Depression and Threats to International Peace and Collective Security: Manchuria 1931-3 and Abyssinia 1935-6
The Impact of the Great Depression
The Great Depression is the single greatest reason for the collapse of international peace.
It led to aggression and the collapse of international co-operation.
The Manchurian crisis exposed both the League of Nations and collective security as hollow concepts.
Important factors: resentment for Germany
Two crises that caused L of N to collapse on itself and labeled as a failure Abyssinia and Manchuria. L of N was nothing more than a show organization.
It brought Hitler to power and undermined the Geneva disarmament talks.
It weakened the UK and France.
This made it possible for Mussolini to engage in aggression in Africa ending hopes for preserving peace.
Great Depression helped Hitler come to power. People lost everything.
Wall Street crash was not the cause of the Depression. No money, extremely angry. Look to someone who promises a better life, and this is how Hitler was able to rise in power.
The great depression was a huge factor in Hitler coming to power.
Countries are concerned with fixing things at home. Mussolini and Hitler did what they wanted unopposed.
Hitler took stimulants, amphetamines. During the WW2, kamikaze went into American ships.
WW2 loss of life in civilians.
WW2 cemented the USA as a world power, and weakened the UK and France.
Impact of Depression on International Relations
The causes of the Great Depression are not the focus but how it influenced international relations.
The Great Depression had an impact on events in Manchuria and Abyssinia.
It also had an impact on the ability of the world to continue seeking peace and harmony.
The Great Depression
It was not caused by the Wall Street crash of 1929 this was a signal that it had arrived.
The roots can be found in the weakened states of many nations after WW1, in particular Germany and the UK.
The turmoil in the USSR and Eastern Europe had further weakened trade and world markets.
The burden of war-debts, government deficits, and the political and social turmoil caused by WW1 all played a role.
Germany owed money and so did the UK.
The Depression devastated the spirit of the world.
It resulted in a terrible struggle to survive by any means.
Nations were no longer willing to co-operate through trade and exchange.
Survival of the fittest.
US sending money to Germany, this all ended.
Countries adopted a bomb-shelter mentality.
They cut off contact with their neighbors, raised tariffs and cared little for affairs outside of their own borders.
This insular attitude was worse in the democratic countries.
Briana M. Silva
IB History II
September 13, 2011
Citizens demanded that their governments give money to domestic problems and ignore the problems of the world.
No resources and energy should be wasted on international agreements or enforcing them.
Domestic hardship was to be the focus not armaments to control aggressive foreign states.
The end of peace due to necessity, people were starving. Forefront of America, people are literally starving, yet billions are spent on fighting expensive wars in the 1930’s and today.
Wars, disagreements, were at the time seemingly minor. Problems are home were the priority, building armies.
Aggressive foreign states
Those who were driven to extremes of hardship saw war as a solution to their problems.
Japan’s attack on Manchuria was an example of this.
The Japanese argued that without Manchuria they would starve- it was every nation for himself.
In Japan, Japan was hit hard by the Great depression. Rather than improving things at home, Japan wanted to boost morale at home and improve revenues and create money, they went to war. The Japanese would invade Manchuria to try and boost morale in the country and take over an area where they would get an ample supply of food and rice. Without the invasion of Manchuria, they would starve, survival of the fittest, needing the food that this land has.
Japanese were trying to build an empire by invading Manchuria.
The Great Depression, more than any other reason, brought Hitler to power.
His primary goal was the destruction of the Versailles settlement by whatever means.
His solution to economic weakness was to advocate Lebensraum- territorial expanses to seize resources. Lebensraum was to destroy the Versailles settlement.
Hitler’s aim was the same as the Japanese. Germany was economically weak, he would build a powerful army, and expand German territory to gain the natural resources of other countries.
Versailles was still fresh in the German minds, and Hitler had a solution to destroy the Versailles settlement, and bring Germany to what it had once been.
Hitler was able to come to power to desperate people.
Great Depression- International Peace
It is important to understand the impact of the Depression on the efforts to maintain world peace.
It is the single greatest reason for the collapse of the previous efforts to develop international understanding and co-operation.
It destroyed the economic welfare of the world.
Countries were desperate to improve things at home, and believed the best way to do this was to invade small countries, which was AGAINST the League of Nations.
The Great Depression resulted in the complete collapse of the League of Nations.
It also destroyed the optimism created by Locarno, Kellogg-Briand (between Briand of France and the U.S. which was agreement where Germany was put back to its post-war status, to co-operate internationally and peace), the League of Nations, and other attempts at international co-operation.
