Great Depression (mid 1920s-39)

Question 1

Discuss the political and economic causes of the Great Depression in the US

Answer 1

Vulnerable economic structure most important:
• Historian Lewis Frederick Allen: overproduction make the US economy unsound
• 1927 recession: a component was Ford laying off 60,000 workers in a temporary closure
• By 1929, 75% of cars were sold on credit
• Historian John Garraty: unproductive uses of wealth (eg. artificially raising value of stocks with insider dealing) was a large factor in severity of Great Depression

Political lenience:
• Coolidge’s laissez-faire policies: Federal Trade Commission allowed unfair business practices (eg. Samuel Insull’s electrical supply holding company - anticompetitive conduct)

Question 2

Discuss the political and economic causes of the Great Depression in Canada

Answer 2

Economic weakness
• Export reliant: in 1920s 25% of Canada’s GNP was derived from exports - US was largest buyer of timber & biggest investor
• Historian Peter Clements: Uneven distribution of wealth wasn’t extreme -> 1925-29 400 million bushels of wheat produced annually
• WWI impact: wheat prices falling after WWI
• 1921-22 wheat price per bushel halved (agriculture faces drought, dust storms, international competition)

Question 3

Discuss the political and economic causes of the Great Depression in Brazil

Answer 3

Economic:
• Dependence on coffee: 70% exports was coffee (1929-31 coffee prices fell from 22.5¢ to 8¢ per pound)
• Historian Barbara Weinstein: coffee was most significant factor
• Reliance on imports: 80% of grain and manufactured goods were imported
• Connection to US: 35% of Brazil’s debt owned by USA

Political:
• Domination of coffee plantation oligarchy: Brazil remained a monoculture
• Government traditional elites: very little support for growing industry

Question 4

Compare and contrast Hoover and FDR’s solutions to the Great Depression

Answer 4

Increased government involvement:
- Hoover:
• Historian James Patterson: Hoover called for federal intervention, canceled war debts, sped up work on Boulder Dam
• 1930-31 government spending for subsidy and relief schemes increased its share of GNP 16% to 21%
- FDR:
• Glass-Steagall Act: prevented bank actions and centralized open-market operations

Failure of agricultural policies:
- Hoover:
• Federal Farm Board (1929) wasn’t successful at preventing the collapse of grain prices in 1932
- FDR:
• 1933 Agricultural Adjustment Act: farm income was still only 80% of 1914 levels
• 1932-33 cotton prices rose from 6.5¢/lb to 10¢/lb
• AAA subsidized farmers to reduce production and slaughter piglets
• Historian Raymond Moley: FDR’s policies weren’t too different from Hoover’s

Impact on international trade:
- Hoover:
• 1930 Hawley-Smoot Tariff: 1929 and 1930 the value of international trade decreased by $500 million
• Historian Paul Boyer: Hoover’s domestic policies were ineffective because he blamed the Depression on international forces
- FDR:
• 1933 Took US off of Gold Standard, which decreased the international value of USD and foreigners could buy 15% more American goods

Hesitance to increase government spending:
- Hoover:
• Historian Hugh Brogan: Hoover’s idea of American individualism meant his policies were inadequate
• Voluntaryism was not very effective (US steel did introduce 10% wage cuts in 1931 though)
- FDR:
• 1933 Glass-Steagall Act

Question 5

Evaluate the social impact of FDR’s policies during the Great Depression

Answer 5

Social classes:
• 1933 National Recovery Administration: outlawed yellow dog clauses (benefits to workers)
• Ineffective policies: 1937 Wagner-Steagall Housing Act received $500 million, half of requested amount
• WWII was most significant: 1940-44 unemployment fell 14.6-1.2%

Culture:
• Department of Agriculture commissioned Pare Lorentz’ ‘The Plow that Broke the Plains’
• Historian Ann Banks: New Deals projects helped expression
• WPA 350 ways to cook spinach (unproductive jobs slowed actual improvement)

Women:
• Continuity of women with less employment opportunities: 1933 Economy Act - 75% of fired governmental job holders were women
• National Recovery Administration allowed women to be paid less
• Historian Ira Berlin: the great depression exacerbated existing inequalities

Minorities:
• Pre-depression, 85% of African Americans in the South lived in ghettos with overcrowding and poor conditions (as tenants, share-croppers, domestic servants)
• National Recovery Administration allowed African Americans to be paid less
• 1931 magazine The Nation reported that unemployment amongst African Americans was 4-6x higher than whites
• FDR appointed Mary McLeod Bethune in charge of National Youth Administration
• 1933 CCC did little to nothing for minorities

Question 6

Evaluate the effectiveness of MacKenzie King and RB Bennett’s responses to the Great Depression.

Answer 6

Bennett:
• Limits to aid: 1931 Unemployed and Farm Relief Act allocated $20 million for emergency relief for provinces -> <$20 for each person
• Increased government involvement: 1934 Bank of Canada created - centralized banknotes and gold reserves -> stable banking system
• Addressing causes: 1935 Prairie Farm Rehabilitation Act: helped 100,000 farmers in South Saskatchewan build irrigation systems and reservoirs

King:
• 1926-30 proponent of laissez-faire and high tariffs
• 1935-48: increased trade agreements (eg. 1935 decreased tariffs between US and Canada)
• Agricultural challenges due to weather: 1937 prairies faces driest summer on record -> jobs lost
• Impact of WWII: 1938-41 unemployment decreased from 11-2%
• Historian John Francis Bannon: rather than King or Bennett, WWII was the most impactful factor

Question 7

Evaluate the effectiveness of responses to the Great Depression in one Latin American country

Answer 7

Increase in industry:
• Import controls and long-term loans to new industries -> industry grew 11.2% annually
• 1931 National Coffee Council - 1933 3 billion coffee tree planted -> 1942 2.3 billion
• Agriculture remained dominant

Decreased foreign involvement:
• 1937 Law banned foreign companies from exploiting raw materials
• 1939 only banks with Brazilian shareholders could operate

Social challenges:
• 1937 strikes were illegal
• Repression kept Brazil a low wage economy
• 1939 half of urban dwellers had no electricity

Question 8

To what extent did the Great Depression contribute to political instability in one Latin American country?

Answer 8

Generation of opposition to overthrow Washington Luis’s successor, Prestes, in 1930:
• Historian Boris Fausto: 1930s saw an exchange of elites from traditional oligarchies to military men, young politicians, industrialists, etc.
• Tenentes wished to see modernization and worried about Communism
• Sao Paulo reformers and Coffee planters believed the government wasn’t doing enough to relieve poverty/help

Instability under Vargas:
• 1932 Sao Paulo rose against loss of rights and influence -> 1934 Constitution introduced secret ballot, suffrage for all over 18, 8 hour workday, etc.
• 1935 National Liberation Alliance’s armed insurrection -> neutralized with government force and labor policies