United States Cabinet: Great Depression Crisis

Transcription

1 Ninth Annual Session of the Santa Barbara Intercollegiate Model United Nations Conference November 16 18, 2018 United States Cabinet: Great Depression Crisis 1/15

2 Chair s Letter Honorable delegates, I am delighted to be welcoming you all to the U.S. Cabinet: Great Depression Crisis Committee at the Santa Barbara Intercollegiate Model United Nations Conference My name is Hallie Georguson and I am a first year English major at UC Santa Barbara. This conference will be my first experience with Model United Nations, but I have worked very hard to prepare myself as your chair for this committee. I am excited to meet all of you in November! This committee will be focusing on events during the Great Depression. However, it will provide an interesting perspective of the 1930 s because as Cabinet members, you will encounter issues of the economic depression and the rise of European fascism. It is our goal that you will use your positions within the Cabinet to develop solutions that will ease the effects of the issues that arise without resorting to violence. It is expected that you will utilize the information provided and develop unique solutions. All this being said, I trust you will excel in your planning and research for this committee. Please do not hesitate to contact me with any questions or concerns you may have, and I wish you all the best of luck! I am looking forward to reading your resolutions! Hallie Georguson Chair, United States Cabinet: Great Depression Crisis halliegeorguson@ucsb.edu 2/15

3 10/16/2018 GREAT DEPRESSION - Google Docs Committee Introduction The Great Depression, which lasted from 1929 to 1939, has been characterized as the worst economic downturn seen in the history of the industrialized world. With causes ranging from the stock market crash of 1929 to the Dust Bowl, millions of Americans were left homeless, jobless and foodless. And despite President Hoover s reassurances that the economy would improve, conditions only worsened. This committee will simulate meetings between cabinet members and additional figures who have had a profound impact in policy and direction of the Great Depression. Those who are Cabinet members, in conjunction with the Vice President, have the potential power to deem the President unable to discharge the powers and duties of his office under Amendment XXV, Section 4 of the Constitution. And because President Roosevelt and Congress will act as the crises staff, all resolutions that pass shall become automatic law. However, there is the ability to have the Supreme Court strike down passed resolutions. This committee is left with the task of resolving the numerous issues that arose during the Great Depression and will be ending on the midst of European fascism. While the information given in the guide is historically accurate, it is up to the committee to choose which pieces of history they would like to follow. 3/15

4 General Background America experienced one of the largest economic expansions in written history as the country s total wealth more than doubled between the years 1920 and This decade is often referred to as the Roaring Twenties as mass consumerism, technology, and economic prosperity became embedded in American culture. Such prosperity can be partly attributed to the First World War as factory production sharply rose in order to meet export demands. This sharp rise in factory production, as well as the devastation Europe experienced after the war, allowed for American 1 factories to become more efficient. In addition, the presidencies of Harding, Coolidge and Hoover sought to protect American businesses by implementing tariffs on foreign made goods. The 1922 Fordney McCumber Tariff Act is a prime example of an act created to protect American businesses; such act resulted in an increase amount of goods to be produced and 2 marketed by Americans. As a result of the influx of wealth, a new American culture emerged. More Americans lived in cities than farms for the first time in the country s history, women challenged traditional gender roles and workers had money to spend on leisure activities. In addition, the economy and the stock market expanded rapidly, resulting in stocks to reach record highs in September This high plateau, however, did not last as the infamous stock market crash also known as Black Tuesday occurred just a month later. 1 twenties/roaring twenties history 2 s history.com/pages/h1370.html 3 educational.com/fordney McCumber.htm 4/15

