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Great Depression Unit Study Guide

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									Great Depression Unit Study Guide
 The Great Depression: Political and economic causes in the Americas
 Nature and efficacy of solutions in the United States: Hoover; Franklin D Roosevelt and the New Deal; critics of the New Deal.
 Canada: Mackenzie King and RB Bennett
 Latin America‘s responses to the Depression: Getulio Vargas; Import Substitution Industrialization (ISI)
 Impact of the Great Depression on Society: African Americans, women, minorities
 The Great Depression and the arts: photography, the movie industry, the radio, literary currents.

The Great Depression: Political and economic causes in the Americas
United States-
Stock Market Crash
Bull market The surge of the market began in 1927. Brokers‘ loans increased from little over 3 billion to 4.5 billion by the end of
December. Conservative Bankers urged causation but Coolidge thought it was fine. This speculation drove up prices. Industrial stocks
were trading at 16 times their earnings where the traditional ration was ten to one. Brokers‘ loans were now at 8.5 billion. General
opinion was that we experienced a general panic. On the 29th 16.4 million shares exchanged hands. There was a loss of 40 billion
dollars. Most investors thought Stock Market was unreasonable inflated. ―Black Tuesday‖- John Garraty called the ―Most devastating
day in the history of the New York Stock Market.‖ October 24th and October 28th but the 23rd started to show the cracks and really this
was a slower process than many have indicated. A combination of margin calls and other large investors deciding the boom was over.
Dow Jones dropped 21 points in 60 minutes. Scholars agree that the collapse had little to no impact on Industrial Activity.
Psychological Impact: Discouraged investors and consumers. The essential fact of that American prosperity was in large measure
dependent up on the smooth functioning of the basic cogs of the economic machinery – world trade, investment in capital plant and
equipment, the construction industry, and production of automobiles. The oil that lubricated this economic machinery was confidence
that goods could be sold and investments would yield a profitable return. The stock market crash severely shakes the confidence of
the business community which limited investment, slowed industrial explanations and shrunk American purchases. The fragile
economy was heavily dependent on confidence and the spending and investment of the well-to-do. Crash cut both of these.
Theories on the reason for the Depression:
Keynesian Explanation: GD was caused primarily by a fall in total demand so severe that only the government spending could restore
it. Hoover further hurt this by keeping a balanced budget for the first couple of years. FDR did increase federal spending but when he
stopped in 1937 it seemed to prove this theory. The huge increase in government spending for WWII seemed to help the economy out
of its problems.

 Topic                     Author     Thesis                       Quote                                 Evidence to support
                                                                                                         conclusion
                                      The role of the great        “The American economy had begun       -Stock prices weren‟t
  Stock Market Crash &




                                      stock market crashes is      to decline during the early summer,   unreasonably high.
   influence on the G.D.




                           Garratty   exaggerated in the cause     well before the crash.”               - mostly a psychological
                                      of the G.D                                                         effect

                                      The stock market crash of    “Once a sizable number of important   - Depression results in drops
                                      the 1920‟s was a long        investors decided the boom had        in expenditures
                                      process of depleting         ended, it had ended.”                 (consumption) because of mal
                           MacElv     confidence, not a collapse                                         distribution of income over a
                            aine      after several days.                                                long period of time.

Monetary Explanation: GD originated in the fall of demand but its length and severity are the results of the unwillingness of the FRS
to prevent bank failures and to maintain a large supply of money. They blamed the conservatives who allowed banks to failure rather
than supporting the banks the way they were designed to. Other historians have sense come along and blamed the structure of
Federal Reserve which was decentralized and FDR reorganized them giving power to the central board and the chairman. Banking
Crisis Panic of 1907-Federal Reserve Act of 1913- set up a series of banks. Between 1930-1933- 9,000 banks failed. Banking
resources went from 72 billion to 70 billion by June 1931 but from June 1931 to June 1932 resources shrunk to 57 billion and 9 billion in
deposits. 60% of the failing banks were rural. Related to the over expansion of small rural banks in the twenties as well as to the
depressed state of American Agriculture. By the end of 1933 many states were declaring Bank Holidays. Gov of Nevada closed state
banks. Huey Long, the governor of Louisiana followed suit then the governor of Michigan called for a moratorium. When Roosevelt was
inaugurated in 1933 banks were either closed or severally restricted in 47 states.

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3. International Explanation: Part of a larger global depression but it was more severe in the US because the US stayed with gold
standard.
The Problem: At the end of the World War I, France and England had demanded that Germany be forced to pay heavy reparations.
Similarly, the Allies owed large debts to one another, one of the greatest creditors being the United States. These reparations and
debts, British economist John Maynard Keynes had warned, would ultimately destroy the entire European economy. By 1929 Germany
was unable to pay its debts, relying instead on high inflation to keep its economy running. Unable to collect from Germany, France and
England were unable to repay the United States, and none of the three was able to buy American goods, in a cycle which ultimately led
to the American collapse.
Dawes Plan- Reduced the war debts to a manageable size; commission reorganized Germany backing system and arranged a large
loan so the country could return to the gold standard... Secretary of State Charles Evans Hughes help design a program that from
1924 to 1927 where US loaned 3 billion to German and received 2.6 billion back in Allied debt payments. The most crucial barrier to
U.S. economic health was the unstable character of the international economy following World War I (1914-1918). Before World War I
the United States had been a debtor nation, but between 1914 and 1919 there was a major change. The United States had become the
world's leading creditor; the war also propelled most of Europe's economies into a state of collapse and they could not pay their debts.
By the end of the war the private debt owed by Europeans to the United States equaled nearly $3 billion, and the public debt owed by
foreign governments to the U.S. government was $10.3 billion.
Failure of international trade: Tariffs: Republicans believed that the tariffs are essential to protect US businesses. The
Fordney-McCumber Act (1922) 38.48 The Hawley-Smoot Act (1930) created the highest-ever schedule of tariffs for foreign-made
goods. Had pledged to help farmers by raising tariffs on imports of farm products. Very specific %s the average being 41.14%. Other
nations responded and made it hard to then survive. Great Britian had long been the lender of last resort and was the financial leader
of Europe but WWI moved that Title to the US but they did adopt the trade friendly policies that US
The United States fails to act. To deal with this potentially disastrous situation the United States could have forgiven public debts and
adopted a trade policy designed to encourage exchange, but the policy that was followed was exactly the opposite. The United States
demanded that foreign governments pay their debts in full. At the same time, the United States raised tariff rates, which undermined
trade. This resulted in a favorable balance of trade for the United States and an increasing trade deficit for Europe. It was only
because of massive investments by U.S. businesses, which amounted to about $1 billion per year between 1919 and 1930 that Europe
was able to make up the deficit. Thus the international financial structure came to be almost entirely dependent upon U.S. businesses
and banks. This European reliance on U.S. investments was a system that could operate successfully only as long as the outflow of
U.S. capital continued. With the boom in the stock market many investors kept their money home. This combined with the US tariffs
left Europe in an untenable situation so when Alstat failed in Austria this triggered a sequence of events that had most European
governments abandon the gold standard.
Gold Standard and the Bank of England: In a related development, the Bank of England in September 1929 had raised the discount
rate of interest, primarily to stabilize England's economy by restricting the flow of gold to the United States. British investors saw an
opportunity in the U.S. stock market, and the Bank of England wanted to stop the outward flow of gold. In the United States, President
Hoover encouraged the Federal Reserve Board to raise its interest rate to 5 percent in June, to 6 percent in August, and to refuse
discounts to banks which were mainly lending to stock investors. This further constricted the economy and contributed to the collapse.

Another international Problem:.

4. Misdistribution of Wealth-McElvaine
Distribution of Wealth: The nation's total realized income rose from $74.3 billion in 1923 to $89 billion in 1929. Uneven distribution of
the Wealth broadened during the Twenties. According to a study done by the Brookings Institute, in 1929 the top 0.1% of Americans
had a combined income equal to the bottom 42% That same top 0.1% of Americans in 1929 controlled 34% of all savings. Nearly 80%
of the families had no savings-21.5 million households. Automotive industry mogul Henry Ford provides a striking example of the
unequal distribution of wealth between the rich and the middle-class. Henry Ford reported a personal income of $14 million in the same
year that the average personal income was $750. By present day standards, where the average yearly income in the U.S. is around
$18,500. Mr. Ford would be earning over $345 million a year! Between 1920 -1929 disposable income for all Americans rose 9%; for
the top 1% it increase 75%. By 1929 15,000 families in the United States with incomes above $100,000 per year received as much
income as 5 million to 6 million families of poorly paid workers. That same year the top 5 percent of income earners in America held
33.5 percent of the nation's total wealth.

Reasons for Misdistribution of Wealth:
Productivity outpaced wage growth. 1929 worker output per worker in manufacturing leaped forward 43%. Corporate profits rose 62%
but workers wages only went up 11%. Some industries lagged behind: Farmers, Mining and textiles: Some industries lagged behind:

                                                                                                                                       2
In the mining industry, for example, although output per man rose 43 percent between 1920 and 1929, yearly earnings fell from $1,700
to $1,481. Farmers never recovered from the recession of 1920-1922. The relatively impoverished condition of American farmers, who
averaged 40 percent of urban laborers' income, meant that they could not afford to buy the consumer products--refrigerators,
phonographs, and radios--that fueled the boom of the 1920s. In 1920 Farmers were 22% of the population and received 15% of the
income. Eight years later in 1929 annual income of farm persons was $273 to $750 for everyone else. Such differential distribution of
wealth had several consequences. It meant that the majority of Americans, like the farmers, could not afford to buy the consumer
goods of the period, leading to large-scale overproduction.


Other Issues: Consumer debt rose from 1.38 billion to 3 billion which left consumers with lower purchasing power. Overproduction
of goods caused by the belief that demand would continue to consistently rise. Advertising and other social forces convinced people to
consume rather than save. By the end of the decade 3 out of every 5 cars and 80 % of the radios were purchased on installment credit.
Put off the problems as but made the collapse worse as people were spending part of the salary and purchasing power on past
purchases. Speculation on stocks and land artificially raised prices and when they collapsed, investors lost large sums of money.
Republican Policies caused problems as they furthered the gap between the rich and the poor. Secretary of the Treasury from 1921
to 1932. In response to his demands, Congress repealed the excess profits tax and reduced the rates for corporate and personal
income taxes. Mellon provided business leaders with a list of tax loopholes which the IRS had drawn up at Mellon's request. Saved the
rich up to 25% on their taxes. Carnegie steel got a 15 million dollar tax refund. Cut the working class taxes by 3% to 4%. Income of 1
million would lower your taxes from 600,000 to less than 200,000. Mellon‘s own income was higher so he saved several hundred
thousand. People felt the working class should have most of the tax burden through sales tax. The federal government had created
the FTC to regulate big business and to look into unfair trade practices, but the commission did less and less of this in the 1920s. As
Secretary of Commerce and as President, Hoover encouraged price-fixing and believed that the government was responsible for
helping businesses profit. Federal Reserve-Filled with conservative groups of people and committed to the gold standard which means
you keep interest rates high.

Canada- Situation Canada was impacted worse than most countries. Canada‘s gross national product fell from $6.1 billion in 1929 to
$3.5 billion in 1933 and the value of industrial production halved. By 193330% of the labor force was unemployed, and 1 in 5
Canadians became dependent upon government relief for survival.

