Great Depression Ch Fordney-McCumber Tariff Law (1922) Americans feared the flood of cheap European goods after WWI Hiked tariff from 27% to 38.5% Europe needed to sell its goods in America to achieve economic recovery and repay war debts to the US Spurred European nations to pass high tariffs of their own Harding Scandals 1921 Teapot Dome Scandal Sec. of Interior transferred naval oil reserves to wealthy oilmen after receiving bribe 1923 head of Veterans Bureau embezzles $200 mil. in connection with construction of veterans hospitals 1924 Attorney General gets caught selling pardons and liquor permits Calvin Coolidge Becomes president when Harding dies of pneumonia Conservative businessman Wanted to reduce taxes and debt Laissez-faire Farmers Suffer Hurt by their own efficiency Went into debt purchasing machinery Crop prices fall because of bigger harvests International Affairs Allied war debts $10 bil. Allies protest repayment claimed tariffs made it impossible to pay debts Germany must pay reparations to Brit. and France so they can repay the US Germany starts printing money, causing hyperinflation Dawes Plan 1924 Rescheduled German payments Private American loans would be made to fix German hyperinflation Herbert Hoover Elected in 1928 Self-made business man Believed in isolationism, industrialism, free enterprise and small government Hoover Administration Setup Federal Farm Board to lend money to farmers Hawley-Smoot Tariff (1930) average tariff rate raised from 38.5% to almost 60% Great Depression Oct some investors begin selling stock after Brit. Raises interest rates Oct. 29, 1929 Black Tuesday Great Depression 1930 4 mil. workers lost their jobs 1932 6 mil. workers lost their jobs 5,000 banks collapse ( ) People lose life savings Causes of Great Depression US ability to produce goods greater than its ability to consume goods Over expansion of credit created massive individual debt European debts to US Decreased international trade Drought in Midwest Hoovers Response No govt handouts Reconstruction Finance Corporation (1932) assisted companies hoping to increase employment Norris-La Guardia Anti-Injunction Act (1932) outlawed yellow-dog contracts Public Works Projects Hoover Dam Bonus Army 1932 Veterans march on Washington demanding payment of a bonus that was due in 1945 Evicted by Gen. Douglas MacArthur Huge blow to Hoover PR FDR Campaign Brain Trust informal team of advisors Campaign slogans Happy days are here again The worst is past Prosperity is just around the corner Election of 1932 First time blacks shift allegiance to Dem. Party Voters voted as much against Hoover as they voted for FDR FDR and the 3 Rs FDR Emergency Banking Relief Act 1933 President could regulate banking transactions Glass-Steagall Act Set up Federal Deposit Insurance Corp. (FDIC) Guaranteed banking deposits up to $5,000 Creating jobs Civilian Conservation Corps (CCC) Govt camps for young men for reforestation, firefighting, etc. Federal Emergency Relief Act (FERA) $3 bil. to states for work projects Agricultural Adjustment Act (AAA) Paid farmers not to grow crops Inadvertently created unemployment Struck down by Supreme Court in 1936 Civil Works Administration (CWA) Provided temporary jobs during harsh winter Helping Industry and Labor National Recovery Act (NRA) Designed to assist industry, labor and the unemployed Encouraged employers to hire more workers Ex. Hire two men to work 30 hrs/week rather than one man to work 60 hrs/week Established minimum wage Helping Industry and Labor (cont.) Public Works Administration (PWA) Provided industrial recovery and unemployment relief Built Coulee Dam 21 st Amendment repeals prohibition to tax alcohol The Dust Bowl Caused by: Drought Wind Poor crop rotation No trees Grapes of Wrath John Steinbeck Resettlement Administration Moved poor farmers to new land Planted trees Banks and Big Business Truth in Securities Act Cant lie about how well a stock is doing Securities and Exchange Commission (SEC) Regulates stock market Housing and Social Security Federal Housing Administration (FHA) Provided loans and mortgages to individuals for improving homes and buying new ones Social Security Act of 1935 Provided money for unemployment insurance Provided money for senior citizens, disabled, etc. Funded by payroll tax A New Deal for Labor National Labor Relations (WAGNER Act) Boost to labor movement Reassured rights to collective bargaining Fair Labor Standards Act Established 40 hour work week FDR v. Supreme Court Supreme Court strikes down 7 of 9 New Deal cases FDR wants new court in favor of his programs Wants to add one new judge for every judge over the age of 70 Congress and the American public disagree Roosevelt Recession 1937 people blame tax hike for Social Security FDRs solution: spend more money Impact of New Deal Federal govt becomes largest employer Republicans claimed the way out of Depression was less govt restrictions Some argued it did not fix depression since farm surpluses still existed