5 While there are several theories debated regarding the cause of Black Tuesday, economists have agreed on these two basic factors: asset bubble and panic. An asset bubble, which is when stock prices rapidly rise but are not supported by an equal rise in demand, emerged due to overconfidence in the market; this is problematic as it left no 4 sustainable foundation for the stock market. This phenomena was paired with panic after the market crashed as investors sought to withdraw their money, resulting in cash reserve shortages. The stock market crash, however, was not the sole contributor to the Great Depression. As few as 10% of households were invested in the stock market and upwards of 90% of banks were involved in the stock market. This heavy involvement partaken by 5 banks resulted in several hundred bank failures. A majority of banks were not affiliated with the Federal Reserve. This was problematic because when depositors began to pull their savings after the crash, many banks lacked the reserves to fund such bank runs. And while the crash did push the economy past the tipping point, as it created numerous bank runs, it was the underlying weaknesses in the banking system that was responsible for the crises that occurred during the Great Depression. 4 bubble causes examples and how to protect yourself hostos ushistory/chapter/the stock market crash of 1929/ 5/15

6 As the Hoover Administration was faced to tackle the various problems arising from the Great Depression, they had no choice but to attempt to act on it. One of the most infamous attempts to circumvent the effects of the depression was to instill the 6 Smoot Hawley Tariff on overseas competitors in order to protect the U.S. industry. This tariff imposed substantially high tax rates on imported goods and left numerous American trading partners upset. As retaliation, America s trading partners counteracted and imposed tariffs on American businesses. World trade fell by two thirds between 1929 and 1934 due to these actions. The consequences of the Great Depression evidently became global forces. Unemployment reached new levels throughout the Great Depression as its peak was 24.9 percent in No longer was mass consumerism, technology and prosperity the norm in America as it was soon replaced by Hoovervilles, homelessness, and soup kitchen 7 lines. The Great Depression left two million people homeless, resulting in shantytowns also known as Hoovervilles to spring across the nation as people were evicted from their homes. Hoovervilles ranged in population size from a couple hundred to thousands, and were typically built around rivers in order to have access to a water source. Consequently, conditions were highly unsanitary as there was little that local governments and 8 health agencies were able to do. With the government failing to provide aid, dissent for President Hoover arose among Americans, causing shantytowns to be named after him. 6 hawley tariff act a classic economics horror story 7 during great depression 8 depression/hoovervilles 6/15

7 The Great Depression not only saw economic distress in banks and global trade, but was also faced with issues of agricultural overproduction and underconsumption. Farmers and factories continuously overproduced, leaving crops unpurchased and causing the prices of goods to fall. This loss in profit left workers unable to sustain their farms. And although they overproduced, the excess crops were left to rot while people on the streets 9 starved. Worsening the effects of the Depression was the Dust Bowl. Due to numerous years of overproduction in America, the majority of topsoil on unfarmed plains became dislodged 10 and formed massive dust clouds. Living conditions in the most highly affected regions were extremely poor and maintaining crops was nearly impossible. These dust storms persisted throughout the 1930 s, with the worst to take place on April 15, This day became known as Black Sunday due to the sun s inability to penetrate the dust clouds. Initially, reactions to the droughts in Washington D.C. were minimal, but following its rapid progression in 1930, Congress appropriated $65 million for food supplies. But despite these efforts, food shortages plagued America for much of the Great Depression. Hoover Administration ( ) Prior to his election in 1929, Herbert Hoover was a famed humanitarian for projects such as the Commission for Relief in Belgium and the Hoover Dam. This, in combination with President Coolidge s decision not to rerun for the presidency, allowed Hoover to win the Republican nomination with ease. While campaigning, Hoover proclaimed that We in America today are nearer to the final triumph over poverty than ever before in the history 11 of any land. So, it was with an unlucky bit of irony that the stock market would collapse within the first year of his taking office. Contrary to popular belief, President Hoover had little confidence in the economy s self correcting abilities, and by depression/dust bowl 11 the white house/presidents/herbert hoover/ 7/15

