 1918 End of WWI  1922 Roaring Twenties ‘Seven Fat Years’ What Happened??  1929 Collapse of the Stock Exchange Great Depression

USA:  Adopted a policy of isolation (Monroe doctrine)  Neutrality under pressure by 1915  April 1917 USA enters WW 1  Ending US neutrality

 Several factors contributed to USA entering World war 1  Refer to notes and complete the table

Warren Harding  Wilson lost election to Harding  Congress and Americans not interested in TOV and LON  Desired neutrality  Harding adopted a policy of ‘isolationalism’

 Not really???  USA attempted to remain isolated However:  Did not join League of Nations  Refused to ratify Treaty of Versailles  But international events forced US to intervene

Post war arms conference Resulted in three main Treaties being signed: 1.Four power Treaty 2.Washington Naval treaty 3.Nine power treaty Focused on maintaining peace between the attending nations in the Pacific during the 1920’s.

1922 Fordney-McCumber Act was a law that raised American tariffs on many imported goods in order to protect factories and farms.tariffs Tariff: A tariff is a tax on imports or exports (an international trade tariff).

IMPORT TARIFF  The act raised U.S. tariffs on over 20,000 imported goods.  Made the economic problems caused by the Great Depression significantly worse RESPONSE  Americas trading partners increased their own import and export tariffs reducing Americas imports and exports by almost half

 Seven Fat Years:  Boom in US economy  Prosperity  Great time to be living in USA WHY??

 Economic boom:  Enormous growth potential  Laissez-faire system  New products and industries  Mass production  Chemical industry  Film industry  Electrical goods  Speculation on the stock exchange

 Numerous defects in US economy:  Economic isolationism  Unequal distribution of wealth  Problems in the agricultural sector  Trade problems – over production  Decline in older industries  Extravagance vs Thrift  American loans  Malpractices

 Due to:  Over-speculation  Share prices too high  No government intervention  Banks started to sell shares  Panic  Thousands of shares for sale, but no buyers  COLLAPSE – 29 th October 1929

Decline in economy Bankruptcies Lack of world trade Economic Effects High unemployment rate 1 Million people left homeless No government intervention Social Effects Government unable to solve problems Many lost confidence in democracy Political effects

 Elaborate on the following:  1. Unemployment  2. Factories and businesses  3. Collapse of the banking system  4. American Farmer

1932  Franklin Delano Roosevelt – President  Promised schemes to assist poor and unemployed  Protection to workers NEW DEAL

 Measures to rescue the economy:  Relief – To those worst affected by the depression  Recovery – Get industry going and people back to work  Reform – Fundamental reforms to prevent another economic collapse

Solve financial crisis, all banks closed Some banks allowed to re-open Laws passed to regulate business practices Government intervention Banks Public Works projects (Building of schools, parks..) Jobs for millions of unemployed Large-scale government spending Unemployment Government controlled production levels (Crop and livestock) Subsidies given to the farmers Farmers

Tennessee Valley Authority Help agriculture – hydro-electric scheme Created jobs for thousands Assisted with irrigation and electricity in poor areas TVA National Recovery Administration Improve working conditions Codes for each industry Workers to be protected NRA National system of old-age pensions, unemployment insurance, child welfare, health benefits Government responsible for welfare Welfare

 Three essential Questions to be considered: 1. In what ways did the New Deal challenge economic thinking? 2. Did the New Deal challenge ideas of Democracy? 3. Did the New Deal strengthen capitalism?