HIST 1312 1st Edition Lecture 9 Outline of Last Lecture I Prosperity Decade a The Economics of Prosperity b The Automobile Driving the Economy c Get Rich Quick The Speculative Mania d Agriculture Depression in the Midst of Prosperity II The Roaring Twenties a The Automobile and American Life b A Homogenized Culture Searches for Heroes c Alienated Intellectuals d Renaissance Among African Americans e Flaming Youth III Traditional America Roars Back IV Race Class and Gender in the 1920s V The Politics of Prosperity Outline of Current Lecture I The Diplomacy of Prosperity a Foreign Affairs b The United States and Latin America 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 America and the European Economy d Origins of the Depression e The Stock Market Plunge II Hoover s Final Efforts III Depression in the U S a Families in the Depression b Discrimination in the Depression c Franklin D Roosevelt Current Lecture From Good Times to Hard Times to the New Deal 1920 1932 I The Diplomacy of Prosperity a Foreign Affairs President Harding dismissed any U S role in the League of Nations and refused the Treaty of Versailles o Secretary of State Charles Evans Hughes concluded separate peace treaties to end the U S role in World War I American banks and corporations begin to expand as a result of international economic changes caused by World War I o American businesses had become the world s major producers o American business shaped the global economy by lending money Neither President Harding nor President Coolidge had any expertise or interest in foreign affairs and deferred making and implementing policy to their secretaries of state o Their secretaries supported independent internationalism avoiding political and international responsibilities while expanding economic opportunities overseas o Secretary of Commerce Herbert Hoover also promoted American business abroad o While successes in Asia and the Middle East were limited efforts in Latin America and Europe were quite successful b The United States and Latin America The U S role in Latin America especially Central America and the Caribbean was influenced by the Monroe Doctrine direct American investments and control of the Panama Canal When necessary the United States used direct armed intervention in the region The Marines o In 1921 the U S had troops in Panama Haiti the Dominican Republic and Nicaragua to ensure continued U S influence and order Roosevelt s Policing of Western Hemisphere o U S forces had not advanced the educational systems national economies or standards of living for most people Use of marines weren t used to further Democracy or freedom they protected American business interests Americas economic interests came in front of social justices Elsewhere in Latin America the 1920s saw U S commercial intervention in the region o U S firms like the United Fruit Company purchased land in Central America Specifically Guatemala o U S oil companies obtained drilling rights in Venezuela and Colombia Oil also played a key role in U S relations with Mexico since the 1917 Mexican Constitution nationalized Mexico s subsurface resources o Coolidge sent Dwight W Morrow as U S ambassador to keep us out of war since Morrow understood Mexican nationalism and pride o Morrow reached a compromise with the Mexican government that reduced tensions and delayed nationalization c America and the European Economy World War I shattered most of Europe physically and economically and the U S had become the world s leading creditor nation o The U S sought to expand its exports and reduce its imports o High tariffs inched higher throughout the 1920s including the 1922 Fordney McCumber Tarif which set high protective rates for industrial goods Tariff protected American jobs by raising cost of outside goods o Through the Dawes Plan U S bankers loaned 2 5 million to Germany so that it could repay the other European nations and they could repay the U S The Kellogg Briand Pact 1929 renounced war as an instrument of national policy Every country signed on to outlaw war d Origins of the Depression The prosperity of the 1920s depended on a few major industries construction automobiles and consumer goods since other sectors of the economy barely made a profit o Farmers watched demand for their goods shrink while income and property values declined Other problems included the misdistribution of wealth and the overproduction of goods o Needed government intervention Upon assuming office President Hoover tried to stimulate trade by lowering tariffs up to 50 percent but most Republicans disagreed o Hoover won against Al Smith the first Catholic nominated by a major party Many believe Hoover won because Smith was Catholic e The Stock Market Plunge The desire to invest in the stock market fed a speculative fever that pushed stock prices higher and higher o By 1929 stock prices had little relationship to a company s worth o Finally in 1929 the realities of wages credit inflated stock prices and the slowing American economy collided o Despite a lack of public concern events on Black Thursday affected everyone as the selling price and value of stocks plummeted The stock market crash undermined economic confidence o A lot of suicides o No more confidence in the banking system worried that their money would be gone from the bank because of bad investment choices o Created a lot of doubts causing everything to stop spending money going out marriages etc The effects of the stock market crash and the declining American economy had an international impact II Hoover s Final Efforts Over the next two years Hoover greatly expanded the role of government in responding to the Depression o By December 1931 Hoover promoted more direct federal involvement and asked Congress for support through banking reforms and financial support for home mortgages o Hoover also intended to pump money into the economy through the Reconstruction Finance Corporation o All this represented an unprecedented effort by the federal government to intervene directly in the nation s economy Hoover opposed direct federal relief money to the unemployed the dole as too burdensome for the federal budget o He believed that relief should be distributed by private organizations and local government and the dole would erode the work ethic o Hoover eventually agreed to create the Emergency Relief Division