8 extent was not a supporter of laissez faire policies. This was evidenced by the broad scope of political action taken following the onset of the Great Depression. Nevertheless, the Great Depression only worsened during his presidency. This is because many of Hoover s attempts to repair the economy s problems only made matters worse. Most famous among these was his signing of the Smoot Hawley Act in 1930, which heightened tariffs on 900 imported goods. Rather than bringing aid to failing farmers, the tariff raised prices on food, and more significantly, damaged trade relations between America and other foreign 12 nations. Two years later, President Hoover signed the Revenue Act of 1932, raising income tax for the upper class in the hopes of lowering the federal deficit. Again, this warranted poor results. The frequency of Hoover s unsuccessful efforts in correcting the economy led to increasing criticism of the president. Many Americans decided that what Hoover was doing as president was simply not enough. In order to express frustration, the people developed Hooverisms. Hoovervilles referred to poor, shabby communities, Hoover flags to the appearance of empty pockets turned inside out, and so on. President Franklin D. Roosevelt Franklin D. Roosevelt took office in 1933, and began implementing the New Deal within the first 100 days of his presidency. For many presidents, the first 100 days of office, often referred to as the Honeymoon Period are highly influential as they still have a widespread focus on them from the election. This was no different for FDR. On March 9, 1933, the new President launched the Emergency Banking Act, which temporarily closed all U.S. banks in order to reconstruct the banking system and restore public confidence in banks. In the first of many of FDR s Fireside Chats, he assured citizens that it is safer to keep your money in a reopened bank than 13 under a mattress presidents/herbert hoover /15

9 The Emergency Banking Act is among many New Deal policies enacted during FDR s 14 presidency. Later that month, he enacted the Civilian Conservation Corps, employing 3 million Americans to help maintain public areas, and later that year, the Glass Steagall Act was put in place, establishing the Federal Deposit Insurance Corporation, which insured 15 depository banking accounts associated with the FDIC. These policies, which stimulated the economy and decreased unemployment, caused FDR to become very popular among the population, despite some debate from opponents over whether his actions were borderline communist. Timeline of Events Date Development 1929, March 4 Herbert Hoover becomes president. 1929, September 29 The Dow Jones Industrial Average reaches a peak of , October 29 Stock Market Crash of 1929; also known as Black Tuesday. 1930, June 17 Smoot Hawley Tariff is passed by Congress. 1931, December New York s Bank of the United States collapses Unemployment is at an average of 24.1% for the year. 1932, November 8 Franklin D. Roosevelt is elected. Questions to Consider 1. Could the Great Depression have been foreseen and prevented with the policies in place during the 1920 s? How could this have been done? 2. How could President Hoover have responded differently to lessen the effects of Black Tuesday before they occurred? 3. What actions could FDR have taken had he not thought of the plans for the New Deal? How might the American population respond to these actions? /15

10 4. What sort of power does the U.S. Cabinet hold to combat issues of the Great Depression? Could the Cabinet have done more? Roosevelt s Cabinet Members 1. Cordell Hull US Secretary of State US Secretary of State Cordell Hull is an American politician and served as a U.S. representative for Tennessee until During this time, Hull served as the leader of the movement that advocated for low tariffs, was a member of the powerful House Ways and Means Committee for eighteen years, and authored the first Federal Income Tax Bill (1913), the Revised Act (1916), and the Federal and State 16 Inheritance Tax Law (1916). Hull was elected in 1931 to serve in the U.S. Senate but resigned the position when he was appointed as secretary of state by President Roosevelt in George H. Bern Secretary of War Secretary of War George H. Bern is a progressive American politician and businessman. He served as governor of Utah for two terms ( ) and successfully reformed the state s tax system and made improvements to the financial support that public schools receive. Dern heavily supported Roosevelt during his campaign and was appointed as Secretary of War when Roosevelt took 17 office. 3. Frances Perkins U.S. Secretary of Labor Frances Perkins is a workers rights advocate as she has lobbied for better working hours and conditions and successfully lowered the workweek for women and children to 54 hours. Perkins was also the head of the National Consumers League which is a group that represents workplace issues. Perkins was appointed by 18 Roosevelt to U.S. Secretary of Labor after agreeing to a list of demands. 4. Mary Bethune civil rights activist people dern george henry /15

