USA, 1918 - 41 Flashcards

Question

Why was Prohibiton introduced?

Answer 1

- Thought it would eliminate problems of domestic violence, crime & poverty - Some argued alcohol caused unemployment (industrial inefficiency) & physical attacks on woman - many US brewers were German & many prohibitionists used anti-German sentiments (due to WW1) to their advantage. - alcohol was causing the loss of traditional American values - WCTU led multiple campaigns that called for prohibition

Answer 2

-not enough money was made available to enforcement services ($2 million given where $5 million was said to be needed) - led to the growth of organised crime (65,000 criminal actions under Volstead Act & Al Cpaone had a private army of 1000) - people began smuggling in alcohol & making their own - dangerous - many thought it had no place in the free modern America - many argued ending prohibition would provide much needed jobs & generate tax - prohibition agents were payed little and thus easy to bribe | People tasked with shutting down consumption of alcohol

Answer 3

- Speculation - Many Americans bought shares hoping prices would keep rising. People borrowed money (buying on margin) to buy shares. When prices stopped rising, panic selling began — caused prices to crash & people to be unable to pay back their loans. - Bank failures - many banks had lent money to speculators, who couldnt pay the money back when the stock market crashed, banks had also invested into the stock market - Lack of governemnt regualtion - Republican government followed a laissez-faire policy, there were no checks on risky investment or borrowing - Falling confidence meant people panicked & sold their shares quickly, making the crash even worse. Market overheated.

Answer 4

**1. Shortage of Money supply** - Industry had become saturated with products & poorer Americans lacked the money to continue spending. Demand for manafactures products collapsed & inventory piled up in factories. Factory owners started to lay off employees. Prices went down, but Americans stopped buying & the economy experienced a cashflow crisis. Farmers produced too much food leading to lower prices & lower income for them. **2. The Stock Market Crash** - $85 billion was lost from share values **3. The Banking Collapse** - Since WW1, the USA had become the world's banker. For example in 1924, the Dawes Plan had bailed out the German economy. - By the end of the 1920s it was heavily overexposed (at high risk - fragile triangle) - Banks had invested their customers momey in the stock market and, as a result of the crash, had lost a fortune. People lost confidence in the banks & took their money out. - In 1931, the Bank of America went out of business & 3,700 smaller banks followed. **4. Tariffs** - As demand for goods slumped, government started to impose tarrifs (in 1930 the Smoot-Hawley Tarrif Act was passed) to protect its own producers. - in 1932, the British Empire responded with its own tarrif - Imperial Preference. As a result, the flow of trade slowed down; factories were forced to cut prices & production even further which led to huge unemployment.

Answer 5

1. Mass Unemployment - soup kitchens were set up 2. Housing Crisis - rise of homelessness & 'Hoovervilles' (makeshift shanty towns named after the controversial President Hoover) 3. Decline in city services - plummeting tax revenues meant cities cut back on public services, such as transport & education 4. Increase in social unrest & protests

Answer 6

Farmers were already facing problems (overproduction & Canadian competition meant that prices/income fell) Dust storms/overworled soil, which created the Dust Bowl. Many moved (as their incomes had halved) - 3.5 million people became economically displaced migrants seeking new land, moved to areas like California to pick fruit where wages were better (although still half of what was considered a subsistence income) - became known as Okies & Arkies

Answer 7

Republican President 1929 - 33 Believed in self help, or rugged individualism - success comes from your own hard work & effort. Too much help (relief, welfare) would damage the spirit of self-reliance that made America great. In response to Depression, he believed voluntarism - persuading business to act, not forcing them through Government legislation.

