THE DEPRESSION, 1929 - 1940

Lecture Guide # 27

I DESPAIR AFTER WWI:

A Even in USA (which was helped & little hurt) men returned physically injured & mentally harmed (“shell shock”)

B ROARING 20s: Roared more w/ Despair than Happiness – It was a desperate Roar!

C ECONOMIC TROUBLES

1 US Economy SOARED (had SERIOUS, but unrecognized problems); Europe NEVER recovered from WWI

2USA: String of Republic Presidents (Warren G. Harding, Calvin Coolidge, Herbert Hoover), 1921 - 1931 = a

“return to normalcy”

II CAUSES OF THE GREAT DEPRESSION

A PHONEY, PARTIAL, PAPER PROSPERITY: luxury Goods w/ Limited Markets; Older, Basic Industries suffering (RR,

Mining, Housing)

B PAPER SPECULATION (Everybody investing in stocks): “Buy Now, Pay Later” –> Leveraged buying; “Shoe shine boy”

investment (Kennedy said he knew to get out the market when he heard his shoeshine boy talking about buying stocks)

C FARM ECONOMY NOT PROSPERING: High Import Tariffs – meant Cost of consumer goods high; Could not sell our

farm products abroad; Dust Bowl on Great & South Plains (result of plowing west of 90 th parallel, no rain)

D POOR DISTRIBUTION OF MONEY / INCOME

1 Market for Luxury goods small

2 Republican Economics of Andrew Mellon = Sec. Treasury since 1920-c. 1930: 3 successive Republican presidents;

Believed money belongs in pockets of rich (Corporate Profit up by 62%; Wages NOT going up w/ profits

3 STATS: 1929 in USA: 21% of families earned less than $1000 / year – Earning of the top .1% ( 1/10 th of 1%) =

earnings bottom 42%

EBAD CORPORATE STRUCTURE (unregulated = unchecked) – Corporate Larceny had Big Impact on American Attitudes:

1867 - 1929: Business Man = American Ideal (college grads into business); 1930 - ca. 1980: Professions = American Ideal

(college grads into professions)

F BAD BANKING STRUCTURE (unregulated = unchecked): Low Interest Rates didn’t curb inflation; Banks lending to

speculators (1928: Interest rate went up on Federal Reserve Notes; Sept. 1929: Tightened again (rates up again) ----> BUST)

G STATE OF INTERNATIONAL ECONOMY BAD

1 No REAL recovery from WWI in Europe: REPARATIONS TRIANGLE: USA –> Germany –> Brit/France –>

USA (same money)

2 High USA Tariffs against European goods: Europe could not sell goods here; Europe could not afford our exports

(E.g, farm goods)

3 USA Insisted Europe pay WWI Debts: Before WWI, USA = DEBTOR NATION ; After WWI, USA = CREDITOR

NATION

4 EUROPE DEFAULTED ON DEBTS: USA exports to Europe dropped; US farmers, dependent upon export,

suffered

5 Depression began in USA and spread to smaller economies

H POOR STATE OF ECONOMIC INTELLIGENCE:

1. Hoover’s Advisors (&, to less extent FDR’s) were Bad! Principally, Andrew Mellon: money belongs in pockets of

the rich

2 Republican Gov’t failed to do anything after Crash

a HH well-meaning but trapped by his politics old-style Liberal Republican ideology (no gov’t help to

people, just business)

b then came Bonus Army, 1932, when Gen. Douglas MacArthur (Yes! The Hero!) & US army fired on US

army Veterans!!!

I OVERPRODUCTION! OVERPRODUCTION! OVERPRODUCTION!