What caused the Great Depression? There are five major reasons why Canada fell into the great depression. One, prosperity was
unevenly distributed: Prosperity was unevenly distributed. When the depression hit countries around the world, demand for
Canada‘s products fell. Fish in the Maritimes and wheat in the West were especially hard hit. Industry in East (Maritimes) went through
an industrial explosion after 1870 and when MacDonald took over the Canadian government With the end of customs tariffs there was
no longer a market for their products, while in the absence of transportation subsidies costs exploded, and the region went through a
period of deindustrialization. Transportation costs hurt both the farmers in the west and the Maritimes. It was the central provinces that
received much of the boom of the 1920s. In 1928 the coal mining industry in Alberta was depressed. A market was available in
Ontario, if Alberta coal could compete successfully there with coal from the United States. Alberta members suggested a lower freight
rate to reduce the price of Alberta coal. Unskilled workers during the great depression made low wages; 60% of men and 82% of
women made less than $1000 a year.

Two Canada’s dependence on a few primary products and international markets for income. Canadian economy lacked
diversification. Canada‘s economy depended on a few basic products (staples) such as wheat, fish, minerals, and pulp and paper. As
long as world demand for these remained high, Canada would prosper. When the depression hit countries around the world, demand
for Canada‘s products fell. Fish in the Maritimes and wheat in the West were especially hard hit. Although Ontario and Québec
experienced heavy unemployment, they were less severely afflicted because of their more diversified industrial economies. There was
an over-reliance on resource-based industries. Most critically, about one-third of Canadians still derived their income from farming, with
wheat production being the most important. So when international wheat markets were good and there were bumper Canadian crops,
things were humming. However, when things turned, the entire economy suffered. Wheat prices began to decline sharply. Immediately
after World War One, a bushel of wheat fetched $2.45 on the world market. Ten years later, that price had fallen to $1.29 a bushel.
Four years later in 1932, it had plummeted to 34 cents. Argentina and Australia were producing wheat in large quantities the resulting
surplus drove prices down. At the same time terrible droughts on the prairies destroyed crops. Farmers could not pay mortgages.
Industries such as flour mills, railways, also slowed down without the production of wheat. That was a disaster for the Prairie farmers,
hundreds of whom lost their farms to the combination of the dustbowls that blew away their valuable topsoil and greedy banks that
foreclosed on their mortgages. Perhaps even more disastrous was that farmers now could no longer act as the vibrant consumer for all
those manufactured products coming out of Canadian factories.

                                                                                                                                         3
Three Canada’s dependence on the U.S.: Canadian—American trade continued to grow in the 1920s. By 1930 the United States had
invested some $4bn in Canada (more than twice the level of British investment). American companies circumvented the protective
Canadian tariff by establishing branch plants, and American business interests quickly became major players in the Canadian
economy, especially in the natural resource sector and in newer industries that had been sparked by the introduction of modern
technology.
Four high tariffs and consumer debt created by using credit to make purchases High Tariffs (aka import taxes) Americans on
imported goods (from Canada and the rest of the world) cut down the market. Canadians found it hard to sell their products south of
the border. Remember, the US is Canada‘s biggest trading partners. By 1932, international trade had declined by over 50% and the
resulting rise in unemployment was inevitable.
Five Credit Buying: The nation's productive capacity was greater than its capacity to consume. When prices fell, everyone panicked
because they knew they would owe a lot (because they bought the stocks on credit)
Brazil: Reasons for the Depression and Revolution:
In 1891 Brazil became a republic as the army and the elite overthrew the monarchy. In 1890 the population of Brazil was 14,300,000.
Of that group 42 percent were mulatos 38 percent white and 20 percent blacks.
Education: Only 17 % of the population from six to 15 went to school. There were only 12,000 in secondary schools and only 8,000 in
college. A huge gap existed between the educated elite and the illiterate masses.
Economy: in 1872 80% of the population worked in agriculture, 13 % in services and 7 percent in industry (mainly mining).
Coffee industry continued to go from 1850 to 1900 where sugar fell as it could not compete with its lack of technology. Rubber boom
between 1850 and 1880 as it made up 8% of the exports.
Government: Chamber of deputies and the senate. President as the executive and then the army.
Despite a long struggle the liberal elite took firm control with Sao Paulo taking the lead. Through out the 1890s Brazil‘s already
extensive foreign debt continued to rise. In 1896 and 1897 the increased supply of coffee on the international market
Political Development: Dominance of the Coffee Oligarchy of Sao Paulo and Minas Gerias that instituted policies that squashed
social and economic force of industrialization that saw growth during WWI. Political Crisis in 1920s showed some of the problems with
the ―democracy. In the Constitution of 1891 Coffee growers solidified power as they kept the provincial governments strong by having
the ability to tax exports and could rule over their province. So the monarch was replaced with democracy. Large landowner’s
maintained control from 1893 on and really kept policies that undermined the growth of industry by not expanding infrastructure,
investing in education, giving other incentives to businesses. Protected the coffee interests at the expense of the others and allowed
provincial governments to be dominated by oligarchies of the landed class. The President From 1894 to 1906 from Sao Paulo and
then the next from Minas Gerias. No official candidate lost the election as only 300,000 out of 17 million qualified to vote as if you
are illiterate you cannot vote. It was important to realize that although the electorate grew from the empire it was controlled by Colonels
(rural landowners.). Suppression of other movements: It is questionable how much the government suppressed industrial growth but it
dealt swiftly with dissent of both agricultural and industrial workers even deporting foreigners similar to Canada.
1922-1926- rebellions against Paulista president by the low ranking army officials demonstrated some of the problem. Also during
the twenties lesser states put forward candidates from other parties to show some of the problems people had with coffee oligarchy.
Sao Paulo: Good soil, migrant work force. Major producer of coffee, turned out 75 percent of its industrial and meat products, and held
80 percent of its banking resources.
Old Republic: Brazil changed at a frightening rate. As its population increased 162 percent between 1890 and 1930, it became more
urbanized and industrialized, and its political system was stretched beyond tolerance. Concern over the resurgence of labor activity in
the late 1920s was one of the factors that led to the collapse of the Old Republic in 1930 and to the subsequent significant change in
labor and social policy.
Economic Development: Finance: The Bank of London and its British counterpart owned more assets than the Bank of Brazil and
over half of banking transactions in Brazil were done by foreign banks. By 1928 Brazil has the largest debt of any Latin American
Country: 44 Percent of all debt in Latin America. Debt was created by government building infrastructure (ports and railways), support
coffee industry or to service existing debt. Much of Industry in the cities ran on electricity funded by Light, a Canadian company. Brazil
early on developed the sugar industry but as sugar burned through the land in the north. The power shifted south where coffee was
grown in a abundance. Brazil though was vastly underdeveloped country with vast untapped resources that only foreign companies

                                                                                                                                          4
were equipped to take advantage of but a growing movement in Brazil against foreign influence. It like an athlete who just starts
playing a professional sport. He is vastly gifted and dominates early on but is not able to go farther until he develops his skills through
hard work. Brazil in 1930 had a grouping of regional economies that exported their own specialty products to European and North
American markets. The absence of overland transportation, except for the mule trains, impeded internal economic integration, political
cohesion, and military efficiency.
No diversification in the economy. Completely reliant on coffee, rubber and cotton. Why are these only export crops? In 1902
rubber was 27% cotton was 5%, sugar was still 5% and the rest of the exports were coffee. National Government and Sao Paulo Gov
came to the aid of coffee growers. Defense of coffee 1. forbidding new coffee planting for 5 years. 2. Bumper crop in 1906 3.
valorization started borrowing money from Foreign banks so the government could by the excess coffee and sell it in a way to keep
prices up. Four-year gap between the time a coffee tree is planted and the time of the first harvest magnified cyclical fluctuations in
coffee prices, which in turn led to the increasing use of government price supports during periods of excess production. The price
supports induced an exaggerated expansion of coffee cultivation in São Paulo, culminating in the huge overproduction of the early
1930s. Valorization and dependence on Foreign Markets. The whole economic system was dependent on foreign investment and the
their markets. By 1930 the foreign loans were 1 billion and 200 million annually. To solve the coffee labor problem the states and the
fed gov encouraged and sponsored immigration however this really encouraged Industrial growth as the immigrants especially from
Portugal, Italy and Spain fueled some of the industrial growth. Put immigration stuff here. In a 1920 census 9 million workers and
1,200,000- 13.8 % were industries 1.5 in service industry and the rest agricultural. Large growth from 1872 when it was only 7%.
Immigrants brought changes. They were land owners they made food for the cities, grew cotton. Led to the growth of industry as they
both started businesses and led to a large labor pool that drove down wages and allowed industries to expand. Coffeemen also
spurred industrial growth. Created an internal market for manufactured goods. Supported investment in railways which gave needed
infrastructure still not enough. Promoted immigration it helped industry. Coffee exports provided the financial resources to import
machinery. The Cafeteria is bankrupt and cannot operate anymore. What is your response? What is the short effects? Long term
effects? World War I restricted trade (ISI) and Brazilian industrial production increased substantially. Already 80% of clothes were
made locally. Industries grew from 3,000 to 8, 8950 from 1915 to 1918. Why do think they grew so much during WWI? These
industries were mostly small food processing and textile shops. Mostly light industry. The government stressed the need for more
industrial independence from foreign producers and stimulated import substitution, particularly in textiles. But still supported the coffee
industry. Many of the factories were small, with an average of twenty-one workers. In 1920 about a million urban workers were
concentrated in Rio de Janeiro and São Paulo. Brazil was just beginning to develop its industrial base, but it was still mainly an
agricultural country with 6.3 million people working the soil.
Economic and social neglect
Industries geared toward the internal market: There was a strong group that grew tired of the government spending its money and
influence to keep a small group of coffee growers in power. More important for power though was that the Army was also growing tired
of the coffee oligarchy. Majority of the population was poor and illiterate. No education system, healthcare system. Lack of
economic infrastructure as most of the government money was spent on valorization. In 1860 Brazil had only 223 kilometers of
railroads; by 1885 this total had increased to 6,930 kilometers. The main rail link between São Paulo's eastern highlands and the ocean
port of Santos allowed for a rapid expansion of coffee into the center and northwest of the state. Feudal system that existed in the
outlying provinces. Warred with private armies and worked against any modernization.
Land ownership: 461 land owners held more than 27 million hectares of land, While 464,000 owned 15.7 million acres. Poor
agricultural practices led to declining crops- Slash and burn methods. Used manual labor with no mechanization. Immigration-
2,740,000 between 1887 to 1914, Brazil was subsidizing them to provide labor the coffee industry for the coffee industry actually led to
some diversification of agricultural products and led to the expansion of industry as many of these immigrants went to work in the cities.
The living conditions of urban workers were bad.- Led to unrest among the workers. Housing, transportation, sewerage, and water
supply trailed far behind the rapid population growth and produced serious public health problems. The clean-up campaigns at the
beginning of the century struck at the high incidence of yellow fever, malaria, and smallpox in Rio de Janeiro, Santos, and Northeastern
seaports. The city centers were made safer, but the workers who crowded into sordid "beehives" (cortiços --small crowded houses)
and favelas (shantytowns) suffered all sorts of ailments.