These progressive idealistic agreements were forgotten or ignored in the selfish, cynical world of the 1930’s.
Survival of the fittest was becoming the order of the day.
The Depression created the reason for aggression in the Manchurian crisis.
It also took away the ability and motivation of nations to work together to preserve the peace.
The League and its founding principle of collective security was exposed as a hollow idea unable to guarantee a peaceful future.
The powers that had pledged to uphold collective security were now even less likely to stand behind it and had no desire to do so.
The Depression seriously weakened GB and France who had tried to defend Versailles and the precepts of the League.
Their weakness was exposed by the Manchurian crisis which encouraged Mussolini to attack Abyssinia which gave Hitler an ally in his desire for conquest.
The invasion was a clear challenge to the principle of collective security and the League.
China was a member and asked for help against Japan.
The League sent officials to study the problem (this took a year).
In February 1933, it ordered Japan to leave Manchuria.
Japan refused and instead left the League.
The main problems with the League of Nations responding is that it took him a long time to travel.
The Nationalist government of China led by Chiang Kai-shek was weak, corrupt and busy fighting the Communists.
Because of the Great Depression, Japan wanted to build an empire to secure supplies of raw materials.
The army was its own entity, and did what it wanted, despite the instructions of the government.
China did rule Manchuria, but the Japanese wanted the railways there.
The Japanese government was controlled by the army.
China ruled Manchuria, but the Japanese army ran the railway there, and ruled in Korea.
September 1931: There was some vandalism on the Manchurian railway; Japan claimed the Chinese had sabotaged the railway.
They invaded Manchuria and set up ‘independent’ Japanese controlled, State of Manchukuo under the former Emperor of China, Hnery P’ui.
China appealed to the League.
Such an impact on WW2.
Japan was a full member of the League of Nations, and so was China. Collective security was supported by the League.
China asked the League for help.
In December 1931, the League appointed a commission led by Lord Lytton to investigate.
He did not go to Manchuria until April 1932 and did not report until October.
In October 1932, Lytton’s report stated that Japan was the aggressor and should leave.
On Feb. 24, 1933, the Assembly voted that Japan should leave Manchuria.
League stated that Manchuria self govern while the issues be fixed. Japan must withdraw its troops, and recognize that China has sovereignty over Manchuria. Japan had special rights in the region, and was entitled. China was responsible for the deterioration between Japan and China. China had to bear a certain amount of responsibility, internal stability in China affected Japan.
The Japanese delegate stated that Manchuria belonged to Japan, Japan refused to compromise over this and withdrew from the League consequently.
Japan stayed in Manchuria.
The League could not agree economic sanctions or an arms sales ban.
In 1933, Japan resigned from the League and invaded/ conquered Jehol (next to Manchuria).
Members of the league could not agree as what to do. How will you force Japan to leave?
The Japanese continued to expand. They kept Manchuria. They invaded Jehol in 1933, and China in 1937.
Japan’s economy improved, which then helped the economy of these other countries.
The League was discredited/ Manchuria showed
It was slow (The Lytton report took almost a year to prepare) By the time the finding of the reports were made, it hurt the League, it was too late, Japan was already in charge.
A country could get its own way if it ignored it. League felt they could not really confront Japan. Major opposition at home.
‘Collective security’ was useless against big countries- especially during the Great Depression.
Even the great powers within the League, Japan was on the Council) were happy to ignore it.
Herbert Hoover would not support economic sanctions against Japan.
Hoover sent delegates, no part in sanctions. Communism was also a big factor, fear. Japan kept the balance in power and stopped Communism from spreading in the Far East.
The Washington Naval Conference, the Kellogg Briand Pact were nothing more than a meaningless gesture. Highlight weakness of the League.
Countries will go to the aid of other countries, unless it is a big country.
The League of Nations did nothing to stand up against them.
Because of the Great Depression, Italy wanted to build an empire to secure raw materials. Mussolini was a fascist
Briana M. Silva
IB History II
September 14, 2011
A wide range of issues caused the Japanese invasion of Manchuria.
Japan had become the largest industrial power in Asia.
This growth and development was based on the success of her exports to the rest of the world.
Japan has few natural resources and because of her growth population could not feed herself.
She depended on the export of goods, primarily to the US, to maintain her prosperity.
The collapse of the US markets created enormous hardship in Japan with massive unemployment and starvation in rural areas.
Japan seek some solution to the starvation and unrest.
The disastrous economy led to a decline in the popularity of the liberal democrat government.
It led to demands of action by radical nationalist groups often made up of army officers.
They demanded the government take action to protect the population from the failure of the liberal capitalist economic system.
