1930’s
Calvin Coolidge
Vice President to Warren Harding
Became President after Harding died August 2, 1923
“Silent Cal”
Elected for one term of office in 1924 (Republican ticket)
“The business of America is business.”-Calvin Coolidge
Key Terms
“Coolidge Prosperity”
Big Businesses flourished through corporate tax cuts. The National government blatantly
ignored anti-trust laws established during the Progressive Era. Frederick W. Taylor’s time
and motion studies and scientific management system for faster more efficient production
increased productivity (think assembly lines). The Union movement was stalled because
businesses generally held promoted open-shop environments, where union members
weren’t hired. Laborers and farmers did not benefit from Coolidge’s policies. Crop prices
dropped significantly from their high during WWI and WWI veterans flooded the work
force raising unemployment.
McNary Haugen bills of 1927 and 1928
These bills were written to provide government-backed price supports for staple crops.
Both of which, Coolidge vetoed
Consumerism
Through “Coolidge Prosperity” and advancements in production and energy, more
products were available for less on the market. Companies began advertising to further
advance their products and chain stores opened nationally. Often times chain stores
were cheaper than local vendors. Companies began to let customers by on credit with
more regularity than in earlier time periods.
Laissez Faire
A policy used in Coolidge’s presidency of minimal government involvement in the
economy
Herbert Hoover (1928-1932)
Republican
*defeated Catholic Alfred Smith in election
* laissez faire approach
*eight months into presidency, the stock
market crashed
Rugged Individualism
The concept that anyone can be successful if they work hard enough
The United States has experienced both times of panic and prosperity due to its boombust business cycle. Although traditionally the panics were short-lived and repairable, the
1920’s investorswould watch their fortune and success crash and burn.
Black Thursday (October 24, 1929)
Initial date of New York Stock Market crash
Black Tuesday (October 29, 1929)
Stock market prices reach new lows
Reasons for the crash:
*Americans purchased stocks on margin
*Over speculation on property
*Supply Side Theory (supply and demand.... later would lead to
overproduction of manufactured goods)
*Usage of credit (farmers buying expensive agricultural equipment)
Effects of Crash
*By January 1930, 4 million unemployed
*There was no social security, no welfare or safety net, so the devastations
of the crash were felt strongly
*Banks stop lending money
*Agricultural surplus, leads to depressed prices
*International retaliatory tariffs (largely a response to the Hawley-Smoot
tariff)
Hoover's Response
*Originally believed that Europe was at fault
*Enacted the Hawley-Smoot tariff which increased the tax on imported
goods to nearly 50%
*It hampered international trade
*Encouraged public works
*Suspended bank activity
*Unwilling to give direct relief to citizens, he believed it was up to private
charities
*Congress created the RFC (Reconstruction Finance Cooperation) in
1932
*gave loans that benefited banks, railroads, insurance companies.
Bonus Army
World War I veterans marched with families to the Capitol, demanding that
Congress pay them. Verterans and their families camped in Hoovervilles (large shanty
towns) Hoover called in the army, which used both force and tear gas to remove the
persistant verterans. (2 protesters were killed). The Bonus Bill was not passed.
Black Shirts
thwarted African-American industries, beleived that white males should have
priority for jobs in U.S.
Dust Bowl
By 1931, the rain had stopped in the Great Plains, and temperatures had risen in Iowa,
greatly destructing crops.
Dust Storms in Kansas, Colorado, Okalahoma, Texas and New Mexico, land was literally
blowing away.
Many farmers and families migrated to the central valley of CA, and lived in migrant
camps, they were called Okies
Farmers' Holiday Association 1932
Midwestern farmers withheld crops from the market, also used road blockade to demonstrate their
point
Franklin Delano Roosevelt
32nd President
Term: 1933-1945, the only president to serve more than 2 terms
Democrat
Franklin Delano Roosevelt created an economic stimulus program called the New Deal after the
stock market crash.
 The three R’s (relief, recovery, reform). In FDR's acceptance speech, he promised relief for the
people out of work, Recovery for the business economy, and Reform for the American economic
institutions.
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Roosevelt relied on his Brain Trust, a group of university professors, to help him create the New
Deal
The First Hundred Days: FDR eneacted numerous laws and agencies (more than any president)
 Bank Holiday- March 6, 1933, FDR declared a bank holiday and all banks were closed so that
the government could reorganize them.