Why Vargas came to power.
It took grave political error and an international crisis to end the power monopoly exercised by the coffee oligarchy. Two
Major shifts that led to political and economic upheaval. The Paulista government was already starting to crumble because of social
and economic forces that they tried to keep in check and basically ignored them. Political elections of 1930 the coffee elite of Sao
Paulo had lost much of its support. So Washington Luis nominated Julio Prestes, a Paulista rather than a Mineiro like himself. This
                                                                                                                                              5
split the Minas Gerias along economic lines as the coffee growers were cool but the cattle ranchers were furious so they jumped ship
and went Rio Grande do Sul which included business, industrialists, middle class, and the tennnetes in the army. So Getulio Vargas
ran against Prestes. Now in typical Brazilian fashion he lost a rigged election. Vargas‘s running mate was assassinated. So the
military stepped in and deposed Prestes and allowed Vargas to take control. Washington Luis made the political error of selecting
another Paulista as his successor, the young governor of Sao Paulo Julio Prestes. The older groups protested that a young person
passed them and the polarization of Minas Gerais were no longer in alliance. Mendes Fradiqu once noted ―The twenty states of Brazil
are two: Sao Paulo and Minas Gerius. The non-coffee states protested that another coffee interest president would rule.
Wall street Crash of 1929 rather than just cause the depression in Brazil, it marked the end of the coffee elite
Coffee Prices, went from 22.5 cents per pound to 8 cents and Rubber prices plummeted. Both already had been going down. Inflation
was rampant and because Brazil was trying to keep value in their currency they joined the gold standard. The gold reserves were gone
by 1930. Brazil could not get loans as Europe and American financial systems were reeling from the crash. This killed the valorization
program and led to a complete collapse of Brazils ability to import.
Historiography: Wiiliamson hails the importance of the depression and he states that King coffee slowly lost power over time rather
than the perfect storm Burns seems to intimate that it was because of the political error and the depression at the same time that
caused the revolution. So What really happened in Brazil, a depression or revolution? Which is more significant the crash of the
economy or the fact that it lead to a social, political and economic revolution? What were the political and economic factors that led to
the economic collapse following the stock market crash?
IB Prompt and Mark Scheme for causes of the Great Depression.
13. With reference to one country of the region, analyze the causes of the Great Depression
and assess the political impact of the Great Depression on that country.
Causes. For the US, answers could include analysis of some of the following: stock market speculation, margin buying, price rigidity,
overproduction of consumer goods, shrinking foreign markets, weak farm economy, government policies, global economic problems.
For other countries, causes include conditions in the US and their impact on the hemisphere.
Impact. Answers will vary according to the country selected. The most general trend was the end of a laissez faire approach and an
increase in government participation in the economic life of the nation – and also the political life in some countries. Impact can be
illustrated in detail with reference to specific changes in the chosen country, e.g. details of increased federal powers, action and
agencies in the US.
Maximum of [12 marks] if only one part of the question is addressed.
[0 to 7 marks] for general narratives of the Depression.
[8 to 10 marks] for narratives of the Depression with little, or mainly implicit, analysis.
[11 to 13 marks] for focused comments on causes and political impact of the Depression.
[14 to 16 marks] for analytical, focused, balanced answers: may not address all aspects.
[17+ marks] for thorough analysis of both the causes and political impact of the Depression in the country selected, showing detailed
knowledge and insight.
    T                 Author       Thesis                                       Quote                                Evidence to support conclusion
                                   The only way to create enough demand to       “Unemployed remained                -GD length supports theory
                                   employ the whole work force was to           high…only when American              - Unemployment remained high until the
                      Keynes       increase the government spending to          government began to increase         1930‟s.
Causes of the Great




                      (Keynesian   compensate for the fall in demand. The       spending…for World War II did        -loss of demand cost jobs & killed hope
   Depression




                      theory)      federal reserve should print more $, not     unemployment begin to fall”          of rise in spending w/o work.
                                   raise taxes.
                                    The actions of the federal reserve system   “Federal Reserve System raised       -Discouraged loans/ raised again in 1939,
                      Friedman     caused and further perpetuated the G.D.      interest rates in early 1928”        1931
                      & Schartz                                                 “The federal reserve bank in         - Banks were reluctant to loan lots of $
                      (monetary                                                 1930‟s refused to support banks      that was set aside much of it wasn‟t
                        thesis)                                                 that they thought were unlikely to   used.
                                                                                pay them.”




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        Eichengree     The gold standard helped cause the             “Only after the newly elected       - Devalued dollar - prohibited owning
        n & James      international depression when there wasn‟t     Franklin Roosevelt abandoned the    gold.
        (internation   enough gold to go around. Increased            gold standard did recovery begin”
        al)            interest rates helped sever the flow of gold
                       out of the country. Less $ was loaned, debts
                       rose.
                       The GD started in the US (and swept world      “The depression was the result of   -Falling stock market made investors sell
                       wide). The stock market crash reflected the    a drop in autonomous                -Black Thursday
        MacElvain      fragile economy that relied on confidence to   expenditures, particularly
           e           function. The drop of consumption paired       consumption.”
                       with over production is on key catalyst for
                       the GD.

Nature and efficacy of solutions in the United States: Hoover; Franklin D Roosevelt and the New Deal; critics of the New Deal.
Hoover
As President: Philosophy: political philosophy upheld the traditional virtue of individualism but also recognized that economic realities of
the market and the modern industrial state could easily erode individual liberty. He envisioned an economic system that would be a
blend of individual entrepreneurs and a shared technological approach. This could be accomplished, he believed, through the
promotion of private associations that represented various trade, labor, and manufacturing interests. He believed in the volunteer
approach.

Volunteer approach towards Industry
Tax cuts to encourage volunteer efforts of business. In the State of the Union Address in December 1930, Hoover informed the joint
sessions of Congress that there would be enough of a tax surplus that year to offset tax cuts. On December 5, 1930, Congress passed
the tax cut bill and nearly $2.5 billion was earmarked for public works that would create 600,000 jobs.

November 1929- 19-27th Conference for continued Industrial Progress. Met with major leaders of all government agencies and
major sectors of the economy. Hoover was Optimistic and secured pledges to keep wages high avoid layoffs and create construction
jobs through building projects. Railroads pledged to do more construction despite lower investment. Industry leaders pledged to keep
wages high and avoid layoffs. Hoover asked Julius Barnes chairmen of Chamber of Commerce to create a committee to help manage
pledges made. Union leaders said they would refrain from demanding wage increases. He wrote governors of each state to spend on
building and construction projects now rather than later. Despite Hoover's efforts, the economic situation continually worsened.
Employers--faced with huge surpluses--felt they had to cut production. In September 1930 the United States Steel Corporation
announced a 10 percent wage cut, and other major firms soon followed suit. Similarly General Motors cut salaries by 10 to 20 percent.
Within days over 1.7 million workers were impacted.

Smoot-Hawley Tariff- The economy was not helped by the Smoot-Hawley Tariff, signed by Hoover on June 17, 1930. A tariff is a tax
or duty placed on goods imported from another country, protecting U.S. workers by assuring that U.S.-made goods will not be
undersold by foreign competition. At the same time, by taking foreign-produced goods off the markets, U.S. consumers are forced to
pay higher prices for the protected products. The bill's sponsors, Republican senator Reed Smoot of Utah and Republican
congressperson Willis C. Hawley of Oregon were fervent protectionists, men who believed that the U.S. economy had to be protected
from foreign competition by the government. The tariff involved 75 increases for farm products, and 925 for manufactured goods.
Hoover strongly opposed its high schedules, and retaliation eventually occurred. In 1932 the British responded by establishing its own
protective tariff within the British Empire, and other U.S. trading partners followed suit. As far as its domestic consequences went, it did
little to raise agricultural prices, something that Hoover sought above all.

Volunteer approach towards Banking
October 4, 1931 Hoover asked for private bankers to create the National Credit Corporation (NCC). He met secretly with Mellon and
40 lead bankers. To help with economic recovery, President Hoover calls on leading banks to organize into a voluntary credit
association later called the and pledges federal support to stem the growing banking crisis. By December 1931 the NCC had only
loaned $10 million.

Volunteer approach towards Agriculture
He called Congress into special session on April 15, 1929, and two months later the Agricultural Marketing Act was passed and
established an eight-man Federal Farm Board. Its purpose was to establish a $500-million fund that would makes loans to farm
cooperatives. The cooperatives in turn would control crop production in order to avoid massive surpluses and low prices. It also sought
ways to produce and market crops more efficiently. By the summer of 1932, having lost some $354 million in market operations, the

                                                                                                                                                  7
board conceded failure. In December 1932 it called upon Congress to regulate production directly. Hoover's farm program, with its
stress on voluntary cooperation, had failed.

Volunteer approach towards Labor
Fall of 1930 PECE. President’s Emergency Committee for Employment (PECE) was modeled after past successful efforts of
Hoover. It worked to be a clearinghouse of information and shared what was working with others. For example in New York‘s
Emergency Work Bureau that took donations from JP Morgan company and others to employ people to work on the city parks and
other city improvement. But given that this only employed 20,540 of the almost 400,000 unemployed. So as impressive as this
program is it does not even begin to address the problem. Governor of Michigan stated that everyone is doing all they can accept the
government yet the committee was trying to stay positive.

Hoover as Activist: At Hoover's prompting, Congress passed other relief measures. In January 1932 it provided $125 million for
Federal Land Banks. A month later it adopted the Glass-Steagall Act, making about $750 million of government gold available to
business. In July it passed the Emergency Relief and Reconstruction Act, which empowered the RFC to provide $1.5 billion in
loans for state and local construction of public works, to furnish $300 million in temporary loans to states otherwise unable to finance
relief measures, and to give $200 million to assist in liquidating closed banks. By the end of 1932, however, the RFC was so cautious
that only $30 million of the $300 million allotted to the states for relief had been spent, and none of that sum was allocated for public
works. December 7, 1931: Following the failure of the NCC, President Hoover submits a comprehensive recovery program to
Congress that includes establishment of the Reconstruction Finance Corporation (RFC) to provide federal financial support to the
banking system. January 22, 1932: Congress establishes the Reconstruction Finance Corporation. The RFC loans $90 million
to the Central Republic Bank of Chicago in an effort to avoid a collapse of the banking system. Home Loan Bank Act: Extended
credit to mortgage companies so that they could keep lending to home owners. With so many people unable to pay their mortgages
there assets were frozen.

Prompt and IB Rubric: Discuss Hoover’s response to the Great Depression.
Initially downplayed the Wall Street Crash and subsequent Great Depression as part of ―a natural economic cycle, the terrible effects of
which would simply have to be borne until better times arrived‖.
Believed that the federal government shouldn‘t intervene with the economy (laissez-faire).
To ease the suffering faced by many Americans he sponsored the ―voluntarism approach‖:
              o business leaders pledged to maintain wages and employment
              o called on municipal and state governments to create public works projects
              o established the Emergency Committee for Employment to coordinate voluntary relief agencies
              o persuaded the nation‘s largest bankers to establish the National Credit Corporation to lend money to smaller banks
                   and business
              o Cut taxes at home.
By 1932 changed tactics and used more decisive intervention measures and approved Congress‘ Reconstruction Finance Corporation
to provide loans to large economic organizations such as railroads and insurance companies. Signed the Glass-Steagall Act and
authorized legislation to provide federal money to state and local governments for public works programs.

[0 to 8 marks] at the lower end there is little knowledge of Hoover‘s response to the Great Depression. At the top end there could be a descriptive or
narrative account with some implicit assessment.
[9 to 11 marks] for satisfactory knowledge of Hoover‘s response to the Great Depression. There is a more explicit assessment of the response.
[12 to 17 marks] for this band a good and solid knowledge of Hoover‘s response is present and a critical assessment of his response to the Great
Depression is demonstrated within a structured essay
[18 to 20 marks] for an extra dimension such as a balanced and pertinent evaluation of different interpretations of Hoover‘s response.