During times of depression, people for someone to help them, and therefore, radical groups, such as Hitler, rise, and are made of army officers.
The specific objective was to take over the Chinese province of Manchuria. The radicals will build an empire to secure supplies of raw materials. China was an easy target, government was weak and fighting against Communism.
Manchuria held a vast wealth of natural resources of all kinds.
Japan had control of the roadways, a monopoly of railroads.
Did railroads help to win the Second World War? Transport troops, food, supplies, weapons, ammunition, travel quickly.
The decision to invade was made easy because Japan had made economic investments in the region since the Russo-Japanese War.
IT had also kept troops in Port Arthur to protect her interests.
Japan will make its own international law. You cannot just invade another country.
Japan had been looking to expand into China and had increased her presence there under the Treaty of Versailles.
It had also increased its territory in concessions forced from a weak Chinese government during WW1.
Hitler invaded Poland.
Manchuria ruled itself, and as ruled by a war lord who was constantly fighting with Communist Japan.
Japan left in 1919, felt it should have had more land.
Japan, like Germany was looking to gain more land.
China was in a state of turmoil.
It made sense to invade Manchuria and posed very little risk.
Manchuria is very close to Japan and its colony Korea. (Japanese since 1910).
China was involved in civil war and offered no resistance.
Since the Washington Conference of 1922, Japan had military supremacy in East Asia.
None of the Great Powers had forces or bases in the region to oppose her.
The Depression had caused cuts in armaments spending in the West and the UK, France and the US were in no position to intervene.
Japan arranged for someone to vandalize their own railways. Have the government support the military.
Japan invaded Manchuria claiming that her property and citizens had been attacked by Chinese troops.
This was completely fabricated by the radical nationalists to force the civilian government to support military action.
The Chinese were defeated and in 1932, Japan created the puppet state of Manchukuo.
Briana M. Silva
IB History II
September 20, 2011
Because of the Great Depression, Italy wanted to build an empire to secure raw materials.
Mussolini was a fascist, and wanted to revive the glories of Rome.
France and Britain needed Mussolini’s support against Hitler. (Stresa Pact 1935).
This directly related to what happened in Manchuria. Italy wanted to invade Abyssinia, Africa.
Scrambled to get as many colonies as they could.
Abyssinia is where Ethiopia is modern day.
Italy suffered a humiliating defeat in Abyssinia, in 1896, the Abyssinians defeated the Italian army.
France wanted revenge on Germany.
1896, Italians wanted Abyssinia.
1933 October withdrew from the League of Nations. March 1935, Hitler announced that he would re-arm, forgetting the terms of the Treaty of Versailles.
The League could do nothing about it. Hitler will re-arm and rebuild their empire.
In 1936, Hitler sent German troops into the Rhineland, which was an area where Germany wasn’t allowed to have troops after the Treaty.
Mussolini, the fascist, had an idea that he could turn Italy into a Roman Empire, after Julius Caesar.
Hitler was becoming very obvious to France and great Britain, and was turning into a serious threat. Hitler was not hiding this.
Hitler was pursuing aggressive foreign policies.
France and Great decided they need support against Germany, and they wanted Italy’s support, and thus formed the Stresa Pact, and the purpose was to have a strong front to confront Hitler, and realize the danger of Hitler.
France and GB need the support of Mussolini against Hitler. France and GB are the two main members of the League of Nations.
Italy fared badly for Ethiopia, as Ethiopia had its own emperor since 1896.
The border between Abyssininia and Italian Somaliliand was uncertain and disputed- in December 1934 there was a small skirmish at Waal-Wal.
Mussolini demanded an apology and threatened to invade.
There was great anger in Britain; Hoare (the foreign minister) made a strong speech supporting sanctions and collective security.
Wal-Wal is an oasis.
Britain doesn’t want any other nation becoming powerful or gaining control of more territory and trade routes.
In February 1935, the League set up a commission, which reported in September. It suggested giving part of Abyssinia to Italy.
In October 1935, Mussolini rejected the plan and invaded Abyssinia. He used tanks and flame-throwers and attacked Red Cross hospitals.
The League banned weapon sales, and put sanctions on rubber and mental (this hurt Abyssinia more than Italy).
Abyssinia was hurt more than Italy. Mussolini was guilty of committing atrocities, as he used mustard gas, and killed innocent civilians.
It did NOT close the Suez Canal or ban oil sales, which would have stopped the Italian invasion.
In December 1935, Hoare-Laval Pact, a secret plan by Britain and France to give Abyssinia to Italy.
Britain and France asked that sanctions to be lifted- only Abyssinia voted against.