Answer 8

**Initial reputation:** - Known as a self-made millionaire and humanitarian - Gained fame for organizing relief efforts in Europe during and after WWI - Considered a capable and efficient administrator - Entered presidency with high expectations from the public

Answer 9

**Do Nothing reputation: ** - failed to take strong action to help Americans - resisted governement aid/ federal intervention due to his belief in rugged individualism - slow response to the Great Depression - people living in shanty town called them Hoovervilles - blaming him for their poverty/quality of living 1930 - The Smoot-Hawley Act raised tariffs 1931 - the Federal Bank raised interest rates 1932 - Hoover blocked the Garner - Wagner relief bill (would have allowed Congress to provide $2.1 billion to create jobs) 1932 - Government raised taxes

Answer 10

**Do Something reputation:** -he did take steps to fight the Great Depression 1929 - set up the Federal Farm Board to buy surplus produce & keep prices up November 1929 - encouraged businessmen to agree not to cut wages 1930&31 - cut taxes & the Commitee for Unemployment Relief was formed 1931 - gave $423 million to state governements to set up schemes to provide work (e.g. the Hoover Dam) 1932 - Reconstruction Finance Corporation provides $2 billion to state & city governments, mortage companies & railroads. Continued lending money until 1953. - Federal Home Loan Bank Board overseed security of home mortages - Glass- Steagall Act helped banks by making it easier for them to borrow from the Federal Reserve

Answer 11

His actions were seen as too little, too late. He still refused direct aid to individuals (no unemployment benefits, no welfare). Most Americans were suffering, and top-down aid didn’t help them immediately. FDR’s New Deal later made Hoover's efforts look even smaller by comparison. Perception: ‘Do nothing’ — out of touch, slow, uncaring. Reality: ‘Did something’ — but focused on helping business, not people directly.

Answer 12

At the end of WW1 the surviving 3.5 million soldiers had been promised a bonus/pension that would be paid to them in 1945. During the Depression, in 1932, these veterans called on the Government to pay the bonus early as they desparately needed the money. On June 17, 1932 10,000 veterans & their families (around 20,000 people altogether) went to Washington & set up a temporary camp in tents to demonstrate for their bonus. On Capitol Hill, the Senate voted whether to approve paying the bonus early. The senate voted 62-18 against paying the cash bonus early. Hoover had the Washington poliuce provide beds & medicine & food. After the vote, the marchers refused to disperse - Hoover came to see them as a 'revolutionary mob' who needed to be dispersed. Hoover appointed Patrick Hurley (Sec. of War) & General Douglas MacArthur to deal with the crowd. Hoover ordered Genral MacArthur to clear the downtown area making sure womean & children received 'every kindness & courtesy'. In reality, troops charged in with 'naked sabers'. Tear gas grenades were fired & the BEF's camp was burned. 2 babies died from the gas & a 7 year old was bayonetted through the leg trying to save a rabbit. Hoover attempted to justify the attack by saying that fewer than 10% of the men attacked were veterans, and only about 5,000 communists & criminals were left by the time of the attack. Severely damaged hoovers reputation - first time that Federal troops were summmoned to attack American citizens in thier own national capital.

Answer 13

FDR vs Hoover. FDR won by a landslide (42 of 48 states) **Hoover** - Out of touch, out of control, unsuccessful leader - Bonus March & Great Depression severely damaged his reputation. - American people wanted change. **FDR** - avoided being photographed in his wheelchair/cane - hid weakness - told personal stories which made him seem more relatable - promised a 'New Deal' for the American people - new voting block of farmers, minorities, blue collar workers & those in banking/oil industries which he appealled to - promised an end to prohibition, wanted to tax the profits - this was a popular decision - used technology such as radios to get people to listen & become aware of his campaign (Hoover did not) - travelled to Chicago/around America on his own train (the Roosevelt Special) - made him look more active - made flexible & vague promised - meant that appealed to a wide variety of people - changed the focus of the election from social issues to economic issues, which also brought attention to Hoovers economic mistakes, many people worried more about money after Great Depression

Answer 14

**RELIEF** - Relieve extreme poverty, feed the starving & stop people losing their homes or farms **RECOVERY** - Revive the economy by getting industry going & people working again. **REFORM** - Make the USA a better place - bring in measures such as unemployment insurance & old age pensions & help for the sick, disabled & needy