 Topic         Author        Thesis                                       Quote                                Evidence
                             Hoover sought to create a business-labor     “Business cycles were not like       -increases of funding & decrease of
               MacElvaine    government partnership to reverse the        weather and were susceptible to      unemployment
      Hoover




                             GD. He moved swiftly and boldly in the       human remedies”                      -public works (1931) $700million
                             onset of the recession.                                                           -1932- Hoover conservative
                              Poverty was normal in the presidency of     “President Hoover‟s programs         -some of Teddy‟s New Deal ideas
               Romansco      Hoover. The GD challenged Americans          represented a new beginning, and     were borrowed from Hoover.
                             but Hoover‟s approach was so innovative      most beginnings tend to
                             that not even failure could taint it.        be…modest.”




                                                                                                                                                     8
FDR and the New Deal : “He pledged to execute the New Deal ―promptly, fearlessly, and generously‖
Brain Trust: Raymond Moley, A.A. Berle, Rexford G. Tugwell Hugh Johnson. All got posts in different agencies they help create.
Roosevelt persuaded Congress to give him emergency powers from 9 March to 16 June 1933 (the 'Hundred Days'). Although many of
Roosevelt's ideas were not new (some just copied Hoover's), 1933 - especially the 100 days - saw a burst of legislation to tackle the
Depression like never before.
The First New Deal: He got a group of people around him from universities to help him come up with the New Deal. They helped with
the campaign and then with the first new Deal. Second New Deal: Is a significant movement Left because of the protests and
organized masses that came to being in the 1934 congressional elections. Harry Hopkins, Felix Frankfurter, Brandies and others
pushed Roosevelt to go for a more liberal agenda as business was not going to work with him. He went for a program to provide
security and hope for the masses.
A. General Society: Confidence & Relief: Roosevelt undertook a series of measures to keep the American people on his side.
First New Deal abolished Prohibition. Roosevelt said: ‗I think this would be a good time for a beer‖. This restored faith in the
government because it stopped the humiliation of the government‘s laws being openly ignored. Congress at FDR‘s urging passed the
Beer Tax Act which increased the government‘s revenues. And allowed some people to have a beer. FDR triad to connect with the
common man through radio broadcasts called ‘fireside chats’ where he would explain his policies and programs. FDR made sure that
everyone who sent him a letter got a reply (he got up to 8,000 letters a day), and that everyone who telephoned the White House was
never cut off. First one was used it to help avert the banking crisis in March 12th 1933.
 FERA (Federal Emergency Relief Administration): provided matched funding to help states organize payments to the unemployed and
homeless.
Budget- Economy Act of 1933 CUT the pay of government employees by 15%. He did not want to run deficit budgets (i.e. it did not
spend more than it gathered in taxes). The government borrowed huge amounts of money to finance the New Deal, but it spent it on
projects that were planned to pay back eventually.
General Society: 2nd New Deal
Social Security Act (1935): Provided America's first system of social welfare. Set up a national system of unemployment insurance:
Federal gov. offered to partner with the states to take care of existing 65 year olds. Compulsorily tax of the wages that would then give
out 10 to 85 dollars in 1942. Offered Federal Aid to states to take care of the physical disabled, the blind and dependent mothers and
their children
Wealth Tax Act (August 30, 1935): The Wealth Tax Act included a small corporate tax and a small inheritance tax. The goal of the act
was to redistribute some of the wealth concentrated among the very rich in order to benefit the vast majority of Americans who were
not rich. The act made income taxes progressive, which meant that the wealthy would be taxed at a higher rate than those with lower
incomes. (Progressive income taxes are still in effect in the United States in the twenty-first century.) The passage of this tax bill
confirmed President Roosevelt as a representative of the working class.
Stimulate Economic Recovery through reform and control of supply: His philosophy was to create close cooperation between
workers farmers, businessmen and assure fair distribution of goods and incomes. Scorned the ideas of stimulating foreign trade and
encourage new investment as the American Economy had reached full maturity.
Finance Industry- First New Deal
Bank holiday to the Emergency Banking Act closed the banks for four days and forbade the export of gold and gold payments. His
second day of office the government checked that all were financially sound, and when they reopened, they reopened with the
backing of the Federal Reserve. This restored confidence in the banks, and people deposited their money there again. RFC gave 1
billion in aid to 6,468 banks from 33-35 that were considered sound. Liquidated 2,352 banks and lost almost 3 billion.
Roosevelt believed that he had to make sure that the economy was ‘sound’. Currency Reform: forbade citizens owning gold from
different people national gold standard at home but retained gold bullion banking for international exchange. He decided to go for
inflation. He decided to devalue the dollar to help people carry their debt burdens. Foreign Trade agreement in 1934 to try to increase
trade
The Home Loan Act and the Home Owners Loan Corporation-1933 did the same for ordinary home owners. 2 billion and by 1935
5 billion to help urban homeowners to refinance to prevent foreclosure. They helped 1 million homeowners stay in their homes.
Federal Housing Administration: 1934 large role in the resumption of private construction by giving out long term loans of 554,000
loans totaling 2.3 billion for new construction.


                                                                                                                                        9
Stock Exchange Truth in securities act: Needed to be truthful with value and have to give complete information on securities/stocks.
The Securities and Exchange Commission introduced rules for the Stock Exchange to prevent another Crash like 1929.
Banks: 2nd New Deal Banking Act of 1935: which centralized banking by giving more power to the Federal Reserve Board and the
chairman so that monetary policy is consistent and the FRS could then act as one.
Industry
Industry- First New Deal NIRA Black Bill- 30 hour work weeks. Chamber of Commerce had a plan to have industries work together
through a national council of industries and business. The plan would stabilize wages, prices and production. The Brain Trust: created
NIRA to reconcile the two plans. Moley, Johnson and Tugwell have the same goals as the Chamber of Commerce plan but would do it
through federal control with codes for industry, business, labor and the public. In the event of problems the president could step in.
Then established the NRA with Johnson in charge. The NRA (National Recovery Administration) was set up, where businessmen
joined a ‗Roll of Honour‘ (and were allowed to show a blue eagle symbol) where they promised to cut production and pay good wages –
2.5 million firms, employing 22 million people, joined the scheme. Established 557 basic codes and 208 supplementary codes. The
codes discriminated against small producers. So they pushed code enforcers to take a broader look at the goals. This brought conflict.
There was little evidence of problems with small business but the uproar forced the president to get Clarence Darrow to investigate and
instead he went after the NRA. Johnson was forced to resign and was replaced with a board. What went wrong: Had some bad
assumptions which led to failure. Number 1: Assumed business men would regulate themselves instead of trying to take advantage of
the NRA. Number 2 Assumed that full production could be achieved by outlawing price competition. This constricted the economy and
did not encourage new investment and a massive increase in production. So it impeded economic growth rather than encouraging it.
Industry- 2nd New Deal Series of acts which replaced some of the banned NRA codes. Guffey Snyder Coal Conservation Act of
1935 which salvaged the codes for bituminous coal code and gave the NRA authority. Alcohol control Act: which reestablished NRA
codes for Alcohol. Federal Power Act of 1935 that enlarged the Federal Power Commissions authority and control over the power
industry

 Agriculture:
Agriculture: First New Deal: Farm Holiday Association threatened a strike if Roosevelt did not meet their demands. In Iowa a furious
crowd of farmers dragged a foreclosing judge from his bench and beat him senseless. He created the Farm Credit Association and
gave them new credit. Frazie- lemke farm Bankruptcy Act. Allowed farmers to get back property on easy terms. The Agricultural
Adjustment Act (AAA) in 1933- establishes and maintains a balance between price and production. Paid farmers to take fields out of
production; the idea of this was to stop over production and to drive up prices. Got southern farmers to plow under 10 million acres of
cotton. Destroyed 220,000 sows and over 6 million pigs. But farms just tried to get more out of there remaining crop by heavily
fertilizing it so the cotton production did not diminish but grew. Bankhead cotton act allowed them to place quotas on crops.
The dust bowl droughts of 33 and 34 helped the AAA to reduce production in cotton, tobacco and to a lesser extent other staples. By
1935 farmers started to recover and saw growth in income from 1932 just under 2 billion to over 4.5 billion. The ratio of industrial prices
versus farm prices shifted in their favor.
Agriculture: 2nd New Deal: Resettlement Administration: established to take farms from sub marginal land and push a collective
approach which was already helping. But besides providing some assistance to farmers after the dust bowl nothing really got done
Rural Electrification Administration in 1935 to give out loans and use WPA labor to extend power lines into rural areas not served by
private companies. Did such a good job that its budget was augmented in 1937.? Soil Conservation Act (1935): Was created to
address the drought conditions of the Midwest and to replace the AAA. Gave subsidies to farmers to grow crops that conserved soil,
built wind breaks and established quotas. Helped farmers back to the prosperity level of 1937. To replace the banned AAA. Allowed
the government to continue subsidizing farmers. Bankhead Jones Farm Tenancy Act of 1937: reformed the Resettlement Admin to
the FSA with the job of helping enterprising tenants to becoming landowners, by rehabilitating small farms.

Labor
 Labor: First New Deal: Public Works: Congress set aside 3 billion for public works and projects: roads, tunnels, bridges, housing
projects, dams. PWA as part of NIRA. This could have been very effective had it been put right into circulation instead he Ickles in
charge. So created CWA- Hopkins as administrator Took 400 million. He gave living 4 million men and women employed in 30 days.
This organization built roads, airstrips, bridges and hospitals. Was liquidated in 1934 . CCC (Civilian Conservation Corps): provided
paid conservation work to give unemployed young men jobs – by 1941, 2.5 million had taken part PLUS millions of trees panted/ parks
and forest areas developed. 2nd New Deal WPA (Works Progress Administration)-1935 ran projects which provided work for the
unemployed, e.g. building airports, schools, hospitals or bridges – millions earned a small wage and felt valuable. NIRA: (National
Industrial Recovery Administration created the NRA): Guidelines for fair wages, hours and work conditions for industrial labor. FDR


                                                                                                                                        10
also abolished Child Labor – this put more adults into work.. TVA (Tennessee Valley Authority): Gave them money to build and
manage 21 dams in ten years – stopped flooding, and provide electricity to an area that did not have any electricity.
Labor 2nd New Deal: Emergency Appropriation Act: provided nearly 5 billion for the year to do public works. WPA was created to
administer the money and projects. This time Harry Hopkins had the real power. He was authorized to create projects to put people to
work. Projects were large airports to stone walls. 78% percent of the money went to public construction and conservation. The rest
went to a variety of community projects that put writers, artists and other white collar people to work. In pure economic terms it helped
return job rate and did not considerable add to national debt.
National Youth Administration 1935 as part of the WPA: Williams, the leader, was on the liberal end of the new deal so he wanted to
help both blacks and whites equally. Its purpose was to keep high school and college students out of the job market while giving them
skills to help them later. So 400,000 youth were getting weekly stipends to work as typists, laboratory assistants, libraries assistants,
tutors and other campus jobs.
National Labor Relations Act or Wagner (1935): After the challenges of the first New Deal Roosevelt abandoned the hope of working
with Big Business. The Supreme Court brought this bill about as they made NIRA unconstitutional,. Also known as the Wagner Act
this law was to replace the banned NRA. Protected workers' right to join a trade union. Set up the National Labor Relations Board
(NLRB) to prevent employers from victimizing workers.
Fair Labour Standards Act (1938): For workers engaged in interstate commerce. Mandated minimum wage maximum weekly hours
child labor standards . The law represented a departure from the policy of strict voluntarism that organized labor had supported prior to
the Great Depression. However, continuing concerns on the part of American Federation of Labor (AFL) leaders about the state
determining wage standards helped to shape a law that fell short of the aim of those New Dealers who wanted to require employers to
pay a "living wage."
 T                              Thesis                              Quote                                                              Evidence to support
                                                                                                                                       conclusion
                                The failure of the US to recover    “Private industry…could not take up the slack”                     -14.6% of the labor force
                                during times of peace leaving       “Since the Roosevelt administration had done nothing to            unemployed as ate as 1940
                                millions unemployed.                prepare doe the transition form government to private spending     -most recovery was successful
                        Best




                                                                    that John Maynard Keynes and other had warned them…”               because of stimulus furnished
                                                                    “The New Deal had been far too bust waging war against
 FDR and the New Deal




                                                                                                                                       to industrial enterprise not
                                                                    business to allow it the opportunity to prepare for any such       deficit spending.
                                                                    transition.”
                                FDR was revolutionary in            Only offered half a revolution, recognizing more minorities        - 1941- 6 million still
                        Leuchtenbe




                                approach, the first of a new era,   reforming society.                                                 unemployed
                                “but the New Deal left many                                                                            - 1943- war time needs finally
                                problems unsolved” and even          -“It never demonstrated that it could achieve prosperity in       lower unemployment
                        rg




                                created some new one.               peacetime”
                                WWII saved the U.S from the         The FDR administration became a transition period in which the
                        Wiley




                                Great Depression, not the new       depression crisis demonstrated that the transitional role of the
                                reorganization of gov‟t             sate intervention was inadequate to deal with the weakness of
                                                                    capitalism as it developed after WWI.