March 1936: Hitler marched into the Rhineland, everyone forgot about Abyssinia.
May 1936 Mussolini conquered Abyssinia.
June 1936, Haile Selassie, the emperor of Abyssinia, went to the League to ask it to reconsider its “terrible precedent’ of giving way to force. He was ignored.
The League was condoning the use of force, giving in to any big country.
Why was Abyssinia a failure?
The Fascists continued to expand over Europe.
Mussolini kept Abyssinia.
Hitler began to expand in Europe.
Fascists took power in Spain.
Britain and France abandoned the League as a way of keeping the peace, started to appease Hitler.
The US continued to trade with Italy, it did not follow sanctions.
The League was a ‘useless fraud.’ Stated by AJP Taylor, a British historian.
It was slow, the Lytton Report took 8 months,
A country could get its own way if it ignored it.
‘Collective security’ was useless against big countries- especially during the Great Depression.
Even the great powers within the League were happy to ignore it (Japan was on the Council)
Even Britain and France would betray the League.
Nine countries left 1936-1939.
Italy was forced to approach Germany, and signed The Berlin Access.
Italy and Germany became Allies.
Briana M. Silva
IB History II Preparing for Paper 2 and 3 Cold War
September 21, 2011
Causes of World War I
Spanish Civil War and China Civil War 1927-37 during the time when Manchuria was invaded)
Falklands War in 1982 and the Gulf War 1990-91
Guerilla War and Decolonization
Algerian War of Indonesia
The Great Depression
Briana M. Silva
IB History II
September 22, 2011
The League of Nations had success.
“ Account for the Foundation of the League of Nations and assess its success between 1920 and 1935. Big countries didn’t have to follow the laws set by the League of Nations.”
The successes were Greece, Bulgaria, Locarno Treaty, the peac conferences were made outside the League of Nations.
Washington Naval Conference and peace conferences made OUTSIDE THE LEAGUE OF NATIONS.
The League failed because the United States wasn’t in there.
No way to enforce was a failure.
Failed during Manchuria.
Wilson’s League of Nations.
Treaty of Rapollo
Versailles and Germany
Characteristics of War
Two factions/ parties opposing each other in the same country.
Insurgency, coup d’etat military uprising.
Account for the Foundation of the League of Nations and assess its success between 192- and 1935.
The League of Nations was the most ambitious and idealistic outcomes of the peace treaties. The League intended to create collective security and international co-operation to settle disputes peacefully and to support disarmament. However, the League had little to no success, as many of the world major powers, including that of the United States and the Soviet Union, were not members of the League and the countries wanted their own self-interest. The League did in fact have a few successes in resolving disputes of small world powers, but the League did not have success with major countries. The League was intended to create international organization to prevent the outbreak of war and to solve disputes, however, it was the influence of Woodrow Wilson and the presence of the United States that brought the League into being. The League was meant to be a permanent international body, allowing all nations to meet, discuss, and settle disputes in a peaceful manner. The collective security of the League intended for all the members to help countries to resist aggression, despite whether or not it was vital to their own self interest. As the United States had emerged from the First World War stronger than when the war began, the two leading members of the League, France and Great Britain, were weakened and had limited ability to enforce the terms of the Treaty of Versailles. Another problem with the League included the number of countries that had dropped out between 1919 and 1939. Much of the League’s success was made though the various peace conferences outside the League, including that of the Washington Naval Conference to disarm and the Locarno Treaty of 1925 which had resolved Franco-German relations. Collective security had served as the backbone of the League of Nations in regard to maintaining peaceful international relations. The Corfu dispute of 1923, led by Mussolini, in which the members of the League took no action contributed to the collapse of the League. The success that the League had involved the settling of disputes and the prevention of war between nations in the early years of the League, including the Aaland Islands, the Upper Silesia, and the Greco Bulgarian War of 1925. There were also a number of incidents in which the League failed to resolve the dispute including that of the Russo-Polish War, the Ruhr Crisis, and the Corfu incident. The League was successful in resolving disputes involving small or medium powers who were unwilling to resort to violence. This allowed the League to negotiate and enforce a settlement to these disputes in which both parties would accept. The League was unsuccessful when the disputes involved major wolrd powers that refused to submit to the League and used violence, rather than peaceful negotiations. Peacekeeping for the League of Nations succeed in the disputes of small countries. The most successful disarmament conference after the First World War included that Washington Naval Conference. The conference addressed the issue of the naval and arms race between the major powers of Japan, America, and Great Britain. The major issue that the conference tackled was to defuse the tension between Japan and the USA and their involvement in the Far East and Japan’s aim to dominate China, while the United States feared the loss of trade. The Washington Conference served as the most successful, although its disarmament success was temporary and limited. The size and number of battleships was limited and decreased, as was their aircrafts and carriers. The US, UK, and Japan agreed to keep a ratio of 5:5:3 as a maximum of fleet size. The conference succeeded, as it allowed weapons to decrease in production and limited future armament. In 1932, the Geneva Conference promoted the need for a reduction of extensive armaments, as 31 nations attended the conference, two of which, the USSR and the United States were not members, but attended. However, the Geneva Conference presented problems, as the nations present could not distinguish between offensive and defensive weaponry to make the nations feel secure and therefore lead to debates, and a lack of enforcement mechanisms, as well as no organization to oversee the compliance of the terms of the conference. During the conference, Germany stated that all of the other countries should disarm to her level according to the Treaty of Versailles, or that she be allowed to expand. The Locarno Treaty signed in October 1925 was an important success as Germany accepted its border with France and Belgium as permanent. The Locarno spirit had allowed international co-operation, intended by the League to flourish.