1 Not Enough Consumers in the Market: USA Workers paid low wages; USA Tariffs impede sale Overseas (high

tariffs on their products means their products don’t sell here, then they cannot afford to buy our products)

2 J.A. Hobson (British), Imperialism, 1902: Pay your own workers well enough to buy your own products so they

can buy your products

III THE GREAT CRASH

A OCTOBER - NOVEMBER 1929

1 BLACK THURSDAY, Oct. 24, 1929: stock prices began falling

2 By BLACK TUESDAY, Oct. 29, 1929 banks were calling in loans

3 By Mid-Nov, $30 billion (in today’s value) lost in stock values

4 Herbert Hoover still in “Denial”: “any lack of confidence in the economic future . . . of the United States is

foolish,” HH

B. REAL DEPRESSION

1 March 1930: 3.2 million unemployed (up from 1.5 before Crash)

2 HH still optimistic the country would right itself “during the next 60 days” HH

3 Popular Discontent –> Rebellion (? Revolution?)

a Feb. 1931: food riots in parts of USA

b Mar. 1931 Strike at Ford Plant in Michigan: police & Ford’s guards killed 4 workers

4 Dec. 1931: NY’s Bank of the United States collapsed ($200 million in deposits = largest single bank failure in US

History)

amore than 750K New Yorkers dependent on city relief, 160K more waiting list

b city spending average of $8.20 / person / month for relief

5 By 1932, 50% of American Wage-earners were unemployed – some counties = 100% unemployment

C. ABROAD = NO BETTER: Began in USA , spread to Britain, Germany, Portugal, Spain, Austria, Italy, France

1 USSR? NO Depression: Fixed Wages, Fixed Prices

2 Dictators & Fascism rapidly arose in all Western Europe except France & Britain

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THE DEPRESSION, 1929 - 1940

Lecture Guide # 27

I DESPAIR AFTER WWI:

A Even in USA (which was helped & little hurt) men returned physically injured & mentally harmed (“shell shock”) B ROARING 20s: Roared more w/ Despair than Happiness – It was a desperate Roar! C ECONOMIC TROUBLES 1 US Economy SOARED (had SERIOUS, but unrecognized problems); Europe NEVER recovered from WWI 2 USA: String of Republic Presidents (Warren G. Harding, Calvin Coolidge, Herbert Hoover), 1921 - 1931 = a “return to normalcy” II CAUSES OF THE GREAT DEPRESSION A PHONEY, PARTIAL, PAPER PROSPERITY: luxury Goods w/ Limited Markets; Older, Basic Industries suffering (RR, Mining, Housing) B PAPER SPECULATION (Everybody investing in stocks): “Buy Now, Pay Later” –> Leveraged buying; “Shoe shine boy” investment (Kennedy said he knew to get out the market when he heard his shoeshine boy talking about buying stocks) C FARM ECONOMY NOT PROSPERING: High Import Tariffs – meant Cost of consumer goods high; Could not sell our farm products abroad; Dust Bowl on Great & South Plains (result of plowing west of 90 th^ parallel, no rain) D POOR DISTRIBUTION OF MONEY / INCOME 1 Market for Luxury goods small 2 Republican Economics of Andrew Mellon = Sec. Treasury since 1920-c. 1930: 3 successive Republican presidents; Believed money belongs in pockets of rich (Corporate Profit up by 62%; Wages NOT going up w/ profits 3 STATS: 1929 in USA: 21% of families earned less than $1000 / year – Earning of the top .1% ( 1/10 th^ of 1%) = earnings bottom 42% E BAD CORPORATE STRUCTURE (unregulated = unchecked) – Corporate Larceny had Big Impact on American Attitudes: 1867 - 1929: Business Man = American Ideal (college grads into business); 1930 - ca. 1980: Professions = American Ideal (college grads into professions) F BAD BANKING STRUCTURE (unregulated = unchecked): Low Interest Rates didn’t curb inflation; Banks lending to speculators (1928: Interest rate went up on Federal Reserve Notes; Sept. 1929: Tightened again (rates up again) ----> BUST) G STATE OF INTERNATIONAL ECONOMY BAD 1 No REAL recovery from WWI in Europe: REPARATIONS TRIANGLE: USA –> Germany –> Brit/France –> USA (same money) 2 High USA Tariffs against European goods: Europe could not sell goods here; Europe could not afford our exports (E.g, farm goods) 3 USA Insisted Europe pay WWI Debts: Before WWI, USA = DEBTOR NATION ; After WWI, USA = CREDITOR NATION 4 EUROPE DEFAULTED ON DEBTS: USA exports to Europe dropped; US farmers, dependent upon export, suffered 5 Depression began in USA and spread to smaller economies H POOR STATE OF ECONOMIC INTELLIGENCE:

Hoover’s Advisors (&, to less extent FDR’s) were Bad! Principally, Andrew Mellon: money belongs in pockets of the rich 2 Republican Gov’t failed to do anything after Crash a HH well-meaning but trapped by his politics old-style Liberal Republican ideology (no gov’t help to people, just business) b then came Bonus Army, 1932, when Gen. Douglas MacArthur (Yes! The Hero!) & US army fired on US army Veterans!!! I OVERPRODUCTION! OVERPRODUCTION! OVERPRODUCTION! 1 Not Enough Consumers in the Market: USA Workers paid low wages; USA Tariffs impede sale Overseas (high tariffs on their products means their products don’t sell here, then they cannot afford to buy our products) 2 J.A. Hobson (British), Imperialism , 1902: Pay your own workers well enough to buy your own products so they can buy your products III THE GREAT CRASH A OCTOBER - NOVEMBER 1929 1 BLACK THURSDAY, Oct. 24, 1929: stock prices began falling 2 By BLACK TUESDAY, Oct. 29, 1929 banks were calling in loans 3 By Mid-Nov, $30 billion (in today’s value) lost in stock values 4 Herbert Hoover still in “Denial”: “any lack of confidence in the economic future... of the United States is foolish,” HH B. REAL DEPRESSION 1 March 1930: 3.2 million unemployed (up from 1.5 before Crash) 2 HH still optimistic the country would right itself “during the next 60 days” HH 3 Popular Discontent –> Rebellion (? Revolution?) a Feb. 1931: food riots in parts of USA b Mar. 1931 Strike at Ford Plant in Michigan: police & Ford’s guards killed 4 workers 4 Dec. 1931: NY’s Bank of the United States collapsed ($200 million in deposits = largest single bank failure in US History) a more than 750K New Yorkers dependent on city relief, 160K more waiting list b city spending average of $8.20 / person / month for relief 5 By 1932, 50% of American Wage-earners were unemployed – some counties = 100% unemployment C. ABROAD = NO BETTER: Began in USA , spread to Britain, Germany, Portugal, Spain, Austria, Italy, France 1 USSR? NO Depression: Fixed Wages, Fixed Prices 2 Dictators & Fascism rapidly arose in all Western Europe except France & Britain

IV FAILURE OF CLASSICAL LIBERALISM

A HOOVER = Good man, but hands tied by his 19th^ C. Classical Liberal ideology that Gov’t should help business 1 But Govt should NOT help individuals – makes them dependent 2 Hoover gave Feed to farmers for their cows, but not food for children; then Doug MacArthur attacked Bonus Army B BONUS ARMY, 1932 1 Gov’t promised Bonuses (in future) to WWI Vets – they need it now! a May: Vets left Oregon marching to Washington to demonstrate for payment; arrived June, set up camp near White House b Bill failed in Senate (Millionaires’ Club), HH provided money to get them home & dismissed them 2 Vets decided NOT to leave a July: HH ordered troops to clear out Anaconda Flats b USA Army troops under Douglas MacArthur moved in c & shot and killed American Veterans! 4 Nation was outraged & HH was a deadman at next elections C. Beginning of The American WELFARE State or American DEMOCRATIC COLLECTIVISM 1 Franklin Delano Roosevelt (Democrat) elected by landslide, Nov. 1932 (22.8 million to 15.750 million a Largest growing Political Party that fall in USA = Communist Party b March 1933: FDR took office 2 In 100 Days, American Way of Government changed a from NON-interventionist, Classical Liberalism b to PRO-ACTIVE Gov’t which aims “to promote the general welfare ” as American Ideal 3 NOW, we can use the words “Conservative” and “Liberal” in the sense you are familiar with a Democratic Party was Party of Jefferson: Classical Liberal, SMALL gov’t Party – until FDR / New Deal move to Left b Republic Party was Party of Hamilton: STRONG Gov’t helping Business – til FDR Demos left them on the political Right

The Depression 1929-1940 - Study Guide | HIST 111, Study notes of Cultural History of Europe

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Download The Depression 1929-1940 - Study Guide | HIST 111 and more Study notes Cultural History of Europe in PDF only on Docsity!

THE DEPRESSION, 1929 - 1940

I DESPAIR AFTER WWI:

IV FAILURE OF CLASSICAL LIBERALISM