Critics of the New Deal- Use your handout from the Presentation
Challenge of the Court: Black Monday May 27th1935 Supreme Court started to exercise judicial review to nullify of New Deal.
Louisville Joint Stock land bank v. Radfors, the court nullified the Frazier-Lemke Farm Mortgage Act. On the ground that it deprived
creditors of property without due process of law. In Humphrey‘s Executor v. United States the majority reprimanded the president for
removing William H. Humphrey, a reactionary republican from the FTC. In 1935, in A.L.A. Schechter Poultry Corp. v. United States, the
Supreme Court declared the NIRA especially the NRA unconstitutional . In reviewing the conviction of a poultry company for breaking
the Live Poultry Code, the Court held that the code violated the Constitution's separation of powers for two reasons.1st written by
agents of the president. The codes exceeded the power of Congress. Roosevelt's poultry code fixed the maximum number of hours a
poultry employee could work, imposed a minimum wage for poultry employees, and banned certain methods of "unfair competition."
Schechter was charged with selling sick chickens. He would purchased live poultry from commissioners in New York City and
Philadelphia that had been declared unfit. He then slaughtered the poultry and sold it to retailers and butchers in Brooklyn. Schechter
Corporation v United States of America. All the justices including the liberals agreed that the NIRA was unconstitutional, on the ground
that the statute conferred essential legislative authority on the President and that the corporation involved in the case was engaged
only in intrastate commerce. Schechter Poultry's sweeping interpretations of legislative power had devastating effects on President
Roosevelt's New Deal programs in the 1930s. The centerpiece of the New Deal legislation, the NIRA, was essentially declared
unconstitutional. FDR said the danger in this decision lay in the court‘s narrow view of interstate commerce as consisting only of good
                                                                                                                                                                    11
in transit. ―How could the Federal government seek to remember any national economic problem if this definition of interstate
commerce is so narrow. Who is the Supreme Court?
Who is the Supreme Court: Many of them were appointments of the Republican Presidents before him. Chief Justice Charles Evans
Hughes, Owen Roberts were considered moderates then the Four horseman were stalwarts of the Laissez faire system. The liberal
minority was Louis Brandeis, Cardozo and Stone.
United States versus Butler: on Jan 6th 1936 held the AAA was unconstitutional. AAA provided payments to farmers who agreed to
reduce production acreage; these benefits were paid from the proceeds of a tax on commodities processors. In a 6 to 3 decision, the
Supreme Court found that while the tax itself was justified under the "general welfare" clause of the Constitution, its intended use was
"coercive" and thus unconstitutional. AAA violated the Tenth Amendment by attempting to use the taxing power to regulate agricultural
production—a matter that the Court determined was the sole jurisdiction of the states. It was a strained decision but its meaning was
clear: the production of agricultural commodities was local activity, not interstate commerce. Therefore Congress could not use the
taxing power to regulate agriculture.
Then in 1936 Carter v. Cater Goal Company rendered an opinion invalidating the Guffey Snyder Coal Conservation Act. Said coal
mining was also a local activity. The court basically said the Federal government does not have the power to regulate Manufacturing,
Agriculture, Mining and labor conditions. But then the court on June 1st then denied the States right to regulate hours and wages of
workers. This had created an intolerable constitutional situation by the summer of 1936 as most of the second New Deal will be struck
down.
Lower Federal Courts filed no less than 1,600 injunctions against New Deal agencies that the NLRB and the SEC were shutdown. So
was the court in the right here? Or were they over stepping their bounds by so tightly defining the right of government?
FDR then submitted the Judiciary Reorganization Bill on February 5th 1937. It empowered him to appoint a new Federal Judge
whenever an incumbent failed to retire in 6 months. The whole plan of course grounded on Roosevelt‘s control of the Democratic
majorities. But this bill created a rupture in the Democratic Party because Roosevelt did not consult the members of congress. He then
refused to listen to compromise. Roosevelt backed down and Hughes convinced Roberts to vote with him on the side of the New Deal.
Right after the fight over court packing Roberts joined the progressives to uphold a Washington State minimum wage law that one year
early he had went against a similar law in New York.
Impact of the Critics: What changes did the critics force in the New Deal? In 1935, Roosevelt's New Deal was still hugely popular with
the people, but it was running into opposition (see next page for greater detail). How FDR Saved Capitalism. First, he responded to the
various out groups by incorporating in his own rhetoric many of their demands. Franklin Roosevelt demonstrated his skill at co-opting
the rhetoric and demands of opposition groups the year before his 1936 reelection, when the demagogic Senator Huey Long of
Louisiana threatened to run on a third-party Share-Our-Wealth ticket. Second, he absorbed the leaders of these groups into his
following. These reflected conscious efforts to undercut left-wing radicals and thus to preserve capitalism. In 1937, Philip La Follette‘s
executive secretary told Daniel Hoan, the Socialist mayor of Milwaukee, that a national third party never would be launched while
Roosevelt was ―in the saddle,‖ because Roosevelt had ―put so many outstanding liberals on his payroll [that] . . . any third party
movement would lack sufficient leadership.‖

Canada: Mackenzie King and RB Bennett: Lecture on Canada during the Great Depression
The depression started with King and he approached the same way he approached the depression in 1921. He loosened credit; kept
the budget balanced and let the states handle relief as it is laid out in the BNA. He just used that as an excuse that there was little he
could do."Mr. King promises consideration of the problem of employment. I promise to end unemployment. Which plan do you like
best? ―
Bennet: Two major actions when Bennet first takes office. Gave 20 million for relief to the provinces to give out. With the Federal
budget was only 500 million was a sizable sum. However he did not have a quick plan to put it into action. He then created a simplistic
50% Tariff. The tariff was put into action quickly but did not meet the needs of every industry. Export industries like fishing, wheat,
beef, pulp, and paper were hurt as they could compete at home and needed to export to grow. It became obvious that it was not the
manufactures that were hardest hit but the natural product industries.
Bennett takes limited action
Ottawa Conference 1930: Made agreements with Great Britain and other commonwealth nations. This preserved an export market but
it did little to bolster the prices of farm products. Britain could not absorb their entire surplus primary product. Bennett spent over 100
million on farm and unemployment relief- he wanted to do infrastructure projects but he did not have the money to keep up with relief
and do the other expenditures. By 1932 there were 70,000 unemployed transients

                                                                                                                                         12
―In Sudbury, Ontario, Liversedge and other recent arrivals were confronted by the harsh surprise of the Canadian winter, and by the
crowded conditions of the local jail when they were picked up for vagrancy. After serving 30 days, they sought refuge in the city's only
soup kitchen. It was in a dimly lit basement and the men stood around tables to eat. "The atmosphere was like that in a chilly moldy
crypt. The tables were covered with ice and beans and pieces of wet bread. The meals were always the same. The exception was the
shooting of a bear by a Sudbury businessman who gave the bear to the city who then sent it to the soup kitchen with the result that a
few hundred men suffered violent diarrhea." Liversedge continued west. He took a train to Winnipeg, but couldn't find work there. In
Saskatchewan, he found a farm job for the summer then went on to Calgary. As the Depression deepened, unrest grew among this
jobless army. The federal government seemed indifferent to their plight. And financially strapped local governments refused aid single
homeless men between 1932 and 1936.
So Bennet put together relief camps. The men cleared bush, built roads, planted trees, erected public buildings in return for room,
board, medical care and 20 cents a day. They were paid one-tenth of what an employed laborer would make doing the same work.
Prime Minister R.B. Bennett became so concerned about their mounting anger that he established a system of voluntary work camps in
1932. Liversedge ended up in a work camp in northern British Columbia. But the camps only fuelled the flames of frustration and soon
Liversedge and thousands of other jobless transients would organize and demand the government's attention.
While the Bennett government hoped the camps would ease the unrest, they became a focal point for the men's anger. The young men
were frustrated that the government could not provide them with meaningful work. By 1935 there were major protests. Workers
organized and marched on Ottawa. The movement launched months of cross-country protests, which culminated in a riot in the
streets of Regina when Bennett ordered the railroad to stop carrying the protestors. Bennett then ordered the Mounted Police to
disperse the protestors which resulted in violence. A year later, with a change of government, the unpopular relief camps were shut
down. Some of the men found temporary work but most returned to their wasted lives in the cities. In all, 170,248 men had stayed in
the camps.
 Bennett the Man- He gave money from his own wallet to Canadians who wrote to him and returned every letter that people sent to
him. He worked 14 hour days and stayed committed to his policies. Yet people viewed him as a callous millionaire.
Bennett’s New Deal: January 1935 Bennett did a series of give radio broadcasts that basically outlined a New Deal. ―In the last five
years great changes have taken place in the world... The old order is gone. We are living in conditions that are new and strange to us.
Canada on the dole is like a young and vigorous man in the poorhouse ... If you believe that things should be left as they are, you and I
hold contrary and irreconcilable views. I am for reform. And in my mind, reform means government intervention. It means government
control and regulation. It means the end of laissez-faire.‖
  Many of his cabinet and party were hearing of the New Deal for the first time which was typical of his top down leadership style that
really alienated many. In the speeches he referred to unemployment insurance, minimum wages and scaling down mortgages. This
brings in the BNA of 1867 which gave these powers to the Provinces. Now this really needed to happen given that BNA was not
working as the Federal Government had all the money and the Provinces all the social responsibility. Given how wide spread it was
they did have the money to deal with the need. He promised Anti-combination legislation. These ideas were not new but what was new
was conservative like Bennett was pushing them forward. Bennett though was really only trying to preserve capitalism. Legislation
included the Natural Products Marketing Act (1934) and, a year later, the Minimum Wage Act, the Limitation of Hours of Work Act, the
Dominion Trade and Industry Act and the Employment and Social Insurance Act. Natural Products Act the Act allowed for provincial
marketing boards of all farm products except grain, and for other natural products such as lumber and fish, its original intentions were
humbler. It was at first intended to apply only to dairy products and fruit, but because of the difficulty of defining the exact range of
products, the drafters avoided the problem by including everything in the bill and leaving the detailed definitions to the administrators of
the schemes. Eventually most of this legislation was disallowed by the British Privy Council as being outside the constitutional powers
of the federal government to enact. Would centralize power and bring the government more into the economy. Bennett‘s brother-in-
law was in the US and reported that the New Deal was failing but it had a good psychological effect on the Society. So Neatby argues
that he was really going for this psychological effect anticipating the need in the 1935 elections. In general, the London decisions took
from the Canadian Federal Government and wished onto the provincial governments of the Dominion many a charge and responsibility
so heavy that Prime Minister King will have to find new legislative means of having the Dominion bear them anyhow. Held
constitutional and valid the FCAA (Farmers' Creditors Arrangement Act). The uncertain character was shown by such cautious
references last week as that of the Montreal Star which said it "provided a means by which a farmer and his creditors might be brought
together for a settlement of debts along bankruptcy lines but without actual recourse to the Bankruptcy Court."
Two of the Acts that Bennet passed were effective. In July 1935 Bennett formalized Federal aid to wheat farmers with the Wheat Farm
Board Act. In 1934 he passed the Bank of Canada Act which created the BANK OF CANADA 1935 in response to the 1933 Royal
Commission on Banking and Currency. The Bank of Canada was at first privately owned, but was nationalized by 1938. Then to extend
aid to other farmers he passed the