Finally, in 1931, when the Japanese had invaded Manchuria during the Great Depression to stimulate the Japanese economy, the League had failed again. The Japanese had established the puppet state of Manchukuo. The Chinese pleaded with the League for assistance against the military supremacy of Japan, yet the League could not confront the major world power without violence. The League therefore, did nothing to prevent the Japanese expansion, and was ineffective.
Briana M. Silva
IB History II
September 27, 2011
Spanish Civil War
Timeline of the Events
Overthrowing of monarchs
Corruption of government
The wealthy hold the power
Stability was when Spain remained neutral in WW1
Military influence and instability
Short term changes
France and French intervention
Long Terms Causes of the Spanish Civil War
Weakness of government- 1871- why was government weak?
Factions of different parties that had similar views
Corruption and rigged elections
Europe is unstable different regions, speaking different languages
Role of Spanish Army
What was the role of the Spanish army?
Intervened in Politics
The Spanish army had internal instability
The army in Spain, for example, had too many officers and the army was too big, and the army did not work to save the King.
“Too many chiefs, not enough Indians.”
Too many officers. Outbreak of the First World War, being an officer related to how much money and influence you had, the greater position you had in the military, in charge.
Too many officers bred incompetence
Role of the Church
The Church supported corrupt regimes
Religion and church influence, means more money. Religion serves as a way to control people.
Abusive power, ideological, in terms of
Communism for the Catholic Church isn’t good. Communism refutes the belief in a god.
Communism if it spreads in the country, the church is out of business.
The Church had much self interest
The Church survived and came out intact
Rich and the poor, extreme gap
Land ownership, agriculture
Agricultural work was seasonal, and work and non-work during the year. The rich get richer. Agriculture is tied in to the economy
Workers, peasants who worked the lands, conditions were so bad for them that they turned to anarchy, in terms of Communism.
A war against fascism.
Americans and people from Great Britain went to fight in the Spanish Civil War.
Long Term Causes of the Spanish Civil War
Role of the two main protagonists regions during the 1920’s
Basques, want to be separate. Engage in terrorist activities.
18 different political parties in Spain: Somewhat Similar views, different agendas
Could not agree
The Fall of the Monarchy and the Establishment of the Second Republic
King Alfonso XIII- 1931 Defeat in Morocco
12 governments between 1918 and 1923
King Alfonso, much chaos, matters came to a head, a period of real instability. He was not into reform, he was old fashioned, much like Czar Nicholas, no reform to make things better, no change.
General Primo de Rivera- military coup. Rivera improved industry.
Authoritarian right wing regime
Spanish Civil War is a dress rehearsal for the Second World War.
In 1930, 1931 the Great Depression hit, and threw the world into turmoil.
The King went into voluntary exile.
The Church and the army didn’t make an effort to save the king.
‘Velvet Revolution’ – a time of great change, a soft, bloodless revolution.
Second Republic without a king.
April 1931, the Second Republic
Short Term Causes of the Spanish Civil War
Political Polarization, everything goes to chaos.
The Left Republic lasted from 1931 to 1933- Manuel Azana
Workers of all classes
Key Issues: still plagued Spain
Azana attempted to limit church power
Stop state payments to the clergy
Take education away from the control of the Church
LIMIT CHURCH POWER
The Left Republic tried to address the abuses of the Church.
Army soldiers, if you retire, reform army, the state will pay off 50%. Pay off the officers to stop corruption.
The military academy, the head General Franco, and it had to be shut down. The retirement plan had backfired. The officers left were extreme strong right wing fascist type people.
