Period 7

• Republican leadership in the 1920s accepted the idea of limited government regulation as an aid to stabilizing business
• Coolidge believed in a limited government so business could conduct its own affairs
• Economic development: unemployment below 4%, increased standard of living (indoor plumbing, electricity, central heating), and increased income for the middle and working classes
• Increased productivity - companies made greater use of research and scientific management to make manufacturing processes more efficient - major industries adopted the assembly line
• Energy technologies - increased use of oil and electricity
• Government policy - government favored the growth of big business - offered corporate tax cuts and did not enforce antitrust laws
• Tax cuts for high income Americans contributed to imbalance of incomes
• Electricity sparked consumer economy, automobiles more accessible, advertising manipulated consumer demand
• Labor union membership declined by 20% - some companies began practicing welfare capitalism - offering employees improved benefits and high wages to keep them out of labor unions
• Progressives had the belief that society needed changes and the government was the proper agency for correcting social and economic ills
• “Muckraking” - publications about schemes in politics. Reform based

  • Exposed inequalities, education the public about corruption, prepared the way for corrective action
• • Direct election of US senators
  • Initiatives (voters could compel legislature to consider a bill)
  • Referendums (allowed citizens to vote on proposed laws)
  • Recall (enabled voters to remove a corrupt politician from office)
• Municipal reform - public ownership and operation of the city’s utilities (water, transportation, electricity)
• Temperance led to prohibition of the sale of alcoholic beverages in some states
• Child labor laws - state compulsory school attendance laws effective in keeping children out of mines and factories
• “Square Deal” - conservation of resources, control of corporations, and consumer protection - Teddy Roosevelt
• Conservation: To conserve something for the time being and use it later.

  Preservation: To preserve something forever
• Woodrow Wilson pushed Congress to pass the Federal Reserve Act with a federally regulated banking system and dollar bills
• Civil rights organizations: Niagara movement, National Association for the Advancement of Colored People (NAACP), National Urban League
• Causes of the GD

  • Uneven distribution of income
  • Unemployment
  • Stock market - people in all economic classes invested in the stock market - when market collapsed many lost everything they had borrowed and invested
  • Increased borrowing and installment buying - bank failure
  • Overproduction
  • Farmers suffered from overproduction, high debt, and low prices
  • Government did little to control or regulate business
  • US insistence on loan repayment from WWI weakened Europe and contributed to worldwide depression
• Crash ended Republican dominance in government
• The homeless lived in shantytowns called “Hoovervilles”
• Hawley-Smoot Tariff - tax increase on foreign imports - reduced trade for all nations
• New Deal by FDR
• First 100 days of FDR's Presidency - enacted new laws and agencies
• Bank holiday - ordered banks closed and allowed them to reorganize on a sound basis (New Deal)
• Ended prohibition (New Deal)
• Fireside chats - through the radio, FDR assured listeners that banks opening after bank holiday would be secure (New Deal)
• Glass-Steagall Act - increased regulation of banks (New Deal)
• Farm Credit Administration - provided low-interest farm loans and mortgages (New Deal)
• Programs to offer government jobs to unemployed (Public Works Admin, Civilian Conservation Corps, Federal Emergency Relief Administration) (New Deal)
• Industrial Recovery Program - guarantee reasonable profits for business and fair wages for labor (New Deal)
• Second New Deal - concentrated on relief and reform
• Works Progress Administration - relief agency - employed for public works (2nd New Deal)
• Wagner Act - worker’s right to join a union (2nd New Deal)
• Revenue act of 1935 increased taxes on the wealthy (2nd New Deal)
• Social Security Act - federal insurance program based upon automatic collection from employees and employers - trust fund used to pay retired people (2nd New Deal)
• Fair Labor Standard Act - minimum wage, maximum work week of 40 hours, child-labor restrictions (2nd New Deal)
• More women sought work but were accused of taking jobs from men
• Severe drought in early 1930s ruined crops - region became a dust bowl - Great plains region migrated west to California in search of farm or factory work