History revision paper 2


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History revision paper 2

  1. 1. Historyrevision<br />USA <br /> The Depression and The New Deal<br />
  2. 2. 1920s Boom<br />War<br />The USA had played a very small part in the First World War, only joining in 1917,and none of the fighting took place on American soil, so they emerged stronger than most of the European countries.<br />Production <br />The age of consumerism began in the USA, with many middle class people buying good such as radios, cars and fridges.<br />The production of consumer items such as this were revolutionised with new technology, and the method of mass production where one person does one job repeatedly.<br />Other industries were aided by the production of goods, such as the rubber and glass industries being boosted by the production of cars.<br />New materials were invented, so that a synthetic version of certain luxury goods such as silk stockings.<br />Government<br />The presidents Harding, Coolidge, Hoover were Republican presidents, so held the view that the rich should pay less tax, and the poor were that way because they were lazy.<br />The government did not believe that they should be involved in the business world, and worked on a policy of laissez faire(let business be the business of business)<br />The government introduced the Fordney-McCumber tariff, which high put interest on foreign goods, so they became more expensive than American goods.<br />Stock Market<br />The stock market was also a popular method for many to make money, as people bought shares, and sold them on for a profit. This system worked as long as share prices increased. 1/10 people played the stock market, and often bought on the margin which meant that they only played a small proportion of what they bought on the premise that they would be able to pay later.<br />There was high level of confidence that America would continue to prosper, as there appeared to be no sign of the boom halting.<br />
  3. 3. Down Side of the Boom<br />Not everyone shared in the prosperity of the 1920s and almost 60% of Americas lived just on the bread line.<br />Industry<br />Traditional industries such as coal and textiles did not prosper. In 1929, when the average monthly income of bricklayers might be $320, coalminers were earning only $103 a month. <br />In response to American import tariffs on their products, many other countries put customs duties on American goods, which reduced American exports,<br />Farmers<br />During the First World War, farmers had been encouraged to grow as much food as they could. They continued to do this in the 1920s until they had produced more cotton and wheat than they could sell. <br />As prices dropped, many farmers lived in unhygienic conditions in tin shacks, without electricity or running water.<br />Many farmers had taken out loans which they could not repay, so end up having to sell their farms and rent the land back.<br />Black People<br />Before the First World War, many Americans saw their country as a melting pot in which people of different nationalities, races and religions could live in harmony. The Statue of Liberty symbolised the welcome offered to the huddled masses as they entered America. Yet, there were signs that this mood of tolerance was under attack. <br />In the southern states there were Jim Crow laws which allowed segregation to take place, and prevented the black community form claiming their civil rights.<br />Prohibition <br />Many Americans never gave their support to Prohibition and were willing to drink in speakeasies - bars that claimed to sell soft drinks, but served alcohol behind the scenes. The low salary paid to the agents made it easy to bribe them, and the size of America's boundaries made it hard for these agents to control smuggling by bootleggers. Gangsters such as Al Capone made money from organised crime.<br />
  4. 4. Why was there a Crash?<br />
  5. 5. Results of the Crash<br />Results<br />Unemployment rose drastically from 2.5million in1929 to almost six times that to 13 million people were out of work by 1932. <br />Industrial production dropped by 45 per cent between 1929 and 1932, leaving many people redundant.<br />The entire American banking system reached the brink of collapse, and from 1929 to 1932, 5,000 banks went out of business. <br />Although many people went hungry, the number of recorded deaths from starvation during the Depression was 110, although many other illnesses and deaths were probably related to a lack of nutrition.<br />The bonus marchers were ww1 veterans who wanted their pensions early.<br />Governmental Response <br />Hoover believed that if you were in trouble you should help yourself and not expect others to help you. This he called "rugged individualism". Therefore he did not do a great deal to help those out of work.<br />Hoover did not believe that the depression would last - "Prosperity is just around the corner" is what he said to businessmen in 1932 when things were just about at their worst. Squalid cardboard campsites were created in cities to live in...called "Homerville's". The nick-name of the soup given out by charities for the unemployed was "Hoover stew".