HY 204 1st Edition Lecture 121929 The Economy Goes Bust I. Conservative Backlash Against Change A. 18th Amendment and Prohibitiona. Prohibits sale& distribution of alcohol i. Alcohol “supported Germany” and post-WWI America wanted to strike out any German influence ii. This lasts until 1933b. Underground networks and speakeasies erupt to illegally distribute alcoholB. Red Scare (1919-20)a. Fear that Russian spies within the US borders were plotting to turn America into a Communist nation b. Effort to deport communistsi. J. Edgar Hoover is successful in deporting over 300 “suspected communists”C. Resurgence of KKKa. Extremists groups resurface at this time II. Problems in American Economy A. Warren G. Harding and the “Return to Normalcy” a. Idea of getting back to enjoying life b. Dies suddenly of a heart attack; Replaced by VP Calvin Coolidge i. Coolidge is successful in reducing taxed to 25% c. Hoover elected next as the “first real businessman” B. Stock Market Speculation and Black Tuesdaya. Trading on debt; no real cash flow b. Black Tuesday –stocks take turn for the worst i. Caused even wealthy individuals to begin pawning their belongings for cash c. No Government regulation on the stock market These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.C. Run on the Banksa. Failure of the banks i. Banks spent money that had been deposited 1. Left average working-class Americans high and dry b. Federal Reserve doesn’t come to the banks aid; left to fend for themselves D. Too many goods, Not enough buyersa. Mostly affected agricultureb. 5% of the nation held 2/3 of the wealthIII. Hoover Promotes Relief A.