                                                                                                                                         13
Analysis: He has been harshly criticized but maybe more of a product of his times of balanced budgets and retrenchment of old
government ideas. Even FDR smacked of this when he criticized Hoover for lavish spending and tried to balance the budget. A fairer
criticism of Bennett is that he alienated many Canadians and gave them the feeling that the government was on the side of the
privileged groups. He was too authoritarian and did not communicate well even in his own government. By failing to give Canadians
the feeling that his government was their government he alienated a large group of Canadians.


King: an opponent stated ―was unpopular in the house of commons and among most Canadians‖
So how did he win elections?
Worked with his cabinet and his party to find common ground. He originally saw the Depression as a temporary recession. His point of
view was to not obstruct and let economic law right itself. And he saw Tariffs as the worst kind of intervention. In 1932 he was strongly
against the tariff but moved towards credit buying. The East and the West liberals had different views. The west wanted inflation and
the East believed it to be immoral. King or Chaos: Won a resounding victory over Bennett and the CCF. Despite winning King had
nothing new to offer Canada. He was convinced that he could use similar policies to the ones he used in the 1921 depression. Trade
Agreement with the United States-free trade was expected to help Canadian producers of raw goods; this agreement did not have any
immediate impact. 1st Budget: no new expenditures and actually raised taxes on corporations and sales. Took steps to nationalize the
bank of Canada. Special programs for the prairies: marginal crop land was turned back into grazing land; The Wheat Board was kept
from Bennett but improvement lie in that crop failures and other problems in Canada and other places raised prices would get farmers
off relief. National Employment Commission: set up to try and help the federal government save money but b/c all the money was spent
by provinces they had no control so advised two things to happen: 1. National government should take over all unemployment relief
and recommended increase federal spending and lower taxation during depressed times. In 1937, after debate with his cabinet
authorized 25 million in public works. Budget of 1938 reflected this change in philosophy. He also gave low cost loans to local and
provincial governments and passed the National Housing Act to encourage the building of homes.
A turning point for Canadian politics where King embraces Keynesian spending for the first time. Move to more government
involvement in the economy. King actually amends the constitution in the 1940s to pass similar legislation to Bennett‘s New Deal
that leads to the welfare state of present Canada. Given the biggest problem was the BNA of 1967 which divided powers between the
two governments.
                                          Thesis                                                Quote                              Evidence to support conclusion
                                          Many historians are harsh because Bennett tried to    - “Bennett dominated his           - created the bank of Canada & C.B.C
                                          be a one man cabinet but if you look at his balance   government and his part while in   -50% treaty
 Canada: Mackenzie King & RB




                                          sheet as a common statesman he clearly made a         office, and when the party was     -1931 conference
                                          difference. Its not Bennett‟s fault he wasn‟t ahead   shattered and defeated he was      -excess production & their reliance on
                                          of his time.                                          loaded with the blame.”            export devastated the economy.
                                          -Bennett made more of a long term impact than                                            -Statue of Westminster
                               Neetby




                                          immediate difference by establishing the bank of                                         - Created work camps, very unpopular
                                          Canada, Wheat Board (1935)                                                               -mimicked FDR- fire side chats
                                                                                                                                   - program ruled unconstitutional 1935
                                          Bennett made a huge long term difference but not      “Bennett thundered „Mackenzie      -1933 23% unemployment
                                          many short term answers were offered. He              King promises you conferences; I
                               McNaught
 Bennett




                                          mimicked the New Deal implementing programs,          promise you action‟”
                                          but got little social favor.




Who is Vargas: A son of wealthy cattle ranchers down near the Argentine border. He initially joined the military. After a brief two year
career as a cadet Varges went to school to become a lawyer with eyes of being a politician. In 1924 he became the Finance ministry in
Washington Luis‘s government as patronage to his province. In 1928 Vargas was the governor of Rio Grande do Sul and had
distanced himself from Luis. He officially ran against Prestes the hand picked successor. He ran on the platform: Amnesty for the
rebels of 1922-1926 , new election laws, social legislation, a reorganization of the educational and judicial systems, and accelerated
economic development. Those planks seemed to promise change and modernization. He lost the election but the unrest was too large
for him to just back down and so he became the leader of the rebellion with the support of the army and the conglomeration of other
interests that rally around him. This group could be put under the banner Nationalists. This movement grew throughout the twenties.
His supporters were from all walks of life. Vargas led the revolt with the words, ―To re-acquire liberty, to restore the purity of the
republican regime, to achieve national reconstruction.‖ How revolutionary was this revolution? One Elite to another. One General
stated about Washington Luiz, ―No one wanted his son to put on a uniform and die fighting for a man frankly divorced from the common
interest.‖ Army officers at the capital stepped in and forced Luis to step down and gave power to Vargas to avoid Civil War
                                                                                                                                                                            14
Changes in Brazil: The old republic died with the October revolution but the old political machines and oligarchies still existed.
Currently three main groups pushed Vargas for power. Old style politicians that wanted power but had no ideology Tenetes who
wanted Vargas to hold almost doctorial power and they were willing to force his hand on this. Liberal constitutionalists who wanted a
new constitution and an elected group.
Provisional Government: His New government had four central differences from the oligarchies of the past
     1) Political autonomy by centralizing power with the Federal Government
     2) Economic policy slowly turned toward the promotion of industry
     3) Social policy tended to provide some sort of protection to workers
     4) Armed forces were given a central role in support of the creation of an industrial base and to keep internal order.
Political autonomy by centralizing power with the Federal Government & Armed forces were given a central role: Vargas first
steps were to consolidate power. November 1930 Vargas assumed both executive and legislative power. He worked with the church
to get greater control in the central government. Inventors Code: Each State would be assigned an inventor that would have executive
and legislative power. tate could no longer contract foreign loans without the consulting the central government. They could spend no
more than 10% on their state police. They could not supply their state police with equipment similar to the Federal military.
Reason for reforms: Obviously there are legitimate reasons to court the military.
In 1932 he survived a Civil War from Sao Paulo that might have included several other states including his home state. Why
revolution? Liberal Constitutionalists were frustrated by the lack of democracy or movement. Old Oligarchy for revenge, Other groups
upset about the inventor. Vargas tried to work with the pissed off coffee interests but they took his measures as weakness rather than
conciliatory and tried to revolt in 1932. The revolt was regional and did not include Sao Paulo‘s working class. The revolt was crushed
in 3 months but he did not punish its leaders because he felt Brazil needed a prosperous Sao Paulo. Why did it fail? Skidmore actually
points to Vargas intentionally alienating Sao Paulo by being slow to move towards a constitutional government and sending outsiders
to rule Soa Paulo. He gave out the olive branch by giving an Election Code, Calling for a constitutional assembly and by having the
Bank of Brazil take over the loans.
Reforms: February 24, 1932 Vargas created the Electoral Code- answer to the liberal constitutionalists where as the October 3rd club
(tenentes wanted him to keep dictatorial power). Lowered voting age from 21 to eighteen, extended suffrage to working women and
guaranteed the secret ballot. The code still left the illiterate out of the process.
Constitutional Assembly in May 3, 1933- product by 1934. In addition started a constitution Assembly- Guaranteed free elections
and had a new Electoral Tribunal to supervise elections and count returns. The new document maintained and strengthen the federal
system. It delegated wider power to the executive.
Economic and Social Order: New Labor Tribunal now had the power to fix minimum wage as the power was now the Federal
Government. Sections on labor, the family and culture expanded the social consciousness of the government. Showed concert for the
nation‘s economic development by allowing fifty class representatives (delegates from labor, industry and liberal professions).
President serve for 4 years and not be able to succeed himself.
Vargas uses unrest to his advantage : In 1935, there were two strong groups with political sway in the country, The communists Led
by Lius Prestes, a former tenete and the ingrallists Plinio Slagado known as the ―Green Shirts.‖ In 1935 a over confident Prestes gave
a speech condemning Vargas for not caring out the ideals of 1922. He ended his speech, ―Down with Fascism! Down with the hateful
government. Vargas responded using a national security law passed in by congress in 1935 in response to the radical political
opposition to the government. He arrested Prestes. The communist‘s then tried an armed assault on Vargas. These events gave
Vargas added power as Congress gave him a state of siege and he got power over the military. He got control over the promotion and
posting of all officers. What does this do? In 1936 the left was suppressed but the Green Shirts increased their power and Salgado
planned to run for president against Jose Almerico, the government candidate. But Vargas stayed silent as he was not allowed to run.
Vargas lost the power of siege so he did a curious thing, he released the communists he had imprisoned. This created violence in the
streets between the communists and green shirts. The War Minster Eurico Dutra who later takes power himself pushes for a coup by
Vargas and another Vargas supporter was chief of staff in the military.
Estado Novo: does not recognize the rights of the individual over the state. He created Estado Novo: New State ―he promised ― the
legitimate aspirations of the Brazilian people, politician and social peace.‖ He used radio to communicate his case by saying‖ Brazil has
no alternative but to institute a strong central government of peace justice and work in order to adjust the political organism to the
economic necessities of the country. He quickly imprisoned or exiled his political opponents. Specifically the left in the wake of the


