Lecture 6 The crisis of 1929 and its impact on US foreign relations

Question 1

Herbert Hoover, speech accepting the Republican

nomination, August 1928

Answer 1

“Unemployment in the sense of distress is widely
disappearing. . . . We in America today are nearer to
the final triumph over poverty than ever before in the
history of any land.”

Question 2

“The outlook of the world today is for the
greatest era of commercial expansion in
history. The rest of the world will become
better customers.”

Answer 2

Herbert Hoover, Speech at San Francisco,

November, 1929

Question 3

Causes of 1929 Crash

Answer 3

✓ Excessive production and still limited domestic consumption (Keynesian approach)
✓ US economy not sufficiently diversified: concentration in a few sectors, crisis in farming mining textiles
✓ Lack of control on banks (commercial v. investment banks)
✓ Lack of rules in international investments (productivity v.
speculation)

Question 4

US reaction: from Recession to Great Depression

Answer 4

→ Protectionism (domestic pressures)

→ Unwillingness to forgo the international debt

Question 5

Glass-Steagal Act

Answer 5

1933 - limited commercial bank securities, activities, and affiliations within commercial banks and securities firms.

Question 6

Smoot–Hawley Tariff Act

Answer 6

1930 - raised U.S. tariffs on over 20,000 imported goods to record levels. Title - “An Act To provide revenue, to regulate commerce with foreign countries, to encourage the industries of the United States, to protect American labor, and for other purposes.”

Question 7

From Economic Interdependence to Economic Spheres of Influence

Answer 7

✓End of gold standard: GB 1931 (reinstated in 1925)
✓ British empire as economic sphere: Commonwealth (1931-1949)
✓ Economic nationalism: USSR, Italy, Germany
✓Japan’s «co-prosperity sphere» in the Far East
✓«New» US approach to Western Hemisphere: dollar sphere

Question 8

Hemispheric Solutions: a new policy for

Latin America

Answer 8

✓ Abandonment of blatant forms of interference (revocation Roosevelt Corollary and Platt Amendment)
✓ Increase trade and investment (dollar sphere)
✓ From Big Stick to Dollar Diplomacy to
Good Neighbour Policy

Question 9

London Naval Treaty

Answer 9

1930 - Japan rejects 10:10:7 ratio on warships

Question 10

Japan intervention in Manchuria

Answer 10

1931
1. Inaction of League of Nations
2. US inaction
✓ No US military intervention: unthinkable
✓ No US sanctions: counterproductive
✓ No US cooperation with USSR v. Japan 
3. Precedent: other revisionist powers – Italy & 
Germany – took notice (cfr. Munich 1938)