Prosperity and depression study guide



Prosperity and depression study guide


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Prosperity and depression study guide


8.03 - Assess the political, economic, social and cultural effects of the war on the United States and other nations.

• How did the war impact America’s social, economic, political, and cultural institutions?
• To what extent did World War I change US society and affect other nations?
• How did the industrial and technological advancements in this era impact America and the rest of the  
  global community?
• How are civil liberties challenged during times of conflict?

  • 18th Amendment - Prohibition
  • 19th Amendment - Women’s suffrage
  • Committee on Public Information – muckraker George Creel was appointed by President Wilson to head this war propagation committee which promoted the war domestically while publicizing American war aims abroad
  • Food Administration - Herbert Hoover headed this organization during WWI, designed to conserve food at home so that it may be provided to allied troops.
  • War Industries Board - established to mobilize the nation's resources for war while protecting the economy's basic structure and character for the peace that was to follow
  • Espionage and Sedition Acts - provided the government with powers over the rights of free speech and press.
  • Eugene V. Debs - started the American Railway Union. He became a socialist leader who opposed World War I and was imprisoned for 10 years during the war under the Espionage Act.
  • Industrial Workers of the World - A labor Union organized in opposition to capitalism and conservative unionism. It believed in revolutionary industrial unionism and ‘One Big Union’ that combined commitment to industrial unionism, direct action, and building a union controlled by its members.
  • Schenck v. United States(1919) – The case was opened against the Espionage Act, but the Supreme Court decided that in a time of war, extraordinary conditions may allow Congress the right to forbid printed materials or speech aimed at hindering the war effort. The test for "a clear and present danger" was formulated to deal with questions regarding freedom of speech.
  • Palmer Raids – because of a fear that Russian communists were going to attempt to overthrow the American government, thousands of Russians and socialists in the U.S. were arrested and held without trial.  This was also known as the “Red Scare.” People had an increased feeling of nativism.
  • United Mine Workers - The Coal Miners Strike (1919) with their leader, John L. Lewis, pushed for a raise and shorter working hours. The court ordered the miners back to work and an arbitrator put an end to the dispute.
  • Washington Naval Conference - international conference called by the United States to limit the naval arms race and to work out security agreements in the Pacific area.
  • Dawes Plan - American investors loaned Germany $2.5 billion to pay back Britain and France with annual payments on a fixed scale.


9.01 - Cycle of economic boom and bust in the 1920s and 1930s.

• How did the economic, social, and political events of the early 1900s lead to the economic cycles of the
  twenties and thirties?
• How did the variations in the economy in the 1920s cause major changes in that decade and in the 1930s?
• How did early government reactions to the economic bust serve to worsen its effects?

  • Industrialization - when a society changes and becomes based more heavily on industry.
  • Laissez-faire - the government’s “hands-off” approach to business and economy.
  • Mechanization - jobs began using more machines and needed less human labor. Ex: assembly line.
  • Rugged individualism - The belief that all individuals, or nearly all individuals, can succeed on their own and that government help for people should be minimal.


Harding Administration (1921-1923)

  • Warren G. Harding - Republican President (1921-1923) who ran under the slogan "Less government in business and more business in government." While in office, the Teapot Dome Scandal occurred. Harding’s secretary of the interior Albert B. Falls secretly leased oil-rich public land to private companies in return for money and land. Falls was later found guilty of bribery and became the first American to be convicted of a felony while holding at Cabinet post.
  • In the early 1920s Republicans focused on a “Return to Normalcy.” They ceased to promise progressive reforms and instead aimed to settle into traditional patterns of government.

Coolidge Administration (1923 – 1929)

  • After the death of President Harding, VP Calvin Coolidge took the office. He helped to restore people's faith in their government and in the Republican Party.  The next year, Coolidge was elected president.
  • Speculation - the buying of stocks and bonds on the chance of a quick profit, while ignoring the risks. Many began buying on margin- paying a small percentage of stock prices as a down payment and borrowing the rest.

Hoover Administration (1929 – 1933)

  • Herbert Hoover - 1928 campaign pledge: “A chicken in every pot and a car in every garage.”  Hoover tried to reassure the nation. He opposed any federal form of welfare, or direct relief to the needy.  He said that handouts would weaken people self-respect and “moral fiber.” He believed individuals, charities, and local organizations should help. His response shocked and frustrated Americans.
  • “Black Tuesday” - October 29, 1929 - the bottom fell out of the market and the nation’s confidence collapsed. By mid-November, investors lost about $30 billion; an amount equal to the costs we spent on the war.
  • Hawley-Smoot Tariff - passed in 1930 established the highest protective tariff in US history. This was supposed to protect American farmers, but ended up hurting them. By reducing the flow of goods into the US; the tariff prevented other countries from earning American currency to buy American goods. (World trade declined).