The officers left created many radicals and Africanistas, the veterans who had fought in Morocco.
Azana created radicals in the army and created a monster.
The economy was in dire straits, made worse by the Depression.
Many historians blame the failure of this as the main cause of the civil wars.
State could take over land and give it to the peasants.
Stalin’s socialist system of land reform
Ideology of Communism- give the land back to the people.
Opposed by right wing radicals and other ring wing groups.
Similar to Stalin’s socialist system, land reform
The Right Republic lasted from 1933-1936
The man most linked to the army’s victory in the Spanish Civil War.
Factions during the war split into two groups, either Nationalist or Republicans.
Only a tiny minority of people traded on stock exchange, but they possessed vast wealth, and the crash had a ripple effect on the economy.
Lack of Diversification
Wealth depended on a few basic industries.
Construction and automobiles.
Newer industries gad, chemicals and plastics could not pick up the slack.
Main industries, car, automobiles, the economy was based on. Newer industries were unable to compete.
Technological advancements, leads to unemployment.
People have less money to buy consumer goods.
Maldistribution of Purchasing Power
For the poor, weakness in consumer demands, and productivity drops. Never ending cycle.
Mass consumption was already low (poor could afford to buy little)
Unemployment rose, no government assistance at first.
Since people could not buy, productivity was cut back, and further unemployment.
So with additional unemployment, purchasing power declined again, reduced productivity yet again.
Productivity drops, lay a lot of people off.
Herbert Hoover didn’t believe that the government should assist the poor, and that they should get out of it themselves.
Unemployment goes up, purchasing power drops, unemployment rises.
Productivity and Unemployment
In the 1920’s, the US economy was based on the productivity purchasing power, employment cycle.
For many goods to be produced, purchasing demand had to be there: this resulted in high employment and a healthy economy.
Between 1924-27, US productive capacity doubled but it was because of technological innovation.
Electricity and mechanical advances made for better production, but no new jobs were added to the economy.
1920’s goods were being produced at a much higher rate than at the rate they were able to be sold.
More consumer goods were available, but there weren’t necessarily more people to buy them. Overproduction.
Credit Structure of the Economy
Farmers in debt, crop prices too low to allow them to pay off what they owed.
Small banks were in constant trouble.
Large banks were also in trouble as they were investing recklessly in the market.
When the market crashed many banks failed and some called in loans that borrowers could not pay.
People lost everything.
International Debt Structure
European demand for American goods began to decline.
Partly because industry and agriculture were becoming more productive.
Partly because they had financial troubles and could not afford to buy goods from overseas.
European nations owed US banks money post WW1.
European nations didn’t recover from the First World War.
Europe global Depression.
Collapse of the economy in Europe. WW1 indirectly caused the Great Depression and the Great Depression was the main reason for the collapse of peace, rise of Hitler and Mussolini.
Another major problem was an uneven distribution of wealth, Wall Street protestors in modern day.
0.1% at top owned as much as bottom 42% of American families (42% below poverty line)
Of the 58% above the poverty line, most fell into the middle class category- they were not wealthy; they had jobs because of the industrialization and consumerization of the American market place.
This middle class depended on their salaries and when productivity declined they lost their jobs.
And because of low savings, they had to cut back on their purchases.
This decline in consumption among the middle class ruined the whole country.
Agricultural decline, and decline in industry, making too much.
President Hoover’s Response
He didn’t believe that the government should play an active role in the economy. Not enough money going to the workers in there salaries, gap between what can be afforded to purchase and what is made.
He felt that getting involved was socialism and rooted in Communism.
He persuaded bankers and business to follow his policy of VOLUNTARY NON- COERCIVE COOPERATION where he gave tax breaks in return for private sector economic investment.
He organized a public relief effort.
In his attempt to revive the economy, he figured out a plan to try to get money back from Europe. We will put a stop on reparations, not call in a war debt.
Hoover also organized some private relief agencies for the unemployed.
He worked out a system with European powers that owed U.S. money as a result of WW1 debts = HOOVER MORATORIUM put a temporary stop to war debt and reparations payments.
Euro. Countries were to purchase American goods instead to stimulate American economy. Instead of them paying the US and calling in the debt from Europe they will invest in American goods.
“Laissex faire” let the people be and they will get out of poverty themselves.
He fought against “socialistic”
Socialized medicine- medical is free
In early 1931, these measures appeared successful, but then the TARIFF WARS.
Democratic in Congress passed a high tariff (Hawley-Smoot) to protect US industry (hoped to stimulate purchasing of US goods).
