Apush Chapter 25

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Stock market crash – 10/29/1929
Cause of crash #1- Bad Tariff Policy
-Fordney McCumber 1922
-Hawley-Smoot 1930 (after the crash)
-Closes European markets to US goods and vice versa, really hurts farmers

Overextension of credit
-Farmers are overleveraged from WW1 profitability and aren’t pay mortgages -Consumers are overleveraged from easy store credit, they have purchased too many items and can’t keep up installments(debts payment) -Brokers are overleveraged as they have purchased large amounts of stock on margin

Wild Speculation
-When prices are higher than actual value
-Florida Land Bust 1927
-Over-speculation on the stock market, thanks to stock purchases on margin (using purchased stock as collateral) -Stock market correction occurs in October 1929

Overproduction of Durable Goods
-Increased production leads to increased supply, decreased demand, and decreased price -Market is obviously unstable, proud in the 1927 Ford Recession due to shutting down Ford and retool for the Model A

Consolidation of Economic Power
-As industries consolidate (unite into one), CEO decisions are magnified -Of decisions are magnified, bad decisions are really magnified (again see Ford)

Mal-distribution of wealth
-While production doubles in the 1920’s, real wages only raise by 1/3 -Resulting difference goes into corporate profit
-Rich can’t spend and re-invest fast enough
-Leads to an over-wealthy upperclass, and an under-wealthy working class

Agricultural Discontent
-A decade of hardships for farmers
-Competition and the free market fails famers, as supply goes up, price goes down, and farming becomes unprofitable

-FDR-New Deal=progressive(wants progress) and liberal (left on the scale) (democrat) Roosevelt Family
* Blue Blooded America Aristocrats (17th century Dutch Settlers) * Hudson Valley Landowners (Hyde Park near Poughkeepsie, NY) * Prestigious Cousin – Teddy Roosevelt (5th cousin)
* Other cousin-Eleanor Roosevelt (TR’s niece)
* FDR’s mom-Delanos, from the Mayflower
* Old $$$, born for public service, set the example of nobility, oppsosite of New $$$(ex. Bill gates, zuckerberg), environmentally and economically irresponsible

-Education: Groton, Harvard, Columbia Law dropout (because he passed the BAR exam) -Assistant Secretary of the Navy in WW1 (1913-1920)
-1920 VP candidate under James Cox
-1921-28 out of politics (polio)
-1924&1928 campaigns for Al Smith
-1929-returns as Gov of NY, installs a public works plan and state aid to poor

-Viral disease that strikes FDR
-1921 at 39 years old paralyzed from the waist down
-Gives the very assured (exhibiting confidence) FDR a sense of humility and a compression for suffering

-Charming, gregarious, charismatic, executive
-Delegates and compromises well
-knows his shortcomings(flaws)

Let’s talk about Roosevelt Liberalism
-As governor shows a penchant for government intervention including public works projects and relief programs -Very interventionist on economic matters, libertarian on personal freedoms -Old school paternalism (like a feudal lord)

Brains Trust
-Harry Hopkins-Secretary of Commerce, Immediate aid guy, FERA, CCC, WPA -Harold Ikes-Secretary of the Interior, Big Project guy, PWA and large billion dollar expenditures -Henry Wallace-Secretary of Agriculture, Farm Aid, AAA (later elevated to VP) -Felix Frankfutter- Harvard Law, constitutional lawyer, told FDR what he could get away with -James Farley-political consultant and speech writer

-Francis Perkins-Secretary of Labor (First woman secretary of labor)

Election of 1932
-Anyone could have beat Hoover
-FDR’s inauguration
-only thing we have to fear is fear itself
-I pledge myself to the New Deal for the American People
-3 R’s = Relief, Recovery, and Reform

First New Deal
100 Days:
-March 9, Bank holiday, Emergency Banking Act
March 20-Economy Act
**(100 days are part of 1st new deal)
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