1919-1932

Post World War I through Hoover : 

Post World War I through Hoover By: Brian Surkan / The Walker School

Aftermath of World War i : 

Aftermath of World War i Influenza Pandemic of 1918 – 19 Treaty of Versailles (1919) Heavily financially and morally penalized Germany Dangerous circle of debt and inflation created Germans borrow U.S. Gold to pay Allied reparations Allies use German gold to pay war debts to the U.S. Germans resort to paper inflation out of desperation Hyperinflation by 1923 3.25 × 106 percent per month

German Hyperinflation : 

German Hyperinflation

Lost Generation & dissolusionment : 

Lost Generation & dissolusionment Many returning soldiers cynical w/world Disillusioned by the suffering of WWI Offended by the careless love of wealth in USA Some move to Paris & later awed by Stalin’s USSR Fascism/Communism become popular Communist commune in Munich (1919) Communist Party of America – mostly foreigners (1919) Mussolini in Italy (1922) Nazis & Hitler in Germany (1920s - WWII) Fascist Party in Great Britain (1932) Eugenics / racism in vogue worldwide

Socialism: Communism vs. Fascism : 

Socialism: Communism vs. Fascism Communism All property communal Temporary dictatorship Equality of pay Gov’t directs production Heavy, progressive taxes Dissenters killed Goal: Utopia under benevolent anarchy Fascism Private property Strong central government Gov’t regulated contracts Gov’t directs production Heavy, progressive taxes Dissenters persecuted Goal: Enlightened dictatorship forever Socialism: Needs of individuals should be secondary to the needs of the group or society.

Post-war Recessions worldwide : 

Post-war Recessions worldwide U.S. Recession of 1919 – 1921 Steepest deflation in last 120 years (13 - 18%) Federal Reserve lowered interest rates to banks Helped allies stem loss of gold to USA / encouraged debt Income and surtaxes cut by Andrew Mellon (1921) Fordney-McCumber Tariff (protectionist) hurt allies (1922) Federal Reserve postpones post-war depression Artificially low interest rates stimulate economy (1921 – 28) Increases interest rates rapidly to slow inflation (1928 – 29) Stock market collapses (1929) / deflation follows Worldwide economy heads into a depression

Prohibition : 

Prohibition Amendment 18 – Prohibition (1919) “After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited. “ Organized crime thrived in providing the booze Led to police corruption & Kennedy fortune May have contributed to the recession 1919-21

Flappers : 

Flappers

Female Liberation of 1920’s : 

Female Liberation of 1920’s Female Suffrage (1920 – Amend. 18) Liberated in styles and behavior Female smoking and drinking became acceptable Flappers showed more skin and cut hair Movies popularized “liberated” female image Jazz music embodied spirit of freedom & emotion War jobs liberated women Speakeasies

1920’s culture : 

1920’s culture General Optimism after 1922 Rapid expansion of consumer goods Cars / radio / movies / vacuums / washers / fridge Buying on credit/installments popularized Jazz Music Thrived Louis Armstrong Stock markets thrived Stocks purchased with margin loans

1920’s Technology : 

1920’s Technology

Technology in the interwar years : 

Technology in the interwar years Many technologies move from elite to common Radio became common by 1930 Equivalent of today’s television Cars were common by 1939 Trans-continental air travel a reality by WWII 1927 - Solo non-stop transatlantic flight from NY to Paris Charles A. Lindbergh Telephones became increasingly common

Economic Distress : 

Economic Distress Growing losses from bad loans Forced banks / investors to contract credit Forced businesses and consumers to reduce debt Stock Brokers to issue margin calls Liquidated stocks when extra cash not deposited Decline in demand for goods caused price deflation Fewer goods led to companies cutting production Lower production led to layoffs Layoffs lead to less consumption Many banks went bankrupt (magnified effect: fractional reserves) 642 in 1929, >1284 in 1930, 2298 in 1931

Post-Crash of 1929 Problems : 

Post-Crash of 1929 Problems Growing Unemployment Failing faith in self-reliance Falling Prices (deflation) Failing Banks International Distress Foreign currencies leaving gold standard Reparation payments: US->Germany->Allies->US Vocal Opposition by Socialists against Capitalism