                                                                                                                                        15
Cohen Plan. The Intelagrists thought they would benefit from the Coup but they were suppressed so Salgado and others attacked
Vargas. This gave Vargas a reason to suppress political opponents on the far right of the political spectrum.
Reform under Estado Novo- The Brazilian form of fascism that was not ideological as much the creation of Vargas himself. EN
brought state governments under the control of the federal government. States had negotiated their own foreign loans for facilities like
railroads and docks and for financing coffee programs. Education and labor were under the state governments. State owned railroads
and other infrastructure and having private/public corporations centered in Rio. Also the Tax revenue was directed to the federal
government. Immediately moved to reduce the authority of cronies as he brought rural police force under the control of the Federal
Government. He expanded the government ministry to include a minister of labor, created government institutes of pine, salt, tea,
alcohol and sugar. To create cartels to control production and price. He worked to cultivate support: He appeased the coffee growers
by reducing the price ceiling on coffee prices to increase sales. Big step was to eliminate interstate taxes to help create a national
market for goods. DASP: created standards for federal employees to praise skill rather than family lineage.
Economic policy slowly turned toward the promotion of industry
Problems: Land Ownership, Backward farming techniques Need to import food, Government with declining revenues and no ability to
get foreign loans, and Collaspe of the coffee industry
Vargas’s Solutions Revived Classic Valorization methods. National Coffee Council changed to National Department of Coffee proved
flexible in its various plan to relieve the plight of the planters. At once ordered a reduction in coffee tree planting. # of trees went from
1.7 billion in 1920 to 3 billion in 1934 then slowly went down to 2.5 billion in 1939 and 2.3 in 1942. 1931 gov. stated program of coffee
burning and before the end of the decade approximately 60 million bags of coffee were destroyed. Variations of valorization as well as
international agreement with other coffee producing states were tried with minimal success. Brazils coffee trade only recovered with the
advent of World War II. Financial renewal by stop paying on its debt and gave power to exchange money to the Banco of Brazil.
Government tried to diversify the economy through agricultural expansion. Vargas encouraged the Live stock raising and the
mechanization of the sugar industry to make it more competitive. Cotton production showed the most significant growth in the
agricultural sector. Cotton accounted for 18.6 percent of the exports in 1935-1939 period a marked increase over the 2.1 percent of the
1925-1929 period. Cotton was aided by the surplus capital released by the decline of coffee. Internal consumption grew. In Sao
Paulo cotton planting increased six fold. Vargas encouraged the development of the West. Enacted programs to help with irrigation
and expansion of the agriculture in those areas. The number of farms grows from 648,000 in 1920 to 1,896,000 in 1940. Varges
encouraged growth of life stock and other crops for internal consumption. ISA:. Production in food goes up and most of it is used for
the internal market. Still not all the soil was being used. Problems still though is the lack of technology on the farms and so the majority
of farm workers still toil in difficult jobs. 75% are illiterate, and according to Burns, they watched as modernization slipped right past.
Vargas introduced government planning and participation on a large scale into economic life.
Problems: Problem is that Brazil is still in the mercantilist system and very dependent on foreign market. Imports fall as Brazil cannot
pay for them and there are few imports coming in. A 75% decrease between 1929 to 1932 gave Brazil a trade balance as exports did
not fall as much that created needed capital. US imports went from 445.9 million to 180 million. Brazil got a favorable trade balance.
Response: Government response to coffee gave workers their salaries and planters their profits. So they had money to buy products
from industries and planters had excess capital to invest. Vargas encouraged the continuation of low imports. By 1933 he put an
average of 39% on imports and also put import controls as well which only allowed a few products in. Machinery and raw goods were
exempted from import controls. Capital was reinvested in local industry which gets consumed internally. More Brazilians get industrial
jobs.
By 1933 Brazil industry had recovered: In 5 years- the volume of industrial production increases by 44 %. Industrial output is up by
60%. 3 times more new industrial plants went into operation. By 1940 the capital investment in factories totaled 700 million dollars.
Textiles output grows considerably. By 1941 there were 44,100 plants employing 944,000 workers compared to 1920 with 13,336 firms
employing 300,000 workers. These factories made mainly consumer goods.
Labor and Capitol
Vargas worked to overall the whole education system he spent the bulk of the funds and energy creating vocational schools to help
create the skilled labor necessary for industrialization
EN: Labor ministry: minimum wage and government sponsored unions: Pension institute and savings banks for workers benefits
whose capital could be steered towards state favored investment. Import-licensing and foreign exchange authorities. Bank of Brazil
could loan to government designated borrowers
EN: Direct and Indirect Public Investment

                                                                                                                                          16
Indirect: Transportation Air age: By 1939 9 commercial companies operated air transport in Brazil. Vargas created the air Ministry in
1941. Brazil accounted for ¾ quarters of the air traffic in Latin America. Vargas pushed road construction. Surface transportation
network continued to expand. By 1939, there 21,241 miles of railroads, 65 percent which found in four states. Government or the
states managed over 2/3s of the railroads. Vargas protected natural resources in both constitutions of 1934 to 1937.
EN: Direct public investment into private enterprise: National Steel Commission created in 1940. The US gave Vargas 20 million
dollar loan to help create the Volta Redondo steel plant. After this one, other loans were given to the Vargas government to help them
mine iron ore, alkali and to create plants that would build aircraft and truck engine parts. US aided Vargas as they were helping with
the war effort. In 1938 Vargas created the National Petroleum Council. In 1941 Vargas created Petrobras government controlled Oil
company
EN: Economic Nationalism: Vargas increased the appeal of economic nationalism to Brazilian‘s by preaching the importance of
controlling the essential industries that were vital for national security. This was a response to the fact that almost all of the sources of
energy
Vargas and Foreign Trade- Defaulted on Loans in 1938- no repercussions: Why? What is historical context? Commercially Brazil
moved closer to Germany. Germany became the biggest consumer of cotton and second of coffee and cacao. In 1938 Brazil shipped
34 percent of its exports to the US 19 % to Germany and 9 % of GB and bought 25 % of its imports from Germany.
Good Neighbor & Germany: Economic Planning: Volta Redondo steel mill (Unconditional loan from the US), oil company, mineral
exploration and mining. WWII: Provided Brazil with another opportunity to grow industrially. They started exporting consumer goods to
Europe and other places. Vargas answered the economic challenge of the 1930s and set Brazil on a new economic course- Burns
Historiography
Keen mentions his failure. And Skidmore looks at him like a political opportunist. Skidmore‖ In sum Brazil industrialization between
1930 to 1945 was the product of two factors: spontaneous import substitution resulting from the collapse of the ability to import, the
maintance of domestic demand by the coffee support program and the shift to private investment from the export sector to industrial
production for the domestic market. And direct and indirect state intervention. ―
Social policy tended to provide some sort of protection to workers
1920: Social Legislation: in an effort to create a political base for the eventual move towards democracy. Medical and pension benefits
for workers. Ministry of Labor set up a tightly controlled union movement. Only registered unions were legal, Everyone had to pay
dues. Schools left most of the population politically impotent. 64% of the population over 15 could not read. Brazilians average lifespan
was 28 because of malnutrition and disease. Women workers only made 60% of what the men made and suffered under patriarchal
abuse. 1920s Blacks began to mobilize under Marcus Garvey‘s movement. FNB Brazilian Black Front 1931- protests of racial
discrimination. Wanted Black representation in congress.
ISI: Problems of ISI: Alexander: 1st Need to increase production without large mark-ups. 2nd Create a market by agricultural reform
so that the majority of the society can purchase goods. 3rd Need to improve infrastructure.

                          Thesis                                   Quote                                           Evidence to support conclusion
                          For industry to make a difference In
               Chasteen




                          the economy you have to have “heavy”
                          production. A larger nation would have
                          boosted ISI likeliness to survive.
                           Vargas was an idealist who brought      “Vargas placed restrictions in foreign          -textile industry growth
  Depression
  ISI/ Latin
  America’s




                          change to Brazil. Tried to nationalize   companies to discourage or control their        -growth of Mom & Pop industry
  (Vargas)
  response




                          wealth, industry and commerce.           exploitation of the countries natural wealth”   -put in roads around industry
  to the
  Burns




                                                                                                                   -ban on planting coffee
                                                                                                                   - encourage other crops, livestock


Impact of the Great Depression on (American) Society:
Effects of Unemployment: In 1933 over 13 million people were unemployed. In every major city these unemployed people created
makeshift shacks in empty city lots, parks and garbage dumps. St. Louis had over a 1,000 people living in one of these places. These
were known as Hoovervilles. The Civil Works Administration and the CCC were the first workers relief programs. Federal Emergency
Relief Administration gave out grants to state and local government because the private relief efforts that Hoover tried to coordinate
with the PECE were ineffective. Government went away from direct relief towards work programs in the 2nd New Deal. In 1935
Roosevelt created the Works Progress Administration which employed 3.3 million workers. Many of these were put to work on
infrastructure projects like dams, roads, bridges, hospitals, etc. Over 40,000 white color workers were put to work on the Federal
                                                                                                                                                   17
Writers Project, Music projects and Art projects. Native Americans had their own CCC that worked on reservations to improve the
condition of life there. Unemployment hit races unfairly where white women had an 18% unemployment rate Black women were
above 50%. Some organized ―National Unemployment Day where they held hunger marches to protest the lack of action on the part of
the government. In March 1932 in Dearborn, Michigan a town controlled by Henry Ford, the police fired tear gas into the crowds to
stop the marches. Others started Workers Committees that blocked police from delivering eviction notices, packed court rooms to
force judges to postpone evictions. They would return furniture and belongings to apartments. In Chicago judges refused to evict
people during the winter of 1932.
Impact on the Family: People postpone marriages and having children. In 1929 Marriage rate was 10.14 per 1000 in 1932 that
number dropped 7 out of 1000. . Married women which were initially fired first actually entered the workforce and saw their incomes
increase by 52% which gave them more say in the relationship. Divorce rates dropped as the rate desertions continued. Families cut
corners, and were creative to keep up appearances like shopping at second hand stores, growing gardens, and supporting your family.
Sales of glass jars increased as people canned food. Families, listened to the radio, played monopoly [invented in 1932], went to the
movies and played bingo. Families took more road trips which created growth in motels and camp grounds.
Organized Labor: Congress of Industrial Organizations was a nation wide union made up of unskilled workers that included women,
African American and others. The American Federation of Labor was made up of skilled male workers. These two unions often
worked against each other and did not take advantage of all the benefits unions received. The Wagner Act reversed the fortune of
unions that had seen a dramatic drop in membership. General Motors sit-down strike in 1937 in Michigan resulted in Governor sending
in the National Guard to surround the workers and restore order. But unlike the past, the army did not side with the owners and evict
the workers. Same year there was a large strike against Goodyear Tire Company as the company was returning to an 8 hour workday
from 6 but the company was not going to increase pay. Workers won both of these strikers because of the protection given to them by
the government.
Decline in educational opportunities: Inequality exist34d from the beginning by class and race given that schools were funded by
local property taxes. Minority schools already received low funding and that disappeared during the depression. With large
unemployment tax income dropped and so districts had to make large cuts. In Alabama five out of every 6 schools closed. Georgia
shutdown 1,300 schools and West Virginia closed over 1,000. The schools that stayed open shortened their school year. School
attendance in rural schools throughout the country dropped by 60%. Teachers‘ salaries dropped by as much as 20% and there were
extensive cuts to programs and jobs. Yet some places like Gross Point, Michigan, rich suburb of Detroit made very few changes.
Teachers‘ unions lobbied fro increased state funding to balance out the inequalities. Over the depression state funding grew by 30%.
In 1933 14,000 teachers marked on city hall and vandalized several banks because the city owed them 20 million dollars in unpaid
salaries. They wanted the New Deal to pick up the differences. Roosevelt and his brain trust instead funded on the job training
programs like the CCC and NYA which funded technical schools that taught students trades rather than a classical education.

IB Prompt for Society
14. Analyze the impact of the Great Depression on one country of the region. Specific examples will vary depending on the
country chosen. Impacts assessed could include some of the following: the effects of unemployment such as poverty, hunger and
population migration. Impact on the family. Decline in educational opportunities, changing attitudes such as a loss of trust in
government or confidence in banks. Political consequences including repression of political movements and organized labour.