11 Mary Bethune played an instrumental role in leading voter registration drives for women, served as the president for the National Association of Colored Women s Clubs and was appointed the leader of the Black Cabinet. She has spearheaded campaigns against racial and gender inequality and improved the lives of African 19 Americans through education, political, and economic empowerment. 5. John Nance Garner Former Speaker of the House of Representatives, Vice President of the United States (1933 ) John Nance Garner is an American politician and was elected to the House of Representatives for thirty years. Garner was a heavy advocate for the Federal Reserve System and the graduated income tax. He was an expert in lobbying in order to expedite legislation. He originally ran for president against Roosevelt but dropped his campaign and was chosen by Roosevelt to be his vice president. 6. Dr. Robert Weaver Assistant to Secretary of the Interior Ickes Dr. Robert Weaver is an African American who served as a staffer for Harold L. Ickes. He stood for issues regarding civil rights and racial equality, and emphasized the need for minority participation in government policy and decision making. Weaver worked successfully to prove that African American citizens deserved the same wages as whites when the National Recovery Administration pushed lower 20 wages for the former. 7. Eugene K. Jones National Urban League Eugene K Jones became the first Executive Secretary for the National Urban League in He spearheads campaigns to dismantle the barriers African Americans face when seeking employment, helps organize boycotts to firms that refuse to employ 21 black employees and is a part of Roosevelt s Black Cabinet. 8. Thurman Arnold Special Assistant to General Counsel of the Agricultural Adjustment Administration 19 mary.cfm eugene kinkle /15

12 Thurman Arnold was a powerful lawyer in Washington D.C., served in the First World War and served as a member of Wyoming s House of Representatives. Arnold served as special assistant to general counsel of the Agricultural Adjustment Administration. This administration focused on reducing surpluses in order to 22 increase agricultural prices. 9. Henry Morgenthau Jr. U.S. Secretary of the Treasury Henry Morgenthau Jr aided the U.S. Farm Administration in developing a plan to deliver tractors to France and served as chair of the New York State Agricultural 23 Advisory Committee during Morgenthau Jr also served on the Conservation Commission until he was appointed to the Federal Farm Board and eventually the Secretary of the Treasury. 10.Homer S. Cummings US Attorney General Homer S. Cummings is a prominent American political figure and is known for advocating for lower tariffs, the income tax, and antimonopoly measures. He believed the Democratic party was an instrument for social justice, served as mayor in 1900 for Samford and was actively involved in local and national Democratic 24 Party politics. 11.James A. Farley Postmaster General James A. Farley served as the chairman of the Rockland County Democratic Committee in 1923 and became the secretary of the New York State Democratic Committee in Farley successfully organized Roosevelt s campaign in 1930 and was awarded a position on the Cabinet. Aside from his interpersonal and 25 organizational skills, Farley was also a successful businessman. 12.Claude Swanson US Secretary of Navy Claude Swanson is a powerful Democratic leader as he has served in the U.S. House of Representatives for seven terms, as governor of Virginia and as a U.S. senator for twenty years ( ). Swanson heavily advocated for the U.S. Navy and aided henry jr.cfm /15

13 in the development for naval strategy and weapon systems. Swanson also advocated 26 for naval expansion bills. 13.Henry A. Wallace Secretary of Agriculture Henry A. Wallace is an agricultural expert and has conducted experiments with higher yielding corn strains. His experiences allowed for plant genetics to majorly advance. Although Wallace s family was involved in the Republican Party, Wallace 27 opposed highly protectionist tariffs and joined the Democratic Party. 14.Daniel Roper US Secretary of Commerce Daniel Roper is an American politician with vast experience in holding office as he has served on the South Carolina House of Representatives, as chairman of the U.S. Tariff Commission and as chairman of Woodrow Wilson s re election campaign. Prior to serving on Roosevelt s cabinet, he was a member of the Board of Education 28 in District Columbia. 15.Harold Ickes Secretary of the Interior Harold Ickes is a U.S. government official who has volunteered at a settlement house, took on civil liberties cases for no charge and is known to be a progressive Republican. He supported various African American causes and was president of the 29 Chicago NAACP harold.cfm 13/15

14 Bibliography twenties/roaring twenties history educational.com/fordney McCumber.htm hawley tariff act a classic econom ics horror story depression/dust bowl during great depression the white house/presidents/herbert hoover/ presidents/herbert hoover ,00.html ,00.html people dern george henry mary.cfm eugene kinkle context=facpubs henry jr.cfm pe=bio s.htm harold.cfm 14/15