 Beer Wine Reenue Act/Repeal of Prohibition-led to more taxes that would help cash flow
 Fireside Chats with FDR kept Americans hopeful and informed
 New Deal “Alphabet” Agencies:
o Federal Deposit Insurance Corp. (FDIC)- guaranteed individual bank deposits up to
$5,000, reassured those who put their money in banks that they will get at least some of
their money back should they ask
o Home Loaners Corp. (HOLC)- provided refinancing of small homes to prevent
foreclosures
o Farm Credit Admin.- provided low-interest farm loans and mortgages to prevent
foreclosures on the property of indebted farmers
o Federal Emergency Relief Admin. (FERA)- provided grants of federal money to states
and local govts. that operated relief programs for the jobless and homeless
o Public Works Administration (PWA)- gave money to state and local govts. for building
roads bridges, dams, other public works
o Civilian Conservation Corps (CCC)- provided jobs on public/federal lands to young men
and paid their families
o Tennessee Valley Authority (TVA)- hired people to build dams, operate electric power
plants, control flooding and erosion, manufacturing fertilizer, sold electricity
o Agricultural Adjustment Admin. (AAA)- encouraged farmers to reduce production to help
increase prices with subsidies, later declared unconstitutional
o Security and Exchange Commission (SEC)regulated the stock market and placed limits
on speculative practices the were part of the cause of the stock market crash in 1929
o Federal Housing Admin. (FHA)- insured bank loans for building new houses and repairing
old ones for the contruction industry and homeowners
o Works Progress Admin. (WPA)- one of the biggest relief programs, provided jobs
The Second New Deal
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National Labor Relations Act or the Wagner Act 1935- labor law that guaranteed a worker's
right to unionize and the union's right to bargain, outlawed unfair labor
o led to the creation of the NLRB which enforced this law
Federal taxes- revenue act of 1935 increased taxes on the incomes of wealthy
Social Security Act- created a federal insurance program based on the collection of taxes from
employees and employers throughout people's careers the money would then be put into a trust
fund that would make monthly payments to retired persons over 65 yrs. old. Unemployed ,
disabled also recieved benefits
Opposition to New Deal
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soicalists, extreme liberals saw new deal as doing too much for business and not enough for
unemployed, also believed that FDR failed to fix problems surrounding ethnic minorities, women,
elderly
coservatives felt that the New Deal gave too much power to govt.
Demagogues
o Father Charles E. Coughlin- Catholic priest over the radio wanted inflated currency and
nationalizeing of banks
o Dr. Francis E. Townsend- proposed a plan for guaranteeing a secure income
o Huey Long "King Fish"- Share Our Wealth program, wanted to create a minimum
annual income of $5,000 by taxing wealthy
mainly conservative supreme court led FDR to attmept to reorganize the court
o
o
proposed a Court-Packing Bill- president should be authorized to appoint to the
Supreme Court an additional justice for each curret justice who was older than 70.5 yrs.
old...REJECTED
Republicans and Democrats outraged, but several justices retired and Roosevelt was
able to appoint more democratic justices
Unions
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many companies resisted union demands => strikes
General Moters Contoversy- workers insisted ontheir right to join a union by participating in a sit
down strike => creation of United Auto Workers union, many union organizers were beaten and
driven away
Fair Labor Standards Act- minimum wage, a maximum workweek and child-labor restrictions
were declared
Weakened New Deal
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Recession from 1937-1938,
o Social Security tax took away from consumer spending
o govt. reduced spending on relief
Keynesian economics told FDR that he was wrong in attempting to balance the budget, Deficit
spending was needed to inititate economic growth
Did the New Deal Work?
The programs entailed by the first and second New Deal helped to create a significant number of jobs
and to restart the economy. Arguably, the New Deal did little to satiate the economic turmoil of the Great
Depression. However, with the great increases in productivity associated with the Second World War the
American nation was able to make a complete turn around to officially restart their economy.
The New Deal did result in the creation of many works and programs that directly benefited the American
people. Works and programs initiated by the New Deal improved transportation, leisure and its
accessibility, safety, and ownership opportunities. Possibly the most notable, the New Deal greatly
improved morale. When Americans gained money to spend they regained their independence and their
pride. FDR’s launch and institution of the New Deal policies was not a time of false prosperity as in the
‘Roaring 20’s’ and the decade after WWI, but a period of re-growth and re-establishment.
Minorities and Women During the Depression
*African-Americans faced difficulties finding jobs, due to discrimination
*Eleanor Roosevelt and the New Deal assisted African-Americans in finding jobs
*Fair Employment Practices
*Indian Reorganization Act of 1934
*Repealed the Dawes Act, returned land to federal reservations
*Many Mexican-Americans were deported because of nativist mentality.
*Women had to care for children, many fathers left families due to shame
*Women who could find jobs entered the work force