The purchase was to protect local agricultural industry, however, it placed a 40% tax on goods coming in. Other countries said, if you do that, we will do the same.
This was a fatal error.
Congress did not understand that the world had become a GLOBAL ECONOMY.
In retaliation, other countries passed high tariffs and no foreign markets purchased American goods, so US productivity decreased again.
Also in 1931, the Soviets flooded the world market with cheap wheat, (1/2 US price) in an attempt to get money to pay back Austrian banks (but price was too low and they couldn’t)
This resulted in the BANKER’S PANIC.
Austrian banks borrowed from German banks and appealed to the BANK OF INTERNATIONAL SETTLEMENT (France vetoed, international bank, Euro bank)
Austrian banks and loaning German banks therefore were forced into bankruptcy.
And because German banks had borrowed from Americans, US banks began to go bankrupt, wiping out life savings of thousands of Americans.
Hoover tried to help the Am. Economy, and essentially made things worse throughout the world.
The Soviet Union was not affected at all by the Great Depression, already in such poor conditions a Communism economy based on agriculture, didn’t make a difference. Soviet Union flooded the world market with cheap wheat.
Not a Great Depression in the US, but in the whole world.
Americans React to Hoover
Hoover was increasingly unpopular, but he continued to try and establish a more interventionist way to deal with the economy. He persuaded the Congress to establish the RECONSTRUCTION FINANCE CORPORATION. (RFC)
Had power to make emergency loans to banks but it was too little too late….
Hoover Damn improves conditions for industry and agriculture.
$2.5 billion of Congress to back up the RFC.
Hoover wouldn’t involve himself in any programs of direct governmental aid to individuals, didn’t want to erode Americans sense of “RUGGED INDIVIDUALISM”- help yourself
You have to work to get water out
People were frustrated- isolated protest movements.
Dairy farmers were frustrated with low prices of milk and refused to sell, and dumped it.
WW1 Veterans, pensions discontinued by Congress, March on Washington.
Bonus March by the Bonus Army
They reached Washington by 1931 set up SHANTYTOWNS, HOOVERVILLES, food scraps= Hoover meals, hitchhiking journeys= HOOVER RIDES
After one year they were forcibly dispersed by the Army (MacArthur/ Eisenhower).
Veterans in the 1930’s hitchhiked, and Hoovervilles sprung up all over Washington.
1 out of 4 were employed.
National income was 50% of what it had been in 1929.
Republicans nominated Hoover, no hope. Was the Depression his fault? His responses, he tried to get people to help themselves, economy was in such a terrible state.
Winner by a landslide Franklin Delano Roosevelt, Democratic N.Y. governor
FDR was popular on the radio, often believed that he was bringing socialist ideas.
He pledges a New Deal for the American people.
Republicans re-nominated Hoover because they felt that they had to, yet no one felt he was going to win.
Manual labor, worked as farmers, African Americans did jobs that no one wanted to do.
Most of the health, relief, jobs went to white people.
Life did not change significantly for African Americans, farmers suffered, agriculture. Migrate to the cities to see if there’s work there.
What profession did most African Americans in the South have?
Two white girls accused black men of rape.
Did segregation and racism still exist?
What was the “Scottsboro Case?”
Biggest example of racism from the 1930’s
South West and California
Often called “Chicanos”
Many Mexican Americans were migrant farm workers, agricultural migration.
Travel around to plant and grow crops.
Hard, manual labor, usually doing jobs that white Americans didn’t want to do.
Immigrants, cheap labor.
Reinforced discrimination and marginalized minorities.
White people demanded jobs that Mexican previously held.
Repatriation- 500,000 Mexicans went back across the border and were forced.
FDR relief programs that were not available to minorities, Chinese, Japanese, and African Americans. Thread of racism throughout much of the country.
Mexican Americans were rounded up and send home.
Some signs of resistance- Mexican farm workers formed a Union nut faced much opposition from authority. Severe poverty just like African Americans in the South.
Local growers and public. They were ineffective.
Many Mexicans migrated to big cities- like L.A. to look for work. They ended up living in poverty, like African Americans.
Japanese Americans- discrimination immigration laws.
Educated Japanese Americans could not find jobs
Many worked at family owned fruit stands.
20% of all Japanese Americans at such fruit stands at the end of the 1930’s
For those who found work, they faced discrimination like Mexican Americans and African Americans.
White people began to take menial jobs that previously had only been performed by minorities.
Japanese farmers lost jobs to white farmers migrating from Great Plains.
Did not do any better
Faced same discriminations.
The majority of Chinese Americans worked either in Chinese restaurants or laundries.
