The Passive Presidents

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  • The Passive Presidents
    • Harding, Coolidge, and Hoover.
      • LAISSEZ FAIRE - An economic system in which transactions between private parties are free from govt intervention such as regulations, privileges, tariffs, and subsidies.
      • THE EXPANSION OF CREDIT - banks gave out loans and helped make the 'American Dream' a more realistic opportunity for people and helped to create 'consumerism' in the USA. It was a time of symbolism and materialism.
      • PROHIBITION - The 18th Amendment of the US Constitution passed in 1919 prohibited the manufacture, sale, and transportation of intoxicating liquors. The quantity of alcoholic drinks sold still stood at c. 1/3 of the previous level. A black market began to thrive and drinks were sold easily in speakeasies. This hidden industry was worth $2 billion a year!
      • US LOANS TO ALLIED POWERS - The US was determined to secure repayment of more than $10 billion that it had loaned to the Allies over the course of the war.  In 1922, the US War Debt Commission was created to negotiate repayment plans, on concessionary terms.
      • DAWES PLAN - The plan outlined that Germany's annual reparation payments would be reduced, increasing as its economy improved. Foreign banks would loan Germany $200 million to help encourage economic stabilisation.
      • YOUNG PLAN - Reduced the total amount of reparations to 121 billion gold marks (almost $29 billion) payable over 58 years. Along with another loan of $300 million.
      • THE GOVT REACTION TO THE CRASH - Andrew Mellon, secretary to the Treasury of the US Govt, told Hoover to "do nothing". Hoover blocked Congress suggestions of govt relief programmes and passed the Revenue Act 1932, which increased corporate income taxes meaning businesses could not expand and workers' wages could not increase.
      • THE GREAT DEPRESSION - National output had been cut by half and was less than in 1915 (the boom had been lost). Investors lost as much money in Oct 1929 as the USA had spent fighting WW1. Unemployment rose from 2 million in 1928 to 13 million (25%) in 1933. Bank failures increased from 500 in 1929 to 3800 in 1933. 100,000 business failed 1929-33.
      • HOOVERVILLES - Shantytowns were towns made of shacks built of cardboard, tar, paper, lumber, tin etc. They varied in population and size and were built near a water source, whenever possible, for the convenience of a water source. A common factor between inhabitants was unemployement, but whenever work became available it was snatched up, no matter what it involved.


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