[0 to 8 marks] there is little relevant knowledge of the impact of the Great Depression on one country of the region. [9 to 11 marks] there is a
satisfactory knowledge of the impact of the Great Depression on the selected country. Assessment is present but not fully developed.
[12 to 17 marks] there is a critical assessment of the impact of the Great Depression on the selected country. Analysis is detailed and applied to a
well structured essay.
 [18 to 20 marks] for an extra dimension such as critical commentary which is fully integrated within the essay, or evidence of different
interpretations of the impact of the Great Depression on the selected country.

Impact of the Great Depression on African Americans, women, minorities
Women: General Impact on Economic and Social Life of Women
During the GD with the women's average yearly pay being $525, as compared to $1,027 for men. Women were
mainly in service industries and faced less discrimination. Section 213 of the Economy Act stipulated that
married persons could not be employed by the federal government at the same time. Although the original bill
never stipulated that it should be the wives and not husbands to lose their jobs, the majority of the more than
1,600 government employees who resigned or were fired were women. Required female government employees
to take their husbands' names upon marriage. Seem to give private industry and other public employers the right to not hire or
dismiss married women.

                                                                                                                                                   18
Women Teachers: A 1930–1931 National Education Association survey reported that 77 percent of 1,500 school systems would not
hire married women. 63% fired women teachers if they were married. By 1939 restrictions against hiring women existed in 84 percent
of insurance companies, 65 percent of banks, and 63 percent of public utilities. Section 213 of the Economy Act was merely the
federal stamp of approval on well-entrenched state and local traditions.
Political Impact on Women: Roosevelt appointed Francis Perkins as the Head of the Department of Labor. First women cabinet
member. Women’s Cabinet: Eleanor and other top democratic women, including Nellie Tayloe Ross and Sue Shelton White, to
compile a list of women they felt deserved appointments in Roosevelt's new administration. Eleanor constantly worker to get women
hired. In 1936 the U.S. Supreme Court ruled that doctors could distribute information on birth control. Margret Singer was behind it as
she campaigned for birth control and the women‘s right to push for it. The Depression and WWI are responsible as both times women
wanted to put off having babies.
New Deal’s Impact on Women. The Bad News: New Deal program the Civilian Conservation Corps, developed in 1933,
had a formal policy against hiring women despite the protestations of Eleanor Roosevelt. New Deal job programs cast
women in traditional housekeeping roles. Camps operated by the Federal Emergency Relief Administration (FERA) specifically for
young women taught household skills. FERA work relief projects employed women in producing such goods as canned foods, clothes,
and mattresses for distribution to needy families. The Good News: Many of the 2nd New Deal agencies hired social workers to
administer the programs. The majority of these were women. By 1939 the percentage of women government employees had risen to
almost 19 percent, increasing nearly five percent since 1929. Women made up almost 45 percent of the WPA. National Recovery Act:
Discriminated against women. Ellen Woodward oversaw the work of 450,000 women through the Women's and Professional Projects
of the WPA. Frances Perkins and Clara Beyer facilitated passage of labor standards and legislation with the Fair Labor Standards Act.
But the Fair Labor Standards Act of 1938, with its minimum wage and maximum hour provisions, did not apply to domestic or farm
workers. Mary McLeod Bethune became the first black American woman to head a federal agency when she was appointed Negro
Affairs Director for the National Youth Administration (NYA) in 1936. Other women headed other major New Deal agencies.

Depression’s impact on African Americans: What do we already know about African Americans during the Great Depression?
General Impact on Economic and Social Life of African Americans: Black workers were first to loose their jobs in business and farms.
―last hired, first fired‖. Blacks unemployment rate was at 50% compared to 25% for the rest of the population in general. ―No jobs for Negroes
until Every White Man had a job.‖ Denied jobs on public works; AFL and other major unions discriminated against AAs. The number of
lynchings went to 28 in 1933. Leading for push for anti-lynching legislation.
Blacks in Agriculture: In 1930 Two million males worked in agriculture. Over 835,000 of them were black farmers and laborers. Less than
13% of African Americans owned land. In 1930 over 40 percent of black workers were in Agriculture as sharecroppers, tenant farmers and
laborers. White share croppers made $417 a year compared to Black scs made $295 a year. Formed Unions that faced strong opposition
from Whites. In 1931 a group of White vigilantes and authorities attacked the entire Black population in Reel town Alabama( two killed and
hundreds injured) because of union activities. 400,000 Blacks left the South to go North in 1930s. Northern AAs formed cooperatives and
hired other African Americans.
Political Impact on African Americans: Hoover believed in African Americans and worked for equal rights but his policies did little to help.
Yet: The party of Lincoln. Roosevelt got very little of the Negro vote during the election of 1932. Roosevelt failed to give any Civil Rights
legislation or the Anti-lynching law during his four terms in office. NAACP: drafted the legislation but without full support of Roosevelt it failed
to get by a filibuster. Harold Ickles: Department of the interior appointed African Americans to positions and worked to get them housing
during slum removal. Eleanor Roosevelt stated that "the day of working together has come, and we must learn to work together, all of us,
regardless of race or creed or color … We go ahead together or we go down together." 1936 election: Black overwhelmingly voted for FDR.
After the Election FDR appointed 45 Blacks to top positions in the New Deal. These leaders formed an informal group that the press called
the ―Black Cabinet.‖ Led by Bethune would regularly visit the Whitehouse. Mary McLeod Bethune became the first black American woman
to head a federal agency when she was appointed Negro Affairs Director for the National Youth Administration (NYA) in 1936. She was the
unofficial head of the ―Black Cabinet.‖ An unofficial group that lobbied FDR for the rights for blacks. "Don't Buy Where You Can't Work”:
The strategy targeted those white merchants who primarily served a black community but refused to hire black employees. In New York
City, the Reverend John H. Johnson formed Citizens League for Fair Play. They would establish picket lines outside the targeted store then
take photographs of blacks that crossed the picket lines. The local black newspaper would publish them. Blumstein's Department Store stpre
relented after 6 weeks and hired black clerks and professional staff. In 1938 the New York Uptown Chamber of Commerce agreed to hire
blacks in 1/3 of all executive, clerical, and sales jobs in retail businesses.
New Deal’s Impact on African American: The Good the Bad and the Ugly: NRA pushed AA‘s from their industrial jobs. ―Negros Ruined
Again.‖ The program did not cover Black Occupations. NRA programs in effect perpetuated uneven pay. Businesses often ignored NRA code
and paid Black workers less. In the TVA, Blacks were barred from construction and management jobs, barred from the TVA model towns
created to house workers and Black Tenant Farmers also were forced to leave their land in some cases and received almost no benefit from

                                                                                                                                                19
the cheap electricity. AAA reduced income of Black Americans as Blacks that owned less land than white landowners. They would have
received smaller government payments so removing land from production was too great a hardship for many. So they left no land unplanted,
they received no government payments. Many black farmers could no longer afford to keep their own land. Sharecroppers in the South
declined from 390,000 in 1930 to less than 300,000 by 1935. White owners often pocketed the payments and jettisoned the black farmers.
Some Unions gave Blacks assistance by hiring them and also looking out for their interest. United Mine Workers and Automobile efforts.
Socialists also helped organize blacks politically to unionize and push for the anti-lynching bill. Race Riot in Harlem in 1935. A rumor the
police beat a black Puerto Rican spread and Blacks began looting white stores. This alerted FDR. 2nd New Deal sees a shift toward helping
blacks: May 1935 issued Executive Order 7046 prohibited discrimination for jobs in the WPA. 20% of the work force was Black, 250,000.
CCC did not really change their stance as the local areas that they worked in did not include high Black populations. Resettlement in 1935
tried to focus on Black poverty issues and tries to resettle 500,000 farm families on to their own land. Only 4,441 families were relocated.
What conclusions can you draw from your research about the impact of the Great Depression on this minority group?
Native Americans
Great Depression: Dawes Severalty Act 1887 – separated tribal lands into individual plots in order to turn Native Americans into laborers and
farmers. Roosevelt appointed John Collier (Indian Advocate) to Indian Commissioner. Collier authored the Indian Reorganization Act which
repealed the Dawes Severalty Act (IRA). The Bureau of Indian Affairs led by Collier, it encouraged Indian art, religion, language and culture.
By 1940 60% of BIA was Native American. IRA endorsed tribal governments, authorized loans, banned allotment, allowed the purchase of
lost lands due to allotment, and appropriated $10 million to finance Native American businesses. Large tribes voted against the IRA (Navaho,
Onondaga, etc.) 181 pro 77 against. Indian CCC raised incomes temporarily, provided work for NA on reservations, and did similar works
projects like Roosevelt‘s CCC. Office of Indian Affairs improved health care, and education through the construction of 100 new day schools.
Although these programs were meant to improve Indian conditions, the conditions themselves were so bad to begin with anything would have
improved their situation. Collier, and advocate of Indians, along with many other Americans initiated acts without the input of the Indians they
would be benefiting. These acts helped struggling tribes but essentially weakened and constricted larger tribes that felt they did not need
governments like the IRA was proposing.
Mexican Americans
Social and Economic Impact
The majority of Americans blamed unemployment on the Mexican Americans or other groups that worked for cheap and under conditions that
―real‖ Americans would not. The Answer to solving the problem of Mexican Americans taking all the jobs was deportation and repatriation
(which sent Mexicans and Mexican Americans back to their ―origin country but still allowed re-entry into the US but at a much later time)In the
Industrial centers there was more discrimination towards the Mexican Americans, physical threats, and racist propaganda campaigns. These
conditions as well as the free transportation persuaded many Mexican Americans to return to Mexico by their own choice. In Los Angeles
repatriation was considered very profitable. There were more Mexican Americans in California because even though their life was very
difficult, it was ―better‖ in the West then in the South or Midwest. It cost the city $14.70 per person to repatriate back to Mexico. So Los
Angeles ending up shipping out $77,249.29 worth of Mexican Americans saving the city $347,468.41 in relief payments, a total net gains of
$270,219.12. For the Mexican Americans that remained in the United States life was worse for them than for the rest of the Americans that
were suffering because of the Great Depression. Whole families where working and still not making enough money to survive. Since the
Mexican Americans were mostly involved in the agricultural business they had to move around frequently to find work during the off seasons
in certain places. They had to live in terrible conditions, makeshift ―shack towns‖ and suffered from many health problems as well. The
Mexican Americans where a big part of the strikes and unions in the agricultural business, taking part in the San Joaquin Valley Cotton strike
(the biggest agricultural strike in American History) which lost many Mexican American lives.
New Deal: Hispanic arts revival taught cultural crafts and helped Hispanics make money during the rough times but this was a problem later
because it left Hispanics with limited skills and in the end, fewer ways to make money. Social Security, labor reforms and housing assistance
where all aspects of the New Deal that helped Mexican Americans or where intended to help them. New Deal relief funds (like SS, welfare,
etc.) were intended to be distributed regardless of citizenship status, but in the end discrimination against most minorities occurred, which
caused them to get little to now help from the new deal relief funds. In Los Angeles these funds were used to deport Mexican Americans
regardless of citizenship. WPA (works progress administration) was closed to all aliens. General Motors fired ―foreigners‖ (or people that
they thought were foreign) to be in good standing with the government. Conclusion/Analysis: Not only were Mexican Americans not getting
any assistance from the government, they were losing their jobs in big companies because of their ethnicity. Many of the Mexican Americans
were being discriminated against despite being American citizens. The New Deal did very little to incorporate Hispanics and much of the
direct aid was kept from them by discriminatory practices of local authorities.

The Great Depression and the arts: photography, the movie industry, the radio, literary currents.
Study your chart that you made on the different arts.




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