9.02 – Prosperity for different segments of society during this period.

• How were different groups of people affected by the business cycles of the 1920s and 1930s?
• How do economic changes impact society?
• Why and how does economic prosperity vary so much from one segment of society to the next?

Leading up to the Great Depression

  • Urbanization – Cities spread both up and out with increasing population
  • Installment plan – people could buy on easy credit and then pay off their debt in smaller amounts on a monthly basis instead of paying one lump sum.
  • Overproduction – more goods are produced than necessary, therefore lowering the prices.
  • Hoovervilles - homeless men, women and children were forced to take up residence in shacks as a result of the Great Depression. Angry, cold and hungry Americans, who had no other place to reside, nicknamed the shacks in honor of President Herbert Hoover.
  • Breadlines & Soup Kitchens – people received free food – almost 25% of the nation was unemployed.
  • Bonus Army (1932) - A gathering of 12,000 to 15,000 World War I veterans who, with their wives and children, converged on Washington, D.C., demanding President Hoover give immediate bonus payment for wartime services, to alleviate the economic hardship of the Great Depression.
  • Dust Bowl - a term born in the hard times from the people who lived in the drought-stricken region during the great depression. Farmers suffered greatly.

9.03 - Social, intellectual and technological changes of lifestyle in the U.S.

• How do technological and social changes impact American traditions?
• To what extent should the federal government attempt to effect economic and social change?
• What should the role of the federal government be in the economic and social lives of its citizens?
• What long term effects did the New Deal have on the United States?

  • Technology – radio, electricity, automobiles, and airplanes modernized America.
  • Music – The Jazz Age - Grew out of African American music of the south (blues), was largely improvised with an off-beat, syncopated, rhythm.
    • Louis Armstrong and Duke Ellington – influential musicians.
  • Movies – Movie attendance skyrocketed in both silent films and “talkies”
    • The Jazz Singer in 1927 was the first film with sound, a “talkie”
  • Literature
    • Lost Generation – A group of American writers disenchanted by the growing pop-culture of the United States. They left the U.S. for Europe (primarily Paris). Authors included F. Scott Fitzgerald and  Earnest Hemingway
    • Sinclair Lewis - a writer who was the first American to win the Nobel Prize in literature.  He was among the eras most outspoken critics.
  • Prohibition – the time period after the 18th Amendment and Volstead Act in which the manufacturing, production, sale, and consumption of alcohol was illegal.
    • Speakeasies  - bars that operated illegally
    • Bootleggers  - suppliers of illegal alcohol


9.04 - Challenges to traditional practices in religion, race, and gender.

• How were government programs in the 1920s and 30s a challenge to traditional practices in religion, race, and gender?
• How does conflict promote change in a nation’s identity?
• To what degree did America experience social progress during the 1920s and 30s?
• How was America changed the 1920s and 30s?


  • Suffrage – The 19th Amendment first gave women the right to vote in 1920.
  • Women began working out of the home more, attending more social clubs, and having a greater voice in society.
  • Flappers - American women of the 1920s who were rebellious, energetic, and bold, wearing shorter skirts, bobbed hair, and heavy make-up. While not many women actually adopted the flapper lifestyle, many did adopt new fashion ideas from them, modernizing the American woman.
  • Eleanor Roosevelt was an outspoken advocate for women’s rights.

African Americans

  • Blacks were still feeling the effects of segregation because of things like Jim Crow Laws and the result of the Supreme Court Case Plessy v. Ferguson.
  • African Americans also felt resistance and violence from groups such as the Ku Klux Klan (KKK) which was formed against anyone who was not a white protestant. In just one year, KKK membership grew from 100,000 to 4 million.
  • Many African Americans joined in the Great Migration, moving from the south to the north for better job opportunities and to escape the violence of the south. While the north did offer some relief, it was not the land of equality many hoped for.
  • Harlem Renaissance – the African American literary awakening of the 1920s, celebrating African American culture.
    • Langston Hughes and Zora Neale Hurston were two famous authors.
  • United Negro Improvement Association (UNIA) - led by Marcus Garvey, the UNIA aimed to build up African Americans’ self-respect and economic power. Garvey in his Back to Africa Movement urged African Americans to return to “motherland Africa” to create a self-governing nation. 
    • Some African American leaders criticized Garvey because of his call for the separation of the races
  • The National Association for the Advancement of Colored People (NAACP), led by W.E.B. Du Bois, fought to protect the rights of African Americans