<br />However, Hoover did do some good. Money was used to create jobs to build things such as the Hoover Dam. In 1932 he gave $300 million to the states to help the unemployed (Emergency Relief and Reconstruction Act) but it had little impact as states run by the Republicans believed in "rugged individualism" more than Hoover did and they used only $30 million of the money offered to them.<br />He introduced the Reconstruction finance corporation which had little effect as it helped to produce more goods where there was no buying power.<br />In the November 1932 election, Hoover was heavily defeated, and the new president Roosevelt, a Democrat, promised the country a new deal. This included Alphabet agencies, which were designed to get people back into work.<br />
  6. 6. Aims of the new Deal<br />When Roosevelt came to power he knew he had to take emergency action. The first thing he did was to ask for emergency powers like those given in a war situation. He then began passing g a number of controversial acts known as the alphabet agencies these policies did much to get Americans back on their feet. They not only provided relief, recovery, and reform but also drastically changed the federal government’s role in politics and society. <br />Relief<br />Much of the legislation that the Hundred Days Congress drafted doled out immediate relief for the American people that President Hoover and the Republicans had failed to provide. FERA’s relief assistance, for example, provided millions of Americans with enough money to make ends meet. CWAputthe unemployed to work, and the AAA, TVA and NRA, Helped millions to pay for food and housing. Roosevelt became very popular due to these actions, and had a lot of support.<br />Recovery<br />Many of the same programs designed to provide immediate relief were also geared toward long-term economic recovery. The CCCand PWA put millions of men to work not only to keep them employed but also to improve the national infrastructure. When the United States finally emerged from the Great Depression during World War II, it had hundreds of new roads and public buildings, widespread electrical power, and replenished resources for industry. <br />Reform<br />The third goal of the New Deal policies was to reform the banking and financial sector of the economy to stop bad lending practices, poor trading techniques, and corruption. Once Americans became confident that their funds would be safe, the number of bank deposits surged. Likewise, the Securities and Exchange Commission in 1934, which weeded out bad investment habits, gave Americans more confidence in the stock market.<br />
  7. 7. Alphabet Agencies<br />The Banking Acts <br />On March 6, 1933, two days after becoming president, Roosevelt declared a five-day national bank holiday to close banks temporarily, to help the existing banks to return stronger.<br />The Civilian Conservation Corps. <br />For a wage of thirty dollars a month, men worked on flood control and reforestation projects, helped improve national parks, and built many public roads. Approximately 3 million men worked in CCC camps during the program’s nine-year existence.<br />Civil Works Administration <br />The (CWA)helped generate temporary labor for those most in need, they did a mixture of skilled work and unskilled tasks such as building works alongside people paid to scare pigeons. <br />The Agricultural Adjustment Administration<br />The AAA was a scheme which involved subsidizing farmers to reduce production. Before the depression, many debt-ridden farmers had increased crop production in order to earn more money. The AAA, however, began paying farmers extra to plant less or destroy their surplus crops in order to raise prices again. <br />The Tennessee Valley Authority<br />he agency hired local workers to construct a series of dams and hydroelectric power plants, which brought cheap electricity to thousands of people. The public corporation also created affordable employee housing, manufactured cheap fertilizer, and drained thousands of acres for farming. <br />The National Recovery Act<br />The NRA was designed to stimulate industrial production and improve competition by drafting corporate codes of conduct. The NRA also sought to limit production of consumer goods to drive up prices. <br />Public Works Administration <br />This was designed to construct public roads, bridges, and buildings. In accordance with Keynesian economic theories, Roosevelt believed that improving the public infrastructure would put more money into the economy.<br />