Answer 15

**Sorting out the banks** - Since 1930, 5000 + banks had closed. Roosevelt ordered all banks to close for 4 days, while Congress debated & passed the **Emergency Banking Act** (which gave the government power to only reopen safe banks) and the** Securities Act** (which improved regulation of share trading). Banking system confidence was restored. **Ending Prohibition** - began to take steps toward the end of prohibition - legalized light alcohol (Beer-Wine Act). American morale was boosted. **Fireside Chats** - Radio broadcasts where FDR spoke directly to the American people, they were warm and informal. This helped rebuild confidence, explained government actions and combat fear and misinformation. **Set up the first wave of alphabet agencies**

Answer 16

Answer 17

The 1st New Deal wasn't working as FDR had hoped. FDR was facing a barrage of criticism. 14 March 1935 - FDR meets with a group of senators to discuss his ideas about fixing the issues. FDR presents the leaders of Congress with a huge of laws - this was known as the Second New Deal.

Answer 18

Reform & not recovery or relief (like the first New Deal) 2nd ND was aimed at areas that affected ordinary people.

Answer 19

Criticism from the left - people like Huey Long and Father Coughlin siad that not enough was being done. Supreme Court Opposition - Some 1st ND laws were deemed unconsititutional, so FDR needed new laws to keep reform going. FDR wanted to be gain more support for the 1936 election.

Answer 20

They argued that the ND had gone too far. - They compared it to Stalins 5 Year Plan. Some said FDR was communsit. - Thye argued that higher taxation (on the wealthy) was un-American - They thought that FDR had set up Federal dictatorship & had taken too much power to the presidency. They had some success - cut funding for relief programmes from 1938 and blocking a housing plan in 1939

Answer 21

-They disliked the 1935 law that recognised unions in the workplace. - they felt the government had become anti-business by offering good wages & driving up costs. - They thought that taxpayers money was being wasted on bureaucracy They set up the American Liberty League in 1934 - organisation that was anti-New Deal. They distributed leaflets, held speeches and dinners. They were unpopular.

Answer 22

Huey Long | Not enough wealth redistribution | "Share Our Wealth" program - assasinated in 1935 Father Coughlin | Favored big business/banks | Nationalize banks, issue more credit - thought bankers (Jews) were controlling New Deal Dr. Townsend | Ignored the elderly | Pensions for over-60s ($200/month) who would quit work, spend this money and free up jobs for younger people- no proposed funding

Answer 23

**Wagner Act (1935)** | Gave workers the right to form trade unions and collective bargaining. **Social Security Act (1935)** | Set up pensions for elderly, unemployment insurance, help for disabled. **Works Progress Administration (WPA)** | Employed millions in public works (e.g. building roads, schools, even hiring artists and writers). **Resettlement Administration (RA**) | Helped poor farmers, moved families to better land, offered loans. **Rural Electrification Administration (REA)** | Brought electricity to rural areas – helped modernize farming. **Banking Act of 1935** | Strengthened regulation of banks and gave the federal government more control over monetary policy.

Answer 24

4 brothers who ran the Schechter Poultry Corporation where arrested in 1934 on 60 counts of violationg the code fir selling poultry in NYC - these had been drawn up from the NRA. They were convicted of 20. They appealed and the Supreme COurt deemed that the NRA was unconsitutional and said Congress or the President do not have the right to interfere with inter-state trade. However this was a pyrrhic victory.

Answer 25

The New Deal did not end the Great Depression, but it was a major step in relieving suffering and reforming the American economy. It restored faith in democracy, prevented the collapse of capitalism, and created a more active government role in American life. Many of its reforms (like Social Security) are still in place today. However, many believe that American industry was revitalised by WW2 and it was WW2 that lifted the US out of depression, and not FDR.