Applied English for American History II
Fall 1999
Tokyo International University of America
J. E. Seibert

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American History II
Professor Jopp's lecture
November 9, 1999

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Vocabulary:

"The Depression": the great economic depression of the 1930's in the United States

underlying problems: basic problems

prosperity: a situation in which life is comfortable and the economy is good

disposable income: money that is not needed for necessities; money that can be used by a family for things besides food, housing and clothing, such as recreation, travel and luxury items

conspicuous consumption: buying things for status -- to show how much money a person has

"sick" industries: industries that were less able to tolerate competition

intrinsic value or worth: the real value of something (the intrinsic value of a pair of Nikes is, for example, $15 -- labor and materials)

reparations: money that a loosing country pays at the end of a war to compensate the winners for damages

just around the corner: coming soon ("The end of the term is just around the corner.")

a vast multitude: a very large variety and a very large number ("There are a vast, vast multitude of stars and planets.")

The "New Deal": a vast multitude of programs passed by congress under President Roosevelt to restore the confidence and the economy of the country: to reduce unemployment, to reopen businesses and to cut agricultural production

sharecropping: farming land that someone else owns in return for a share of the crop; sharecroppers do sharecropping

tenant farming: farming who rented land from someone else; tenant farmers do tenant farming

FDR: Franklin Delano Roosevelt (lived from 1882 to 1945 and was the 32nd president of the United States, from 1932 to 1945)

• Consumption was increasing; people bought more things than ever before
• The stock market was rising in value and importance; more people were buying stocks
• Industry was expanding: more factories were manufacturing more things; the economy was becoming more and more productive
• There were more wealthy people, including more millionaires, than ever before; more and more people were buying expensive, luxury products
• Wages and salaries were increasing for many, but not all, Americans

• The gap between the rich and the poor was increasing
• "Sick" industries (unstable industries with a small profit margin) collapsed
• The value of stocks began to exceed actual industrial production and worth; stocks were worth more on paper than the amount of money that actually existed or the amount that something was really worth (people would pay a lot for stock believing it would be worth a lot in the future)
• People were buying things they couldn't afford; they used credit
• There was very little government regulation of financial institutions and of labor

• The value of stocks fell
• Industries closed (and people lost their jobs and their money)
• Banks closed

President Hoover ("Prosperity is just around the corner.")

Hoover thought the economy would correct itself; he thought if we waited everything would be better

Results:

• By 1932, 9000 banks had closed
• Industrial production was down by 50%
• 12 million Americans were unemployed (25%)
• People lost their confidence in the economic system in the United States

Franklin Delano Roosevelt ("FDR")

He was fundamentally different than Hoover: he had a very different idea about the role of government

The "New Deal: a vast, vast multitude of all kinds of government programs based on

• The idea that the government can and should intervene in the economy and
• The idea that the government can and should help people directly and indirectly

  Main issues:

  • 1 - Helping the unemployed; creating jobs

    2 - Getting businesses opened again (in part to restore people's confidence)

    3 - Cutting agricultural production because farms were producing too much

    • The AAA = the Agricultural Adjustment Act (part of the New Deal): the idea was to reduce production so that the prices of products would rise:
      • The government paid farmers to kill pigs and cows and paid farmers not to farm some of their land.

        As an unintended result, thousands of sharecroppers and tenant farmers were left without work. Many just left with their families and many of those went "west" to California to work in vineyards.

      (Background note: Before the New Deal, banks had encouraged farmers to borrow money, to buy new equipment, to use technology to increase production, to produce more and to sell more because there was an international market for farm products. Because there was then too much being produced by the 1920's, prices began to fall.)