  8. 8. Supreme Court Opposition<br />In the 1935 sick chicken issue , a majority of justices declared that the National Recovery Act was unconstitutional. They argued that the act gave too much power to the president and was an attempt to control intrastate commerce. The following year, justices also struck down the Agricultural Adjustment Administration on the grounds that it was unconstitutional and tried to exert federal control of agricultural production. <br />Roosevelt believed that the National Recovery Act and the Agricultural Adjustment Administration were crucial to reviving the American economy and feared that any more conservative Supreme Court rulings would cripple or even kill New Deal policy entirely. <br />In 1937, to prevent this from happening, the president petitioned Congress to alter the makeup of the Supreme Court on the pretense that the justices, old age was affecting their ability to work and concentrate. Roosevelt asked for the power to appoint as many as six new justices, bringing the total to fifteen, and to replace justices over the age of seventy. The true aim of the request was obvious: it would enable Roosevelt to effectively stack the deck to ensure that only pro–New Dealers would sit on the Court. <br />The court-packing scheme backfired. Rather than win over Democrats and New Dealers in Congress, Roosevelt shocked supporters with his attempt at misusing his executive powers. The president’s blatant disregard for the cherished separation of powers stunned even the American people. Roosevelt repeatedly denied charges that he was trying to bend the entire federal government to his will and defended his belief that aging justices were often incapable of performing their duties. The court-packing debate dragged on for several months before Congress and Roosevelt reached a compromise. Congress made minor reforms in the lower courts but left the Supreme Court untouched.<br />
  9. 9. 2nd New Deal<br />The Works Progress Administration –The first major legislation that Roosevelt and Congress passed in the Second New Dealwasthe Works Progress Administration(WPA). Created in 1935, the WPA was an effort to appease the “Longites” who clamored for more direct assistance from the federal government. The WPA was similar to the Public Works Administration of the First New Deal, this time hiring nearly 10 million Americans to construct new public buildings, roads, and bridges. <br />The Social Security Act - Congress also passed the Social Security Act in 1935, creating a federal retiree pension system for many workers.Theact also created an unemployment insurance plan to provide temporary assistance to those who were out of work, while also making funds available to the blind and physically disabled. <br />Legislation for Farmers and Homeowners The Second New Deal provided even more assistance to farmers. After the Supreme Court declared the Agricultural Adjustment Administration unconstitutional in 1936<br />Labor Reforms<br />These labor reforms had a lasting effect on America. The Wagner Act paved the way for more effective collective bargaining and striking, and within a year, fledgling labor unions had I-line workers in the General Motors automobile factory, for example, used the Wagner Act to initiate a series of sit-down strikes, in which workers would sit at their stations and refuse to leave, preventing the company from hiring new, non-union “scab” workers to fill in for the strikers. By 1937, General Motors had recognized its workers’ right to organize.<br />
  10. 10. Criticisms of the New Deal<br />Critics of the New Deal<br />Roosevelt’s New Deal came under attack from the right, from Republicans, conservative Democrats, bankers, and Wall Street financiers who claimed that it doled out too many federal handouts. Many of these critics also feared that the policy and programs involved were a dangerous step toward socialism and the destruction of the American capitalist system. <br />The New Deal also came under attack from the far left. Many socialist activists denounced the New Deal because they believed that it was too conservative and that it did not provide enough relief and assistance. Over the years, many historians have tended to agree with this argument. Several have argued that the Great Depression would not have been so devastating for so long had Roosevelt handed more federal money out to a greater number of Americans.<br />It was criticised for not helping certain groups of people, for example black people did not get as much support as white people, and women were not offered much help either.<br />Huey Long-. Long was among those who believed that the New Deal was not doing enough to help Americans. Believing that income inequality had caused the depression, he promoted his own “Share the Wealth”programwhich would levy enormous taxes on the rich so that every American family could earn at least $5,000 a year. Long enjoyed enormous popularity during the first few years of the new deal.<br />Father Charles Coughlin. A Catholic priest from Michigan, Coughlin began broadcasting a weekly radio show in 1930 that outwardly criticized the New Deal. Within a few short years, Coughlin had amassed a following of 40 million listeners who agreed with his anti–New Deal opinions. <br />Dr Francis Townsend planned to boost the economy by raising pensions for the over 60s - in return, they would spend $200 a month to increase demand for consumer goods.<br />