September 1929: Fluctuation
3. John Kenneth Galbraith, The Great Crash
4. Oct 24, 1929 and Oct 25, 1929
5. Monday, October 28
6. “Black Tuesday” – 16.4 million shares
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From Prosperity to Depression: 1920-33
Stock Market Crash
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From Prosperity to Depression: 1920-33
The Great Depression Begins
1. Stock prices continue decline
Oct 29-Nov 13 > 30 billion lost
2. National Income in Billions
1929 > 87 | 1930 > 75
1931 > 59 | 1932 > 42
3. Americans’ personal income
1929 > 82 | 1932 > 40 (million)
4. Unemployment: 3.2% to 24.9%
5. Bank failures: 5000+ by March 1933
6. Business failures -- 26,355 by 1931
7. Farmers struggle -- Foreclosures | Dust Bowl
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From Prosperity to Depression: 1920-33
The Great Depression Begins
Percentage of Non-Farm Workers Unemployed
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From Prosperity to Depression: 1920-33
Herbert Hoover, 1929-1933
1. Before Depression: Agricultural Marketing Act (1929)
a. created Federal Farm Board
b. capital of 500 million
c. promote agricultural cooperatives
d. to stabilize markets for farm products
e. voluntary agreements among producers
f. stabilization corps > as last resort
g. stabilization corps buy surplus
2. Still, Hoover a “Rugged individualist”:
Doesn’t support handouts from government
3 Approaches Depression as temporary downturn
4. Hawley-Smoot Tariff ( June 1930)
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From Prosperity to Depression: 1920-33
Herbert Hoover, 1929-1933
5. 6. Raises taxes > try to balance budget
6. Reconstruction Finance Corporation
a. Loans to banks, railroads, life insurance
b. RFC dispensed $1.5 billion in first year
c. Over 500 institutions received funds
d. Most money went to top companies
e. Trickle Down
7. Hoover’s Remaining Problems
a. Unemployment by 1932 [K, 87]
b. “Pathetically inadequate” relief [K, 88, 91]
c. Veterans Relief – Bonus Army July 1932
8. Sets stage for Election of 1932
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From Prosperity to Depression: 1920-33
Election of 1932 and FDR
A. Republicans: Stay with Hoover
B. Democrats: Franklin Roosevelt
- Born: Hyde Park, New York in 1882
- Private Tutors until age 14
- Groton School in Massachusetts
- At 18, Roosevelt entered Harvard
- Columbia University Law School
- 1905, Married Eleanor Roosevelt, niece of TR
- 1911, Elected to New York State Senate
- 1913, Assistant Secretary of the Navy
- 1920, Ran for Vice-Presidency
- 1921, Polio
- 1928, Governor of New York
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From Prosperity to Depression: 1920-33
Election of 1932 and FDR
C. FDR Campaign of 1932
D. Election of 1932
Roosevelt
Hoover
472
59
22,821,857
15,761,845
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