Enter Herbert Hoover : 

Enter Herbert Hoover Wealthy businessman in global mining Extensive Private Charitable work during and after WWI Brought food and clothing relief to poor “To Hoover” meant to do good in Finland “Hoover Lunches” were free food for kids in need Secretary of Commerce (1921 – 1929) President (1929 – 1933) Conflicted by opposing personal desires to: Actively help people in need Not expand government to provide charity Regulate business activity centrally

Hoover Admin. ResponSES (1929 – 1930) : 

Hoover Admin. ResponSES (1929 – 1930) Wanted to keep wages, prices and employment high Tried to convince business leaders to ignore market forces Agricultural Marketing Act (1929 – before stock crash) Authorized Federal Farm Board buying and selling of farm products Protectionist Hawley-Smoot Tariff Act (1930) Raised prices on over 2,000 imported goods 1,028 Economists signed petition against the bill Foreign countries responded with tariffs on American goods Public works construction to boost employment (1930)

Hoover Admin. Responses (1931 – 1933) : 

Hoover Admin. Responses (1931 – 1933) Democrats took control of House of Reps (1931) Small Republican Senate majority Some Republicans were Progressives (i.e., left-leaning) One-year moratorium: war loan repayments (1931) Affects U.S. Banks / Lending institutions Japan Conquers Manchuria in China (1931) Breaking Washington Naval Treaty of 1922

Hoover Admin. Responses (1932 – 1933) : 

Hoover Admin. Responses (1932 – 1933) Fends off “Bonus Army” with the real army (July 28, 1932) WWI Veterans promised bonuses in 1945 but wanted them early Revenue Act of 1932 Marginal tax rate raised from 25 to 63% Doubled estate taxes Raised corporate taxes by 15% Reconstruction Finance Corporation (1932) Loans made to banks/businesses (esp. RR) in distress Norris-La Guardia Anti-Injunction Act (1932) Begged FDR to boldly state his intentions (1933) Anything is better than uncertainty in business

Response to Hoover : 

Response to Hoover Hoover blamed for distress “Hoovervilles” – shanty / tent towns of homeless “Hoover wagons” – cars pulled by horses “Hoover blanket” – old newspaper used as blanket “Hoover flag” – empty pocket turned inside out “Hoover leather” – cardboard used to replace shoe sole Conservatives accused him of being a socialist Socialists accused him of not going far enough Canadians did same to leader: “Bennet Buggies”

Hoover Takes the Blame : 

Hoover Takes the Blame

Economic Distress? Change ParTies! : 

Economic Distress? Change ParTies! Franklin D. Roosevelt: “Conservative” Democrat Accused Hoover of recklessly expanding government power Promised reduced expenditures & balanced budget Keep a “sound currency” (gold standard) “at all hazards” Regulation of banks, holding companies, utility rates Unemployment and old age protection “under state laws” Sought to appear bold, but without specific policies Willing to change only “foolish” traditions Surrounded himself with a “Brain Trust”of intellectuals Repeal Constitutional Amendment 18 (Prohibition) Sought to help “the forgotten man at the bottom” 1932: Landslide Democratic victory: FDR / House / Senate

Sources : 

Sources http://www.hyperhistory.com/online_n2/connections_n2/great_depression.html http://www.historyplace.com/worldwar2/timeline/ww2time.htm http://en.wikipedia.org/wiki/Events_preceding_World_War_II_in_Europe http://en.wikipedia.org/wiki/Timeline_of_World_War_II http://en.wikipedia.org/wiki/Transatlantic_flight http://www.presidency.ucsb.edu/medialist.php?presid=32 http://www.pbs.org/wgbh/amex/rails/timeline/index.html http://www.yourememberthat.com/files/119811e40fad3bb9.jpg https://woodward8.wikispaces.com/file/view/Hoovervilles.jpg http://images.businessweek.com/ss/07/04/0426_dow/image/2_great_depression.jpg http://farm4.static.flickr.com/3159/3109349739_d46051931f.jpg http://www.subprimeblogger.com/wp-content/uploads/2008/12/depression-vs-recession.jpg http://www.loc.gov/exhibits/treasures/trm203.html