Those who moved outside the community rarely got more than entry level jobs.
Example- Chinese Americans who worked in stores worked in stock rooms they never made it one to the shop floors as sales clerks.
Educated Chinese Americans both men and women found no opportunities for work outside of Chinatowns.
Women and the Great Depression
The Great Depression strengthened and reinforced the idea that a woman’s place was in the home.
With no jobs, many believed that any available jobs should go to men, as men served as the primary breadwinners.
Strong belief that no woman whose husband had a job was allowed to work.
Federal Civil Service- 1932-37 Only one member of a family was allowed to work.
These beliefs and values did not stop women from working outside the home.
Both married and single women took jobs in the depression in spite of public condemnation- they needed the money.
By end of Depression 25% more women were working than men.
Professional opportunities declined because men started to take jobs that had traditionally been women’s work- teaching and social work.
Female industrial workers more likely to be laid off than men.
White women advantages stenographers and other service positions salesclerks.
Less likely to disappear than heavy industry jobs.
African Americans women experienced massive unemployment in South especially because of the reduction of domestic positions.
At the end of the 1930’s 38% of the African American women were employed as compared to 24% of white women.
This was because African Americans both married and unmarried had to work out of financial necessity.
Great strain on the family unit middle classes in yjr 1920’s saw a period of prosperity.
They were then plunged into despair in the 1930’s.
Many families changed how they lived.
Taking in relatives and boarders.
Sewing clothes for family members.
Depression eroded the strength of the family unit.
Decline in the divorce rate- no one could afford it.
More common was informal breakup of family
Sons would leave king for work.
Desertion of families by men escaping the humiliation of not being able to support the family.
Marriage and birth rate declined for the first time since the early 19th century.
Chapter 25: The New Deal
This was the name FDR gave to his new program to fight the Depression.
It was a revolution in American society- changed completely the way the government functions
The first phase of the New Deal dealt exclusively with economic reform unlike Hoover, FDR believed government legislation and involvement was crucial to stimulate the economy
Step ONE- dealt with the banking crisis BANKING HOLIDAY- banks shut down and subject to government inspection, allowed to open when “healthy”- people’s confidence returned- they redeposited allowing banks to invest in the economy.
Step TWO- stock market reform Security Exchange Commission established to police the NYSE first chairman was Joseph P. Kennedy practice of buying on margin was regulated.
Step THREE- to put more $ in circulation, FDR went off the GOLD STANDARD government could print more $ than Fort Knox gold reserves would allow- with more $ in circulation, wages and prices increased.
Inflation, causing dollar value to lower gave government spending power Keynesian economics.
FDR fireside chats to safely invest money in banks again, because the government will stimulate.
Gold standard is a monetary system where fixed weight of coin, unit of money, fixed amount of gold coins.
To kick start the economy, if you have gold, those who issue bank notes, give notes for the gold coins. Dollar value.
Gold reserve was declining at the time, FDR said to the government that no one was allowed to have a private supply of gold, must surrender to the treasury in exchange for paper notes!
Less gold, price increases. FDR then took the country off the gold standard and this created more manageable economy, as he could control the banks. This created inflation.
US leaves gold standard, inflation in the economy, as the premise is that the price of the dollar is not related to the price of gold. Costs will go up so that the economy will be stimulated. To print more money, you are done for!
The price of dollar doesn’t increase with gold, price of goods in market will rise. Production of goods increase. Gives the government control.
Putting more dollars in, increase wages as well.
FDR’s New Deal R.R.R
Economy Act- balance federal government by cutting salaries of government employees and reducing pensions to veterans.
Glass Steagall Act June 1933- created the FDIC which insured deposits of up to $5,000.
This increased confidence in depositing money and ended several bank failures.
Shut the banks down, encourgage people to put money back into the economy.
The country had budget buts. Cut salaries of government employees.
The Inauguration was March 4th. Hoover was still in charge. Roosevelt was the president elect.
February 1933, the banking system was collapsing.
Hoover was trying to get out of interfering with currency and banking during Roosevelt’s term.
Hoover’s legacy was that of the Great Depression.
March 6, called it a banking holiday, FDR shut down the banks.
Because Congress was so panicked by the collapse, and the threat of the banking system, they, the Congress, essentially gave blank chekque powers for his New Deal program, approved extreme.
He made the public know that he was going to deal with this straight away.
By shutting the banks down, it created relief and hope amongst people, Congress passed the Emergency Banking Act.
Before a bank was allowed to re-open, it had to be inspected by the government. The purpose was to protect larger banks from being shut down by smaller banks.