  • Italian immigrants Sacco and Vanzetti were convicted, sentenced to death, and killed within 4 months of being arrested for the robbery and murder of a man. Many Americans believed they were arrested mainly because they were immigrants with radical beliefs.
  • The National Origins Act was passed in 1924, reducing the quota of immigrants allowed in to 2 percent of the 1890 census. It also specifically excluded the Japanese.  President Harding believed that restricting immigration helped the cause of social stability.


  • Religious traditionalists pushed Christians toward the idea of fundamentalism, which argued that God inspired the Bible, so it cannot contain contradictions or errors, it is literally true.   
    • Aimee Semple McPherson and Billy Sunday were two influential fundamentalists.
  • The Scopes Trial – after a small town teacher taught the theory of evolution in his biology class, he was taken to court and the case became a battle between two of the countries greatest lawyers – William Jennings Bryan (Fundamentalist) and Clarence Darrow (supporter of free speech) over constitutional rights and the changing beliefs and values of the United States.  As expected, since Scopes ha d clearly violated Tennessee law,  William Jennings Bryan and the fundamentalists won.

9.05 - Impact of the New Deal reforms in enlarging the role of the federal government in American life.

• How did the role of the federal government change during the 1920s ands 30s?
• Is it appropriate for the government to be involved in social and economic change?
• To what degree did America change positively or negatively during the 1920s and 30s?
• Why did citizens allow the federal government to increase its power during the Great Depression, and how did it impact the future of the nation?

FDR’s New Deal
Brain Trust”- FDR carefully picked advisers who began to formulate a new set of policies designed to alleviate the problems of the Depression. This became known as the New Deal- a phrase taken from a campaign speech in which Roosevelt had promised “a New Deal for the American people.”

  • Its policy is focused on three general goals: relief for the needy, economic recovery, and financial reform.
  • Social Security – Started by the Social Security Act, it was one of the New Deal’s most important achievements. It provided financial security in three major parts:  old age insurance for retirees 65 or older and their spouses, unemployment compensation system, and aid for families with dependent children and the disabled.


  • Civilian Conservation Corps (CCC) - put 2.5 million young, unmarried men to work maintaining forests, beaches, and parks. They earned $30 a month and had free housing, food, job training, and healthcare.
  • Agricultural Adjustment Act (AAA) - Tried to raise farm prices through subsidies, government financial assistance. The AAA used taxes to pay farmers not to raise certain crops, in hopes that lowering production would cause prices to go up.


  • Federal Deposit Insurance Corporation (FDIC) – Established by the Glass-Steagall Banking Act of 1933, the FDIC was established to insure bank deposits up to $5,000 dollars.  The FDIC prevented banks from closing, and It still protects our money today.
  • Securities and Exchange Commission (SEC) - Set up after the Federal Securities Act (which required companies to release information about their finances if they sell stock), the SEC was set up by congress to regulate the stock market.  The commission still exists today.


  • National Industrial Recovery Act (NIRA) – Sought to raise prices and balance the unstable economy through extensive planning. Codes were made to establish fair business practices; it controlled working conditions, production prices, and established a minimum wage.
  • Public Works Administration (PWA) – Preceded by the NIRA, the PWA completed projects ranging from dams to bridges to highways.


  • Tennessee Valley Authority (TVA) – Helped farmers and created jobs by reactivating a hydroelectric power plant used during WWI. It provided cheap power, flood control, and recreational activities to the entire Tennessee Valley.
  • Works Progress Administration (WPA) – Provided work for more than 8 million citizens. It improved thousands of schools, playgrounds, hospitals, airfields, and also supported creative works of artists and writers.


  • National Labor Relations Board (Wagner Act) - Legalized union practices such as collective bargaining and closed shops (workplaces only open to union members). The NLRB enforced the Wagner Act.
  • Fair Labor Standards – Set the maximum work hours for the week at 44 hrs, to drop to 40 hrs after 2 years. It also set a minimum wage ($.25, which would eventually be raised). It set rules for the employment of those under 16, as well as banned hazardous work for those under the age of 18.


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Prosperity and depression study guide